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Family businesses often bring to mind infighting, chaos and nepotism – the latter sometimes resulting in the disastrous promotion of incompetent cousins. But according to family-business consultants Christopher J. Eckrich and Stephen L. McClure, the management of a family business doesn’t have to resemble a television soap opera. On the contrary, many family-based enterprises are more successful than other types of companies, because the degree of loyalty and commitment that relatives generally demonstrate toward their own business reaches a level that other firms can only dream of achieving. Eckrich and McClure promote the concept of the “family council” to help smooth familial relationships and business dealings. They suggest – though too often in unnecessary and recurring detail – the steps you can take to create your own family council. getAbstract recommends this practical approach to running a family business without drama, despite those cousins.


Why Start a “Family Council”?

Most businesses work hard to recreate what family-run companies usually enjoy: “a strong sense of commitment that comes from genuinely caring about each other, about customers and about what the business is doing.” To exploit that advantage, family-owned firms should use a family council, a setting that provides relatives an opportunity to collaborate on issues and strategy. Like every clan, every family business is different, but each one can benefit from a well-organized family council. In that framework, managers can learn from past generations’ missteps, handle problems more proactively, tap into kinship loyalties to help the business succeed and establish fair treatment among members.

A Council for Every Family

A family business should organize its council to fit its development as it grows and matures through five stages:

  1. “Founder stage: kitchen table” – This first-generation structure suits a newly established or young business. Hold informal meetings as needed to keep the family apprised of matters and to discuss long-term plans to bring the next generation into the company.

About the Authors

Christopher J. Eckrich and Stephen L. McClure are principals of the Family Business Consulting Group. Eckrich is also an adjunct professor at the University of Notre Dame. McClure has worked with family businesses for over 25 years.

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