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Family Business Matters       10/05 06:16

   Family Loyalty Can Lead to Business Turmoil

   Here are a few ways your appeals to family loyalty can become emotional 
handcuffs in agricultural family businesses.

By Lance Woodbury
DTN Farm Business Adviser

   What does family mean to you? For many, family means unconditional love and 
support, an enduring set of relationships that carry you through the ups and 
downs of life. Family provides an emotional safe haven, where we can share our 
deepest hopes, joys, concerns and frustrations. 

   Family also brings expectations of loyalty. We expect family to look out for 
one another, to watch over and care for each other. We even find such 
expectations rooted in the earliest chapters of the Bible, from the story of 
Cain and Abel to the dynamics between Joseph and his brothers. 

   But, when you mix family culture with the shared ownership or management of 
land or a business, family expectations of loyalty can create a set of 
emotional handcuffs, chaining family members to unproductive communication 
patterns and unrealistic business outcomes. Here are a few ways your appeals to 
loyalty can, in fact, become emotional handcuffs in agricultural family 
businesses. 

   -- "SOMEDAY THIS ALL WILL BE YOURS." Parents often invoke this statement 
when encouraging their sons or daughters to be loyal and return to -- or stay 
in -- the business. In many cases, it's used to justify a low current wage in 
return for future wealth. Sometimes it's used as an excuse by parents to avoid 
more specific planning or to sidestep sharing their specific intentions.

   Unfortunately, it causes the next generation to develop expectations or to 
make plans based on an assumption, and if the parents later deviate at all from 
this statement, family conflict ensues.

   -- "WE HAVE TO WORK TOGETHER, WE'RE FAMILY." Using family loyalty to attempt 
the management of conflict between siblings in the business seldom works. 
Sometimes, the disparities between family members are too great.

   Trying to work together amidst different styles, different goals or 
different ethical or performance standards creates so much friction that the 
business suffers. In several instances, I've seen family relationships improve 
once siblings got out of business together and had time apart.

   -- "OUR FAMILY HAS ALWAYS DONE IT THIS WAY." Loyalty and tradition are 
called upon to defend against any major change in the business. Selling land, 
changing crops or tillage practices, contemplating employee ownership or 
partnering or merging with a neighbor are just a few of the ideas that get shot 
down out of loyalty to the ways "our ancestors" did business. 

   Agriculture, however, is always changing. Crop prices, labor challenges, 
weather patterns, supplier consolidation, rent and equipment prices are 
dynamics that require the best businesses to innovate and adapt. Instead of 
staying loyal to specific business strategies, consider staying loyal to 
enduring business values like honesty and integrity. 

   -- "WE LOVE YOU ALL EQUALLY." In estate planning, loyalty becomes synonymous 
with equal gifts to family members. But, unless everything is turned to cash 
and divided equally to the penny, the emotional significance family members 
place on certain assets (like the home place) often means that no one ever sees 
a distribution as exactly equal. Also, multiple siblings owning equal but 
undivided interests in land sets the stage for decision-making conflicts and a 
potential sale of the land to finance buyouts. Instead of aiming for exact 
equality, consider how your gifts to the next generation might complement their 
individual efforts, goals and needs, and communicate sooner rather than later.

   Loyalty is one of the best attributes of family; you can count on one 
another. But, when carried too far in the business, expectations of loyalty can 
cause unhappiness, perpetuate conflict, create feelings of guilt or endanger 
the business, thwarting your transition goals. Fully glean the advantages of 
your family business by carefully watching how your expectations of family mesh 
with the reality of business.

   Write Lance Woodbury at Family Business Matters, 2204 Lakeshore Dr., Suite 
415, Birmingham, AL 35209, or email lance@agprogress.com.


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