This conundrum of
control is widely blamed for the demise of many family businesses. Family
members often pursue different agendas—some want to cash out, others want to
build the business, some perhaps are looking for a comfortable sinecure. If the
family is not tight-knit, or if it has no family council or creed to guide it,
the business can slip into a decision-making paralysis. These companies,
stripped of a founder’s guiding vision, often suffer as market opportunities
pass them by and competitors gain ground.Consultants often quote the
(perhaps somewhat apocryphal) statistic that only one in four family businesses
survives to the second generation. While that may be an exaggeration, family
decision-making issues were of sufficiently pressing importance to Molina
Healthcare to prompt the family to seek some outside expertise. The Molinas
hired a family business consultant who helped them realize that they needed to
focus on the business side of the family-versus-business equation. “There’s
nothing magical about a family business,” Molina says. “You still have the same
issues, it’s just that some of the people that you’re dealing with now are also
your relatives. What are we going to do for capital? What’s our strategy going
to be? How are we going to compete in the marketplace?” The Molinas realized
they needed to set aside personal agendas to ensure that their company remained
successful because, in the end, it was the family’s core asset and the mechanism
for pursuing its family (and corporate) mission: to provide health care to the
poor.
|
