In Part One, we explored the role of identity in family business leadership. Now, in Part Two of our three-part series, we’ll examine why standard management frameworks often fall short in family businesses, delve into the impact of emotions, and identify five roadblocks to effective leadership.
Series Takeaways:
Understand how identity shapes decision-making and problem-solving.
Learn why conventional management and governance frameworks may not suit family businesses.
Discover the five roadblocks hindering leadership effectiveness in family enterprises.
Recognize emotional intelligence as a leadership superpower.
Access two practical exercises to enhance your leadership effectiveness immediately.
Why Modern Management Frameworks Are Insufficient
A common question from families during significant transitions is: “We know what to do, the framework is very clear —why can’t we get anything done?”
The business consulting world offers numerous frameworks—like OKRs, the McKinsey 7S, the Balanced Scorecard, EOS, and Scaling Up. While these models drive success in many organizations, they often fall short in family businesses because:
Designed for Non-Family Enterprises: Most frameworks don’t account for family dynamics.
Rule-Based Approach: Even those that touch on family aspects focus on structures, roles, and rules.
Overlook Emotional Factors: They fail to address identity needs, succession planning, mental well-being, balancing family and business interests, and managing family conflicts.
The Role of Identity and Emotion
“Families are first and foremost emotional units. It is within these units that individuals are most intensely shaped and influenced.” — Dr. Murray Bowen
Family dynamics deeply influence beliefs, values, and behaviors — the very things that are also critical for any management framework’s success. In family businesses, the business, money, and self are inextricably linked—a phenomenon we call the Snowflake Effect. This heightens the emotional intensity of conversations about family business related matters. Addressing these intertwined relationships requires more than standard frameworks; it demands leaders who have strong business acumen and equally strong soft-skills capabilities.
Bottom Line: Frameworks and intellectual intelligence (IQ) alone are insufficient. Modern family business leaders must develop the ability to proactively navigate family dynamics, mental health challenges, and interpersonal challenges in the family.
A Real-Life Example
One family we worked with illustrates the power of focusing on emotion and identity. Despite a well-structured organization with separate management and governance bodies for both the family and the business, they reached an impasse over generational succession. We helped them realize that family succession wasn’t feasible due to differing goals, ages, financial needs, business acumen, and leadership strengths—a significant emotional blow for many involved.
Instead of forcing a decision, the family engaged in a facilitated exploratory process, allowing each member to share their vision and make their case to a special committee of the board that includes family members, non-family directors, and two outside advisors. Through open dialogue filled with honesty and empathy, they enhanced their emotional intelligence—building self-awareness, social awareness, and self-regulation.
The Result: While the decision that neither was qualified was difficult and several family members struggled with accepting the sub-committee’s decision, the family did not shy away from the emotional journey. The business now thrives under a non-family CEO, with engaged next-generation members and an alignedfamily involved in philanthropy, private equity investing in other family businesses, and real estate through their multi-family office. By addressing emotional needs, they navigated conflict constructively and set the stage for a robust future.
Conquering the Five Roadblocks to Leadership Effectiveness
While the above example shows what’s possible, many families face common obstacles:
Emotional Attachment: Tendency to make decisions based on personal loyalty, favoritism, loss aversion, fear, or nostalgia rather than on what is best for the business.
Identity Protection: Defense mechanisms to preserve self-concept may result in self-sabotage, passive-aggressive behaviors, or outright rejection of innovation.
Destructive Family Conflicts: Intense disputes (most often about power, money, or kids) harm relationships and disrupt business operations.
Misaligned Family-Business Priorities: Differing visions, priorities, and goals create strategic disagreements and hinder cohesive direction.
Entrenched Organizational Culture: Rigid norms stifle growth and adaptability, preventing evolution with market conditions.
Since emotion is a key driver, understanding your level of emotional self-awareness is a good starting point. (See link to free assessment below.). No matter where you find yourself on the ESA scale, the key to increasing this skill rests in self-reflection and feedback. Consider the following exercises:
Leadership 360 (L-360): when effectively conducted, the process provides an excellent reflection of the experience others have. In addition to enhancing self-awareness, an L-360 process can aid in removing blind spots, setting personal and professional development goals, and enhancing team dynamics.
Self-Reflection: recognize that all humans are fallible and subject to cognitive biases, emotional triggers that hijack decision-making, and motivational drivers that fuel our behavior. Know your triggers. A behavioral trigger is an external stimulus—such as an event, situation, image, word, or action —that elicits an intense, often automatic emotional or behavioral response. Triggers are typically linked to past experiences, memories, or unresolved emotions, and can provoke a range of reactions, from anxiety, fear, or anger to sadness or distress. For example, a person who associates raised voices with past conflicts that ended poorly—such as feeling belittled, ignored, or emotionally overwhelmed— who hears a raised tone could automatically trigger feelings of anxiety or discomfort, leading them to avoid the confrontation altogether.
Take the time to look at your strengths and explore when a strength moves toward a weakness. Be curious about what triggers might cause this shift.
Consider what you experience from others in the present that leads to sadness, frustration, anger, or resentment. Are there any recognizable patterns that could lead to a trigger?
Work towards a list of your top 5 triggers. Select 1 trigger and find a trusted person (coach, mentor, friend, therapist, etc.) to explore it with. How do you want to respond the next time you experience it?
Next Steps
Explore Our Resources: Dive deeper into topics relevant to your family business.
Ask Us a Question: We’re here to help you navigate your unique challenges.
Reach Out for Help: Contact us for personalized guidance.
In our final installment, we’ll discuss emotional intelligence as a leadership superpower and provide a third practical exercises to enhance your leadership effectiveness immediately.