Family businesses are unique in the array of stakeholders involved in the ownership and the management of the firm, as well as the issues of conflicting loyalties that inevitably complicate all decisions. It is this matrix of relationships that provides both the competitive advantage and the competitive weakness of any family business.

How can it be that relationships provide both the vigor and the handicaps that mark family businesses? On the one hand, these firms often have "right of first refusal" in hiring and retaining the best and brightest from the family. Sons and daughters, nieces and nephews commit to work in industries and situations that might never, in other circumstances, be able to recruit them. Capital is also available that could not be otherwise accessed. On the other hand, it is a fact of the human condition that none of us can see our family members as objectively as we can see others. Because of this, strengths often go either underutilized and unrealized or overestimated. We place greater expectations on relatives. Disappointment too often quickly follows!

It is thus not surprising that management issues of selection, promotion, and retention pose complicated tasks for many a family business. Less recognized are the complications of ownership, which increase geometrically with each successive generation. How does one reach agreement on board- and ownership-level issues of vision and policy, not to speak of issues of use of capital? Is the emphasis to be on current income, reinvestment, or preparation for liquidity?

Based on its strengths in helping us to understand ourselves and others, the Enneagram is currently being used in many family-owned business because it provides a particularly useful approach that allows the individual, management, the Board, and the family as a whole to objectively and collectively examine the common ground and significantly improve decision-making at the management, leadership, and ownership levels.



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