When Mark Sirkin was 18, his father died suddenly. First came heartbreak, then a terrifying reality: The family inherited Sirkin's father's finance company, a business they had no experience running.
Not surprisingly, it was not a smooth transition. Employees stole from them, his brother decided to leave the company, and Sirkin and his mom eventually sold the business.
Sirkin now knows that they got it all wrong.
Today, as a 57-year-old psychologist and business consultant in White Plains, New York, he helps other families get it right by helping them practice open and honest communication and develop strategic plans. "It's not a stretch to say I've become the family business consultant that I wish we had had," says Sirkin, author of the 2004 book, "The Secret Life of Corporations."
Sirkin and other psychologists who work with family businesses say that these operations come with unique challenges, including the need to distinguish between professional and familial roles and manage different generations' goals. Learning to manage such challenges and build trust among family member business partners has the potential to "unleash the inimitable competitive advantages for family businesses," according to a 2014 article in the European Journal of Work and Organizational Psychology.
What's more, employees of a family business tend to be fiercely loyal to their business, understand each other's strengths and weaknesses, and are more fulfilled by their work, says Sirkin, who earned his PhD at the University of Connecticut and is a member of APA Div. 43 (Society for Family Psychology) and Div. 13 (Society of Consulting Psychology), which prepared him well for his work.
Psychologists are primed to help family businesses draw out such benefits. "I found my training as a psychologist really important because it lets you think systemically," he says.
"In other words, you don't try to find the one person or the one symptom responsible for the problem because you understand that everything is interconnected in a complex way."
Role reversal
Among the typical problems in family businesses is role conflict, the distinction between someone's role in the family and his or her role in the business.
One of Sirkin's recent clients, for example, wanted his father and grandfather to help pay for his kids' camp and school, but they had already accounted for such costs in the son's salary, actually overpaying him for the job he was doing. The son was "imposing on the father and grandfather in a way he wouldn't impose on a boss," Sirkin says.
A murky distinction between work and family can also make room for bringing up family grudges during business meetings or other low blows, says William Criddle, MBA, PhD, a psychologist and family business consultant in Seattle. He's seen siblings complain that another has always been favored, for example, or argue that an adopted son should have less stake in the business than a biological one.
These are the sorts of issues that "have no place, no rationale, at the board meeting," says Florence Kaslow, PhD, a psychologist in Palm Beach Gardens, Florida, who is certified in family business advising by The Family Firm Institute. Rather, they should be worked out in therapy if they cannot be handled at a family dinner, retreat or meeting. "The family business being successful is important to everybody, and if old issues keep getting played out competitively, it's to the detriment of everybody," she says.
Bringing a bit of family background into the board meeting isn't all bad, though. A 2008 study, for instance, found that family business CEOs tend to be more successful if they possess "cultural competencies," such as understanding the family's goals, values and norms, rather than just living up to the more formal qualifications of the job (Family Business Review, 2008).
Transitions from one generation to the next can be a prime time for conflict, too. Wealth manager Gary Bottoms, of The Bottoms Group in Atlanta, explained in a Wall Street Journal essay in September that he brings in a psychologist when assisting clients who are transferring ownership of a business from one generation to the next. Having a psychologist on the team, he said, "can help people articulate and communicate their feelings so that they can understand where one another are coming from." Bottoms also enlisted a psychologist's help when his oldest son joined his firm.
Another common scenario is a "retired" founder who continues to micromanage his or her children, even when those children are close to retirement age themselves. According to a 2011 study in Family Business Reviewopens in new window, it can be difficult for aging business leaders to adjust their goals accordingly and to plan their retirement. "Letting go is frequently a problem," says Criddle, who shares a private practice with his wife, a psychiatric nurse.
The opposite can happen, too, when younger generations don't care, care less or care about the business in different ways from their forefathers.
With all of these potential conflicts, psychologists and psychological strategies can help businesses and families succeed. In his role as a consultant to family businesses, Criddle teaches clients psychological skills, such as emotional control, before helping them improve communication and problem-solve. He and other experts also help family businesses put in place certain structures, such as hiring outside boards and establishing regular meetings.
If all goes well, a family business's profits are more than monetary. "In a successful family business, not only are they providing a self-renewing resource for the next generation, but they're also providing a kind of lifestyle that encourages the values of hard work, attention to detail and all the things you want your kids to learn," Sirkin says.
