Toronto Canada

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Pervin Family Business Advisors


Retreat to Win!

Family-owned businesses have a lamentable survival rate – less than a third survive through the second generation; 70 per cent are either liquidated or sold after the founder's involvement has ended; and, only 13 per cent last through the third generation.

One reason, I've found, for this tendency to self-destruction is the inability of the business family members to balance the real, but often conflicting needs of their business and their family.

Yet some individuals find a way to achieve both business success and family harmony. Their family-owned business provides them, and future generations, with opportunities for fulfilling careers, financial security and contributions to their communities. Their family lives are also enriched by the sharing of both sacrifices and benefits in a common endeavor with spouse and children, parents and siblings. They have a clear pride of ownership that shapes their relationships in a positive fashion.

The common philosophy of "business first", fails to consider the effects on the family. All too often, putting the business first distorts family values and relationships.

These individuals and their families tend to strike an appropriate balance between the best interests of the business and the well being of individual family members. The business is a true family partnership, with family members willing to make personal sacrifices for the long-term benefit of the family and the business. Continuity of family management from one generation to the next, they will explain, begins around the dinner table, not the boardroom table. And they have worked at establishing ground rules for family involvement in the business.

Unfortunately – as the mortality statistics show all too clearly – the vast majority of family business owners/managers are unwilling to address key issues such as planning for transition and continuity of ownership and management, compensation, rivalry among siblings and relatives, competition for authority and their personal relationships with spouse and children. In my experience when owners/managers, particularly in the second and third generations, try to preserve the company by sacrificing family interests, both the business and the family lose. Yet, many of these businesses could have been saved if the owners/managers had addressed business and family needs, and found solutions and compromises that would bring business and family needs into a workable balance.

Partly because owners/managers are so immersed in the everyday pressures of the business (I have to stay hands-on), they rarely take the time for a long-term view (the future is too hard to predict), seldom consider the effect it has on family relationships (they're family after all), and take it too much for granted that other family members understand and support what s/he is doing (I'm the boss, they have to support me). They rarely ask other family members for their perspectives on the business/family relationship (why would they think any different) – much less discuss their own views. In this situation, we've found, resentment and/or open hostilities grow among family members as each perceive themselves as being short-changed in the interests of the "Company", a more active sibling/cousin (s/he has more power), a less active sibling/cousin (s/he is sucking money out of the company and putting nothing back), etc.

In my experience a family retreat is an effective start toward balancing family and business. It can be the first step in a healthy transition from no communication – or communication in emergencies only – to a unified family dialogue. The best place for these meetings is away from the shop and the telephone. All family members affected by the family business, whether or not they are active in the business, should participate.

Retreats provide a forum for introspection, problem-solving and policy-making. For some participants, it is the first opportunity to talk about their concerns and deal with the family's "open secrets" (we all know s/he's a shallow, greedy, incompetent... ) rather than 'sweeping them under the table' for the sake of perceived family harmony.

The most effective retreats are guided by a facilitator with experience in helping family-owned business. S/he shares experience and knowledge, helps identify issues/assumptions/perceptions of intra-family relations that have seldom been publicly tested against reality. Most importantly, the facilitator acts as a lightning rod during the 'hanging out the laundry' phase.

The facilitator helps family members initiate solutions and compromises that will bring balance between family and business priorities. Continuity of family ownership and management is accomplished by family members who are committed to common goals and values.

Deal with all the issues

All issues should be allowed to surface so that they may be faced. Ideally, a family should be able to deal with these sensitive issues openly, but, unfortunately, families are seldom perfect. In addition to standard business issues such as long range planning, I urge families to consider issues that are critical to the success of the family owned and managed business including:


A retreat is only one step toward ensuring survival and success as a family operating a family business. In addition to examining issues and possible solutions, a retreat should result in a commitment to a shared future as well as more formal and informal family meetings and ultimately a family council.


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