Family Business Course - Session no.1

1. Putting your home in order- Helping family
businesses reach new heights
The Need to Survive – Setting the Scene
Silvan Mifsud, Chairperson Family Business Committee
THE MALTA CHAMBER
OF COMMERCE, ENTERPRISE
AND INDUSTRY

2. Whatis so distinct about familybusiness?
Family and Business are two of the most powerful forces in the world. W
combined their impact and complexity can be endless.
All Good or All Bad? So which family businesses survive?
At their best family businesses invest for
the long term.
A their worst they are plagued by conflict,
destroying business value, wealth, jobs
and their own family relationships.
- Keen on learning, looking for new ideas, asking the
right questions.
- Those that stick together no matter what..
- Those that are open to change.
Putting yourhomeinorder- Helpingfamilybusinessesreachnewheights: The Need to Survive – Setting the scene

3. The Powers of Family Business
The Power to Sustain……..
The owners of family businesses have the power to build enterprises that
can be sustained for generations. This means that as family businesses are
more interested in the long term, they are more open to take specific
decisions that would sustain the family business from generation to
generation.
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

4. The Powers of Family Business
The Power to Destroy……..
In family businesses conflict among owners can spiralled out of
control, destroying the business. Because the owners of family-
owned business make the rules, they can also break them. This
means that family business owners need to have the skills to
figure things out between themselves.
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

5. Do you really know your FamilyBusiness?
Decoding a Family Business can be a hard nut to crack. Family Businesses
can be understood if you stop viewing them like a conventional business
Individuals Relationships
Individuals, especially
owners (but not only)
have a huge impact
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene
Relationships are
multidimensional and
interlocking.
Systems
Systems and cultures shape
everyone's behaviour, in so
many ways, that many do
not realise.

6. Individuals
The owners of family businesses are relatively a small number of individ
They have the authority to fire staff, change business strategy or even se
Business. Who these individuals are and what they want has a huge imp
on the family business.
Yes, it’s personal (….and keeping personal &
business separate)
The personal character of the family business leader or leaders, has a great
impact on the business.
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

7. Relationships
Unlike conventional businesses, with clear boundaries between professio
and personal relationships, any family business involves multidimensiona
relationships (three distinct relationships at play – see below) that effect
the business tremendously.
Family Business
Family relationships are
highly emotional – both
positive and negative
emotions. Many families
are emotionally
connected. The main
reason while there is also
fertile ground for conflict.
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene
Business Relationships are
usual hierarchical, within a
structure and should be
based on meritocracy.
Owner
Owner relationships are a
mixture or who has most
shareholding voting rights
and who is most capable to
influence and persuade.

8. The Complexityof Relationships
In a family business, each big decision has to be taken within the context o
complex expression of family emotion, business hierarchy and owner pow
Decisions are rarely ever just straightforward business or family calls.
Walking on Thin Ice
This complexity of relationships in family business plays out in a staggering
number of important relationships.
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

9. Systems
A family business is a system, meaning that the people who are part of it
exist within an interconnected environment – legal, cultural and other fac
System dynamics shape what happens in a family business, how people
and even what they want.
Four main system dynamics are at play:
Similarity, Teamwork, Competing Interests and Unintended
consequences
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

10. Systems- Similarity
Family Business Owners tend to think that their family business is unique
The reality is that it will very likely behave in predictable ways that are s
to some businesses, no matter the industry or the size of the family busin
Bottom line – Many family businesses have more in common than
they think. They can learn from sharing their experiences.
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

11. Systems- Teamwork
The interconnected nature of a family business means that people can
only achieve the most important outcomes by working together – hence
the importance of teamwork.
In the long run, family businesses succeed by making decisions that are of
mutual benefit to family members. Common interests can only be achieved
through collaboration.
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

12. Systems– Competing Interests
The dynamics of a family business lends
themselves to create competition inside a
family business.
Competing interests typically emerge over
time.
As the family business grows and includes
new generations, with many more persons
involved, multiple competing interests arise.
Hence the importance of achieving a good
balance between the three overlapping
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

13. Systems– UnintendedConsequences
In a complex system, like the one found in any family business, actions hav
ripple effects. This suggests that when actions are interconnected, small thi
can have major impacts that are nearly impossible to forecast all of such
Impacts.
You can never really just change one thing in a family business; a single ch
almost always triggers other unforeseen consequences. When you take a
stand or make a major change, you will often create an outcome that is
different from, or even the opposite of, what you originally intended.
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

14. So FamilyBusinesses can seem…..
…to be complicated, if you just analyse things at a superficial level.
Things are rarely what they seem. Conflicts likely have a long
history of power plays and lingering wounds, but also about
everyone’s deep desire to preserve their parents’ legacy.
The aim of this course is to help you understand your family and
your business better, to then focus on the right problems and help
you maintain both a great business and a great family.
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

15. Things to consider before joining YOUR family
Business….
• What is motivating you to join?
• Are you ready for the commitment?
• Do you already have significant outside experience?
• Are the personal relationships among the family leaders
healthy enough?
• Will you have a role where you can truly add value?
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene

16. Preview of upcoming Sessions……………….
Putting your home in order - Helping family businesses reach new heights: The Need to Survive – Setting the scene
The power to destroy or sustain a family business
comes from the owners’ unique ability to make
choices that influence virtually every aspect of
their companies. So family business owners need
to be careful to exercise their various rights in the
correct way. These rights are:-
• Design
• Decide
• Value
• Inform
• Transfer