Last year, when I was being interviewed by CNN in India, I was asked the question: "What is the difference between an Indian family business and a Western family business?"

This made me think of the old adage which was so often used when people first began speaking about family business: is it 'family first' or 'business first'?

I have a clear view on this, as I have done for some time: no family business can be considered purely 'family first' or 'business first', because family businesses act like a pendulum. There is no static position, and the emphasis swings from family to business (and back again) as and when circumstances require, although the pendulum always finds its way back to equilibrium.

This equilibrium is not necessarily the exact mid-point between family and business, but depends on the particular family and business at hand, as well as a diverse range of other influencers (such as religion, socio-economics, matriarch-patriarch relations, and culture).

Back to the interview question. My answer was a very simple one - I said that in my opinion, in India, it was typically 'family first', whereas in the West it was typically 'business first'. In India the family drives the business, whereas in the West, the business drives the family.

Having thought about it further, I believe that it is not only India where family tends to be prioritised, but any country where family is at the heart of society, such as Brazil, Spain, and Italy. By contrast, my experience is that in other places with less family-oriented social structures (such as the UK), the tendency is for families to prioritise their business.

I've found that it can be very useful for families to ask themselves which model they follow, and below I have outlined a few key considerations for families attempting this exercise. Answering the following questions can help to identify where on the scale between 'family first' and 'business first' the family is.

  • How well-defined are the boundaries between the business and the family?
  • How flexible/structured is decision-making?
  • What is the 'emotional-temperature' of decision-making?
  • Are business decisions ever made for family reasons? Are family decisions ever made for business reasons?
  • How many family members work in the business? How rigorous is the process for their appointment?
  • Do all family members working in the business sit in positions commensurate with their skill level and experience?
  • Do emotions run high in the boardroom, or are they supressed in order to 'get the job done'?
  • What is the prime motivator for management? Is it financial success, or familial success?

So family first or business first? Ultimately, there is no right or wrong answer. Each family should consider the benefits and drawbacks of each approach, and try to understand and learn from their current position, because over time it may change unexpectedly. What is paramount is to be able to uphold both positions (and the variations in between!) and be able to change when the need arises according to circumstances.

I once suggested to a family grappling with these matters that it would help if they were to organise their business as a family and their family as a business, and so far so good....

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