All of us can learn from others. There are many inspiring stories within the BRW Rich Families list… stories of determination, hard work and luck as well as stories of overcoming adversity and failure.
But does the traditional definition of what defines rich (money) actually resonate with today’s definition of a richer life? Can we redefine wealth away from the balance sheet to a more balanced life, a healthier family dynamic?
The criteria used in the BRW list is determined by financial success, however we know there’s a new type of currency that’s just as significant, if not more important, to these successful families to create a richer life. We ask families to conduct a ‘health check’ which rates family businesses on a scale to indicate the health of the family, determined by family dynamics and family relationships.
Moreover, does the health of the family match their wealth? Sadly, experience indicates a huge gap between the wealth and the health of many families.
Family businesses are failing for family reasons, not for business reasons. There is too much emphasis on business matters at the expense of family issues. Ninety-nine percent of most families’ time is spent on the business.
This inevitably results in a lack of effective and regular communication between family members, which over time, leads to a breakdown in the trust and respect among family members – the two essentials for all successful families.
A culture of avoidance and deflection arises that reinforces the inability to sit down and have face to face family conversations, which leads to different expectations between generations. Their inability to talk ensures tensions and disagreements continue and potentially move into conflict – serious conflict, which becomes linked to anger, fear, envy and emotions – a volatile and potentially deadly mix in a family business.
According to a PwC 2014 Family Business Survey only 24 per cent of family businesses plan to pass the business on to the next generation, and with most family businesses failing by the third generation, multi-generational businesses and wealth are under threat. We believe that creating a strong family environment combined with the giving of freedom to individuals to express themselves, to show their passion and to have their own self-respect, is paramount to family continuity and family harmony.
A successful family business requires hard work, commitment, collaboration and understanding. It requires creating a process and infrastructure of open communication, governance and a family plan to provide the framework for family success. It requires understanding that there are options, there are systems and processes that can assist.
So is it time for Australian family business owners to re-evaluate what rich is, to rebalance their priorities and spend more time with their family, and give their children something that money can’t buy – direction, guidance, support and love. A different kind of rich – a richer life.