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Articles - Successful Management Techniques in the Family - Business

Are You An Entrepreneur?

Friday, April 07, 2000

By Kathy J. Marshack, Ph.D., P.S.

Oddly this question came to me while I was attending a conference on entrepreneurship and small business in San Antonio in February. The reason this is odd is that there were few entrepreneurs in the audience. Instead the attendees were professors of business schools from across the country. These are the professors at prestigious business schools such as Harvard, the University of Michigan, Stanford, and UCLA that teach courses on business, marketing and management. They even teach courses on entrepreneurship, but most of these professors don't own their own enterprise. They study entrepreneurs. They develop theory about entrepreneurs. They even teach courses for entrepreneurs, but they don't "walk the talk."

Until fairly recently entrepreneurship has not even been a topic of conversation in the nation's top business schools, for the simple reason that business schools are primarily about training professional managers and future professors. The graduate students from these schools go on to work in corporate America, working their way up the career ladder, hoping to reach the presidency some day, or at least earn a key to the executive washroom. It's not that these professional managers are not talented, nor that they lack leadership qualities. They are creative and innovative too. However, they are not entrepreneurs.

If you are an entrepreneur, or are married to one, or know one personally, chances are the entrepreneur did not go to business school. Or if they did, they dropped out (i.e. Bill Gates) when they learned that business school was not going to open the doors of opportunity. A few entrepreneurs managed to stay to graduation, but they were probably bored out of their minds, just biding their time until they could do what they really wanted to do. My brother-in-law Rick is like this. To please his father, he went to law school, even joined a law firm after graduation. However, soon he realized that he was too restless to work for anyone else. Before he turned 30, he was heading up his own firm and well close to achieving his dream of being a multi-millionaire.

True entrepreneurs don't come from business schools. They come from engineering, medicine, anthropology, the arts (all of them), psychology, computer sciences. They are liberal arts majors, history majors, athletes, general studies majors, high school graduates, even high school dropouts. They come from all walks of life and have as varied life experiences as is humanly possible. This is why the entrepreneur has been so hard to define. You just can't fit them into a category. Psychologists have been trying to do this for years, but there is no reliable personality test for the traits of entrepreneurship. Entrepreneurs aren't a type of person. They are people who are entrepreneurial.

The closest I can come to defining the entrepreneur is that this person has vision. They are able to see the big picture like no one else. And they are determined to accomplish their vision. In other words they are extremely hardworking and tenacious. They are no more intelligent than others; no more creative either. But this vision is a special gift that puts the entrepreneur light years ahead of the ordinary person. With vision the entrepreneur is able to see opportunity before others.

Even more important than vision is purpose. The vision is a like a bright beacon that guides the entrepreneur toward his or her goals. However, to determine those goals in the first place, the entrepreneur has to have purpose. Most entrepreneurs will tell you that they "just had to do it." They have known what they were about since they were children. Their purpose is not always clearly defined in a business plan, but they have been pursuing it nevertheless. The successful entrepreneur is true to his or her purpose for a lifetime, regardless of the enterprise they engage in.

One local entrepreneur loved to build things as a little boy. He went on to get a degree in engineering and eventually started a manufacturing plant. But his purpose is deeper than that. He doesn't just like to build things; he has to. And he doesn't just like to build things; he has to contribute to the community. Although this man is an engineer by education and training, he is really a builder of ideas.

Not all entrepreneurs are millionaires either. Another local entrepreneur is a minister and artist. Since she was a little girl she loved to draw and paint and sculpt. She never really fit into the mainstream, but she always blamed it on her dysfunctional family. Now she realizes that she was preparing herself to carry out an important purpose in life. Through art (her own and that of those she counsels) she helps people discover their spiritual mission.

The saving grace of the conference was the noon keynote speaker on Friday, Marjorie Alfus. I was so inspired by Marjorie's speech, that I jumped to my feet after her talk and started a standing ovation. At 78 years of age, Marjorie epitomizes the American Entrepreneur. Although she has made her wealth and could retire, she can't stand being bored. She is taking her twentieth century entrepreneurial experiences and translating them into the twenty-first century, by creating a web business. Marjorie made her wealth by outsourcing and just-in-time inventory, when other twentieth century entrepreneurs were putting their money into brick and mortar. Now she can use that good common sense to succeed at her new venture, With a modem, fax and world wide merchandising contacts, Marjorie will probably clean up.

If you don't have a knack for vision or you are not sure of your purpose, take heart. You may still be an entrepreneur who is holding back. It takes a lot of courage to follow your heart and create a dream that no one else can see or support. All entrepreneurs have one more thing in common. Before they are successful, no one really understands them, but with success they are much appreciated.

Kathy J. Marshack, Ph.D., P.S., Licensed Psychologist and Family/Business Consultant is the author of ENTREPRENEURIAL COUPLES: Making It Work at Work and at Home (1998, Davies-Black). She can be reached at (360) 256-0448 or

Know yourself first to be true to yourself, successful in business

Thursday, February 03, 2000

By Kathy J. Marshack, Ph.D., P.S.

Which would you rather have, an educated customer or one who requires that you walk them through everything? Would you rather have a customer who is familiar with your product or industry, who has background negotiating business deals, who uses normal business systems such as estimates and purchase orders, who can read a schematic? Or would you rather have a customer who knows nothing of these things and you must explain and justify every painful detail, every step of the way.

Let's put it another way. Wouldn't you rather that your customer already knows the basics of building a warehouse, so that you can get down to negotiating price and materials? Wouldn't you rather that your customer is already knowledgeable about farming equipment in general so that you can quickly explain the benefits of modernizing with your new machine? Wouldn't you rather your customer have purchased and sold a home before, so that they are more realistic about the home-buying marketplace?

Of course there are times when a naïve customer is easier to deal with than a sophisticated one. Occasionally the sophisticated customer thinks he or she knows everything, when they really have just enough knowledge to be dangerous. But by and large your work is cut in half when you have a knowledgeable, educated customer who knows what it takes to get the job done with you. At the very least it is easier if your customer is bright enough and open enough to learn quickly and accepts your expertise.

Ah, but the world is not perfect. So much of your professional time is spent educating, persuading and hand-holding in order to complete your job. But for yourself I would suggest being an educated consumer as often so you can. If you are a family business owner, this means becoming knowledgeable about the connections between your personal life, your family life and your work life. Understanding your personal family dynamics and how they interact with your business creates a more successful business and family life. Even if you are not a family business owner, your personal life influences your business decisions, and vice versa. Therefore, it is well worth your while to become more knowledgeable about your personality style, your family values, your blind spots and how they shape your daily actions.

Come to terms with family, business

Darvin, for example, never really considered that growing up under his authoritarian father affected his business, nor his parenting style. As a child Darvin was expected to work in the family business from the time he was about nine. Whether he was sick or home from school on vacation, Darvin was expected to pitch in. Darvin's father meant well enough. He was trying to prepare his son for the future and he wanted an heir for the business. However, Dad never considered that his son might have other career interests. He also gave Darvin little time to have a childhood.

When Darvin grew up, married and started having his own children, he was determined that his own sons would be free to choose their own direction. Darvin was now the owner of the business his father had built, but he didn't want his sons thinking they were obligated to work in the family firm. He encouraged their other interests and gave them liberal time to play. He coached soccer teams and volunteered in the boy's classrooms, something his father never did.

However, one day, one of his teenagers implied that he expected to work for Darvin when he grew up. In fact the boy suggested that he wanted to be the president of the company some day! Darvin was shocked at his son's interest, especially since Darvin did not think this particular child had what it takes to be president. Then another even more shocking realization came over Darvin. After spending all these years encouraging his children to follow their hearts, he had paid no attention to grooming as interested child for coming into the family business. In fact, he had almost resisted the idea.

So, to avoid Dad's mistakes, Darvin made different mistakes, which is a common problem for family business owners who do not recognize that childhood experiences shape you as a business person. Now the task for Darvin is to educate himself about all he learned and interpreted as a child and their connection to his current adult life as a business owner, husband and father. If he is to be a success at all these roles and prepare the business for s healthy transition when he retires, he needs to be educated about family dynamics and how they interact with business planning.

Not everyone is an entrepreneur

Elliott is not the owner of a family firm, but he feels very close to his staff, many of whom have been with him since the founding of the firm. He literally built the business from nothing into a respected national manufacturer.

Elliott is a "can-do" guy. His technical training helped him create the idea for his business, but he had neither business nor marketing training when he set off on his own. Nevertheless, Elliott believes that he can accomplish whatever he puts his mind to. If he lacks knowledge or a skill, he learns it. He reads books, attends seminars and asks experts, then applies the knowledge to his own unique business. This flexibility is the reason Elliott's business has grown so rapidly. He is adaptable.

Elliott's problem is the exact opposite of Darvin's. Because of his confident and flexible approach to problem-solving, he has extremely high expectations of others. Elliott naively thinks his managers, staff and line workers have these same abilities. While it is important to encourage the best in employees so that they can rise to their highest level of competence, Elliott often promotes untrained, unskilled workers beyond their capabilities to a level of incompetence.

For example, he has promoted a welder to a position requiring an engineering degree and a bookkeeper to a position as controller. Even if these employees have the potential to grow into these positions, they do not currently have the skills to handle their jobs, which leads to failure --- failure for the individuals, as well as for the company.

If Elliott is going to grow his company further, he needs to get a handle on this problem. As he understands better that his unique personality is not the standard for all people (in fact, very few people are entrepreneurial), ha can make better use of his employees' talents. He can't always promote from within, but he can find other ways to honor employee loyalty. When a business gets as large as Elliott's, it's time to hire professionally trained managers and staff.

Being a success in business means being honest about your personal limitations too. It means becoming educated about the unique way your personality, childhood lessons and adult business decisions interact. Knowing your values and where you learned them enables you to choose which ones you want to keep, which ones are practical. Knowing your personality better enables you to design systems that complement your contributions. Darvin has been trying to set his children free to follow their own calling, ignoring that at least one of them may be a lot like himself. Elliott, on the other hand, has been grooming everyone to be like him, ignoring that his employees may have a different calling and different contributions to make.

How many of you have problems brewing that are similar to Darvin's and Elliott's? It may be hard for you to define your problem even though you know you have one because you don't have the required education. But the solution lies in becoming educated about the interaction of personality, family dynamics and business systems. When you finally develop enough insight into how you came to be who you are and how others came to be who they are, you can correct subtle problems such as Darvin's and Elliott's and avert major disaster when the problems are still small. Remember, we must know who we are first in order to be true to ourselves.

One man gives back to the community that supported him

Monday, October 25, 1999

By Kathy J. Marshack, Ph.D., P.S.

Let's say you have worked for the same boss for 15 years. You are a loyal, hard worker who takes pride in your contribution to the company. You have a fair boss, who pays you well and trusts you to handle your responsibilities like a mature adult. You have good benefits, including a tidy retirement that has been generously matched by your employer. If you call in sick or just want an extra day off occasionally, your boss assumes you have a good reason. To top it all off, everyone else in the company is treated the same way, so you have a happy group of coworkers. Of course you are looking forward to retirement, because work is not your whole life, but for now you couldn't find a better place to work.

Then one day, you receive a letter in the mail from your boss. He announces that he has sold the company and plans to retire. You had heard the scuttlebutt but weren't sure if it was true; now you know. The letter goes on to reassure you that your boss has negotiated for all employees to keep their jobs; nice guy again. You sigh, because at 52 you're not quite ready to retire. Then you pull the bonus check from the envelope. For all your years of service and dedication your boss is rewarding you with one million dollars . . . tax-free!

This fairytale is real, believe it or not. Bob Thompson of Belleville Michigan surprised his 550 workers with similar letters. All told, Bob divvied up $128 million among his employees. Bob's "share the proceeds plan" included paying hourly workers who already have pension plans, $2000 for each year of service. Salaried workers, without pension plans were given annuities they can cash in at age 55 or 62. Those annuities range from $1 million to $2 million. Thompson even included some retirees and widows in his plan. And to insure that employees actually reached the one million mark, he paid the taxes on these gifts, which amounted to $25 million.

Bob Thompson sold his 40-year-old firm for $422 million, but long before he grew this big he and his wife had planned the gifts. Years before he had already included a number of employees in his will. Bob is not a man who has always lived with money. He started the road construction business in his basement with $3500.00 and the support of his teacher wife.

Although over the next forty years, the money did roll in, money wasn't Bob's goal. He said, "People work exceedingly hard for us. It's a tough business, and this is a demanding company. Some people make a lot of money in the stock market, but we're dependent on people, so it would just not be fair not to do it. They've allowed me to live the way I want to live."

In addition to the gifts to employees Thompson plans to gift even more to other entities. "It's sharing the good times. I don't think you can read more into it. I'm a proud person. I wanted to go out a winner, and I wanted to go out doing the right thing." Yes, I agree Bob Thompson is a winner, but he's more than that. As an entrepreneur he took his responsibility seriously. He used his talents to evolve a business to the level where he could give even more back to the community who supported his growth. This stage of development is called Stewardship.

A business, like a child (and adults for that matter) goes through stages of development. Given the right mix, the business will complete its evolution at stewardship. According to psychologist Will McWhinney there are three stages of growth for a family business. The first stage is that of Entrepreneurship. Entrepreneurship is the stage of early innovations, niche formation and creativity. Because of the entrepreneur's determination and charisma, there is high cohesion and commitment from all in the company.

The next stage is Ownership during which there is a need for stability and security to nurture the family. During this stage the family business structure becomes formalized and institutionalized.

The third stage and the one that Bob Thompson epitomizes is Stewardship. Stewardship results when the business is well established, the children are grown, and the founder has developed beyond the need to use the business for his expression of personal power. As the business expands, there is more structural elaboration, adaptation, and possibly decentralization.

Stewardship offers the family business the opportunity to give something back to the community. At the developmental stage of stewardship, family businesses often establish charitable foundations or employee stock option plans, but the family firm has even more to offer. Because family-owned firms are microcosms of the society at large, how the family manages its wealth and influence can have a major impact on society. You must go beyond simple economic theory to understand this influence. The values of the family and the culture of the family firm can have tremendous social impact not only on the quality of commerce, but on the total community.

Naturally many people want to know what Thompson's employees plan to do with their windfalls. Some have indicated that they will buy new furniture or a new car. Others are spending it on much needed braces for a granddaughter or care for a mentally handicapped child. Still others are putting aside money for college tuition and retirement. But there are a few who say they've been inspired to help others. "Of course, that's what I want to hear," says Thompson.

Stewardship is a wonderful stage of life for a family business because it offers the entrepreneur the chance to be proud of his or her accomplishments and go out like a winner, as Bob Thompson has. And it puts the entrepreneur and the business in the important position of modeling for others in the community not only how to be winners, but how to do the right thing. Bob Thompson's idea of winning is sharing the wealth. For him, stewardship is using his wealth to improve the lives of others. But beyond the money, stewardship involves changing the lives of people forever.

Kathy J. Marshack, Ph.D., P.S., Licensed Psychologist and Consultant to Families in Business, is also the author of ENTREPRENEURIAL COUPLES: Making It Work at Work and at Home. Dr. Marshack is hosting a seminar for entrepreneurial couples on October 15th and 16th and a free breakfast roundtable on November 5th. Call for details at 360-256-0448 or

The four secrets to running a profitable family business

Monday, August 30, 1999

By Kathy J. Marshack, Ph.D., P.S.

Learn From Those Who Know

One of the most challenging of lifestyles is working with your spouse in a thriving business. Most entrepreneurial couples would have it no other way. They love the opportunity to be independent, in charge of their own destinies, and to work along side the one they love and trust most. Maggie and Paul are such a couple. Maggie is a veterinarian with two clinics. Her husband Paul is an assistant district attorney. Although Paul does not work full time in the clinics, he is always a support. Paul is frequently seen at the clinics on his days off, in the evenings and weekends, where he helps Maggie build shelves, organize supplies, care for the boarded animals and so on. And when Maggie brings her "work" home with her, Paul and the children get a chance to be foster family to yet another animal friend.

It hasn't always been easy for Maggie and Paul, however. Like any other entrepreneurial couple, they have had crises in their marriage and crises in the business that seriously rocked their security. Somehow they pulled through these crises, however, and have come out the other side in superior shape. So the question is . . . how? What do successful entrepreneurial couples know about keeping a marriage and a business on track? And can other couples learn from them? Whether in business or marriage, problem solving requires gathering information. It just makes common sense to find out what successful entrepreneurial couples know and do that works for them. Out of these strategies, you may find a nugget that applies to you and your spouse.

100% - 100% Rule

Over the years I have had the opportunity to meet many entrepreneurial couples and there is a pattern among those who have long-term happy marriages interwoven with a prosperous business life. First and foremost they follow the 100% - 100% Rule. That is, each partner considers her or himself 100% responsible for the quality of her or his individual life as well as their joint ventures (i.e., parenting, household duties, managing and promoting a business). While most couples follow a 50% - 50% Rule, meeting each other half way, by following the 100% - 100% Rule entrepreneurial couples meet each other all of the way. They each put his or her whole self, talents, intuitions, and muscle into the relationships of marriage and business partnership, making each equally responsible for the outcome. Even though for efficiency's sake they may divide up duties along the lines of who is most capable or available, they still consider themselves as responsible as their partner for the success of the goal.

Encourage Competition

Without question entrepreneurs are achievers and highly competitive. Without these qualities they could not create a successful business venture. Sometimes the achievement motivation and a healthy dose of competitive spirit are all that sustains the entrepreneur during extremely lean times. However, achievement needs and competitive drives are not reserved only for entrepreneurs. These qualities are evident in many people such as corporate executives, Girl Scout leaders, truck drivers, teachers and homemakers.

Sometimes it is not always easy to admit that you are in competition with your spouse, but once the truth comes out you are in a much better position to work with the inevitable. If you are feeling envious of your spouse, or resentful, you are experiencing competition. If you are feeling smarter than your spouse or the need to have the last word, you are experiencing competition. If you evaluate the worth of yourself and your partner by how much you each earn, you are in competition. Instead of being embarrassed by your competitive nature, or suppressing it or even denying it, admit it and acknowledge the problem to your spouse. Then do what successful entrepreneurial couples do . . . they encourage it!

Believe it or not, successful entrepreneurial couples actually encourage competition in their partners but they do put their relationship off limits. That is, their love for each other and commitment to their marriage and family life come before business or career needs. By following the 100% - 100% Rule they forgo competition within the relationship, but can foster it outside the relationship. For example, they give credit where credit is due. If they are copreneurs, working full time together in their joint venture, there are rewards and incentives built into the business for each partner to achieve. Instead of paying only the founder of the business and undervaluing the other spouse's unpaid help, the supportive spouse is paid what they are worth and not a penny less. Bonuses aren't banked for the common good, but awarded to the spouse who achieved the reward. Each partner is encouraged by the other to achieve their dreams, to express their strengths, to utilize their talents. If this means besting your partner in a career or business move, it shouldn't be threatening to your spouse, but viewed as a challenge to work toward his or her own excellence.

Worrying about ego or pride is a waste of precious energy that can better be used in pursuit of your dreams or being creative. Harness that competitive spirit and re-direct your achievement need toward the things you do best at the business or at home. That way not only do you succeed, but your spouse, family, business and community benefits too. What better way to express the 100% - 100% Rule ?

Make Love the Top Priority

With the pull of achievement needs and competitiveness in the business world, entrepreneurial couples have their work cut out for them to sustain balance in their personal lives. Making time for friendship, romance and family togetherness is difficult but imperative. Again successful entrepreneurial couples have figured out how to make love the top priority. They have abandoned the old methods that worked when they were younger and had free time. They realize that spontaneity or waiting for the "right moment" is not likely to happen today with their lives full of so many responsibilities. Rather, they realize that they have to plan for love to happen and be sustained. And they build a structure they can count on to keep these priorities straight. For example, they schedule once-a-week "dates" with each other to talk and rekindle romance. They make time in the morning or at the end of each day for uninterrupted discussions about anything and everything that is necessary to talk about to keep the flow smooth. They go on frequent mini-vacations of two or three days to pull themselves away from the demands of entrepreneurial life. They each volunteer their time to one community cause or child-related activity. All of these approaches help you remember why on earth you are working so hard anyway . . . to share your successes with the ones you love.

Renegotiate the Terms of the Partnership

By making love the top priority, entrepreneurial couples have a simple way to notice when they need to reorient their lives. If there is no time to give or receive love, from each other or the others in their lives who are supposed to count, then it becomes time to renegotiate the terms of the partnership. If life isn't meaningful or fun for either of you, it is time to re-evaluate the marriage or the business partnership or both.

In order to keep a business healthy, a business owner must not only be aware of market trends, employment needs, and movements of their competitors, but they must also be prepared to alter their business plan accordingly. Within your personal life, it is no different. A marriage agreement that worked when you were twenty, may be outdated for a couple in their forties, for example. Or aspects of the marriage contract may be archaic while others are still solid. Don't throw the baby out with the bath as the saying goes, but if some things need changing, do it now, or suffer the consequences of a loveless marriage.

I have met too many entrepreneurial couples where the only thing holding them together is the business. They have forgotten that the business is a function of their love for each other, that by encouraging each other to achieve excellence, they have created a successful venture. By recognizing that the love is diminishing in your relationship and by being willing to renegotiate the terms of your marriage and partnership, you may be able to rekindle the romance and re-direct the business to new heights.

The Guidelines to Success

Although it is a lot work to maintain a healthy personal relationship among the busy-ness of entrepreneurial life, the methods of doing so are simple. Successful entrepreneurial couples already know these secrets. Now it's your turn to cash in on what they know.

  1. Follow the 100% - 100% Rule and you will have a trusted full-time partner at your side.
  2. Encourage achievement and competition in your partner and you will share the fruits of his or her success along with your own.
  3. When you make love the top priority, you always have a marker to guide your decisions and direction in life.
  4. Finally, when you get off course, stop and renegotiate the terms of the contract, so that you can nurture and sustain business and marriage growth.

Could Your Wife Run The Business In Your Absence?

Friday, June 04, 1999

By Kathy J. Marshack, Ph.D., P.S.

Jay was 28 when he founded his sign business. He and his wife Teddie were thrilled when they opened their storefront and sent out the first announcements. As a young couple, they had a lot of energy and worked long hours getting the office and shop ready, buying supplies, arranging office furniture, developing a business plan, joining the local chamber and greeting their first customers.

Jay took over full management of the operation while Teddie kept her full time job as an account executive for a women's fashion company. But Teddie was there through all of the growing pains of the business too. She helped with billing and emptied the trash. She took messages for Jay at home in the evening when he was working late. The goal was to build the business to a level where she would quit her job and come to work with Jay. In the meantime her job provided a steady paycheck and other benefits such as insurance.

As the business grew, so did Jay and Teddie's family and responsibilities. With the first child, Teddie still managed to work full time because her mother and mother-in-law were willing babysitters. However, with the second baby, Teddie and Jay had to look at a more reasonable plan. It just wasn't possible for Teddie to work full time, care for two daughters, and help Jay in the business. Also Jay's Mom wasn't as healthy as she used to be and wasn't available for childcare anymore. Teddie's Mom was still helpful, but she and her husband had retired and wanted more free time. By the time their second daughter was born, the sign business was doing well enough to support the young family without Teddie's income. It would be tight, but the couple decided to take the plunge. Teddie quit her job to have the flexibility to care for her children and help out at the business.

For years Jay and Teddie ran the business this way. Although they shared equally in the ownership of the business and both worked long hours, Jay was really the manager and Teddie the home manager. Teddie would leave early to pick the kids up from school and get them to soccer practice and piano lessons. On some mornings she would come in late to the office because there was a dental appointment or a school field trip that she helped with. At the office, however, she was fully in charge of her department . . . everything that Jay didn't do, such as the bookkeeping, billing, purchasing and replanting the flowerbeds by the front door. Jay did the management, hiring and firing, marketing, customer service and the technical work. Amid all of this the children got more involved with the business, at first just watching dad build a sign, and later learning complex computer work.

If you are typical of most family business owners, you could probably plug your names into this scenario and change only a few details to make it your own story. Likewise, if you are typical of most small business owners, you do not have a succession plan. You have been so busy establishing and growing your business that you haven't looked that far ahead. You may not even have the confidence yet that your business will be around that long. Or you may decide to sell the business and build several other empires before you retire or die. When you were getting your business underway, it never occurred to you that you were building a legacy; you were just going after your dream.

If you are among the rare few who have considered succession planning, more than likely you and your spouse have discussed which child is best suited to be president or if management responsibilities should be shared by siblings. If you are in partnership with your brother, mother, sister-in-law, or some other family member, you probably have a legal and financial plan for how the partnership will transition should one or the other of you die or wish to be bought out. However, if the family business is a sole proprietorship such as Jay and Teddie have, and the husband is the founder and president, it's highly unlikely that you have considered your wife as a successor to the business leadership. Yet it is the wife who is most likely to be thrown into that position with the death of the founder where no succession plan has been established.

In 1984 McKinley conducted an interesting study in which she found that a widow was more than willing to take over management of the business upon her husband's death, especially if she had been working with her husband. But even among those widows not working in the business side-by-side with their husbands, there was a strong desire to take over the management. These widows reported that the business was very meaningful to them, that it was a part of their identity, that they had psychologically helped build the business. They did not want the business to pass out of their hands, even if they didn't know how to run it. Furthermore, most of the widows studied did not know how to manage their husband's business, because they had not been trained. Their function had been auxiliary.

They provided support such as Teddie has done for Jay. Therefore, these widows, untrained in the ins and outs of managing the family business, had to turn to their attorneys, CPAs and other advisors to educate themselves about the business. This is not sufficient training for the complexity of running a small business, as any business owner knows. But these particular women were determined and they learned as their husbands had done . . .by the seat of their pants.

This seat-of-the-pants training may have been sufficient for the founder, but it seems a waste to have the successor not benefit by her predecessor's lessons. Unless the business is a professional practice requiring college and certification that your wife could not readily get upon your death, preparing your wife to take over the business is a logical and practical step for most business owners. A side benefit is that once she is trained, the founder can turn his interests elsewhere, such as expansion or developing a second business entity. Growth of an empire is possible only when you have the flexibility and freedom to explore uncharted territory. If you are busy manning the helm, your growth will be limited to raising prices on product or adding a new line.

Preparing a wife for the presidency is no easy feat, however. It means acknowledging that the founder may die or wish to move onto something else. It means putting things into writing, such as compensation plans for your wife. It means letting go of control and allowing your wife to know all of the company secrets. It means that the marriage itself will be challenged. As the protégé grows in ability and leadership, the mentor may find himself eased out of power before he is ready. Can your marriage stand the strain of your wife being the boss, for example?

Making your wife your equal partner at work (provided she wants the job) and teaching her everything you know, will provide a solid succession plan. She will most likely be a devoted fan of yours and the business, and therefore a loyal and responsible guardian for the business. She will be a much better prepared widow than McKinley found in her study and less likely to lose the business. However, this also means redesigning the business today to accommodate two owners, two managers, two leaders. The consensus model of marriage that most Americans accept as the standard today will be brought into the business setting. Not only will husband and wife have to adjust to this change, but so will employees, customers and others used to a more hierarchical model. Be prepared to change the structure of management when your wife becomes your management partner. No longer can the founder fly by the seat of his pants. Although you may feel that your style is cramped when there are two of you to answer to, remember that having a well trained successor (and one who loves you) means that the business has a much more bright and stable future.

Achieving Harmony in the Family Business

Thursday, March 04, 1999

By Kathy J. Marshack, Ph.D., P.S.

In January I was a speaker at the annual conference of the United States Association for Small Business and Entrepreneurship in San Diego. There were other presentations at the conference that were interesting and helpful too, but the one that really caught my attention was a panel of CEOs from successful family firms in the San Diego area. The title of the seminar was "What do family firms want from consultants?" The panelists discussed their most pressing concerns and the one that topped the list was how to create harmony among family members who work together. Although legal, financial and business consultants abound, these CEOs felt that they already had those matters covered. What they really want help with is communication and relationship skill building to create a meaningful and harmonious family/work life.

It's not hard to understand why this is so important to these California CEOs, as well as those of you living in the Northwest. It's one thing to run a successful enterprise, but if you have failed in your marriage, or you have alienated your siblings, or you have intimidated your children, then who do you share your successes with? Achieving harmony in personal relationships requires skill, time and commitment. As if that isn't enough, accomplishing these goals is that much more difficult when you also work with the ones you love, which requires negotiating a business relationship as well as a personal one.

I have reported before on the research showing that entrepreneurs will spend exorbitant amounts of time at work and short their families. Entrepreneurs (both male and female by the way) are willing to work early and late almost every day, but rarely will they report to work late or leave early. Perhaps once a month, they may leave the office early on a Friday night to be with their families. Yet in spite of this entrepreneurs will tell you that their loved ones are more important to them than their work. It's just that work is more compelling. Taking just one more phone call or putting the finishing touches to that important contract, or even solving an employee morale problem come before attending to the interpersonal relationships of CEOs in family firms.

When family members work together, it often turns into all work and no play.

The personal side of the family/business relationship is taken for granted. There seems to be a belief that "because we love each other and because we are family," there is endless tolerance and support for work at the expense of the relationship. Apparently this lack of attention to the personal side is what ruined the Hanshaw brothers. While in southern California at the conference, I happened to read an Orange County newspaper and learned of the bitter feud between Jack and Randy Hanshaw. The brothers had been in business together for years, along with several other family members. They each had outside interests as well. Together and separately they amassed a fortune. Starting out as a milkman in the 1960s, Jack started buying liquor stores and then strip malls. His brother Randy soon discovered the untapped potential of Arizona real estate. Each invested in the other's business and made it possible for others in the family to create wealth as well.

However, in 1994 Jack accused his brother Randy of cheating him and started a lawsuit. Randy hired his brother-in-law for his attorney, furthering the feuding within the family. In spite of repeated efforts to resolve the suit, it degenerated into "a highly emotional, mean-spirited war of brother against brother, with money no longer the real object" according to the judge involved. Because the brothers could not settle their dispute, the judge ruled to dissolve the partnership and appointed a reciever to divide the $6 million in property.

The receivership was humiliating enough for the brothers, but so enraged was Jack Hanshaw that he offered a $100,000 bribe to the reciever. Of course he was reported to the judge who then fined Jack another $700,000 for the criminal act. Oddly enough, it was discovered that Jack was the actual cheating brother. Not only did he attempt to bribe the receiver, a local bankruptcy attorney (and also my brother-in-law) but he had taken $500,000 of his brother Randy's money!
How do these things happen? They happen when minute problems are ignored and business comes first. Left unresolved these minute problems grow into small issues, which grow into average-sized resentments, then expanding into large stone walls of bitterness. Brothers who shared the same bedroom as children grow into the bitterest of enemies, willing to do whatever it takes to get revenge.

How can these things be prevented? Obviously at the point where the Hanshaw brothers are, there is no turning back. They may never again be able to enjoy each other's company. And sadly for the rest of the family, because the line has been drawn and sides have been taken, the entire family may never again be whole. But for those of you reading this column, prevention is simple if you follow the suggestions listed below. Remember that if you work in a family firm, most of your interactions with your family involve work. You need to give at least equal time to the personal side to keep communication, trust, love and respect healthy.

  1. Take time away from work every day to talk with your family/business partners about something other than work. You might start the morning with coffee and sharing the crossword puzzle.
  2. At least quarterly, arrange a retreat for the family firm that involves playing, such as a trip to the mountains to ski.
  3. Discuss all problems no matter how small, whether they are work issues or not.
  4. Allow for individual differences. Allow members to speak up in disagreement. Just because you are family and work together, does not mean you are all joined at the hip. So make room for new and different opinions and ways of doing things.
  5. Hang in there when there is a problem. Don't give up until you have a solution to the problem that is a winning one for everyone.
  6. If things get out of hand, ask for professional help.

Families are composed of individuals who love each other and have a commitment to take care of each other. Businesses are composed of individuals too, but there is not always the same level of either caring or commitment. When you combine family and business the values of this hybrid may be confusing for people. Keep the rules clear. Healthy loving relationships should always come before business needs, just as those CEOs in San Diego realized. If you are communicating openly and loving unconditionally, then family members in family firms should be able to grow successful family/businesses.

Five must-answer questions for passing on the family-owned business

Thursday, December 03, 1998

By Kathy J. Marshack, Ph.D., P.S.

Our world is a bundle of contradictions. The other day I read that the American Heart Association will not allow its healthy heart logo to be placed on Post Grapenuts cereal because the company is owned by Phillip Morris, a tobacco company. Grapenuts cereal has relatively no sugar and no fat. On the other hand, the healthy heart logo is on Kellogg's Fruit Loops cereal, which is 50% sugar, because Kellogg's pays the American Heart Association for the privilege. With these kinds of mixed values going on, it's very important that you recognize the only one who can take care of you is you. Not even a private non-profit organization can be relied upon to guide your eating habits. While it may be easier in the moment to focus on only those pleasant uncomplicated things in life (such as the taste of Fruit Loops) in the long run ignoring the contradictions may prove quite hazardous.

People are often surprised to find out that I can have negative, suspicious, even paranoid thoughts, and that I waste my time researching things like the contractions of the American Heart Association. After all, I am a psychologist and professionally I encourage entrepreneurs and their families to find healthy constructive solutions to the problems that life dishes out. So if I am professionally supposed to look on the bright side, why then do I point out everything that is or could go wrong?

The simple answer is balance. We live in a world of duality ... positive/negative, good/bad, male/female ... and balance is the act of giving each side attention and respect. Having a positive outlook on life is just fine, but looking only on the bright side is like the proverbial ostrich with his or her head stuck in the sand. You also need to look at what is going wrong, or not working, or not even in the ballpark of reality. If you fail to account for the negative side of things, you fail to plan and live your life fully. How can you correct your mistakes, if you never sort through your flaws and problems? To sum it up, my motto is : HOPE FOR THE BEST, but PLAN FOR THE WORST. That way you've got everything covered.

For entrepreneurial couples and families in business, there are two unpleasant areas which are regularly ignored and therefore never planned for ... death and divorce. Some of the juiciest scandals come from family firms that failed to plan for the succession of the business after death or divorce. Because the founder never thought he or she would die, they never developed a plan for whom to pass the business on to. Even if they had a successor in mind, they may never have told this person, let alone trained them. Furthermore, the founder usually has no plans for employees, customers, vendors or even their files or inventory. If you ask these founders what they would like upon their deaths, they often have very specific wishes, but they have no plan to carry them out.

Still there are more entrepreneurs planning for business succession than planning for divorce. Planning for the possibility of divorce of an entrepreneurial couple is a real taboo, apparently. Most couples fear that if you plan ahead for the possibility of divorce, you are setting yourself up to create a divorce.

Matt and Kristen were a happily married young couple when they started their modem manufacturing business in their garage. They had a toddler and one school age child at the time. Kristen's Dad loaned them the startup capital. Both Matt and Kristen had the technical expertise for the business, since they each had a degree in engineering and had originally met while working at a high-tech company in the Silicon Forest. It all seemed perfect and it was for awhile. But business started booming and employees were required. Then the garage got too small and a warehouse was rented. Then a third baby came along and Kristen was fatigued trying to cover the home front as well as the business. Soon she opted for staying at home and Matt ran the business.

Even this set up worked for awhile because Matt was a capable business manager and had hired excellent help. He did not have to work excessive hours because he and Kristen had designed an excellent product that practically sold itself, especially with their combined contacts in the industry. So Matt was able to be available to his family almost as much as when he had worked a 9 to 5 job. The problems emerged, however, when Kristen became resentful that she was no longer at the helm of the thriving business. After all, she had prepared herself through education and training for a career that she thrived on before the marriage and children. Although she loved her children and Matt, she felt a great loss at not being able to use her education and intellectual talents too.

Eventually Kristen's resentments grew to the level that she and Matt couldn't talk anymore without a fight. Matt started working longer hours at the office. The children were stressed and scared because Mommy and Daddy weren't happy. When the baby came down with a serious illness requiring hours of Kristen's time and emotional energy, she brought up the topic of divorce. As clear as their thinking had been about how to develop the business, how to use their combined talents and resources to secure a financially successful future, Matt and Kristen had never considered divorce and therefore had no plan for parting ... as marriage partners nor as business partners.

But let's back up and take a look at what might have happened had Matt and Kristen built into their life/business plan the possibility of divorce, right from the start.

If they planned for an amicable divorce or dissolution of the partnership, they not only would have a legal document to follow (such as a prenuptial or partnership agreement), but they also would have had to look at what could go wrong and make contingency plans so the worst may not happen. In other words, in planning for the worst, they would look at these things among many others:

  • What if the business grew so big it moved out of the garage?
  • What if there was more to handle at home requiring one or the other partner to quit working the business and focus more on home management?
  • What are the desires of each partner with regard to career and business?
  • What are the desires of each partner with regard to the children and family development?
  • What are the desires of each partner for their marriage?

Paradoxically, by planning for the possibility of divorce right from the start of a marriage and business venture, the entrepreneurial couple has to focus on those things that actually will help strengthen their marriage/partnership. By digging deeply into who you are, and what you want, you have the opportunity to negotiate with each other to make your desires come true. Instead of resentments building, the trouble spots are planned for. Therefore the entrepreneurial couple has a better chance of facing the problems head on, learning from them, or even avoiding them. Planning for the worst in this case isn't a prescription for divorce, but insurance against it.

Remember the question isn't "What do I do with my business or marriage/family if I die?" The question is "What do I do with my business or marriage/family when I die?" And the question isn't "What do I do with my business and marriage/family when we divorce?" The question is "What do I do with my business and marriage/family if we divorce?" Death is inevitable and those who don't face this one are avoiding their responsibilities to others and courting a miserable demise for themselves. Divorce on the other hand is not inevitable, but avoiding thinking and talking about the possibility is just as foolish as ignoring the inevitability of death. If you want to get started planning for the worst but hoping for the best with regard to creating a healthy, long-term, successful marriage/business partnership with your spouse, try asking yourselves this question:

If one or the other of us wants a divorce in the future, why would that be and what can we do now to prevent this.

Family Business / Risky Business

Thursday, November 05, 1998

By Kathy J. Marshack, Ph.D., P.S.

Todd looked at me bewildered, as if to ask, "Can’t you make her see reason?" The tension in my office had been mounting between the couple as they discussed the likelihood of divorce. They had been at odds for years and everyone including friends, family, employees and business associates knew it. This couple never kept their disagreements secret. In fact, they openly fought in front of employees, just like Mom and Dad in front of the kids.

When the discussion got even more heated, I stepped in and tried to offer help to the husband who seemed so confused about his wife’s request for a divorce. "It’s simply that your wife doesn’t want to be your business partner any longer if she files for divorce." "She doesn’t trust you anymore," I said, "as a husband or a business partner." This couple had built a successful business over many years of hard work. But as the business had grown successful, the marriage had foundered. Now the wife wanted out ... out of the marriage and out of business.

Todd again looked at me as if I were speaking in riddles. "What’s trust got to do with it? I know that she wants a divorce. I am OK with that. But can’t she learn to be civil and still be my business partner? We stand to lose a lot of money if we have to split up the partnership."

Unfortunately this scenario is all too common among couples and families who work together. The focus is so much on the business, so much on business success, so much on financial profit, that the family fails to keep tabs on the loving relationships that made the business partnership possible in the first place. As they ignore the signals that their personal life is sinking into oblivion, these couples and families seem to put even more energy into the business. It’s as if they are trying to save the sinking ship by putting on a new coat of paint.

Entrepreneurial families and couples are starting businesses at a phenomenal rate right now. There are powerful incentives to do so.

Not only are there terrific financial and ego rewards from self employment, but couples find that there is great joy in working with the ones you love. Where else can you find a more trustworthy, reliable, confidential business partner than your spouse or close family member? Todd and his wife started out this way. They had a dream and worked hard to make it a reality. They wanted to provide a quality of life for their children that would enable them to achieve even more than their parents had. They wanted freedom to create something out of nothing. They wanted to go beyond the limits employers always placed on them. They wanted to help each other grow as individuals and in their business/professional lives. At first Todd and his wife Laura were ecstatic with their new lives. They looked forward to each new day. They worked long hard hours but they were doing it together. This "togetherness" was inspiring. Somehow, their combined effort was synergistic and they created even more than they dreamed they could alone. Then something happened. It didn’t happen with a bang, but snuck up on them. Inch by insidious inch, Todd and Laura lost track of themselves as individuals and as a married couple. Instead they were business partners only. The business consumed them. Vendors, customers, employees, business associates, the CPA, their attorneys ... all came before Todd and Laura and their love and friendship.

When Todd and Laura came to my office it appeared that all was lost for the marriage. The business was thriving and would carry on under the capable leadership of either one of them. There would be some financial loss, a few employees would quit, perhaps a contract would be lost, but ultimately, Todd and Laura had created a business that produced a quality service and customers were pleased and faithful. Even a divorce would not really threaten the business. Financial problems were not their worry. Rather, it was the value placed upon each of them as individuals and the value placed on their relationship that was suffering. This kind of problem erupts when entrepreneurs focus all of their attention on the competitive world of business and away from the nurturing world of family life and marriage.

When Laura asked Todd for a divorce, she made a bid for freedom from the tyranny of a one-track life. Better to get a divorce than go on living for nothing more than financial profit. Laura felt dead inside, something money could not heal, but love could. If Todd could no longer love her because the business had become his obsession, then she would seek love elsewhere. Laura was willing to admit that she had made the business her obsession too. It was not all Todd’s fault. She ignored the early warning signs just as he did. She too was thrilled with the status of achievement that came with self employment success. She even felt guilty for not doing something sooner so that she wouldn’t have to cause Todd such pain by asking for a divorce. "If only she had put her foot down sooner," she thought.

The problem that Todd and Laura created for themselves is brought on by two major errors. The first error is building your life around the business. Remember the business is there to serve you, not the other way around. The business is a result of your creative energy, your vision. It reflects your personality, but it is not the master. Todd and Laura’s business was a success because it reflected the synergy of their collective talents and energies. Without them the business would have never been.

The second error is failing to confront problems head on when they first appear. Todd and Laura knew that they were spending too much time on the business. They justified it in those start up years as a necessity to get the business going. They justified it as years went by to stay ahead of the competition. They continued to justify it in later years because work is all they knew. But as the business grew under their careful and committed hands, their relationship was left untended and shriveling into a shadow of what it had been when they started the business.

Is it so hard to turn off your pager or cell phone and take a walk with your sweetheart? Couldn’t you squeeze in a little time to read a novel if you put down the trade journal? How about joining an adult soccer league instead of attending more business after-hours meetings? In other words, attend to your life, your whole life, just as carefully and mindfully as you do your business. If you have it in your power to create a successful thriving financial enterprise, can’t you put similar energy toward your emotional- spiritual-relationship enterprises?

Cost Containment or Quality Care? Health Issue

Friday, July 03, 1998

By Kathy J. Marshack, Ph.D., P.S.

Are you a good old-fashioned American Capitalist? Most of you who are reading this article are entrepreneurs or business owners or executive or managerial employees of local businesses. This makes you American capitalists in the truest sense of the word. You believe in working hard, competing for profit, and setting your sights on the American Dream of financial success and security. Is it any surprise then that health insurance companies are American capitalists too? They were founded by visionaries who recognized a market just waiting to be tapped, employers and employees who needed help paying for medical expenses and who were willing to pay in advance for the insurance that the costs would be covered. Being capitalists, they used the existing American system for setting up their businesses and arranged to make a profit. As more people founded insurance companies, the competition began to heat up, which only fueled the enthusiasm of these early entrepreneurs. Competition honed the industry into the incredible, unbeatable American Dream Machine it is today. Don’t some of you secretly wish you could have been in on the ground floor of this multi-billion dollar industry?

Most of you readers were not in on the ground floor, nor do you own a piece of an insurance company. Primarily you have not been looking at the profitability of a particular insurance company, nor the investment potential of the market/insurance industry as a whole. Rather your main interest in the health insurance business is whether you have a fair and cost-effective plan to offer your employees and whether you, yourselves have the type of insurance that will take care of your health needs. However, in making decisions about buying and using health insurance plans, it is important that you understand that health insurance companies are businesses, just like yours. Their goal is to make money by providing a service/product that can be produced as competently and efficiently as possible. The problem is, can insurance business owners make medical decisions that affect your health, without the advice of professionally trained physicians, psychologists, chiropractors, dentists and so on?

The insurance companies of the nineties, and their cost-management sub-contractors, managed care companies, are indeed making medical decisions for each and every member of their plans. And they are doing so without sound medical and/or psychological advice. They are making these decisions based upon actuarial tables, not upon the unique individual needs of each patient. For example if the cost of a mammogram is cheaper than an ultra-sound to detect breast cancer (and it is), your cost-management company may deny the claim for an ultra-sound. If the actuarial tables suggest that most cancer is detected satisfactorily by mammogram and self-exams alone, then to contain costs, they will deny the ultra-sound. However, if you have a history of "breast lumps," and so far all of them have been benign, but your doctor is concerned that with advancing age there could be an increasing likelihood of cancerous tumors, or that the benign lumps are hiding the tumor, and in your case an ultra-sound is vital, there is still no recourse with the cost-management company. You may still have your claim denied because you do not fit into the range of what is most cost-effective according to the actuarial tables. There just is no room with insurance companies for the exception to the rule.

In psychology and psychotherapy, the picture is even gloomier. If you have a broken arm, the insurance company will authorize treatment. But if you are suffering from anxiety or depression, regardless of the cause or the intensity of the problem, your claim will be challenged by the cost-management company. One reason is that it is not the event per se that is paid for, but your reaction to it. For example, if you are in an automobile accident and your child/passenger loses his or her life, but you survive, you would be expected to be in shock, to be grieving intensely, to be unable to carry on your daily routine for weeks, months or even a year or two. Yet this event may not be allowable under your mental health coverage because you are reacting normally to the stress. In other words, you can only be covered under your mental health coverage if your reaction to the stresses of life are abnormal. But in my experience, even if you are suicidal (which insurance companies do consider abnormal) you will need to get prior authorization from your cost-management company before you can schedule an appointment with a psychologist. Because the psychologist is a specialist, cost-management companies do not make as much money on their services, so they have established a gate to keep the number of referrals to specialists at a minimum. If you are suicidal you must first call your cost-management company for authorization or make an appointment with your primary care physician, who in turn will make a recommendation to the cost-management company to refer you to a psychologist!

What this all amounts to is that psychological and emotional health do not mix very well with health insurance and cost-management companies. It is important to understand the distinctions between the two realms. Health insurance companies and their colleagues, cost-management companies (euphemistically called managed care companies), are in the business of making a profit by containing the costs of health care. While this goal may be needed or even admirable, it has nothing to do with providing the specific medical or psychological care that you or your employee needs today. The kind of mental health treatment that you or your employee needs today should be a decision between the patient and the doctor based upon the specialized needs of one unique human being. While what the patient can afford, either privately or through their insurance plan, should be considered by the doctor and patient, the best medical/psychological treatment that is necessary for this one human being should always be considered first, not secondarily to what the cost-management company will authorize.

Obviously you cannot ignore the costs of health care, even though psychological health care is relatively inexpensive. However, the biggest mistake that patients make is assuming that their cost-management company is making the wisest health care decision for them, when in fact the cost-management company is diagnosing by the actuarial tables. I know of suicidal patients who went untreated because their cost-containment company could not act as quickly as a phone call to the therapist. I know of patients who want a cure for serious clinical depression within the unrealistic five sessions authorized by their cost-containment company.

I know of patients whose personal, confidential medical records are reviewed by the employer’s human resources department before they are reviewed by the cost-containment company clerk, before they are reviewed by the cost-containment supervisor, before they are routed to the insurance company for a similar series of reviews, before the claim is authorized or denied.

Whether the insurance industry needs cost-management or not is not the question here. What is at stake is the quality of your psychological and medical health care. When making these very important decisions about your health care, consider that your insurance company is not the best source of advice on quality of care. They can only advise you on cost of care. For example, if you choose one of their preferred providers the costs may be lower but cost is no guarantee of quality. For quality of care decisions you have more work to do. Searching for a psychologist, for example, requires assessing just what your needs are, what approach would work best for you, what type of professional you can relate to, what credentials and qualifications make this provider better than another and so on. Furthermore, you may wish to work with a psychologist about problems that are perfectly normal, but that you want help with nevertheless, such as a divorce, child behavior problems, career planning, family stresses at work, work stresses at home and so on. Remember, your cost-management company is not under contract to help you with these problems, only those issues that you are handling abnormally.

When it comes to insurance, Americans are soft. We assume that we are entitled to "life, liberty, the pursuit of happiness and health insurance to cover every conceivable medical expense." Health insurance is an extra. It has its limits. It is time for Americans to build some unused muscle and start making decisions for themselves again. Stop looking for someone to take care of your every health or emotional need. Stop turning these decisions over to cost-management companies. Instead utilize your good old common sense and decide for yourself, with the help of professional advisors such as your trusted doctors, just what is the best psychological or medical treatment for you, your loved ones and your employees.

Can Husbands and Wives be Business Partners

Friday, June 05, 1998

By Kathy J. Marshack, Ph.D., P.S.


Successful business man seeks life partner to share my entrepreneurial dream. Must believe in me and be supportive of the long hours required of a start-up venture. Nothing is too much for you in that you are comfortable juggling the many demands of the wife of an entrepreneur...household, childcare, social obligations and working late hours at the office to meet deadlines. Opportunity to develop your own very satisfying career as you help me build my business. Your rewards are financial security, the opportunity to be part of something big, and the chance to work side-by-side with your husband. At work you are my hard-working right hand person. At home you are the loving support that makes the long hours worthwhile.


Career-minded, college educated woman with entrepreneurial spirit, tired of facing the "glass ceiling" of corporate life seeks like-minded college educated male to share love and business partnership in a start-up venture. Must believe in egalitarian relationships, sharing fully in the household maintenance as well as sharing equally in the ownership, management and responsibility of our joint business venture. Even though you possess creativity and leadership skills which you use to help me create the "American Dream", you’re ego is not bruised by my ability to make decisions and take charge. At work, you are dedicated, aggressive and single minded in your pursuit of success for our business. At home you relax and become playful because you are a loving, sensitive, communicative male, who adores me and takes the time to get to know our children.

The "personal ads" I have written above are of course, tongue in cheek. Yet they represent a classic problem that entrepreneurial husbands and wives bring to their partnership. Each spouse has a very different concept of what they would like in a business/marital partner. Because their expectations are so radically different, husbands and wives become confused and frustrated with a partner that they love. They wonder why they ever asked the other to work with them. Sometimes they wonder even if they should remain married.

As more and more couples consider entrepreneurship, it becomes painfully apparent that they are unprepared for the stress business collaboration will cause their personal relationship. Many career-minded husbands and wives have already achieved some success in the work world before embarking on their own venture. Likewise they may feel that their personal relationship is solid and healthy and capable of taking on the added strain of working together. Yet few of these couples discuss the ramifications of working together. They are totally unprepared for the blurring of boundaries and turf when a spouse becomes one’s business partner. However, clarifying the work/home expectations of each spouse/business partner should be the first thing that any entrepreneurial couple does, even before spending a cent on letterhead, or signing the bank loan.

For example, even though Charlene started the real estate company five years before Ted joined her in the business, she found herself deferring to Ted more and more as the two of them worked together. As a traditional couple, who had two grown children, they were used to Ted being the "head of the household." When they started to work together, they assumed the same roles at the workplace. The problem was that Charlene had nowhere to go with her entrepreneurial spirit and leadership skills. The solution was to redesign the business so that each had their own division to lead and operate.

Frank and Louise had a difficult transition. Although they had a traditional marriage, they operated as equals in the career world, as long as they worked for different companies. When they started their entrepreneurial venture, conflicts arose because they had not discussed expectations at work.

Frank continued to operate as the "head of the house" at work, while Louise designed her work schedule according to the former egalitarian arrangement. Frank started to complain that Louise did not work as hard as he did and that she didn’t care about the success of the business. Louise felt unappreciated because she was working very hard on projects that she felt were important. The problems were (1) that the couple was not talking about work priorities, nor coordinating those priorities and (2) they were using two conflicting models to operate as partners at work. Eventually, the couple decided to maintain the separation of work lives that had worked so well for them in the past. Louise left the business and pursued other interests.

Elise and Aaron were extremely puzzled by the marital conflicts that arose when they decided to move their respective businesses into the same building. They had had a warm and respectful marriage for ten years. Each had built their individual professional practices in that same time and they were thriving. However, when they moved into the same office suite, now seeing each other everyday at work as well as at home, conflicts were happening more often. The tools that the couple had used in the past to resolve problems weren’t working anymore. What was needed was a new set of tools for the changes in the marital/business partnership.

Entrepreneurial couples have a lot of work today to balance the competing demands of home and work. Whatever your style of couple entrepreneurship (a solo proprietorship, co-entrepreneurial couple or dual-entrepreneurs) there are few models to guide you in maintaining a loving marriage and a thriving business simultaneously. There are a myriad of variables to consider. So my advice is to design a model unique to the two of you. Begin by talking with your spouse/partner about the goals each of you has for yourselves individually in life. Then go on to discuss marital goals, family goals and finally business goals. (I have a more comprehensive outline of how to do this in my book ENTREPRENEURIAL COUPLES: Making it Work at Work and at Home.)Ultimately you are searching for a flexible system of relating that can change with the circumstances of your life, your lives together, and the changing marketplace of your business.