A tool to spark a meaningful family dialogue

By Randel S. Carlock

A genogram can help family members understand how they relate to each other— and why—and how they could work together more effectively as business owners and managers. Here are some tips on creating and using this expanded family tree.

Successful family businesses continually monitor their business situation to identify plans and actions that support the firm’s continued growth and profitability. A fundamental step in this process is developing an understanding, shared by the family and the managers, of the business’s strengths and weaknesses. To accomplish this, the management team assesses how well the business is functioning, then works with the family leaders to build a competitive advantage.

But this is only half the equation. In a family business, equally important is simultaneous thinking about the family’s strengths and challenges.

Unfortunately, all too often the family is not regularly discussed, and family members are not brought into the planning process. This is because families, and the way they function, are emotion-laden topics, and many families lack the skills and tools that could help them frame a meaningful dialogue. When a family does address relationship or interpersonal problems, they often rely on memories, sagas and myths—which are easily influenced by defense mechanisms—to guide their discussions. Not surprisingly, conflicting interpretations based on selective memories and differing beliefs may complicate discussions of relationships. Many a well-intentioned family meeting goes wrong as individuals attempt to avoid, or in some cases to detonate, landmines of misunderstanding, blame and recrimination. The resulting disputes erode trust and destroy ownership continuity over the long term.

What can be done to help families learn to work together more effectively as business owners and managers? Let’s take a look at some strengths and weakness that all business families have in common.

Recognizing ingrained behaviors

Our families are the first “organization” that we experience as we grow up. Our family of origin influences how we perceive concepts such as decision making, performance expectations, communications, gender, rewards, appreciation, differences, autonomy and conflict. The family influence is even more pronounced in a business family because in this context, individuals simultaneously model generic skills like communicating as well as specific career behaviors applicable within the business they control.

A family with unresolved conflict betweens two branches, or a long pattern of succession “rules” (e.g., firstborn sons are always CEO) should not be surprised if the family’s legacy includes the institutionalization of these behaviors in future generations. These attitudes and behaviors are learned from the family elders and may not be obvious or acknowledged, particularly in the next generations. Nevertheless, it is important to explore our families if we want to truly understand our business behaviors.

It is often easier for a business family to explore their family’s patterns of behavior with tools that help them gather and analyze information. One very useful tool is called a genogram. The genogram is a type of expanded family tree that helps business families develop a shared picture of how their families work. The genogram helps a family see and appreciate how family members relate to each other and where functioning could be more effective. The family business genogram works on three levels:

1. Documenting family experiences (births, deaths, marriages, educational achievements).

2. Describing the family structure (position and power).

3. Assessing the family’s interpersonal relationships.

Families might also fill in a business timeline, providing a context for the family’s development based on critical business events. Talking about these business events often prompts the family to share stories that explain decision making and how family members work together on important tasks.

Toward a shared understanding

The family business genogram works because it is based on sound social science theory about individual and family life cycles, family structure and family dynamics. Social scientists have discovered that family of origin, and individual differences like birth order and gender, influence human behavior and personality.

Firstborn children tend to act like the caregivers who give them so much attention early in life. This attention and monitoring often leads firstborn children to be achievement-driven in comparison to their creative and adventurous younger siblings. Birth order also influences personality development. Even siblings who are relatively close in age have different experiences based on their parents’ work situation, changes in the family’s wealth, even where the family lives. Gender is another major influence that shapes how a child sees himself or herself and the external world. Typically, siblings in family businesses are “positioned” from an early age by gender and birth order, and this affects they way they are identified, and how they identify themselves, when the family is thinking about leadership roles and succession.

While family members may be intuitively aware of some of their family’s issues, working together to construct a genogram creates a deeper and shared understanding of their family system. In our work at INSEAD’s Wendel International Centre for Family Enterprise, we use the family business genogram to help individuals and families explore their family relationships. We find that the genogram exercise, supervised by a trained professional adviser, helps business families develop a working knowledge of the different factors that influence family functioning.

Creating the genogram

We begin the process by asking the family to complete a genogram by drawing three generations of the family organized by generation and family branch. Figure 1 shows a typical family genogram before it is filled in.

The first step is to add the family’s demographic information, including dates of birth, death and marriages, as well as education and other significant information (see below). This is a relatively straightforward process, but disagreements may arise over birth order or other historical family information. The second step is adding historical information on critical business events (the business timeline, including founding, growth periods, ownership or leadership transitions and bankruptcy) on the left side of the genogram to provide a business context. The result of these two steps is a demographic picture of the family members, how the family is organized and what business events have shaped their development and current position.

The final step in drawing the genogram is to add the schematic descriptions of the family’s interpersonal relationships with each other (see Figure 2). This step requires the participation of a trained adviser who can manage the data collection and the resulting family reactions as relationships are discussed. Family relationships, whether positive or negative, are subjectively perceived by different family members, and the process requires facilitation and interpretation. A discussion among family members about who has a particularly close relationship or who has a conflicted or cut-off relationship often stimulates emotional responses that must be used constructively to ensure no family member is hurt.

Once a genogram has been completed, the family can start to consider what factors create strengths and challenges for the family and the implications of generational patterns. The following themes and questions will help guide the family through an exploration of their genogram that supports thinking and planning for family participation and skill development.

The genogram overview: A fruitful way to begin exploring the completed genogram starts with an inventory of the family’s strengths and values. A good discussion question might be, “What family values or strengths have contributed to our success?” A logical next step is discussing relationships: “Who has particularly strong or conflicted relationships?” and “What is the influence of these relationships on family performance in decision making?” These questions help families think about what has supported their success, the nature of their relationships and the implications for family functioning.

Family and business timelines: By noting important events in chronological order, the family discovers how these events are interconnected and create impact across generations. The family business timeline helps the family and their adviser consider past family business events and transitions that have affected the family and inspires them to develop new behavior that will create improved family harmony. To help families see patterns in family events, we ask questions like: “What life events or life transitions are still unresolved and challenging your family?” and “What are the life cycle transitions that your family may face within the next five years?”

Impact of birth order and family roles: The next phase considers family roles and birth order. In simple terms, this is demographic information, but it is structured in a way that helps families to understand how birth order may influence different roles family members play. We all talk about the “little sister” role or someone who is “mom” or the brother who is a “rebel.” These family roles are all influenced by birth order and the personality of individual family members as well as the family’s functioning. It is important to think about these roles and how different family members interact with each other in order to begin to address behaviors that do not contribute to family effectiveness.

Dealing with family conflict: Business families have multiple reasons for conflict, including overlap between the family and business systems. The genogram highlights ongoing conflict in relationships so the family can discuss how to change tactics and move from denial, blame or capitulation to collaboration, fair process and teamwork. Conflict will never go away, but family members can learn more effective responses to prevent or address future conflicts in their family system.

Figure 3 depicts a genogram showing all the family members’ positions by generation, with specific indications of family dynamics, alliance or conflicts. This genogram represents multiple snapshots of how different family members perceive relationships and interactions. It shows, for example, that one family member considered a relationship with another as distant, while the second person saw it as more satisfactory.

Enhancing conflict resolution skills

Completing a family business genogram and discussing the finished product can help the family and their adviser better understand the family’s unique situation. Each family member will start the exercise with different interpretations or beliefs about the family, but as they work together these differences will be reduced as information and ideas are shared. Discussing the family system also develops the family’s ability to communicate. The family group hones a fundamental skill for bringing new information into the family system to support new behavior, such as renegotiating relationships that must change as individuals and the family develop.

Communication is the family’s only tool for addressing conflict and resolving differences in individual perspectives on an issue. Conflict is inevitable in families because transitions create loss and families experience loss with significant emotional responses—but communicating well about how to deal with conflict can be very helpful. It is also equally important to recognize that some issues will not be fully resolved and must be considered as part of the family’s long-term planning processes.

Randel S. Carlock, Ph.D., is the first Berghmans Lhoist Chaired Professor in Entrepreneurial Leadership and the founding director of the Wendel International Centre for Family Enterprise at INSEAD (Europe and Asia). Previously he was the first Opus Professor of Family Enterprise and the founder of the family business center at the University of St. Thomas in Minneapolis. He is the co-author of Family Business on the Couch: A Psychological Perspective (with Manfred Kets de Vries, John Wiley and Sons, 2007) and Strategic Planning for the Family Business (with John L. Ward, Macmillan, 2001).


Creating a family business genogram

1. Collect data on family composition.

A. Draw three generations of family members (names, age, education, birth order and positions).

B. Add symbols for life events (adoption, death, divorce and illness).

2. Complete family business timeline with critical business events.

3. Discuss and draw family relationships using symbols.

A. How do family members relate with their nuclear family (parents and children)?

B. How close are the intragenerational relationships (siblings)?

C. How does the family relate across generations?

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Winter 2009

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