The Rewards and Challenges of Working for a Family Business

Doug Baumoel’s Story

Based on an interview and article with Cornell University’s Smith Family Business Initiative

Working for your family’s business can be a very rewarding experience, especially if it functions well. When it doesn’t, the experience can be extremely challenging– and even destructive.

“When it works, it is an opportunity to create a valuable family legacy and for families to stay connected for generations,” says Doug Baumoel, founder and principal of Continuity Family Business Consulting. “A connected, extended family with significant resources can produce extraordinary opportunities for individuals and have a significant impact on society.”

Working in a family business, he says, differs from working in a non-family business because “your role in the family business is very much connected to your identity.”

“These roles, including all the opportunity, money and relationships involved, are not as negotiable as they would be in a non-family business,” Doug continues. “I had worked outside the family business for several years, and the big surprise when I joined our company was how strongly we were each invested in our positions, ideas and roles. I can tell you: When it works it can be great. When it doesn’t, it can be devastating.”

“While large family businesses can be more complex, the issues that smaller family businesses face can often seem more urgent for the stakeholders. Stakeholders in smaller family businesses can’t hide within a complex organization or rely on an independent board of directors to help them through an impasse. They are on the front lines, dealing with each other on every issue every day. Emotions and relationships are exposed to potential conflict daily,” he says. “In addition, families of larger family businesses typically have some degree of liquid wealth, perhaps even generational wealth, that can provide a level of security for all stakeholders. Families of smaller businesses are less likely to have such a cushion and, therefore, conflicts and strategic errors can be existential threats to the family and its business.”

Doug’s experience includes leadership roles in non-family businesses, his own family business, and as a non-family executive in another family’s business. In 2003, he focused these experiences to found Continuity, one of the leading family business consulting firms in the U.S.

“I come from a small family business. My father started an industrial instrumentation company in the basement of our home in 1963. It grew substantially, and I spent much of my career as the leader of the second-generation leader of the business,” he recalls. “It wasn’t easy, because we had a lot of conflict. We even hired family business consultants to help resolve our conflicts, but in the 1980’s and 1990’s the field was still ‘in its infancy.’ Doug decided to take the lessons he learned and forge a new career as a consultant to family businesses.

After his frustrating experience with several family business consultants, hired in an attempt to save the business started by his father, Doug was determined to crack the code of what would actually help families move forward. With insights he’d gained, he decided to found Continuity Family Business Consulting.

“Pure and simple, [conflict] is the core challenge for families that work or own [a business] together. A family that can manage conflict well has a good shot to get everything else right,” Doug says. “If they can’t manage conflict well, they get stuck—or worse. I think of family businesses like a building resting on a foundation made of stone. Each stone might be a ‘best practice,’ a policy, or a process that helps the business and its stakeholders in some fashion. The ability to manage conflict well is the mortar that holds it all together.”

“It can really contribute to the success of a family business if stakeholders pursue training opportunities to understand what is unique about the family business and how to navigate its inherent challenges well.” Part of that is knowing how to recognize and manage the complexity of overlapping family, business, and ownership systems.

“Studying engineering at Cornell infused in me an ability to think in systems. I spent several years deconstructing what went wrong for my own family business, and why the family business consultants we hired . . . weren’t successful with us,” recalls Doug.

Doug read everything he could find on family businesses and took additional courses to broaden his knowledge of family systems and dispute resolution.

“What I came away with was a different way to look at family businesses,” he says. “Over the next few years, I developed this view into a robust methodology that has fueled the growth of our firm, Continuity Family Business Consulting.”

Doug says he “could not have made sense” of his experience with his family’s business without the skills he learned studying engineering at Cornell.

“You can’t go through four years of engineering school and not know how to break things down to their component parts and figure out how to put it back together better,” he says. “Although I got my MBA at Wharton, and got a great business education there, it is what I learned at Cornell that really helped me re-engineer [my] approach to family business that formed the [intellectual property] of Continuity Family Business Consulting.”

Doug advises student entrepreneurs who expect to go into a family business to “think multi-generationally across all systems– business management, ownership, governance, and the evolution of the family itself.”

“Remember, a family business requires more than just learning about entrepreneurship and business management. It’s also about family dynamics and psychology, wealth management, ownership transition planning, and, especially, conflict management,” says Doug. “An MBA may be just the beginning of the journey.”

Learn more about Doug and the entire Continuity Family Business Consulting team.

Looking for training specific to the contexts of family business and family wealth? Learn about unique opportunities to train your family for success.