A founder once described his situation to a consultant in five sentences that deserve to be studied the way engineers study a collapsed bridge. "I have had my son working for me in the family...
A founder once described his situation to a consultant in five sentences that deserve to be studied the way engineers study a collapsed bridge. "I have had my son working for me in the family business for some time. Recently, I felt that he was behaving unethically so I fired him. My wife was so upset with me that she kicked me out of the house. Now, I have to sleep on the sofa at my office." He added that his business had stopped growing, that he felt overwhelmed, and that he had no board of directors and no one else to turn to. Then he asked the only question left: "What should I do?"
The founder is called Jim Davis in the book that records him, Consulting to Family Businesses: A Practical Guide to Contracting, Assessment, and Implementation, published in 2003 by Jane Hilburt-Davis and W. Gibb Dyer, Jr. Like nearly every case in that book, he appears in disguise, his name and details changed to protect a real client, so read him as a faithful composite rather than a documented man. It hardly matters. Every reader who has lived near a family business recognizes him instantly, because his five sentences contain the whole anatomy of an unhealthy family firm: a business decision detonating inside a marriage, a family punishment landing on a business, and a man at the center with no structure around him and nobody to call.
The book was written for the consultants who get that phone call. Its authors give their readers a diagnostic framework, two facing checklists, healthy and unhealthy, so that a professional can assess a client family before intervening. This essay takes the framework away from the professionals and hands it to you, because the single most useful thing about those checklists is that a family can run them on itself, honestly, at its own table, before any stranger is in the room. The one idea here is simple: whether your family business is healthy is not a mystery or a mood. It is a list of observable conditions, and you can check them this month.
The authors are careful to define their subject broadly. A family business, in the definition the book adopts from Dyer's earlier work, is "an organization where ownership and/or management decisions are influenced by a family (or families)." Notice how wide that net is. It does not require a famous name or a hundred employees. The shop your mother and brother run, the farm held in your grandfather's name and worked by his descendants, the company where a founder's children fill three of the five senior seats: all of it qualifies. If family influences the decisions, the dynamics in this essay are already at work in your business, whether anyone has named them or not.
Against Jim Davis, the book sets a contrast family. The Williams family business is run by three sisters and led by their mother, who chairs the board. The sisters grew up in the firm and each understands the others' roles. They disagree at work, sometimes sharply, but the book records the detail that matters: their conflicts at work do not spill into their family lives, and they still take reunions and vacations together, gladly. They meet regularly to review the business's performance. They have brought in outside expertise, particularly in finance, rather than pretending the family could do everything. They have a functioning board that includes non-family members. Family values are communicated and shared with employees, and the family has planned ahead for shocks, a death, a disability, a leadership change, before needing to.
Put the two families side by side and resist the easy conclusion that the Williamses simply love each other more. There is no evidence of that, and the book never claims it. What the Williamses have is not more love but more structure: clear roles, regular meetings, outside voices, plans made before crises instead of during them. Jim Davis may love his son as fiercely as any father alive. Love was never his missing ingredient. Structure was, and structure, unlike love, can be built deliberately, item by item, by any family willing to look at a checklist and tell itself the truth.
Before the checklist, the book offers a one-line definition of success that is worth keeping within reach, borrowed from the succession scholar Ivan Lansberg: "Having fun making money together." Six words, and each earns its place. Fun, because a healthy business family is, in the authors' phrase, not tied up in knots with tension; its members actually want to be in the room. Money, because a family firm that cannot pay its people is not a legacy, it is a shared burden wearing a legacy's clothes. Together, because the whole point of the form is that the enterprise belongs to more than one person and more than one generation. Hold your own family against those six words for a moment before going further. Most families can say instantly which of the three is missing.
So what is on the list? The book's healthy-family-business inventory runs long, but its spine is a dozen conditions, and they are strikingly concrete. Individuals can manage themselves and their relationships. The family can resolve conflicts with mutual support and trust. "Communications are open and clear." Boundaries between work and family are appropriate and respected. The family is clear about its goals and navigates toward them; it "has good direction and leadership." Members are flexible and "able to use advisors wisely." And one item that stops most readers: "Transitions are managed and marked by rituals." On the business side, decision making rests on knowledge and expertise rather than rank, responsibility and authority are balanced, succession is planned early, and there is a functioning board with outsiders on it.
The unhealthy list is the same anatomy photographed in failure, and it reads like Jim Davis's biography. Poor communication and unmanaged conflict. Low trust between family members. Unclear goals, unclear roles. No strategic direction. The family tries to do everything itself, admitting no outside expertise. Little thought to succession. No functioning board. "There is no one to turn to for advice and help with key problems." And the summary condition, the one that contains the rest: "Family issues spill over into business issues (and vice versa)."
Read both lists slowly and something surprising emerges: almost nothing on either list is about money. Profitability appears mostly as a consequence. The conditions themselves are about how people talk, decide, plan, and mark change, which means a struggling shop can be a healthy family business and a rich one can be desperately sick. It also means the list travels. The book is a North American manual from 2003, and some of its furniture shows that: "a functional board of directors with outsiders on it" assumes a corporate form many family enterprises, in Africa and everywhere else, do not have and may not need. Translate the principle rather than the mechanism. The principle is trusted outside voices with standing to disagree: for one family that is a formal board, for another it is a council of two or three respected non-family advisors who see the real numbers and cannot be dismissed for speaking. Likewise the item about rituals lands differently, and frankly more easily, in cultures that never stopped marking transitions. Many African families already possess what the book prescribes: ceremonies of handover, of mourning, of blessing a new venture. The question the checklist asks is only whether the business's transitions get that treatment too, or whether leadership slides from one generation to the next unmarked, unspoken, and therefore unfinished.
Here is how to turn a consultant's assessment tool into a family's self-test, and the method matters as much as the list.
Do not discuss the items first. Have each adult in the family score every condition privately, in writing, before anyone speaks: for each item, is this true of us, partly true, or not true? Then compare. The scores themselves will teach you something, but the disagreements will teach you more. When the founder marks "communications are open and clear" as true and both children mark it false, that gap is not noise in the data. It is the data. The people with the least power in a family system are usually the ones who see its dysfunctions first, because they are the ones the dysfunctions land on. A family that lets the youngest scorer explain her marks without punishment has already improved its score on the first item while sitting at the table.
Expect a mixed result, because the book itself insists on one. Most family businesses, the authors write, cannot be classified as completely healthy or unhealthy; each has strengths and weaknesses, and the two are often "different sides of the same coin." The same closeness that lets your family decide fast in a crisis is the closeness that lets a quarrel travel from the kitchen to the shop in an hour. The purpose of the self-test is not a verdict. It is a map: two or three items where the family agrees it is weakest, chosen as this year's work.
And do not run it only on adults forever. A family raising teenagers inside or near the business has, in this checklist, a rare teaching instrument. Sixteen-year-olds cannot score the succession plan, but they can tell you with devastating accuracy whether communications are open, whether conflict gets resolved or buried, and whether business trouble follows the family home to the dinner table, because they have spent their whole lives measuring exactly that. Inviting them to score even four or five items does two things at once: it gives the family its most unflinching data source, and it teaches the next generation, years before any ownership passes, that in this family the business is examined honestly and out loud. That lesson will outlast every individual score on the sheet.
One honest caution before you run it. This checklist measures structure and habit, and structure and habit are what a family can repair on its own. But some findings are not structural. If the test surfaces active addiction, abuse, or a member in genuine psychological crisis, the book is unambiguous that these call for trained professional help, not a family meeting, and we pass that warning on at full strength. Knowing which kind of problem you have is itself a mark of a healthy family.
A self-test that ends with a sigh changes nothing. The results need somewhere permanent to live, and the right place is the document where your family says what it is trying to be. In LegacyPot that is the Legacy Statement, and a family that has just run this checklist has exactly what most legacy statements lack: specifics. Alongside the values and the vision, write the findings. We scored ourselves weakest on succession planning and on using outside advisors; here is what we commit to change by this time next year, and here is who will call the first meeting. Then rerun the checklist annually, and let the statement record the movement. Over a decade that becomes a rare document: proof, in the family's own handwriting, that it chose its health on purpose.
The Williams sisters were not born into a healthy family business. Somewhere back along their line, people built it, meeting by meeting, rule by rule, outsider by outsider, ritual by ritual. Jim Davis, on his office sofa, is what happens when nobody builds. The distance between those two families is not luck, and it is not love. It is a list, and the list is now yours. The consultants were trained to run it on you. Run it on yourselves first, and you may find, as the healthiest families do, that by the time a stranger reaches your table there is very little left for him to discover.