Addiction in family owned businesses can wreck havoc far and wide, affecting employees, other family members, vendors, customers, advisory professionals and of course, the financial health of the business, itself. Today’s guest post by internationally recognized family business expert, Don Schwerzler, covers this topic. Don has been studying and advising family business entrepreneurs for more than 40 years and founded the Atlanta-based Family Business Institute in the early 1980s and the website, Family Business Experts.com, in 2001.

Conflict Related to Addiction in Family Owned Businesses by Don Schwerzler

Our focus/approach is different – the traditional “intervention” (if that is the correct word) is focused on the person with the addiction problem.

Lisa Frederiksen – her books, blog and work around Secondhand Drinking impacts in the workplace and families – caught my attention because she shifted the focus to include not only he addict, but his/her family.

When we are engaging a family business client where one of the family members has an addiction problem – we are “first” dealing with the family conflict issues (dealing with the guy/gal who won’t get help) – and the business issues that are involved when dealing with addiction caused conflict in a family business. That shift “away” from the individual with a problem – that change in focus/emphasis is important.

Addiction causes legal liabilities to the business AND personally to the owners of the business – we use that as leverage to help to empower the family to ask/demand, up to and including termination of employment, that the family member get into a treatment program. Addiction is a huge risk management problem for a family business.

The cost of insurance to cover the risk is generally more than the cost of going into a treatment program – that can help to defeat the argument about the affordability of a treatment program.

Addiction related conflict/crisis can be a huge marketing and brand management problem for a family business. Owner of a business in small town America arrested for drunk driving or for hurting/killing someone while driving under the influence – can be catastrophic. The family business brand will be forever damaged. What is the brand management strategy to deal with the addiction problem?

Legal expenses associated with addiction-related conflict can damage a family business and destroy the family – think divorce. Where is the money coming from for those expenses – from the family business and from the family’s wealth – that has been created by the family business. The legal exposure can kill the goose that is laying the golden eggs.

See our logo of three interconnected circles – a family business has three systems – the family system, the management system and the ownership system. For a family business to grow and prosper, all three systems should be in sync.

Addiction related conflict upsets that balance. A problem in one sphere of influence quickly cascades into the other spheres of influence – which means the problems get ever more complicated and difficult (read expensive) to resolve. For a family business dealing with succession – the addiction related conflict can stall the process for transitioning the business from one generation to the next.

If you are concerned that a family member’s substance misuse – whether that’s heavy use or addiction – is harming your family business, please call me at 770-952-4085 or email me at familybizexperts@earthlink.net and ask about Our Family Business Assessment.