I have a few family businesses as EOS clients. Family dynamics can complicate the issues that a business faces. Each stage of a family business brings its own unique challenges to running the business. Whether the original founder (controlling owner) is faced with succession issues. Or a sibling partnership is sorting out roles and responsibilities. Or a cousins consortium is grappling with the question of who should be in, or own a part of, the business.
Taguiri and Davis provided us the Three-Circle system for considering the interdependence of all the moving parts in a family business. A hat tip to Hank O’Donnell for first explaining the Three Circles to me.
There are the seven zones of intersection found in The Three Circles. Two articles on the www.successtosuccession.com blog were my sources. The graphic is taken from an article titled The family business and the the three-circle system. The description of the zones is taken from an article titled Three circles to draw out the issues. I modified the descriptions a bit.
- Family member, shareholder, working in the company, typically the CEO/Owner, majority shareholder
- Family member, non-shareholder, working in the company
- Share holder, non-family member, working in the company
- Family member, shareholder, outside the company
- Family member, non-shareholder, not working in the company
- Employee, non-shareholder, non-family member
- Financial partner
Disclaimer: I am not a family business expert. I am an EOS expert and EOS can help all family businesses with dealing with their issues.