10 Reasons Why Family Businesses Shouldn't Rush to Become "Professionals"

"Generally, the smartest approach for any business, whether family-owned or not, is to transition to 'professional management' as quickly as possible."

It's a saying that is often quoted. Based on a classic essay by Harry Levinson from 1971.

Is that really true??

This statement is clear and appealing, especially to younger heirs who are tired of the internal family turmoil affecting the business. The idea is that... "Professionalism" Professionalization is a magic bullet that can "reduce emotional pressure" and conflict in family businesses, and that sounds quite reasonable.

However, considering the in-depth research and business trends over the past five decades since the publication of that article, we find that this "fastest" recommendation is actually...It's too broad, and in many cases, can be strategically flawed. Rushing to develop professionalism without understanding. Timing and other important factors. This can lead to results that are just as bad as being completely unprofessional!

This article invites us to consider... reason 10 items This explains why family businesses shouldn't "rush" into professionalization, especially by copying the structure of publicly traded companies or bringing in professional managers from outside before the family and business are ready.

1. "Professionalism" kills flexibility and speed in decision-making.

In the early stages of business (Generation 1), a business needs to survive by relying on... Speed, flexibility, and proactive instincts.For the founders, the decisions are often made in this manner: Immediate and quick. This is an advantage that large companies lack. If families rush to "implant" complex governance structures, such as board meetings filled with paperwork and regulations, or overly strict KPI compliance from the outset, it will...Hindering the ability to adapt. And it may reduce the chances of a business surviving in volatile market conditions. The correct principle is to design the structure so that... Appropriate for the stage of development. (Stage-Appropriate Design) is not the quickest way to do it.

2. "Owner professionalization" must come before professional management.

True professionalism in a family business doesn't start in the executive office, but begins at..."Owner's room" (Owner Room) The rapid transition to professional management, where the owner lacks clarity on how to implement it.The five rights of an owner (The Five Rights of Owners)[1] This will create structural problems. Owners need to work systematically in defining this. Owner's strategy (Owner Strategy Statement Whether to prioritize... Growth, liquidity, and control. However, without this clarity, hiring a professional CEO is like having an expert steer a ship without the crew ever agreeing on which direction they're going.

3. Urgent governance issues lead to Empty Structure Syndrome.

Rushing things can lead to creating complex structures (e.g., setting up independent committees, compensation committees… even though it's just parents and children!) just to appear professional, but the family members are the ones handling it. I don't believe it and I wasn't involved. In the process of creating those committees.

Structures that do not arise from shared understanding may be seen as merely... "shell" หรือ "A useless system." When there are many systems in place, but a lack of trust and faith from family members, a situation arises called... Empty Structure Syndrome This means having a beautiful structure but lacking the power to drive it forward. A stable family needs to be built. Levels of security (Hierarchy of Stability At the level of owners and families, before adding structural complexity.

4. "Professionalism" destroys... Family This is an advantage over typical businesses.

Family businesses have strategic advantages that are difficult for other companies to replicate. Family This is a result of integrating family ties and values ​​into the business. This advantage includes: Long-term perspective (Long-Term Orientation) Trust (Trust) and A deep bondAmong employees and stakeholders, accelerating professionalism by... Copy The structure of a publicly traded company may destroy traditional bonds and family-style caregiving culture, turning the business into mere "Tools for making money" Instead of "Our Legacy"

5. "Professionalism" cannot heal emotional wounds and relationship conflicts.

Harry Levinson used a psychoanalytic lens to identify emotional problems in business, but modern experts like Kets de Vries warn that... You cannot solve psychological problems using only structural tools. If the real problem is... Relational conflict ((Relationship Conflict) Which has its roots in... Feeling of inequality Feelings of guilt or the fear of losing one's identity cannot be resolved by implementing professional KPI or compensation policies. The conflict will simply erupt in other, equally destructive forms.

6. Avoiding the problem: “Fake Harmony”

Rushing to switch to "professionals" simply to eliminate conflict (conflict avoidance) often leads to a problem known as... "Fake Harmony" Families that fear conflict will avoid discussing uncomfortable topics, such as the retirement of a previous leader or evaluating the performance of relatives.

Di Loreto and Isaacson (2022) point out that this false reconciliation is extremely dangerous because unresolved conflicts will...Accumulate and erupt.It is a more severe "cliff event" (a leading-to-death event) that may occur later on, which successful family businesses will be able to do. Engage in constructive debate. (Constructive Conflict) and finding the appropriate point of contention for the conflict.

7. Risks from Gene Lotteries and Unrealistic Expectations of Inheritance.

Successful founders often believe that their children will... Inherit personality traits. While entrepreneurial traits are also present, in reality, from a biological standpoint, such opportunities are like... Gene Lottery This means that the children born may have... Personality traits (Personality) And with skills and capabilities that are completely different from their parents, the possibility of having an heir suitable to inherit the business is no different from winning the lottery.

Accelerating “professionalization” based on the belief that heirs must take on key roles (e.g., giving high positions to children who lack the appropriate skills) will lead to a situation... Person-Position Misfit It causes talented people to leave, and ultimately destroys the business. If leaders don't understand this, it's equivalent to... Forcing children to live lives they don't want. (Unlived Lives)

8. Undermining professionalism in managers due to unresolved Owner-Manager Conflict.

When external executives (CEOs/professional managers) are hastily hired, without...Scope of authority (Boundaries) The lack of clarity between "owners" and "executives" makes it very difficult for external managers to work effectively. Previous leaders or family members who are not involved may exhibit certain behaviors. Hands-on interveneThe operations and decision-making processes can undermine professional managers and ultimately lead to their resignation. Therefore, professionalism should focus on clearly defining the roles and responsibilities of owners, the board, and managers first, in order to give external managers a chance to succeed.

9. The good (but terrible) way to resolve conflict.

Striving for professionalism in order to... "dispose" All conflicts can be destructive. Work-related conflicts (Task Conflict) This is essential for developing good strategies and making sound decisions. Task conflict refers to disagreements arising from differing information or perspectives regarding strategies or methods of operation.

Successful family businesses understand that this conflict should be discussed openly, and...With good intentions. (In good faith) For the best interests of the company, if the family avoids strategic arguments, it will lead to...Bad decision (Poor Decision-Making) and a lack of ability to adapt to external changes.

10. Loss of control and erosion of family values.

The accelerated pursuit of professionalism often comes with pressure to improve. Growth (Growth) Liquidity (Liquidity) At its peak, this can lead to increased debt or the rapid acquisition of outside shareholders. Over-leveraging can also harm families. Loss of controlThe business can be offered to debt holders or banks in the event of an economic crisis.

Furthermore, focusing solely on financial returns (Profit as Primary Motive) will lead to business failure. Reduce non-monetary values. (Nonfinancial Guardrails) such as retaining family-owned employees or investing in environmentally friendly businesses are things that family owners have the right to choose to maintain.

The statement, "Switch to professional management as quickly as possible," is merely a suggestion. "A temporary solution beyond the conflict." While relying on external structures and systems, it is not a foolproof strategic formula for sustainability.

Family businesses should therefore not rush unnecessarily, but should focus on building “Professional ownership(Professional Ownership) Establishing a governance structure that aligns with the family's developmental level and instilling discipline in managing emotional conflict is essential for maintaining "Unique superpower"(Family(Which is exclusive to family businesses.)We can achieve the success that everyone in the family hopes for.

bibliography

Baron, J. (2018). Why Family Businesses Need to Find the Right Level of Conflict. HBR.org.

Baron, J., & Lachenauer, R. (2021). Harvard Business Review Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise. Harvard Business Review Press.

Di Loreto, N., & Isaacson, A. (2022). Avoiding Conflict Will Only Hurt Your Family Business. HBR.org.

Di Loreto, N., & Latta, H. (2025). When Your Family Business Has a Conflict Over Governance. HBR.org.

Gordon, G., & Nicholson, N. (2008). Family Wars: Classic conflicts in family business and how to deal with them. Kogan Page Limited.

Levinson, H. (1971). Conflicts That Plague Family Businesses. Harvard Business Review, 49(2), 90–98.

refer

[1] The Five Rights of Owners is a key framework by Josh Baron and Rob Lachenauer that identifies a specific set of rights that owners must exercise to ensure the sustainable growth of a family business. These rights include: (1) the right to design the ownership structure (Design), determining who can and cannot hold shares and how; (2) the right to decide on the top leadership of the business (Decide), such as choosing a CEO or chairman of the board; (3) the right to define the values ​​and objectives that the business must uphold (Define), ensuring the company moves in the same direction as the owners; (4) the right to receive compensation from ownership (Divide), whether in the form of dividends or stock appreciation; and (5) the right to relinquish or transfer ownership (Depart), such as selling shares, transferring to the next generation, or withdrawing from the business.