Is Trust a Keystone Issue for Your Family Business?

by Shel Horowitz

Because family business relationships go well beyond the workplace, issues of trust among family members in business together are critical. This was the core message at the Family Business Center’s last program of 1997, held at Holyoke’s elegant Delaney House, December 11.

Two speakers shared the program: Kacie LaChapelle, a family therapist and business consultant whom many FBC attenders may remember as the Narrator in last year’s production of “Perils of Pauline’s Family Business,” and her mentor Louis “By” Barnes, a professor at Harvard Business School and former colleague of noted psychologist Eric Erickson.

Barnes compared the types of interaction when trust or mistrust is the operative assumption: “If I feel uneasy about you, I begin to set up a world. I divide that world into You and Me. It’s dichotomized, an either/or situation-that’s a trap! The only way I can gain is at your expense…a win/lose situation; the only way I can gain is at your expense-and I’m going to be expecting you to try to gain at my expense.”

Coming from a place of mistrust, Barnes noted, participants have three alternatives: attack, defend, or withdraw. All of these deepen the adversarial nature of the relationship. “I send you these signals, and you begin to feel uneasy; I fulfill the prophecy” as the other person begins to act from a position of equal mistrust. Each feeds on the other’s negativity, in what Barnes calls “destructive reciprocity.”

By contrast, starting from a position of trust changes the dynamic entirely. Instead of the uncommunicative, exclusionary, micromanaging insecurity of a mistrustful person, when there is trust, true two-way communication flows. People are involved, but allow the other person their independence. In a leader/supervisee relationship, a trust relationship leads to employees who are motivated, cooperative, productive, and loyal-some pretty desirable traits, in other words. Trust creates “an open system. You haven’t confined me, haven’t restricted me, haven’t convinced me” to watch out around you.

Some of the tools for trust building are honesty-even when that means airing a troublesome and potentially dangerous issue-inquiry and curiosity, coping with difficult interactions, and caring about both parties in the discussion-looking for the win/win instead of the win/lose outcome.

But as LaChapelle points out, trust doesn’t mean you eliminate checks and balances. Set up the mechanisms to ensure your trust is well placed, but if you feel positively about each other, that will set the foundation for the tone of the relationship. LaChapelle noted several different types of relationships where trust could be an issue in a family business: within the family; within the family business; between family members and non-family members in the business, and between the organization and its outside contacts (suppliers and customers, for example).

She talked about the concept of a “trust catalyst”: a person who causes others to trust, thus creating positive relationships that ripple outward in widening circles. The catalyst “may not even work in the company”; mothers often play this role among family members, even when they don’t work in the family firm.

How do you move from mistrust to trust? The earlier the change occurs, the easier it is for it to take effect. The trust/mistrust cycle depends on a feedback loop of signals from the other person. If you start with a tentative reaction toward trust or mistrust, the actions of the other can influence the relationship before the pattern is hardened. In other words, if you start from a position of mistrust but the other person offers responses that encourage trust, you will begin to put out more trusting signals. Of course, the reverse is also true. Thus, if another person mistrusts you, you can probably change that around by watching the signals you send out. Instead of a defensive response that will provoke further mistrust, listen and respond to the other’s feelings. As Barnes puts it, “If I can tap that dimension, it gives me a way of giving a response on that level, such as ‘It sounds like you’re upset.’” Then the other person can respond, acknowledging that he or she is, in fact upset-and then the space is created to have a dialog about why (which in turn begins to replace mistrust with trust ad the second person begins to feel listened to).

After a dinner break, the panelists showed a short video of a conversation between Katherine Graham, legendary publisher of the Washington Post, and her son Don. This video showed the importance of trust between generations of family business leaders; the current CEO will only step aside if he or she feels the business is in good hands-if there is enough trust in the children to run the business well. The older Graham, who was thrust into the role of publisher suddenly after the death of her husband, had little preparation and was “forced to learn so much! I made every mistake in the book!” Yet, during her leadership, the Post grew into a world-renowned paper, known for breaking such stories as the Pentagon Papers and Watergate-and those years were highly profitable, as well. The freedom she had to make those mistakes, in a small, private, family company-the trust her employees had in her-helped see through the transition to her leadership, and again when she passed the baton.

The mutual trust of mother and son was clear as the audience dissected the movie: the two worked largely by consensus, and each built off the thoughts of the other.

Then the panelists broke the room into small groups, to address issues of trust across generations within participants’ family businesses. As LaChapelle put it, “Along with a good memory, it makes sense to have openness”-too see if people have matured and are ready for more responsibility.

And, admonishing family business members to maintain high standards for family members, Barnes left the group with this thought: “When was the last time you sat around the table and talked about trust in your family or your organization? It’s a soft topic-and yet they’re some of the most important things in terms of making the organization work.”