Building and sustaining relational trust can be complex and daunting. Trust-building is not just a novel team-building activity you do every couple of years. In this new era of post-pandemic recovery, it should be the highest priority for the entire family enterprise.

In my work with family councils these past 12 months, I have seen extreme variations in family dynamics due to the convergence of the pandemic, social unrest, and a rising generation of family members eager for empowerment and change. Relational trust issues have become front and center.

What Is Trust, Really?

In any organization (privately or publicly held), trust is the currency in which you get things done through people.

In a family system, it can become a little more complicated because of the historical and subjective nature of those relationships. We can lose objectivity quickly when Uncle Charlie refuses to retire and continues to operate his division with cryptic emails and infrequent communication. Let’s be honest. We love Charlie, but for cryin’ out loud, it’s hard to trust him anymore.

Just because we don’t trust family members in certain areas doesn’t mean we can’t care for and interact with them. We need to demystify familial trust and see it in a more fluid and proportional way. It is simply a measure of the amount of confidence you have with someone during a particular time in your relationship. When we see trust in a polarizing way, it minimizes our ability to adapt to times of change and adversity.

Trust is a barometer of the relationship, not a static measure.

How Does Trust Impact the Family Enterprise?

Most organizational cultures are notorious for avoiding difficult conversations, and for families, it’s even more ramped. Low trust in a family enterprise can have a devastating impact on culture, quality, and employee retention.

Non-family employees, the really talented ones, simply won’t hang around too long if enablement, workarounds, and favoritism become the norm — all symptoms of low trust.

However, when trust is high, there may not be a better, happier place to work than within a family-owned business. Trust impacts the bottom line. Period.

How Do You Build It? How Do You Lose It?

Trust is built from an inside-out approach. In other words, it starts with you practicing trustworthy behaviors, regardless of circumstance and personality differences.

Said differently, relational trust is the natural outgrowth of trustworthy people committed to a common purpose. If roles and purposes are unclear, trust will naturally diminish over time. It really becomes less about personality differences and more about the need for clarity and shared purpose. Without it, the family enterprise will experience entropy, and the effective generational transition will be at risk. Unfortunately, this is very common in family businesses. There is too much reliance on past success and assumptions about current roles and structures.

When trust is built through clarity and strong communication, the family enterprise develops an immune system that protects the family enterprise when it experiences change, ambiguity, and adversity.

Why Is Trust So Hard to Sustain?

To build and sustain trust, older generational leaders must commit to developing a healthy family enterprise culture and address anything that would impede the well-being of its members.

When authenticity and a willingness to empower the rising generation are at the forefront, trust will flourish in the family system. However, when these are not among the top priorities, the lofty goal of becoming a “family of affinity” is at risk. NextGen family members play an equally important role, even if they have not yet come into positions of authority and responsibility.

They must choose to balance their desire to change the status quo with an approach that is respectful of legacy and must be willing to listen deeply to those who have gone before them. Determining what’s right is a shared journey, not a top-down edict.

Families that are flourishing and generationally inclusive leverage effective learning programs to foster this much-treasured thing we call trust. If you are not sure where to get started, I would recommend leaning into this topic and asking others to come alongside you to help you assess and determine how to best address trust issues. It’s never too late to start building trust.

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