• Discover how old grievances and unspoken interpersonal dynamics shape decision-making in family businesses
• Learn why the real powerbrokers in a family business often don't appear on the org chart
• Explore the quirks and invisible systems every senior leader should understand before stepping into a family-run organisation
A family business can be a bit like a beautifully restored family estate.
On the surface, everything looks great. The paint is fresh, the timber polished and the family portraits hang proudly in the hall.
But until you get a really good look, you might not see that the wiring is old, the plumbing unpredictable and that no one has addressed the leak in the roof for an age.
I recently had the privilege of speaking with Danette Fenton-Menzies on my podcast, The Real Math of Business.
Danette is a Chartered Accountant, a seasoned executive coach, and a leader who's worked extensively in both public and private sector organisations. But one of the spaces she knows best, and cares most about most, is family business.
In our conversation, she described something that really stuck with me. She explained how leaders entering family businesses often have to navigate both a formal and an informal operating system, one that I can only describe as a soft operating system.
And if you want to lead effectively within a family business (or simply stay sane) you are going to need to know how to identify it, how to map it and how to work effectively within it.
What is a soft operating system?
There are many upsides to working in a family business.
The ability to apply a long-term lens to your strategy and operations. The clarity of purpose. The opportunity to build something tangible and human that might last for generations. The power of knowing that your work will contribute to a family's legacy. It can be deeply satisfying.
But during the podcast, Danette described something that anyone who has worked in a family business knows instinctively, and something that anyone considering a move into one should understand before they step through the door.
Every family business runs on two systems.
There's the formal one: the org chart, the governance documents, the board structure, the policies and reporting lines. And then there's the soft operating system that runs parallel to it.
You can't audit it, but you can sense it. It's the interpersonal layer - the unspoken rules, the legacy assumptions and the unofficial power dynamics that influence how decisions really get made.
Common Quirks of Family Business
If you're used to leading in structured environments, this soft operating system can feel opaque, even irrational. But it's not irrational. It's relational. And in family businesses, relationships are the system.
Which means you'll often find yourself navigating;
Then there is ego. Danette put it plainly. Sometimes the resistance to a new idea isn't about the idea at all. It's about what the idea represents - change, challenge, a loss of control.
She also spoke about the reluctance some families have to bring in outsiders who might "know more", not because they doubt their capability, but because the act of letting go requires a level of trust and identity shift that doesn't come easily.
This is where the soft operating system starts to shape outcomes. And why it's so important that anyone working within the family business has the capacity to map them.
How To Map The Family Business Soft Operating System
Next week, I'll share some practical ways to recognise and map the soft operating system, as well as offer strategies for navigating it without losing your footing (or your patience).
Because while these dynamics can feel messy, they're simple to figure out and navigate within, when you know what to look for.
For now, I'd love to hear from you.
Does the idea of a family business parallel soft operating system resonate with you?
And if you're currently working within on, what hidden systems have you identified and how have you addressed them?
I'd love to hear your thoughts.
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