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Having Integrity in a Family Business

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Joseph Grenny

Joseph Grenny is coauthor of four New York Times bestsellers, Crucial Conversations, Crucial Accountability, Influencer, and Change Anything.


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Crucial Conversations

QDear Crucial Skills,

My husband works with his father in their family business, and it has come to light that his dad is doing some illegal bookkeeping, including tax evasion. He says that they would’ve gone out of business had they done things “the right way,” but this has resulted in my husband owing nearly $25,000 of back income taxes.

How do we (or my husband) have a conversation with his dad to get him to understand that going down this path is hurting himself, our family, and their business?

Dealing with an Evasive Dad

A Dear Dealing,

Yuck. What a horrible thing to learn. What an emotionally difficult situation to address. And I’ve got to guess it is even more stressful for you, since you have less direct influence over something that has such an enormous influence on your family circumstances.

Perhaps one way I can be of help is to give an outside perspective on the priority of the various issues wrapped up in your situation.

1. Your integrity and financial security.

2. Your husband’s business choices.

3. Your father-in-law’s integrity.

Notice that the third issue on the list is your responsibility to influence your father-in-law’s behavior. It’s not the first because it’s the issue over which you have the least control.

The first thing you need to do is have a conversation with yourself. You need to get clear about what you will do—no matter what your father-in-law does—to safeguard your financial security and to defend your integrity. For example, if he chooses not to change, will you remain connected to his business? If his actions are hurting society’s interests, what do you feel obligated to do? If he is behaving in ways that hurt employees or suppliers, do you have any obligations?

I am not suggesting answers to these questions, just that you ask yourself the questions. However, if you do not clarify what your own boundaries are, you will feel manipulated and controlled by your father-in-law’s decisions. You have no control over him. What you do control is yourself. So get clear on how you will respond, irrespective of his choices.

Second, have a conversation with your husband about how he will respond, or preferably, how you will jointly respond. Of course, he has more contact, relationship, and influence here than you do since he is both coworker and son. But your husband’s choices affect you as well, so you have a right and responsibility to weigh in on how he’ll deal with the three questions I posed above. Your husband, for example, should come into any conversation with your father-in-law having already decided what he will do if your father-in-law chooses to ignore your concerns. Will he invoke a buy-sell agreement? Will he exit the enterprise? Will he take it to the board (if there is one)? His goal is not to make decisions about how to force his father to change, but to make decisions to protect his own integrity and financial security.

Third, your husband is now ready to talk. He has detached himself emotionally from the need to control or compel his Dad to change his ways—which would probably backfire anyway. I understand that some of the options might not be fun, but he needs to avoid pretending that all the power sits with his father. It doesn’t. He only appears powerful when your husband remains in denial about reality. Reality might be that he has to choose between staying in business with a tax cheat and resigning. Resigning might seem like a terrifying option, but it is reality. The sooner he accepts this and gets himself comfortable with it, the sooner he’ll be able to have an adult conversation with his father.

From this more responsible posture, he can approach his father and explain the problem. Then he can share his thoughts about the situation and his plan for the future. For example: “Dad, I love you. I love working with you and I want to keep working with you, but I will not do so unless one thing changes. I need you to know that unless we fundamentally change the way we manage our books, I will not stay here. Can we talk about this?”

I suspect this will be one of the most difficult, painful, and emotional conversations you and your husband will ever have. Crucial conversations aren’t easy, but they are the pivot points for influence in our lives. I wish you both the best as you contemplate how to defend your integrity, protect your financial security, and influence your father-in-law in a healthy way.

Warmly,

Joseph

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Joseph Grenny

Joseph Grenny is a New York Times bestselling author, keynote speaker, and leading social scientist for business performance. For thirty years, Joseph has delivered engaging keynotes at major conferences including the HSM World Business Forum at Radio City Music Hall. Joseph’s work has been translated into twenty-eight languages, is available in thirty-six countries, and has generated results for three hundred of the Fortune 500. read more

One thought on “Having Integrity in a Family Business”

  1. I think that a fourth item should also be decided before talking to father; when to talk to lawyer and accountent about own money matters. The IRS is more kind when you turn yourself in. At what point are you willing to risk more money (jail) to stay with father or to turn him in to IRS, what is your limit?

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