A father and daughter sit in a boardroom. He believes he’s giving her sound advice; she hears only criticism. Across the table, what could be a constructive dialogue turns into stony silence and simmering resentment.
Scenarios like this play out every day in family firms, where conversations carry multiple layers of meaning.
Running a family business means navigating exchanges that blend professional issues with personal history. Whether in a business meeting or around the family dinner table, we are always more than our titles, showing up as parents, children, siblings, cousins and partners.
This mix is both the unique strength and the core challenge of family firms—and why transactional analysis can be such a valuable tool.
The role of transactional analysis
Developed by psychiatrist Eric Berne and popularized by Thomas A. Harris’s bestseller I’m OK—You’re OK, the transactional analysis (TA) framework offers a remarkably practical lens for understanding family dynamics.
At its heart, TA suggests that every interaction—what Berne called a transaction—emerges from one of three inner voices: the Parent, the Child or the Adult.
- Parent: This voice is rooted in the past, shaped by early experiences and recordings we absorbed during childhood. The voice of rules, values and judgments, it can manifest as the Critical Parent (“That’s irresponsible!”) or the Nurturing Parent (“You’re doing great, I’m here for you”).
- Child: This is the part of us that feels, plays, complies or rebels. The Child voice is focused on the present, driven by emotion, spontaneity, creativity or the need to please or resist authority.
- Adult: As the rational self that evaluates reality, weighs options and makes decisions, it looks toward the future to anticipate consequences, test ideas and plan ahead.
We all carry these ego states within us, their prominence shifting depending on the context. A formal, high-stakes board meeting calls for a different version of the self than a relaxed family celebration. The key is recognizing which one has taken the driver’s seat—and whether it fits the context.
Why TA matters in family business
Think of a discussion on generational succession. A father who speaks in the Critical Parent voice (“You’re not ready! You don’t understand the business!”) may trigger his daughter’s Adapted Child (“I’ll never be good enough”) rather than her Adult voice (“Here’s the plan I’ve been working on”). The conversation derails.
Or imagine siblings debating an investment strategy. One brother, operating in his Adult ego state, presents data and projections to support his proposal. The other responds from his Free Child, mocking the spreadsheets and proposing a bold, intuitive move.
Both voices bring value—creativity and play are crucial—but if the group fails to notice the switch in ego states, the conversation can quickly spiral into frustration.
TA provides a language to detect these dynamics. Once we recognize them, we can choose how to respond.
Strokes: the currency of recognition
TA also highlights our basic human hunger for recognition, what Berne referred to as strokes. In families, strokes can be unconditional (“I love you, no matter what”) or conditional (“I’m proud of you for closing that deal”). In organizations, they show up as praise, criticism and gestures of trust—or the lack thereof.
Leaders often underestimate the power of strokes, a dynamic that takes on deeper meaning in the context of family business:
The next generation doesn’t just want equity; they want recognition as capable professionals. Senior leaders don’t just expect performance from their team members; they want gratitude for decades of stewardship. Teams don’t just want instructions; they want encouragement that their contributions matter.
Healthy strokes—especially positive and sincere ones—build trust. Negative or manipulative ones corrode it.
Transactions: keeping communication on track
Every exchange between two people is a transaction. TA identifies three main types: complementary, crossed and ulterior.
> Complementary, parallel transactions, where the response comes from the expected ego state:
- Adult–Adult: Adult asks, “What time is the meeting?” Adult replies, “At 10.” This transaction is smooth and efficient.
- Adult–Child: Adult (senior family executive) says, “The market data suggests we should adjust our pricing strategy next quarter. Let me walk you through the numbers.” Child (next-gen family member) replies, “Wow, that makes sense—I’m excited to try this new approach!”
> Crossed transactions, where the reply comes from a different ego state and breaks the flow. An Adult asks, “What time is the meeting?” Child snaps, “Why are you always pestering me?” Conflict ensues.
> Ulterior transactions, where hidden motivations and messages lie beneath the surface. An example might be “This car is expensive” also meaning “I bet you can’t afford it.”
In family businesses, crossed and ulterior transactions are common—and dangerous. A brother may ask a straightforward Adult question about dividends, but his sister hears it through her Child ego state (“You never trust me!”). Or a parent frames a proposal as a rational strategy, while subtly embedding an ulterior message about loyalty and family allegiance.
Clearly, family-owned firms should strive for more Adult–Adult transactions in business discussions to promote problem-solving, accountability and clarity. But don’t suppress the Parent and Child completely: families also need nurturing, tradition, joy and play.
3 takeaways for family business leaders
- Start with self-awareness. When tensions rise, take a moment to notice which ego state you are operating from. Are you laying down rules (Parent), reacting emotionally (Child) or weighing options (Adult)? Awareness is half the battle.
- Name the pattern. When a conversation spirals, pause and reflect: “Are we in a crossed transaction?” Simply recognizing the misalignment can reset the tone and steer the dialogue back on track.
- Invest in positive strokes. Recognition fuels motivation and belonging. Don’t assume your family or team “just knows” you value them—say it, show it and repeat it.
Family businesses endure because they are built not just on capital but on relationships. Transaction analysis provides a roadmap to navigate relationships—a way to decode the hidden dynamics in every conversation.
Used well, it helps leaders harness the wisdom of the Parent, the energy of the Child and the clarity of the Adult so that family and business can grow and evolve together.