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Business Consulting

2003-08-01 11:28:00

All in the family

: My brother and I started our business 10 years ago. It has turned into a large, substantial business.  During those first 10 years, we hired our spouses and some of our children to work in the business. None of them are getting a free ride. We hold them to the same standards as our other employees.  Nevertheless, as our children get older, we are coming to the realization that we are a family-owned business and the dynamics are different than in other businesses.  We haven't had any major family problems but we realize they could arise. Are there any suggestions or best practices for family-owned businesses that we could follow?  

ANSWER: As you are finding out, there are different dynamics in family-owned businesses.  To keep your family business system healthy, we recommend using the following Best Practices and Strategies as a checklist:     Develop a shared vision for your company.  By doing this you will understand the overall desires of your family members and whether everyone is on the same page and has the same goals for the future of the business.  Remember, the owners' vision will dictate business decisions made in the future.      Conduct family meetings.  Regular family meetings provide an opportunity to share information (business and personal), have fun, and discuss individual and family dreams, aspirations, issues and challenges.  Recently, we facilitated a family meeting when an adult sibling told his family he would like to join the business.  His siblings were shocked by the announcement, thinking he had no desire to work in the business.  As discussions progressed, it came to light he felt a strong sense of stewardship to the business and looked forward to working with his family members.  Without these meetings the brother would not have been able to express his desires.      Establish a Board of Directors or Advisory Board.  It can be a valuable tool for you and your company's future. The Board looks strategically at the future of the company, rather than the day-to-day operations.  Owners are usually amazed at the new perspective a board brings to the business. Board members can also be great mentors for future family leaders.     Define and manage both the leadership and ownership succession process.  Succession is not a one-time event. Rather, it is a continuous process that takes place in the organization. Time and time again, we have seen families scrambling to replace a leader due to an unexpected event or, worse yet, deal with the lack of a clear estate plan.  This creates instability throughout the organization and can put the company as a whole at risk. Succession plans should be developed for ownership and leadership of the organization to enable a smooth, planned transition. Engage in Strategic Thinking and Planning to ensure a thriving future.  It is critical that not only family owners' plan and think of the future, but also involve non-family managers in the process. Strategic Thinking & Planning helps organizations create pictures of what the business is today and what it wants to become in the future.   We have a great example of a family-owned business that reformulated their vision and strategy and became one of the premier boat manufacturers in their industry. This family emphasizes the value of a shared vision and the Strategic Thinking and Planning process.  For a copy of the newsletter that describes this company, please contact us.       Capture family business history and values.  For many family-owned businesses this is a wonderful learning experience - finding out how the business was started and the values the business was built around. It is both a tribute to the work of the preceding generations and a guide for future decisions.  Recording the history of the company is also a great way to communicate family values to future generations.  This might be a great project to work on during family meetings.  Participate in effective communication.  Communication is important at all levels of your family business: the family system, the ownership system and the business system.  It is sometimes difficult to talk to family members about contentious issues that arise in the family business. We often recommend families work on their communication skills together. In many of our workshops we teach families in business how to communicate effectively without blaming or pointing fingers. There are techniques to help manage the difficult topics.   I hope this list of Best Practices has been helpful to you and your family business. If you were to take only one piece of information from this list, I hope it would be to communicate, communicate, communicate!