Working With a Family Business and Striking the Right Balance
Family-owned businesses make up a large percentage of small businesses in the world. It can be risky working with family members, the hard part is learning how to put family emotions aside and leave work at work and home at home. When you are at work, you must realise that the business comes first. Whilst every business, industry and family are different, the businesses that get it right tend to have the following in common:
- commitment to the business
- continuity of knowledge
- pride for the family name.
Below are some simple processes to help make your family business a harmonious success:
Define role expectations and responsibilities:
Defining roles and articulating them is as simple as answering the following questions, which by no coincidence is also what every employee (family or not), wants to know when coming to work:
- “What are your expectations of me?”;
- “How am I going to be measured against those expectations?”; and
- “What does my future within the organisation look like?”
In order to get the best results from employees, including the family employees, clearly articulating and documenting the answers to these three questions is key. Importantly, for family businesses to succeed, family members should be held to the same account as would be normal for anyone in that role.
Establish clear and regular methods of communication:
Problems and differences of opinion are inevitable. Maybe you see them already. Consider weekly meetings to assess progress, air any differences and resolve disputes. Make open, regular communication an essential part of your family business. When you sense communication problems, confront them immediately. If there are larger issues at play, consider bringing in an outside consultant.
Practice good governance:
All companies can benefit from bringing in outside expertise in some capacity – such as an advisory board or board of directors. For family businesses, however, it can be imperative. Not only does it help the family and business leadership establish clear goals, boundaries and processes, but outside expertise is often critical for attracting new talent. As a business grows, and gets passed on to the next generation, it is essential to document both the business plan and governance properly. Keeping these in the head of the founder leads to potential ‘shades-of-grey’ and disagreement.
When it comes to longevity, and the success that comes with it, changing with the times is essential for any business, especially multigenerational family businesses. In every new generation, there are significant changes in trends and technology. Being able to adapt to the times you live in will ensure your businesses survival for generations to come and it helps make sure that it is ready to be handed down to whoever in your family will be taking over the business.
Plan for the future:
Successful family businesses plan for the future, creating family business succession plans long before they actually need them. A succession plan should be well documented and highlight how and when the torch will be passed to a younger generation. They also identify talent in employees, both within and outside of the family, investing in them early on to ensure excellent leadership in the future.
If these things can be executed well within your family business, you will be setting yourself up for success. By having the foundations in place, will help avoid some of the most common issues we see when working with family businesses, and when an issue does creep up from time to time, it becomes very easy to refer back to the respective roles and clarify exactly which hat people are wearing.