Advivo Business Accountants Specialise in Working with Family Businesses
Anyone operating a family business will understand it can be very different from other types of businesses.
“When you’re working in a family business, you’re not striving for your own career. You’re striving for the whole entire business, for a brand that usually has your name in it.”
– Katherine Brown , Fourth generation winemaker at Brown Brothers
I worked in the family business for nearly 13 years, and during that time I worked with my father, my mother, my brother, my grandfather, my stepsister, my stepmother and my cousin, who no one knew existed until a couple of years prior to working in the business. I like to think this experience has provided me with a good understanding of some of the complexities that can surface whilst running, or indeed just working, in a family business.
Families typically have hierarchies, often formed from cultural norms and history. This is not unlike hierarchies in businesses, although the business hierarchy should be based on achieving role clarity and provide a platform for good management.
I believe one of the main challenges is the ability to “Leave home at home and work at work”.
This can be difficult for anyone, but it can be so much worse for family business. I clearly remember work issues flowing over into the home and home issues flowing over into the workplace. I’m sure I don’t need to elaborate on the devastating effect this can have to both environments and the relationships within.
The Simple Solution – “Role clarity within the workplace”.
It just sounds like good governance really – that’s because it is. I believe one of the fundamental issues of importance within any family business is role clarity because it forms the basis of expectations for all. Arguably this is true for any business, but the additional challenge for families is that people are coming to work with a preconceived idea of both where they and others fit within the organisation, as well at outside of it. Even if people completely understand their role within the business, they will inevitably find themselves reverting to their ‘family role’ from time to time, even within the business.
This is not always a bad thing, but understanding that there are often 2 roles to play is crucial for the family members working together; it’s important to be able to identify which hat you’re wearing at any one time and why. Often individuals will have many ‘hats’ within the business including the roles of Director, Owner, Financier etc., these are in addition to the many hats they wear outside of the business.
Without getting too philosophical, I believe it’s as important to understand yourself and have clarity on your own roles and expectations, as it is to know the same of others. Having this clear between everyone, will help cut to the key issues in the various situations which inevitably arise within family businesses.
For this reason, when advising family businesses, I often clarify exactly which hat people are wearing in certain situations and why. I find this brings them back to ensure they’re understanding their role within the business at that time and why it’s important for them to do so.
Defining Role Expectations and Responsibilities
With role clarity, comes role expectations and role responsibilities. Defining these and articulating them is as simple as answering the following questions, which by no coincidence is also what I believe 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 family, I believe clearly articulating and documenting the answers to these three questions is key. Importantly, for family businesses to thrive, family members should be held to the same account as would be normal for anyone in that role. For work culture and family dynamics, there can no be no favouritism displayed for family members.
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, which 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.
Remember – for Millennials, the average time in a job is about 3 years, but working in a family business could be a life sentence.
– By Chris Morris
Learn more about our specialised services for Family Businesses at Advivo Accountants and Advisors – Click Here
At Advivo, our highly skilled team of accountants and business advisors will listen to you and take a hands-on approach to managing your business and individual financial needs.