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How To Get Everyone Heading In The Same Direction In Your Family Business

28/10/2016

 
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Did you know it's estimated 75% of all firms in New Zealand are family businesses? This could be romantic couples, parent/child, brother/sister, uncles, aunts, in-laws, or many other combos.

(I offer some additional tips for couples in business, which of course has its own dynamics, in this blog, but keep reading, as this will be useful also...) 


>  The question is, how do you get everyone going in the same direction?

There are plenty of examples of family businesses that have thrived including Nike, Volkswagen, Samsung, and Walmart. Even at Facebook, Mark Zuckerberg’s sister and father have been involved.

A family business can be an incredible asset, where you build a future together, something you all can be proud of. It can last for generations and create real wealth in families.

It's also a fantastic training ground for the next generation, and an opportunity to learn business at a very high management level that is rarely available in other firms. 


Of course, this is only if the business has been set up in the right way and family are heading in the same direction.

Because on the flip side, when family members are in business together - but going in different directions - it gets messy very quickly. And puts strain on both family relationships and the business.

When there are unmet expectations, frustration starts to build...

It can feel like you are holding a grenade in your left hand with the pin missing. Hoping you can hold on a little longer without an explosion. You might get away with it for a while, but eventually, if the grenade is not disarmed and put away, there will be an explosion in the wrong place, at the wrong time, causing the most damage. 
 
Lack of direction can be an issue in any business, so no one is immune.However in a family business, in my experience it’s more obvious, the stakes are a little bit higher, the issues a bit more complex, and there is always history.

Some good history, some not so good. Little Brother remembers the time Older Bro didn’t back him in front of the other staff, or Dad can’t forget when Daughter’s inexperience cost a key account, even though it was 10 years ago and she now knows more about some aspects of the business than he does. (You may have a different story, but it will be something.)

History might blurt out in the heat of battle, or it could be a look that no one else recognises except you. But make no mistake, it’s there, and adds another layer to the dynamics of the business.

We'll leave the discussion on the emotional complexities there, but just remember to take them into account as they can derail plans quickly if not allowed for. Always ensure you’ve built in breathing space for all parties.


>  To be in good shape, it's essential there is good structure in place to deal with direction and expectations of all family members involved in the business.

Here are some simple, practical steps you can take to make sure you stay on track:


1.    Goals and Objectives
  • Meet regularly and define goals and objectives for the company.
  • Review what each family member wants to achieve in the next 1-3 years with the business.
  • Each family member should also consider their personal goals and how it all fits together.
  • Then talk about what needs to happen for the business to be successful.

If family members are employees, rather than owners, it is still smart to ask for and value their input and ideas, as you should of all your employees. Be transparent about the direction you want to take the company in, and make the job description very clear so there is no room for interpretation. Keep communication professional, and let your family member know in regular 1 to 1's the areas you are happy with and where they need to improve.
 

2.    Exit Strategy
  • Have an exit strategy for both the business and individual family members.
  • Sometimes I have seen that a family member might want to do something else but feels that cannot leave because of others expectations; this is a bad reason to stay.
  • Make sure all family members are clear about their expectations around how much and who will be involved in the business long term, and if they are realistic or not.
  • If someone wants to leave, make sure this can be done with dignity for everyone so that relationships are still intact.
  • Take requests to leave as seriously as you would for another employee. Keep it professional; don't let it drag on.

3.    Clear Roles

Make sure you each have clear levels of responsibility, and everyone knows who is in charge of each area. Do staff know who to report to?

Too many chiefs and not enough indians is like trying to build a pyramid upside down – it only ends in rubble.

Often there are frustrations about sharing of information, or one person not being organised enough. If this is the case, you may need to make sure you have better systems in your business. This adds clarity, efficiency and takes the pressure off.


4.    Performance

Just because someone is family does not automatically mean they should get the top job.

Do they have the skills and knowledge to do the job well, or do they need more training?

Are they better suited to another position or do they just need to grow into the role?

Have clear guidelines on performance levels for the position. If a family member is not making the grade, have the hard conversations early before expectations are sky high. Be very clear on what should happen next - standards met by a certain date, extra training to be undertaken, or some responsibilities to now be handed on.
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Remember to play to your strengths. Do some personality/skills profiling to find out where each family members strengths and weaknesses are if you aren’t sure.

Being stuck in a role they’re not suited for, is not going to be good for the person or the business.

 
5.    Rules of Behaviour

Have standards of behaviour for everyone, but especially family. If discussions get heated, have rules on what is acceptable and what is not.

A good start would be:
  • No raising your voice
  • Always listen first without interruption and take time to understand each other’s point of view
  • Respect for each other (especially when you disagree)
  • Never argue in front of other staff members

6.    Mediator

If you cannot agree on an important issue, work with a trusted mediator to talk through the issues with you. Sometimes with another viewpoint, they can help you work through the problem from another angle.

It would be useful to agree ahead of time, when things are good, who this person would be if it were ever needed.
 

7.    Board Meetings

Have board meetings monthly to go through financial performance and other aspects of the business. Any family members in management positions should be accountable for their role and for the performance of the company.
 
This is a business - and must run like one!

 
>  Working with family can be a lot of fun. Where there is mutual respect, the older generation can bring experience and perspective and the younger ones can bring energy and fresh enthusiasm. It can be the best of both worlds!
 
Although, sometimes, despite best intentions, running a business together isn’t healthy. If you’ve tried everything and it isn’t working, implement an exit strategy.

At the end of the day, money will come and go, and you can choose to start or stop a business. This business may not always be in your life, but your family will be. So make sure you protect the relationships; if broken, this would be probably a bigger source of pain and regret than a failing business would be.

You don’t want any grenades exploding. It's just way too messy.

> I have plenty of stories from clients who, with a little coaching, are all heading in the same direction again and loving it.

If after reading this, you realise your family business is not in good shape, give me a call
. (The longer you wait or ignore the issues, the harder it will be to fix.)

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Is your service up to scratch?

2/6/2014

 
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It does not matter what industry or market you are in, at the end of the day your business will be made or lost on how well you deal with your customers.

  • A customer is four times more likely to defect to a competitor if the problem is service-related than price or product related.

  • 96% of unhappy customers don't complain, and 91% of those will simply leave and never come back.
  • In most cases, businesses spend way more money trying to get new customers - and literally nothing on looking after the ones they already have.

  • The probability of selling to an existing customer is 60 - 70%. The probability of selling to a new prospect is 5 - 20%.

Customer service is the lifeblood of your business so don't underestimate its power!

Recently I was waiting in line at the kids section at one of the major department stores and was enthralled to watch exactly what you should not do - an example of customer service unfolded before my eyes. The cashier was a young girl in her early twenties and this was most likely one of her first jobs. She was serving a woman with kids (their target market) who wanted to charge some clothing items to her store card. Much to the surprise of the customer, the card had declined, and in her disbelief the customer explained to the cashier that money had been put on the card just two days ago. She wanted to know what had happened. 

The cashier shrugged her shoulders and explained defiantly that she did not cause the problem or have any idea how to fix it. Her advice was to go and line up at a desk in another part of the store and they might be able to help her if she was lucky - that desk was busy handling other (more important) customers. The cashier made it very clear to this customer that she just didn't care. At this stage the customer was starting to get a little frustrated and after further questioning, the cashier pointed out she could do nothing more and pointed her finger in the general direction of the inquiries department who might know something about it. The customer headed off in the general direction with the parting comment "You have been incredibly unhelpful".

We have all seen this before or been on the receiving end of this type of terrible customer service.

So what is your customer service like? 

By comparison a while ago I purchased a Freeview box for my TV from another well known store. I waited quite a short time, however the cashier acknowledged that I was waiting and let me know he would be just a couple of minutes. After serving the previous customer, he apologised to me for the wait and asked how he could help. He was passionate about his store and the products, and knew the answers to every question I had about how Freeview worked and the comparisons to other systems.

He sold me the unit and started explain a complicated system for installation (complicated to me anyway). He could see I was struggling so he offered to pre-tune the box, ready for me to plug in, which would take only seven minutes. Sounded like a great idea to me as it would probably take me two hours and even then it might not be right. (As you can tell, I am great at helping businesses become more profitable but not-so-great at setting up new technology.)

He then went in for the up-sell - "Would you like a warranty with that?". Usually this is not my thing, as I am of the view that if your product will not last the distance then maybe I shouldn't buy it. He could see that I was not convinced, but remember he already had my attention with his impeccable service. So he pulled out a Freeview box that had been pulled apart and showed me how small the parts were and that they are easily damaged through wear and tear or even small knocks. I thought why not, after all he seemed to have my best interests at heart. He got the up-sell and I walked away a happy customer with my purchase.

Did I tell others, absolutely. Will I go back, yes.


So what makes good customer service?
Well, we can take a few clues from my two examples above.
  • One knew their products well - the other not a clue.
  • One was interested in the customer - the other was not.
  • One went out of their way to be helpful - the other went out of their way not to.

So do you staff ............... 
  • Know about your products and how best to use them?
  • Know the procedures on what to do when a customer complains?
  • Have a good helpful attitude to your customers?
  • Care about your customers and your company?
  • Take pride in their workplace?
  • Have a list of questions they can ask customers to lead them to the sale?

What does good customer service get you? It gets you repeat business (remember this is a lot easier to get than brand new customers), it gets you more referrals and a good reputation, and ultimately, it gets you a lot more sales. Good customer service equals a whole lot more profit!


Action Point: Listen in on some of your staff and how they are handling your customers. Or even better, ask some of your customers how they find you to deal with. Use these quick questions:
  • How do you find our company to deal with?
  • What do we do well?
  • What do you find frustrating when dealing with us?
  • What could we do better?
Listen very carefully especially to the answers to the last two questions. They will be your biggest clues to a much more successful and profitable business.

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Staff - your biggest headache?

27/3/2014

 
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Business owners often tell me this - that staff are their biggest headache. The fact of the matter is that the more staff you have, the more things can go wrong. Many business owners say that if they just had good staff, they would be okay. 

But there is another side to the story - even with the very best employees, they will never meet their potential and live up to your expectations without good systems and clear guidelines for what you expect from them. 

Can you relate to this story? Bob the Builder has started his new business. He gets known as dependable and does good work. He does everything - manages the projects and works hard on the tools, and Wendy his wife does the accounts. Before long he has more work than he can handle himself, so he employs some extra workers and finds some good subbies. Things get busier, and he is finding he is running out of cash as his business grows. Part of the problem is that Wendy was getting the bookwork done at night, but now that the sheen has worn off and the workload is increasing, more and more is getting left undone. Bills are not getting out on time, so Bob is not getting paid when he should. No one is chasing up old accounts not paid, and some are over six months old.

He decides he needs a good office lady as Wendy does not have the time anymore to keep up with the extra work and is sick of chasing Bob so that she can get the invoices out when she would rather be chasing him round the bedroom. So he employs Cindy and everything seems to be going well, although Bob is now so busy that he doesn’t really know what is happening with every project, or how much money they have.  But Cindy seems to have it under control so why worry, it's working. Then out of the blue Cindy hands in her resignation; she wants to pursue a career in interior design which is what she really loves.

A week after Cindy leaves, everything turns to custard. Bob suddenly discovers there are a whole lot of problems he did not see coming. Suppliers have not been paid for three months and have stopped supplying, customers are unhappy that jobs are taking too long, and there are a whole pile of jobs that were never invoiced. Bob finds himself in absolute frustration – he trusted Cindy and she let him down. 

I have seen this kind of thing a lot. The problem in this scenario is that Bob did not know what Cindy was doing, and even worse Cindy did not know what Bob even wanted. So the chances of this going well were abysmal. Bob was not clear on what time frame was acceptable to send invoices within, when old accounts should be chased, what suppliers should be paid first, how much money should be in the bank, etc...

Can Bob fix it? Not without good systems.

The moral of this story is: Have good staff, but have even better systems. This is the vital first step towards building yourself a great team...

Good systems will show when staff are not performing, Good systems will make good staff, Good systems will mean the business carries on when staff leave, Good systems take headaches out of your business.

Action Point: Look at your key staff and list what you specifically need from them. Then meet with them individually and go through it with them. It could be the most important thing you do this year!

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