(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.
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.
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.
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.
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
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.)