by:
Jerry I. Kleiman,
Ph.D. & R. Phillip Colon, Ph.D.[1][1]
The
economic boom of the nineties encouraged complacency and avoidance in dealing
with conflicts within the family-owned business. Issues that were in remission
under the palliative salve of a high revenue stream have most likely been eating away at the infrastructure of many
family owned businesses. As the revenue stream slows, relationship
problems can no longer be relegated to the backburner. Family business owners
are finding that if money cures all ills, the cure is only transient.
HAVE
HOPE!!
From
our experience in consulting to family-owned businesses we have developed a
list of seven major characteristics that
we know to be correlated with successful business practice and successful
family relationships. Some of these attributes have also been cited by other
experts in the field. By understanding these characteristics and implementing
them within your own business, you can
help your family owned business survive and thrive.
·
ESTABLISH CLEAR BOUNDARIES AROUND THE BUSINESS
AND THE FAMILY
The key to success in family-owned
business is being clear on where the family ends and the business begins.
Relationship issues and personal needs , if not attended to in the family, play
themselves out in the business. If these needs for approval, respect,
competency, independence and nurturance have not been recognized in the family,
people look to the workplace for fulfillment.
The business may then becomes the arena for the gratification of these
needs. Business decisions may then be determined by emotional factors and sibling
rivalries and jealousies are often acted out in the business.
Successful
family-owned businesses treat business as business, and family as family
·
DEVELOP A SUCCESSION PLAN
Successful
family-owned businesses are busy making their plans for succession. The
founding generation is looking ahead, planning and considering their own future and the future of the
business. Passing the baton means that the owner is entering into new stage of
life. As we describe it, it is not just a question of what one is leaving or
retiring from, but what they are retiring to.
A
succession plan, important in any business, is critical in a family-owned
business. Succession planning always
provokes critical business and family issues. At stake is who will run the
business, how that decision will be made, and how that decision will be implemented. Succession planning forces family
members to acknowledge the founder’s (parent’s ) retirement and the fact that
he/she is not immortal. One apocryphal story has the CEO / founder , talking about succession, saying ‘and if I
should die.’ Succession raises questions about parent-child relationships,
the founder’s marital relationship, and evokes issues concerning dependency and
autonomy. Succession planning is a major issue because both business and family
transitions intersect, as both enter the next stage of their respective life
cycles. Successful succession planning is a long term project; having the
ability to take long range perspectives is one of the advantages of having a
family-owned business. We strongly advise our clients…begin planning now!
·
FORMULATE
A BUSINESS AND STRATEGIC PLAN
As with
non-family-owned businesses, strategic planning and business planning are
critical to the success of the business. A family-owned business is more likely
to have the flexibility necessary to anticipate and adapt to changes in the
market place than a non-family-owned business. It is essential that family
business owners learn from the experience of others as to the regular and
predictable issues that will surface in the family-owned business. Developing
and codifying job descriptions, entry criteria and compensation formula is
helpful. Problems occur when family members perform multi-tasks without clear
delineation of responsibilities, with
either disappointment in compensation
or unrealistic understandings about
promotion ensuing. Sibling issues often arise when leadership refuses to
address the issues of succession, nor make clear entry and compensation
standards and job descriptions.
·
HOLD REGULARLY SCHEDULED BUSINESS MEETINGS
Family-owned
businesses, particularly smaller ones, tend to be run informally, the way one
might run a family. Business meetings are held on a ‘catch as catch can’ basis.
We cannot stress how important it is to hold regularly scheduled business
meetings. Each meeting should have a formal agenda with an opportunity for all
to talk. These meeting are a perfect opportunity for expectations to be
clarified so that resentments don’t smolder and for the younger generation
under the tutelage of current management teams to begin to take the
responsibility for corporate initiatives.
·
PLAN
REGULARLY OCCURRING FAMILY GATHERINGS
We believe that ‘better family means
better business’. While we certainly encourage having family councils and
retreats to discuss family matters, there are dozens of naturally occurring
opportunities for the family to get together, ie.holidays,
birthdays, anniversaries, special events, weekends in the summer home, or just
getting together for a sporting event or the theater. These gatherings, whether
they be one-to-one or in larger groups,
help insure that emotional needs are gratified within the family and
that the business is not used as the arena for the fulfillment of these needs. Keep
the focus on developing and maintaining healthy family relationships and
preventing the business roles from enveloping the more basic familial roles.
·
DEVELOP
CONFLICT RESOLUTION SKILLS
All healthy people living or working in
close proximity argue. It is impossible for mature individuals to coexist in
perfect, total, and perpetual harmony. In the successful family-owned business,
family and non-family members feel free to express their thoughts and feelings.
Sometimes this leads to constructive arguing. In order for arguments to be
constructive, certain techniques of good communication need be adhered to. Rather
than list all the varied rules and techniques of communication and conflict
resolution, suffice it to say that it is imperative that the founder/parent
lead by example and encourage open discussion,
questioning and even disagreement. Communication and the ability to
fight constructively are skills that can be taught. Learn them.
· APPOINT AN OUTSIDE BOARD OF
ADVISORS
Successful family enterprises have an outside board of advisors.
The adage about not seeing the forest from the trees is never more appropriate
than when considering one’s family business. Outside advisors are critical in
helping to establish succession, compensation and entry criteria, diffusing
sibling issues and in developing market strategy. Unbiased, non family
professionals can give input and help business leaders make difficult,
emotionally laden decisions. Also, they can identify for the business owners
options and alternate resources, i.e.; consultants and other advisors.
No successful family-owned business should be without an
outside board.
Founders
and owners of family enterprises are typically highly invested in the business.
This commitment needs to be
balanced with investment in the family.
We advise our clients: Don’t take the
business for granted; don’t take the family for granted- be proactive in both.
[2][1]
Drs. Kleiman and