Family-owned businesses often present the most challenging situations. If you have ever owned, worked in, or consulted with a family-owned business you know the pain of dealing with the problems inherent in this business situation. The typical family business splits its time between trying to please the business and please the family. Usually this is at odds with each other.
The Family Business Institute put out this checklist to gauge how well the business is mixing the family and business aspects.
- Are family or personal disagreements publicly aired in the workplace?
- Do you have any family or friends of family who do not pull their weight in the business?
- Are people paid according to who they are versus their level of responsibility and productivity?
- Do people take sides or align in cliques around different family members or issues?
- Does constructive conflict resolution occur between family employees?
- Are the issues of future ownership and future leadership potentially divisive?
- Is the company’s proper mission, direction, or strategy a matter of who you ask?
- Do personality differences among family members cause tension or lack of sound communication?
- Does conflict in the business interfere with family and interpersonal relationships away from the business?
- Do certain people tend to perpetuate conflicts “and/or pour salt on old wounds?”
If you answered yes to five or more of these questions, the business may be in jeopardy.
There is no easy answer to the problems incurred in a family business. Here are a few tips from the Family Business Institute that can help.
- Have and enforce accountability. Every family member should have assigned areas of responsibility and be measured on those just like all other employees. Do not accept sub-standard performance just because someone is a family member.
- Set up behavioral ground rules. These include separation between personal and business discussions, pitting one person against the other, interference in family business and other actions that need to stay out of the business.
- Set a clear mission, strategy and objectives. Write them in a business plan and stick to it.
If you are having problems with a family business, an outside, uninvolved, unbiased consultant may be the only way to get to the bottom of the issues and resolve them. Waiting too long can be a death sentence to a small family owned business. The good news is there are consultants available that have expertise in dealing with family businesses. Find one that works well with yours and the future will be bright for this generation, and many to come. To learn more about avoiding some of the family business traps, give me a call at 203-545-6186.