Please allow me to vent my frustration. My focus is yet again Family Businesses.
Many family businesses take on the distinctive identity, focus and idiosyncrasies of the family leaders who run them. It is true that these norms can be motivating and can create a sense of common purpose. But this also comes with a whole load of issues and disadvantages, from the lack of structure, lack of proper decision making processes etc…..bottom line: Lack of Professionalism!
So the million dollar question is – How can a family business keep the benefits of a family operation while accelerating the professionalisation of their business?
A straight answer would be the following:-
- Attract, develop and retain great family and non-family talent
- Ensure that the organisation can always make timely big decisions
- Strengthen family discipline and commitment toward the business
- Respect the management hierarchy and empower employees to make decisions
- Create systems to ensure consistently high performance and fairness
- Guard their core values like a hawk.
I will try to expand on the above by the following input.
Start with the Basics: What is the family’s vision, values and goals? Do you even know them? Ever discussed them? When these are identified and communicated well within a clear operating or business philosophy, employees feel they understand why they’re there and where they fit in the grand scheme. Values that make the company great—commitment to quality, taking care of customers, treating employees with respect—can endure for generations. Smart companies live by values that make them strong and help them learn.
Open your eyes: Realise that the lack of professionalism in the way you run your business, the lack of proper structures, the lack of coordination in your workflows…. are having a negative effect on all persons working around you. I meet Family Businesses owners texting employees at all hours, telling them what needs to be done. Even the most dedicated of all employees will eventual grow to be resentful and be burnt out, because they can’t manage their own time and have no sense of autonomy. Some of the best employees start leaving when they got too fed up after repeatedly putting aside critical tasks for ones the family owners describe as urgent, although the critical tasks have to be completed just the same.
Lead not Control: You need to find the time to draft policies and procedural guidelines. Often, family businesses don’t formalise work processes or rules, because family members like to keep CONTROL. The lack of formal guidance means that ALL decisions have to be escalated the family members leading the business. Not only does this create a massive bottleneck, but the decision-making style creates many inconsistencies and confusion, which end up into clashes even between family members.
Work on the Culture: Along with devising policies and procedures for work content, holding discussions about “what we do and don’t do here” will help build the necessary corporate culture. Identifying such a corporate culture will also help to make sure that the family business leaders do actually “walk the talk”. Hence, privilege that family members sometimes demonstrate would immediately stand out and be against the corporate culture. I meet family business owners who even bring their pets to work without thinking what would happen if all their staff bring their pets to work aswell. Things can get more nasty if there are vast difference between family members in the business and non-family business members with regards things, like for example, attendance and leave. Finally, you may decide to speak to family members at home using profane or insulting language, but using that same language at work when speaking to family members infront of your employees or worse still when speaking to employees, is a form of incivility that will have a negative impact on work quality and productivity.
Be Fair: You are running a business, not a charity shop. A business that is competing against other businesses. Hence you need to best people to be working on your business. Hence the need to create the same level of accountability for both family and non-family members, so that when employees are off track, someone will remind them of where they ought to be, without them feeling that they are being short changed. You need to break the assumption that family will always show preference for other family members as this will surely affect morale and productivity.
Set up a board of directors. A board that includes several outside directors can add structure and professionalism to a family culture, because other professionals will have both insight into and oversight of what the executive team says and does. Company leaders can tap these outsiders to gain authoritative input for planning and decision making, as well as to gain access to expanded networks when the company is looking for potential new employees and suppliers.
Beat the Resistance: There can be many reasons why family owners can resist strengthening standards of performance and ethics. To begin, professionalising a company isn’t cheap. A business may have to increase compensation to attract new employees or invest in new technology or introduce planning, control and performance management systems. But money usually isn’t the biggest obstacle to professionalising a family company. The biggest obstacle is when powerful people in the family business system—who can inhibit these changes—feel their power and status are threatened or feel disrespected by these changes. Professionalisation involves the acceptance of new management, ownership and even family practices. This process often occurs around the passing of ownership and management authority from one generation to the next, which is normal;ly already way too late and also a sensitive time. The senior generation can feel insulted by attempts to professionalise, because it involves a different style or methods of management and feels like a rejection of their approaches. Resistances to professionalisation can be addressed through persuading powerful individuals of the need to change, celebrating the accomplishments of the outgoing administration and committing to certain fundamentals in running the business that has worked in the past. Families in business often confuse their traditions with their core values. Reliance on certain traditions can weaken a company’s ability to adapt: I sometimes hear these sort of golden rules, which make me smile “We have never had debt”, “My father always told me not to trust any single employee” “Only family members can sit on the company board”…and the list goes on. Practices and traditions need to change as times change.
Let me be clear. Professionalising the culture in a family business doesn’t mean getting rid of family members or reducing their impact. It does require making sure that the major relationships and dynamics operate to keep both family and non-family employees comfortable with the business’s values, aware of their job responsibilities and capable of performing as expected. Adopting these approaches will begin to provide stability without squelching the drive or personalities that often make family businesses so unique.