The Epidemic hitting Family Businesses

Invariably when I meet family businesses I always have to face the negative consequences of an epidemic that haunts and hampers them greatly. The epidemic of control. The epidemic of micro-management. Family business have grown to a certain size but its owners and leaders still try to control and direct the business using the same mindset and methods when the business was much smaller. The symptoms are always the same. No time to think. No time to communicate well. No time to plan the future.

In such family businesses, the culture of micro-management from the top, means that the family business leadership is always fully concerned with dealing with operational issues and patching up things, rather than finding long term sustainable solutions. This culture ultimately destroys value and inhibits businesses to truly grow, becoming one of the toughest limiting factors to overcome.

What are the typical signs of such culture?

  • Silence Is Safer: Team members at the lower ranks don’t want to take risks that might harm their reputations or livelihoods, which makes sense when you compare the outcomes of voice versus silence. Speaking up is an act that mainly benefits the organisation and not the individual employee. Moreover, those benefits aren’t even guaranteed and tend to take time to materialise. Meanwhile, holding back gives the employee the instant and certain benefit of feeling safe from exposure.
  • Silence even at the Top: It isn’t only lower level employees who need psychological safety in order to use their voices at work. As people rise in such organisations, the pressure to hold back increases. As INSEAD professor Gianpiero Petriglieri eloquently wrote, “Time does not summon courage. It only morphs the fear of speaking truth to power into the fear of speaking truth in power.”

So the million dollar question is, what can we do to eradicate all this? It’s not easy, but possible. We first of all need to address the core reasons why the family business leadership is hanging onto micro-managing everything and wanting to control all. Here are some very important considerations:

  • Is it because they do not know how to delegate effectively?
  • Is it because they think that by delegating they will lose all control on the final outcomes within their business?
  • As family business grows have structures and systems grown accordingly in order to allow team members the liberty to work well, whilst keeping them accountable to their true performance?

I many times see family businesses that do not have the foresight to grow and develop their structures and systems as the business grows. They keep trying to run their business using yesteryear’s systems, based on adhoc patched solutions. In such instances, the end result is that the more family business owners try to keep control and micro manage everything, the more they feel overwhelmed and cannot keep up with anything, not even their email inbox.

A change in mindset is needed. We need more family business owners to do the much needed jump from being operationally focused to being more strategically focused. We need family business owners that can learn how to communicate, lead and create teams effectively. We need family business owners that understand the need to strengthen their organisational structures and internal systems pari passu with the growth of the business, to then take data based decision.

Only by doing so can we then create strong performance based cultures. Cultures where people are judged by their overall performance and not a single mistake. A culture where trust is strong and communication is clear. Where team members focus on solving issues at hand and not on pinning failures on someone and stabbing each other in the back. A leadership that feels confident to show employees why each of their contributions are needed — not only for some far-off future, but right now.

In turn all the above will reduce the downside of speaking up and increase the upside. Family business owners would have created a safe space where people can speak their minds in a constructive way.

It may be that challenging times are ahead of us from an economic perspective. This presents a golden opportunity for family business owners to look around them and change the cultures they have themselves created in their own business. For businesses to survive they need all the creativity, experimentation, learning and flexibility possible from their teams. Ultimately family business owners are dependent on the contributions of employees’ initiatives, ideas, perspectives, talents and insights. In short, they’re dependent on how safe and comfortable such employees feel to speak their mind and change things. This will never happen in a culture dominated by control and micromanagement.

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