Passing It On¹
Conflict. It happens in every relationship and familial relationships are no exception. When a business is family run and will be inherited by a family member, it is not uncommon for family conflicts to become business conflicts or vice versa.
The detrimental effects of family problems on a business may be felt at all levels of operation, from the completion of basic tasks to hiring and retaining quality employees. Feuding family members can unintentionally sabotage the progress of a business by creating an unpleasant environment for everyone, especially non-family employees.
Here are some tips for successful family - business relationships.
Have a Strategic Plan
A business must engage in strategic planning in order to ensure that its mission is pursued and its business goals are achieved. The family-owned business should also engage all family members in a strategic family plan with goals, responsibilities, and roles. Having a strategic family plan that everyone agreed to can prevent conflict or help determine a course of action when conflict does arise.
As a business unit, the family members need to establish specific and strict guidelines and qualifications for roles and responsibilities within the business. Family members need to agree to their respective areas of responsibility and, if someone feels shortchanged, a specific plan for advancement can be developed that includes a timeline and milestones for achievement. It is important to provide family members with a path to achievement that makes each of them feel like an important part of the business.
Recognize that “Business Is Business”
As part of the strategic planning process, roles and responsibilities can be assigned to each family member that are applied separately to the family and to the business. All members must agree that family issues remain at home and that if any family discord is carried into the business, it will be considered a violation of company policies, which will be met with an appropriate penalty.
An advisory board is recommended to provide additional guidance and direction. The board should be comprised of both family members and outsiders who bring relevant business experience to the table. This will provide your business with objective counsel in the case of family disagreements.
Develop a Successor
Succession planning should begin once children are actively involved in the business. As time passes, it may become clear that one or more of the children are not suited to be a successor, so it will need to be determined what, if any, role they might have with the business.
For the children that express interest and demonstrate the competency and temperament needed in a successor, a clear development path should be laid out that will enable them to develop the skills necessary to take over the business. It may be advisable to have the advisory board create a set of standards and qualifications that must be met so that an objective measure can be taken of competing children.
For children who don’t make the cut, there needs to be path for advancement, as with any career opportunity, that keeps them encouraged and interested in pursuing the goals of the family business. Children who are discouraged or who develop jealousy may have to be weaned from the business so they don’t become a disruptive force.
Seek Out Professional Help
It may be important to hire a business consultant who specializes in family businesses. They can provide an objective and stabilizing influence that can counter the emotional biases of family members in the planning process. The consultant can play a facilitating role on the advisory board so that the input of family members can be weighed equally with the input of non-family board members for a balanced approach to the planning process. This also can ensure that the consultant maintains an ongoing relationship with the family business.