I worked in and owned a business with my family for almost 20 years. When I share this with others, their typical response is “I could never work with my family” followed by stories of just how dysfunctional their family is. It makes for juicy conversation at a cocktail party, but it raises the question: How do you create a family business that performs at its best rather than its worst?
In my experience of working with my family, along with advising family business owners and next generation leaders, I found the following keys helpful in building a peak performing family team.
#1 Know Yourself - While this is about family business, it starts with you. Why are you in the business in the first place? Is it to lend a hand during a busy season or a place to land while you decide on the next step in your career? Or, do you eventually want to take over the business from mom and dad? Whatever your reason, be honest with yourself and your loved ones.
Next, be clear on the strengths you bring to the table and how they can benefit the family and business. It’s tempting to join the company if there’s an opening, but if it’s a poor match for your skills and your personal vision, it will lead to frustration for everyone involved.
#2 Know Your Family – Every family has its way of solving problems and managing differences. Knowing these patterns of behavior is essential to removing the roadblocks that keep the family and business from moving forward. Knowing your family’s strengths is just as helpful here. Aligning everyone’s talents to the task at hand boosts productivity and reduces the tension that comes with mixing family and business.
#3 Think Big Picture – It’s easy to confuse roles and responsibilities in the family business. Sometimes you’re a parent, sales manager and major shareholder at the same time. It’s easy to say that you keep family and business separate, but when a family member is struggling at work the desire to swoop in and save the day is strong. Occasionally that’s needed because everyone missteps. However, if it becomes the norm, it undermines their development, distracts you from your responsibilities, and weakens everyone else’s performance. Be aware and intentional about the role, or roles, you play, and how they may conflict so, you can make more informed decisions.
#4 Build Value – Family businesses must keep an eye towards building a company that’s transferable, whether it’s to the next generation or an outside buyer. Establishing and communicating policies, processes, and practices is essential. It includes managing not just the financial capital, but the human, customer and structural capital too. By following a value building strategy, the business is better positioned to serve the family’s current and future needs.
#5 Take the Long View – Most family businesses are closely held entities not subject to the demands of outside shareholders. They benefit by investing resources that may not yield immediate results but will pay out in the long term. They tend to think in generations and not just financial quarters. When planning, consider how life events such as births, graduations, weddings and retirements will impact the family and business. More than likely, the wealth the business generates will be needed to finance these significant events.
Family businesses are in a critical time of transition and a peak performing team is needed to weather the change. Aligning everyone’s strengths, while taking a big picture approach that includes a value building strategy with an eye to the long view, will ultimately serve you, your family and the business.