Family run businesses can present some unique challenges. Most of these challenges arise due to one fundamental mistake families make – not separating the work from family matters. It is very important for family businesses therefore, to operate in as professional a manner as the usual public or private company does. There should be no difference. In this article, we will explore some tips on how to run a successful family business. These practices are those that are followed by any professionally run organization, and the extent to which these practices are adopted by a family business will determine how fast they succeed. These smart practices are listed under two categories – Business Related and Organization Culture Related. .
A. BUSINESS RELATED GOOD PRACTISES IN A FAMILY BUSINESS
1. Bring in a family member for the position not the person
No family member should be forced into any position or role, in the family business. The family member’s skill set, qualifications and above all the desire to perform that role are of prime importance.
While doing this, every family member’s strengths should be recognized to secure a ‘best fit’ between the position and the individual.
2. Job Description
A detailed job description that lists key responsibilities, goals and tasks, should be provided to each family member joining the business. Further, the job description should also include the reporting relationships.
3. Clear Expectations
All employees, regardless of whether they are family members or ‘external hires’ need to understand what is expected of them and what the consequences would be for not meeting those expectations.
Ideally, the business owners should use non-family members to oversee the family members in the business. This practice will create a barrier between those that manage, instruct and correct family members, and the owner.
4. Performance Management System
Almost all professionally, run organizations have a clearly articulated Performance Management System (PMS). There is no reason why a family business should not have one.
The Performance Management System should include a clear transparent process to manage employee performance. This process should apply to ALL employees, including family members, and should be incorporated into all business functions. The PMS should be clearly understood by all employees.
In a nutshell, the performance management system should include employee goals that are SMART
5. Making tough calls
Situations are bound to arise where a family member is not contributing to the business and to put it bluntly – is ‘dead wood’. In these situations, the considerations of the business and its mission has to be put over the family relationships. It is a tough call but it has to be made.
Once the decision to let a family member go, is taken, it should be done right away, rather than dragging the whole process, because it strips the person of his dignity and his ability to move on to other endeavors.
B. ORGANIZATION CULTURE RELATED GOOD PRACTISES FOR A FAMILY BUSINESS
6. Keep personal matters out of the business
When you are dealing with a family member at work and you have a good insight into his or her personality and thought process, the common tendency is to let personal considerations come in way of business matters. Either you will avoid telling the family member what you should, in the interest of business, or you will go ahead and say things to him, which you wouldn’t to a co-worker.
At the office, every family member has to be treated as a co-worker. Personal relationships, equations and emotions have to be left behind at home. This helps each family member perform his or her role as per expectations. It makes it easier to supervise a family member, and provide harsh but much needed performance feedback.
7. Separate business and family time
A common practice that should be avoided at all costs, is discussing business on the dining table, or discussing family matters at work.
Taking ‘shop’ during family time is undesirable, as is hustling together as a family in the Office. It has to be like different actors playing different roles in different stage performances or movies. You have to find the ability to switch roles depending upon whether you are at work or at home.
8. Being mindful of the generation gap
Most often, a family business involves many generations. This creates challenges. For instance, the old generation may be skeptical about the use of technology at work – like computers, email, etc. The older generation may also be risk-averse and may not endorse a strategy that involves an aggressive growth path for the business.
On the other hand, the youngsters do not have what the older members possess – which is wisdom gathered from years of experience. This experience becomes almost an instinct.
Therefore, it is best to keep a balance between the old and the new. One of the big benefits of this ‘mix’ of old and new is that such and Organization makes customers feel comfortable.