A friend of mine with a great track record of success running a family business recently shared with me thoughts on how to make a family business relationship work effectively. I thought you would enjoy reading this perspective from the front lines. Here is what this family business CEO wrote:
Do you remember the television show Dallas? Or how about Dynasty? Maybe Brothers and Sisters? All of these shows revolve around totally dysfunctional families running their totally dysfunctional family businesses. The backstabbing, infighting and high level drama is what many of us think of when considering family businesses. Truthfully, these shows pale in comparison to a few real life scenarios I’ve seen, and unfortunately there are good reasons for this stereotype. Almost every one of us knows of a story revolving around the running of a family business that has turned out poorly. Brother ends up feuding with brother, mother becomes estranged from daughter, business closes because the siblings can’t agree on anything so nothing gets done, and employees get caught in the middle of the whole mess.
The sad part about these companies is that none of the drama needed to go on stage in the first place. There are some great examples of successful family businesses. You may be surprised by some of the well known names: Ford, Tyson Foods, Comcast, The Gap, Enterprise Rent-A-Car, Hallmark, Hasbro, Perdue, H&R Block, Kohler and Levi Strauss–all are family owned businesses. S.C. Johnson even makes a point in its advertising to highlight that it is a family business. And let’s not forget the mother of all family businesses, Wal-Mart.
So what makes these companies different and successful enough to become household names? At a minimum they’ve embraced these philosophies and actions:
- Only consider working with family members if you can work well together on a professional level.
- Know each participant’s strengths and weaknesses and assign the right seats (positions) in the organization to them based on those strengths.
- Be crystal clear about expectations for each participant, including job titles, hours to be worked, and tasks, results and personnel for which they will be held accountable.
- Document, document, document. Remember good documentation makes good friends. You don’t want any unnecessary surprises. Business in general hands you enough of those!
- Have a succession plan, to include buy-sell agreements and key man insurance.
These five simple bullet points will help you to avoid many of the perils which arise and allow you to enjoy the many perks afforded family businesses. If run professionally, in a business-like manner, you can expect your family members to behave like trusted partners, with a tighter bond than anyone else will deliver. Family members who are fully engaged in the business and supporting each other can be counted on to do what it takes to succeed come hell or high water because they have the same vested interest as you. Working together in the business can also strengthen the existing family bond as you will go through the good, the bad and the ugly together. And, last but not least, you’ll have some pretty darn interesting conversations at the Sunday family dinner table.
© 2010 Makarios Consulting, LLC, www.MakariosConsulting.com