Family Businesses
A lot of people assume that family businesses are synonymous with a small local business. That may be true in many instances but some of the most successful companies in American History have started as family owned and operated businesses: Dupont, Ford, Mars, Tyson and Walmart to name just a few.
I get involved with family business a lot and I feel very comfortable working within their very unique dynamics. I find them incredibly passionate and supportive but there can also be underlying issues that bleed from the family relationships into the business and back again into the family. No two families are the same, so it is extremely important to first suss out the family dynamics within the company and the effect (both positive and negative) on company culture.
Company culture can change rapidly in a family-owned business because decisions are sometimes made based on what is best for the family goals and not necessarily the business itself. And that’s okay, but that is why it is so very important for the CEO to communicate clearly the family goals and intentions with the company’s employees. Uncertainty breeds insecurity so it is important that they know, at a minimum, the following:
Does the family intend to keep operations in the control of the family?
Does the family plan on keeping the company as a generational business?
Will family members have ownership interest in the company?
What opportunities for growth within the company remain for non-family members?
In addition, adding a family member to the employee roster can be a sensitive issue for both family members and the employees of the company. Concerns over fairness, opportunities, nepotism and tenure can quickly change the company culture which could send company performance spiraling downward. Ask yourself a few of these questions:
Are family members being groomed to fill leadership positions? If so, who is doing those jobs now and what happens to them? If no one then what does the gap in talent look like and for how long?
Do family members possess the skill set to be effective in their jobs? Are they making decisions with the proper education/experience required?
Are opportunities within the company the same for family members and employees?
How do the employees feel about each family member working in the business?
Are family members affecting the company culture positively or negatively?
I have found that to be successful, family businesses need to build a company culture of mutual respect amongst colleagues. This exists when each person has the skill set to perform their job responsibilities in a competent and professional manner, regardless of who they are related to.
Successful family businesses are able to navigate the integration of family members into the operations of the business through good communication and transparency, without negatively affecting the company culture, And, a good company is crucial because in order for the company to continue to grow, it will need a disproportional ratio of non-family members to operate and lead the strategic growth plans.