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20 tips to winning in family business


You can choose your friends and business colleagues, but you can’t choose your family. However, many people choose to start or continue running businesses with family members.

Of course, the common stresses of family and business are usually multiplied in a family business, so it’s important to establish the ground rules early on.

Here are 20 tips to keep your family business on track.

1. Family is for life. When the family business started you had a great vision for working and succeeding together. Nothing – repeat nothing – is more important than your family. If your ego and behaviour finds you challenging the very core of a family relationship, step back and pause for a moment. Things said or actions taken in the heat of the moment can often never be undone. It’s simply not worth it.

2. Do the organisational chart with titles, not names. This technique is very effective in taking the ego out of the roles played by each family member. When we draft the business’s organisational chart with job titles in them (rather than your names), it allows you to consider the person with the most suited skills to fill the role. This strategy requires family members to think in the best interests of the business on a commercial basis.

3. Document position descriptions. With the organisational chart completed, the often difficult task of determining “who does what” need not be so delicate. Using the job title as a guide, you now draft the responsibilities and tasks that a person with that job title would fulfil. This technique often has massive benefits in removing tasks that overlap roles or individuals due to family members taking on responsibilities on a haphazard, ad hoc basis.

4. Appoint individuals to titles and position descriptions. Now you have job titles and position descriptions, you can workshop the appointment of individuals to fill these roles. Remember to not limit this analysis to family. Non-family employees should be considered for all roles on the basis of merit. You can even extend your thinking to recruiting new staff from external sources if you don’t have the right internal fit.

5. Time out. Allow you and your family to call for “time out” when things get a bit hot. Acknowledge that you both have a different view, that it’s important you understand each other’s point of view and agree on a time to meet again to discuss.

6. Play the issue, not the person. This is a golden rule. Don’t include personal attacks or family niggle in your business discussions. Agree with the family that everyone should “call this” if they hear the person being attacked rather than the issue.

7. Dealing with nepotism. Nepotism is when favouritism is shown to family. Regardless of what you think, there are elements of nepotism in every family business. Don’t live in denial. Nepotism can either be very alive and recognised within the business or individual family members and/or employees may perceive it. The goal of every family business is to avoid nepotism and promote and empower individuals (family or employees) based on merit and performance.

8. Walk the walk. You will have heard the saying, “Do as I say, not as I do”. Many family businesses have one set of rules for family and another for everyone else. Try and avoid this pitfall and be consistent in how you treat all individuals within the business. The morale, culture and ultimate business success depend on this.

9. When to talk shop. Discuss with the family where and when everyone believes it’s appropriate to “talk shop”. Try and create some agreed “shop-talk-free zones” to manage everyone’s expectations and allow for quality family time away from the business.

10. Be consistent. Linked to “walk the walk” is being consistent. Family businesses can be notorious places for making policy on the run. Everyone feels frustrated and confused when owners are not consistent in their behaviour and decision making. Inconsistency often leads to loss of customers and staff attrition. The ability to attract new talent through recruitment is also affected if the market considers you “on the nose”.

11. Create forums for discussion. Rather than launching into animated discussion at any moment anywhere, it’s very useful to create regular scheduled meetings to discuss operational and management issues as a family. This allows family members to prepare in advance and manages expectations. Agendas and time limits assist here.

12. The devil in email. Avoid communicating through email. It doesn’t allow tone or sentiment to come through. If you have an issue, talk in person. Banging out an email in frustration or anger is a potential time bomb.

13. Internal facilitators. Try and develop trusted internal facilitators within the business that are allowed to keep the family honest in running the business on a commercial arm’s-length basis. Respect and accept feedback when these trusted staff members speak up.

14. External facilitators. Seek and appoint expert external advisors to support the internal management team. All successful business owners are surrounded by their inner circle of experts. Don’t miss out on benefiting from this success secret by letting pride and ego stand in the way. Take advice, share the load and increase the rewards for the family.

15. Don’t air your dirty laundry at work. This is really easy. Just don’t do it. Ever.

16. Lead through behaviour. Within the family group, choose to be a leader in demonstrating these principals in your daily behaviour. Inspire others to follow suit and set the bar high. You’ll be happier and have more work capacity as you stop spending time on negative thoughts, politics or innuendo.

17. Resist empire building. It’s tempting but empires don’t make you a success. Leave your ego in the bottom draw and share the spoils with the family. It’s much more fun to achieve goals with others – particularly your family.

18. Smell the roses together. Remember when you went into business to create success for you and your family? Don’t forget to smell the roses along the way. Too many people say, “When we get there we’ll celebrate.” I’m not sure “where” actually is or “when” you get there. So if you have a win, stop and enjoy it together.

19. Create wealth together. One of the primary aims in running a business is to make a profit. So what better way to enjoy it than creating wealth together with your family?

20. Blood is thicker than water. Loyalty in business is critical. The family bond and ability to unite under pressure is a competitive advantage unsurpassed. Never take it for granted but remember that the power of family can ultimately outlast, outwit and outplay your most ardent competitors.

Darren Bourke is a consultant, business coach and mentor who helps small and medium businesses struggling to maximise profitability, productivity, people and performance. His Free Report titled What Successful Owners of Growth Businesses Do That You Don’t, newsletter and updates are full of strategies and tips to make your business boom. Sign up now at www.businessinfluence.com.au

Photo: Aturkus