No amount of advice and careful observation can fully prepare you for marriage. You have to be in it to experience it. But at least there’s a mechanism to escape if you don’t find it to your liking! But with parenthood there’s no turning back. Raising children is truly one of the toughest jobs, and no-one who’s been blessed with the joys, trials and tribulations of a family will ever have the eloquence to fully describe the emotions that are unleashed by being a parent.
Founding, owning and managing a successful business is also a tough and complex job, and one very few of us are really suited to. Successfully mixing these two tough jobs, parenthood and running a family business, doubles the challenges.
Positives of the family business
Last time we discussed some of the pitfalls faced by family businesses. But it’s not all bad. It can be done, and when successful, a family business is one of the greatest of all shared family joys. I’ve been privileged to work in some outstanding family businesses, and have been drawn into the inner circle of many other successful family enterprises. Even when there are tensions I’ve always been envious of the obvious joy derived by father and son, mother and daughter, brother and sister, and husband and wife while working together to build a better business.
I wonder, can there be a business owner who doesn’t dream of handing on the batton to a family member? And unlike marriage and parenthood, building a successful family business is something you can prepare for. There are many excellent publications dealing with the subject, and regular seminars held around the country. And highly successful family businesses will be happy to share their experiences with you. You don’t have to reinvent this wheel.
When family businesses fail
It’s a fact – most family businesses fail in the third round of succession. Brothers and sisters often grow and keep control of the business, but cousins seldom do. The seeds of destruction are usually sown in the first generation. Mother and father are so involved in the business there’s no preparation made for the next generation. Succession, in particular, can be emotionally charged – and, afraid of conflict, family members avoid it. In some families it never gets discussed, a sure step towards future conflict and business failure.
Making family businesses work
A crucial first step in moving towards a successful family business is ensuring that the lines of communication between family members are open, and to do so as early as possible. As open-minded and approachable as you may think you are, this communication won’t happen informally. You have to set up a formal structure, such as a family forum or council, to open the door so to speak. Use the forum to educate the family on the inherent conflicts that arise between family, ownership and business – the three-circle concept described last time.
The more they understand this, the better they can fill their roles effectively.Also use it to discuss business matters, to build unity and common vision, and to preserve family values, culture and traditions. A good way to start discussion on these topics is to develop a family creed and a vision and mission for the business.All family members, from an age that you should jointly decide, should be invited. Make this age younger rather than older. Teenagers have all the answers, so capitalise on their wisdom!
Meet at regular and preset times at least four times a year, and keep a record of proceedings, with all issues followed up in a matters-arising agenda item at the next meeting.Chairing these meetings can sometimes be difficult. It’s often easier for a non-family member to do this, and many family businesses have appointed a trusted family friend to fill this role.
Plan the agenda with care. Don’t rush the process. For example, introducing discussion on the thorny issue of succession at the first meeting would be a mistake. Deal with the tricky situations later.Set simple rules of order at the meeting, such as no private meetings, addressing others through the chairperson, silence meaning consent, no speeches, and focusing on the issue, not the person.
Taking your business into the next generation will bring you joy that you can’t afford to miss. It’s too important to leave to chance, so get your communication structure operating now.
