Managing a family business can be a complex and challenging endeavor. Along with the usual layers of responsibilities, there's the added complexity of family dynamics that can make things even more interesting. Business culture and personal relationships can become intertwined, which can be either a blessing or a curse.
For team members, navigating this terrain can be tricky, and they may wonder what they should say or do in certain situations. Ultimately, the success of the business depends on how it's managed. Does your team love working for your family business? I sure hope so!
Effective communication is the biggest challenge in family businesses
As a business coach, I've had the privilege of working with a wide range of companies and business owners, and I've seen firsthand how organizational culture and dynamics can make or break a business. The success of a company often hinges on how it's managed and the priorities that are set.
Unfortunately, family businesses can be particularly susceptible to complicated family dynamics that can seep into business operations. In such cases, my approach always centers on improving communication and accountability, but there's more to it than that. Family businesses often need to balance personal and professional relationships, and that requires careful navigation and a willingness to pick your battles. Most family businesses also wish to enjoy Thanksgiving Dinner together, so the family business must tolerate what traditional businesses do not need to. It is a matter of picking your battles. But there is a cost.
The most successful family businesses have discovered the elusive recipe for keeping family dynamics separate from business functions and maintaining an engaged team. This recipe involves hiring the right people, assigning them to the right roles, and ensuring they're equipped with the skills, ethics, and mindset to succeed. Effective communication is crucial, as is setting clear expectations and delivering results in a timely and effective manner. In these successful family businesses, birth order and family relationships take a back seat to merit, skill, and ability.
Dealing with inbound pressures of a family business
Without clear standard operating procedures, policies, contracts, and other essential business documents, a family business can quickly become a chaotic and stressful environment. The JRCI Focus Paradigm Model highlights the various pressures that can arise from all sides, represented in red, which can make the day-to-day of the business feel like a free-for-all where confusion reigns, and stress-levels run high.
At JRCI, we believe in a different approach, as represented by the green arrows in our operating system. We hold everyone positively accountable for their actions and results, including the company, the team, and the customer. With clearly defined roles and goals, everyone knows their score, and we empower all lines in the triangle to do their best work. By prioritizing accountability and communication, we create a more harmonious and productive environment for our team and customers alike.
Once we get the hang of it, we ascend to the next model represented here. Here, the green bubbles represent where effective owners and managers, family members or not, align themselves in directing traffic. Systems drive 80% of the business, and we manage 20% of the variables. Any way you slice it, commitment and accountability is required. But there is more.
Building a culture of trust amongst all team members
Trust is required to ensure success with this model. Trust with each individual, family member and non-familial employee. Trust in the company, the team, and the customer. Without Trust, the triangle implodes, and everyone loses. Trust is earned, and that is hard work. It's even harder to maintain.
Reduce family business challenges by empowering your team
What does it mean to empower your team? Webster's New World Dictionary defines empower:
Empower / ɛmˈpaʊ ər /
1. to give power or authority to; authorize
2. to give ability to; enable; permit."
Family Business owners who are interested in growing their businesses can become stagnated or develop growth plateaus. They work 50 to 70 hours weekly to keep the business viable when they focus on solving any issues that may arise during a business day.
Tim Ferriss said it best in his book, The 4-Hour Workweek:
If you are a micromanaging entrepreneur, realize that even if you can do something better than the rest of the world, it doesn't mean that's what you should be doing if it's part of the minutiae.
- Timothy Ferriss, author of The 4-hour Workweek
By enabling, permitting, or authorizing team members to solve problems that the business owner usually solves, you free yourself to work on the business and not in it. At the same time, elevating the team expands capacity, sustainability and builds meaningful purpose for the team.
How do you empower your teams to act in your best interest?
In order to work on the business and not in the business you need to empower your teams to do work and make decisions so you don't have to. Here are several ways to ensure the team understands your philosophy about how to run your family business, maintain the spirit of the company mission and ensure financial viability.
- Share your vision and mission with your team regularly
- Maintain an employee handbook (aka Policies and Procedures Manual)
- Improve communication skills
- Learn individual motivational factors and inspire them
- Acknowledge individual intelligence and implement it
- Catch people doing things right
- Be honest with everyone
- Show Appreciation and Gratitude regularly
- Establish conflict resolution procedures
- Educate on responsibilities and accountability
How to manage employees in a small family business
Create and share your vision
Creating a vision and mission statement enables your various team members to understand your aspirations for future business and expectations for serving the marketplace today. Maintaining an employee handbook provides clear guidance for what is expected of them to support the vision and mission while conducting day-to-day business and dealing with various circumstances.
Constant careful communication
Communication is the biggest problem family business owners have in empowering their teams. The family matters vs. the need to know business matters often are conflicted. Quality communication is critical in any organization but crucial to family business success. If you can not tell the story to your teams, vendors, and customers of why your business should be successful, you will fail to take them on the journey toward that success you envisioned when you started your business. Communicating well in various mediums is essential to gain your team's Trust and confidence and influencing their contribution to the family business's success. This develops the love of the family business for all involved.
Empower and encourage your team
Learn what motivates your teams to achieve the vision and goals you've established for your organization, and then use it to inspire your team to do great things. It's amazing how someone's IQ doubles when you give them responsibility and indicate you trust them. You will develop incredibly motivated teams if you believe they can achieve great things and communicate it to them. Part of the motivation is to catch people doing things right and acknowledge it. Acknowledging success breeds more success, a true momentum force-multiplier.
Another critical element of empowering people is being honest with everyone. You will lose their respect and devotion if you don't feel you can tell customers, employees, and vendors the naked truth. Some family business owners believe by not being honest about lousy business news, they are sparing their teams from anxiety and stress, retaining customers, and keeping loyal vendors when all they develop is mistrust and fear of the unknown. Always be honest in your business dealings and truthful with everyone; your teams, customers, and vendors will stand by you as no other group can.In this moment, be sure to grant appropriate appreciation and gratitude. Not gratuitously, but well-earned appreciation for a job well done. Never take them for granted; you will earn their appreciation in return.
When you enable or authorize employees to conduct business on your behalf, it is often prudent to establish conflict resolution procedures so your teams can have consistent guidance in resolving customer, vendor, and employee disagreements. Never assume that what you know is right, for correcting disputes is what everyone within and outside of your organization knows is right. Take the attitude that if it isn't written down, it doesn't exist as a policy. It will save you significant discomfort when trying to resolve customer service issues.
Train your team
Remember, “Assumption is the root of all communication evil”, especially in the family business.
Training on expectations, deliverables, responsibilities, and accountability will help teams to know the boundaries within which they are allowed to work for the benefit of the family business. Without clear boundaries, employees will wander, get frustrated, or even unknowingly get in the way. This is not what anyone signed up for. The family business is often far more closely held than a traditional business. For new team members, this can be a difficult shift. Strong communication skills are required for everyone to thrive in this arena.
Make your team love working for your family business
Building a successful family business that your team can fall in love with requires a concerted effort and a focus on several key elements.
At the foundation of it all is earning trust, which requires consistent and transparent communication, as well as a willingness to listen and act on feedback. From there, building a strong team culture based on respect, accountability, and a shared commitment to excellence is crucial.
This takes effort and hard work, but the payoff is well worth it: a thriving family business that inspires loyalty, engagement, and passion from everyone involved.
