Getting the best results for a family business
This month we witnessed the Coronation of King Charles and Queen Camilla. Over the years, the British monarchy has been described as the ultimate family firm. When it comes to the royal family, many of their recent troubles and/or struggles have been played out in the very public glare of the media, but what about a family-owned and managed business, what challenges do they face and how can they best succeed?
In the UK, there were 4.8 million family businesses, who employed 13.9 million people and contributed £575 billion to UK GDP in 2020-21. Many are small in size – for example, 21% had between 1-9 employees. Some of UK’s most successful businesses are family owned, run and managed. JCB, Dyson, Arnold Clark, Specsavers and Bet365 are great examples of success stories.
The pro’s
Working for and/or with your family may sound, in its most simplistic form, like a fantastic idea. There are also many possible combinations such as parents, children/siblings, husbands and wives, multiple generations and extended families where family members take the roles of directors, shareholders, advisers, managers and employees. Furthermore, there are many positives – shared values/outlook, stability, cohesion, flexibility, commitment, authenticity, legacy/succession planning and often decreased costs.
The con’s
All businesses face challenges, whether it’s dealing with fluctuations in the economy, competition, recruitment and retention of employees, work/life balance and wellbeing, establishing and maintaining quality customer relationships, sustainability, technology, increased regulation etc. But add to that the complex interpersonal dynamics that exist in most families – namely:
Different and sometimes difficult personalities
Elevated levels of emotion/increased amounts of drama
Blurred boundaries between home and work
Lack of clarity about roles, responsibilities and expectations
Poor or ineffective communications
Underlying dependencies, disappointment and resentments, including rivalry
Unable to make quick and timely decisions
An inability to let go
… and it’s sometimes no surprise that ideas and development can be stifled by family relationships.
Ways to reduce tensions and de-escalate disagreements?
For success when it comes to setting up and running a family business, it really is all in the preparation; it’s important to have the right approach and mindset to enable the business to thrive and be able to provide a source of pride and financial security for generations to come.
But the main difference of a family business is that you need to remember to treat it like a business, not an extension of the family. So, you will need to have some boundaries and clear processes in place and then stick to them. This will help to ensure that you’re not tempted to cut corners or make assumptions that everyone will know what they are meant to be doing. You will also need to look at everything from structure, culture and mindset, to reporting and management processes, measurement and of course succession planning. Other tips include:
Setting boundaries – do not mix business, personal and home lives.
Treating all staff, family and non-family, the same.
Establishing clear and strong methods of communication.
Motivating and empowering family members to play to their strengths and stick to their roles.
Encouraging staff to have a development plan with clear goals that details activities such as training, qualifications, skills development etc.
Seeking outside advice to ensure objectivity and embrace creativity.
Setting up clear management reporting lines to aid fair and timely decision making.
How I can help
One of the biggest challenges in a family business can be the different personalities involved – everyone will have a different behavioural and communication style. Once you are able to assess and understand more about them as individuals, you will find it easier to develop a happier, more engaged and effective team who will work harmoniously together to achieve business growth and success. For more information about DISC, click here.