Like every business organization family business has a unique set of challenges and problems.
The Keyword is CHALLENGE
Family Business mixes pride and passion with pain and glory and a very hardworking pathway to success. Sometimes a family finds peace and prosperity without apparent effort, while others seem to lurch from one crisis to the next.
We can define Family Business success as achieving, A Happy Family within a Strong Business. Success is more of a challenge at a family owned business because we strive to produce both desirable outcomes, within set time frames. We have twice the responsibility that is the happy family and the strong business.
Obviously Family Businesses go through various stages of growth and development and it becomes more challenging for the second generation or the subsequent generation that enters the business.
A famous saying about family owned business in Mexico is “Father, founder of the company, son rich, and grandson poor”. The founder works and builds a business, the son takes it over and is poorly prepared to manage and make it grow but enjoys the wealth, and the grandson inherits a dead business and an empty bank account.
Family Business is Hardworking Pathway to Success
Below we have listed some of the paramount challenges faced by family owned business which determines the success, growth, and continuation of a FAMILY BUSINESS.
1. EMOTIONS – Family problems will affect the business. Divorce, separations, health or financial problems also create difficult political situations for the family members.
2. INFORMALITY – Absence of clear policies and business norms for family members.
3. RESTRICTED VISION – Lack of outside opinions and diversity on how to operate the business.
4. CARELESS DOCUMENTATION – No documented plan or long term planning.
5. FAMILY MEMBERS COMPENSATION – Dividends, salaries, benefits and compensation for non-participating family members are not clearly defined and justified.
6. CONFUSED ROLES – Roles and responsibilities must be clearly defined.
7. PRESSURE TO HIRE FAMILY MEMBER – Hiring family members who are not qualified or lack the skills and abilities for the organization. Incompetency should not be tolerated.
8. GREATER COMPENSATION TO NON FAMILY MEMBERS – It is a common myth that family members will receive more compensation in a family business and develop a attitude of incompetency towards management.
9. PLANNING FOR SUCCESSION – Great conflicts and division are the result of no proper plan for handing the power to the next generation.
10. ESTATE PLANNING AND RETIREMENT – Long term planning to cover the necessities and realities of older members when they leave the company.
11. PROBLEMS IN COMMUNICATION – Difference in level of seniority and emotions like envy, fear, anger invoke zero communication in members.
12. DISABILITY TO CONTROL – Difficulty in controlling the operations of the organization, other family members and lack of supervision in day to day activities leads to more problems.-
But as we all know that Families and Businesses come from different worlds. Like oil and water… they cannot be mixed. But, families have always built businesses together… and they always will.
One of the challenges in family business is working together in teams. It is a fact that team work offers huge rewards but some frustrations are likely. Working within teams needs improvement in the power of creativity. The team leader needs to encourage this creative power, harness it, and channelize the creative fuel.
Andrew Carnegie- “Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results.”
It is vitally important that the team leader unleash the power of team members with a collaborative leadership style to fuel the creative fire within the team.
Below are our top ten tips for channelizing the creative fire of Family Business Teams.
1. BE CLEAR ABOUT THE EXPECTATIONS – Only after the team members know what is expected of them can they deliver the perfect output. So understanding the difference between expected and derived results is necessary for both the team leader as well as the team members.
2. Faith in the Team Members – Being optimistic and challenging helps when you have total faith in the members of your team. As the leader, you need to expect the best from your team, keeping your expectations high and realistic. This is a challenging balancing act, but people need to be inspired to perform at their best. Instilled faith helps the group to perform better and come up with creative innovative ideas and solutions. Like Mike Litman says Improve at 1% each day and thus raise the bar for top performance one step at a time.
3. Encouragement accompanied with respect goes a long way in generating new thoughts. Fresh perspectives and courage too make up for new ideas easily. the leader needs to master the art of creative mindset.
4. Avoid making judgment while generating new ideas. If you are open to new solutions then the process of idea generation is not suppressed and sometimes best ideas are generated.
5. Brainstorming sessions are a great way to get numerous ideas. While brainstorming avoid judgment, look for quality, make notes to capture the idea and moreover combine two good ideas.
6. Communication is the keyword again, which helps to build strong relationships. Communication with open channels helps to trust the team members and know each other better.
7. Employees need to be given responsibility to bring out the best in them, give them the power to decide on a solution to a problem and watch the creativity grow by leaps and bounds.
8. Praise works like reward for the individuals and team alike. Acknowledgment in the form of encouragement is another word for praising the team members. Making sure that the team is cared for and recognized for its hard work is a reward in it self.
9. Be daring and build a brave team. Accept that mistakes are made at times and it is challenge to build on failures and see them as opportunities to learn and succeed further.
10. Unity in Diversity is the final mantra – build a strong team with diverse people, diverse backgrounds and combine the experience, culture, creativity and align them for the success of our family Business.-
Adding humor as a fuel to creativity is the last but not least step to see the team working happily together and productivity of business soaring to great levels.