A Few Helpful Tips for Avoiding Conflict in a Family Business and Keeping Your Goals on Track

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            Is the stress of working in a family business troubling you? Are you looking for some expert advice to help handle it?  Working in business is hard enough but throw a couple family members in the mix and it can get frustrating, so we’ve assembled a list of excellent family business tips to help guide you through it.

            Family businesses face all the same challenges that the average non-family business deals with, but they also have a few added issues that arise due to family relationships.  Questions like “Which family member holds the most power?” “Who is the primary stakeholder?” “Who is first in line to take over?” and, “Who makes more money?” often arise and create uncomfortable, challenging situations. 

Here are a few helpful tips for avoiding conflict in a family business and keeping goals on track, courtesy of gaebler.com. 

Communicate Early and Often

The best tool for keeping a family business focused on business is good communication.

Good communication avoids unpleasant surprises and can minimize the damage on potential family business crises by addressing problems sooner rather than later.

 

Take the time to ensure that good communication channels between family members are in place. It's a smart idea to conduct family-only business meetings at least twice a month. A family business meeting allows family members get together to discuss how the business is doing. Each family member can discuss their areas of responsibility.

Don't Make Working at the Family Business Mandatory

It's wise not to force a family member to join the family business. Let them know that it's an option but encourage them to consider other options.

If a family member gets experience somewhere else and then joins the family business later, that's a good thing. They will bring new ideas and fresh thinking – avoiding the insular thinking that often plagues family businesses and ultimately leads to their downfall.

Nip Family Business Problems in the Bud

When issues arise between family members, address them quickly.

If a dispute is not resolved early, it can turn into a much bigger problem. Be on the lookout for hostility or jealousy between family members, and deal with such issues directly as they arise.

Don't Take Your Work Home and Vice Versa

It's smart to distinguish between family discussions and business discussions and keep those conversations separate.

Don't have business meetings at the house, and don't have family meetings at the business.

Mixing the two together all the time is a recipe for disaster. The business, the family or both may fail as a result.

Hold Family Members Accountable for Results

In a family, the standard is often to forgive a family member when they make a mistake. In contrast, mistakes in business are not easily forgiven.

Accordingly, a family business must lay down clear guidelines: in the business, we are going to hold you accountable for your actions, just as we hold all of our employees accountable for their actions.

Every family member should have a detailed job description that outlines what they are expected to contribute to the business. Measure performance against pre-defined metrics so there is no ambiguity on whether desired results were achieved.

Treat Family Members and Non-Family Members Equally

If family members get preferential treatment, non-family members will lose their motivation to help grow the business.

Smart family businesses don't flaunt their ownership by giving family members perks that others don't get.

Do whatever it takes to make non-family members feel that they have the same opportunities as family members. Otherwise, expect your family-owned business to deliver mediocre results and lose market share to competitors.

If you can't treat non-family members equally in some area – for example, maybe they can't have stock ownership like family members do – make up for it in some other way.

Ask a Family Business Expert for Help

When in doubt, ask for help.

Family business consultants are well trained in dealing with issues that are unique to family businesses. They will provide you with advice on dealing with complex family business challenges. For more information on family business consulting, visit our website at ContinuityFBC.com.

When Family Ties Bind Business Relationships

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Are you considering working for the family business? Maybe you’re Father owns and operates a construction company, or your Uncle has a restaurant. Whatever the business may be, if it’s family run there are a few things you should know before committing yourself long term. 

Here are a few questions answered about some of the most important aspects of entering into business with a family member, courtesy of The New York Times.

Q. The bleak job market has you considering working in a family member’s business. What are the biggest differences between working for relatives and working for strangers?

A. Keep in mind that relatives are typically focused on relationships and loyalty, whereas in business the focus is on goals, competence and growth, says Greg McCann, a professor of family business at Stetson University in DeLand, Fla., and author of “When Your Parents Sign the Paychecks.”

When the two are combined, the results can be mixed. On the one hand, “Working with or for family can be a source of strength, because you have trust, shared values and long-term commitments to each other,” Mr. McCann says. On the other hand, relatives sometimes take advantage of their relationships by coming in late, leaving early or trying to get paid more, he says.

One of the biggest risks of working for a family business is that if something goes wrong, the damage can go beyond the job to your personal life, he says.

Q. What kind of due diligence should be done before taking a job working with relatives?

A. Make sure there is a path for advancement, says David R. Specht, a family business consultant and a lecturer in family business management at the University of Nebraska’s College of Business Administration in Lincoln.

When working with relatives, Mr. Specht says, you often must manage your career, because there may be no formal process for promotion or development. “Discuss what kinds of hurdles you’ll need to overcome to be a leader there; otherwise you could wind up as more of a hired hand than as someone on a professional path,” he says.

You want to know up front what your long-term job prospects are and what could limit you. “If it’s your brother’s business and he’s got three daughters being groomed as successors,” Mr. McCann says. “you’ll probably never make it to the top.”

Ask about contingency plans. Mr. Specht says: “If it’s your uncle’s business, what happens if he dies or is disabled? Does the business dissolve? Make sure there is a succession plan in place.”

Q. Because you needed a job, a spot was created for you in a relative’s company. Might employees there — especially those who aren’t family — resent that?

A. “There could be a lot of friction with nonfamily employees, who are worried about the tough economic times and know the business isn’t hiring,” Mr. Specht says. “They could feel their own jobs are now in jeopardy.”

It’s important to view the position as an opportunity and not just as a place to park yourself until the job market improves. Hold yourself to a very high standard, advises Graham Chapman, who took a job with his father’s marketing firm, 919 Marketing Company in Holly Springs, N.C., after graduating from college in 2009.

Mr. Chapman — who had few job prospects at the time — started in an entry-level spot but was soon working in a new position developing new business. “I was concerned about being in a situation where others at the firm resented me and thought I was getting favors,” he says. “To avoid that, I knew I would have to work harder than others and have results fairly quickly.”

Q. Even though you’re working with family, should you have an employment contract or other written agreements in place beforehand?

A. If the business owner is a fairly close relative, a formal employment agreement is probably overkill, but you should have a written description of your role and responsibilities and the organizational structure, says Mark T. Green, a partner in the Family Business Consulting Group who works in Salem, Ore., and a clinical professor of family business at Seattle University. “Work as much out as possible upfront, like expectations about compensation, perks, even what happens if things don’t work out, because if you leave you still have to see these people at family gatherings,” says Mr. Green, whose consulting group is based in Marietta, Ga.

Q. Even if it wasn’t your first choice in terms of a career move, what are the benefits of working with family?

A. You will likely wind up with exposure to more parts of the business in a shorter time frame than you would in a corporate setting, because of your access to top leaders, Mr. Green says. Many family-run businesses are small, and that will probably give you the opportunity to wear different hats.

There is also a feeling of loyalty and a sense of mission when you work with relatives. “You want to win for the family. There’s a feeling of ‘If I do well, you do well’ that gives the job purpose and meaning,” says Larry H. Colin, co-author of “Family, Inc.”

Mr. Colin says family members often have a greater tolerance for mistakes and bad decisions than nonfamily members and are generally more willing to accommodate work-life balance.

Working with family isn’t always easy, he says: “But when it works — and it works a lot — there’s nothing better.”

Share your experiences with Continuity Family Business Consulting on our Facebook Wall, linked HERE.

FAMILY FUEDS: Seven Simple Tips To Prevent Family Feuds From Killing Your Family Business

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Family feuds- whether they start in the family and spill into the business or vice versa, they are a major factor in the poor survival rate of these businesses. 

Studies indicate that only about 30% of family businesses successfully transition into the second generation.  "One of the misconceptions many people have is that a successful family business equates to having a common ‘view’ amongst family members of how things are done and when," says Don Schwerzler, a top family business expert.  "It has been our experience that just the opposite is true. In successful family businesses, there is a surprising amount of disagreement or lack of consensus when new ideas or issues are first being debated and discussed."

The day to day dialog within family businesses needs to create a “positive tension,” as opposed to a dysfunctional family business where the tension created by the dialog is destructive and leads to the deterioration of family relationships, creating family business conflict.

Bob and Susan are owners of a second-generation family business. Doing $8M in sales, they have three adult children who work in the business. The family has a formal business meeting every month. Progress Reports are made on "action items" from previous meetings and new ideas and issues are discussed and debated. Sometimes a decision is forthcoming - sometimes the topic is tabled for additional research and further discussion. This family business is a great example of a family working well together and strengthening family relationships.

But it wasn't always like that. At one time, Bob and Susan hated to have family meetings because they rarely did anything positive. It generally turned into family fights where tempers flared and the language used and the insults made would create havoc within the family business. The parents were fearful that the family was unable to work together and that the family meetings would damage the family relationships beyond repair. Before seeking help, Bob explained they planned to put the business on the block and fire sale it - sell it for whatever they could get - if mediating didn’t work because they just couldn’t take the fighting anymore.

Having a facilitator come in during the family meetings helped break destructive habits. Each member of the family agreed to the help - and each agreed to work hard at changing the status quo. They understood that the family business conflicts were hurting the growth of the business and worsening the family relationships.

One of the most basic yet most important lessons taught during facilitation of a Family Business Meeting or a Family Council Meeting is Respectful Listening and Respectful Questioning. The goal is to enable the family members to become better skilled at active listening, which is the key to communicating effectively with those who disagree.

Here are Seven Simple Tips on being a better "active listener," courtesy of FFI.org.

1. Make time to understand the points of view of others - the payoff can be huge.
2. Understand we make a difference one conversation at a time - don't try to out shout everyone else.
3. Seek more information and insights from those with whom you disagree - ask for amplification and examples that will enable you to better understand other points of view.
4. While disagreements on issues may be strong, don't forget the family's values are a shared bond and represent a shared commitment to the common good.
5. Create "rules of behavior" for the family meetings and abide by them - being family does not excuse boorish behavior or a lack of business etiquette.
6. Do not ridicule or be sarcastic to other family members - know and understand that being in a family business does not result in solidarity of opinion.
7. Establish time limits on discussions or debates - when that time limit is reached but closure is not attained, table the topic for further research and put it on the agenda for discussion at a future meeting.

As one expert put it, "I know we don't have to agree with each other to think well together".

Family feuds are a waste of time and money. Do you find your family business constantly arguing? Does your business have difficulty moving forward because family members disagree? Let Continuity Family Business Consulting step in and help. For more information on family business facilitation, visitContinuityFBC.com or our Facebook page, linked HERE!

5 Tips to Running a Successful Family Business

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Is working with family members a dream come true - or a complete nightmare?  This all depends on how the business is run and how well the relationships are maintained within it. 

There are plenty of stories to defend both sides of this argument; some leading to legal action and deterioration of family ties while others achieve great success working with family and pass on the business through multiple generations.

The term “family business” contains a widespread group of different businesses, from multi-national chains to local corner store shops and a wide range in between. The key to a successfully run family business lies in a few core responsibilities that are universal, regardless the size of the company and the family members that comprise it.

In most ways, working effectively with members of your family isn’t much different from working with any other business partners. Being brothers, cousins, sisters, father-son/mother-daughter, etc. isn’t enough to make a business partnership work. It takes an approach that encompasses some principles, which can be found below, courtesy of CNBC.com.

1. Communication is everything. Communication is the key to good relationships of any kind. With family though, it can take a little more effort, as there are often dynamics at play that make communication more complicated. We can have a tendency to feel like a loved one knows us so well that we shouldn’t have to voice our feelings or expectations. But if you want your partnership to work, it’s important to let go of these assumptions and communicate clearly and openly, just as you would with a non-family business partner.

2. Expectations need to gel. To a large extent, this point goes back to communication. Specifically, it is vital that each partner’s expectations regarding their role and those of the other partners are communicated clearly. Again, assumptions are a killer. Lay out what each of your roles will be in the business before starting. Voice what you expect from your partner(s), and put it in writing to solidify it.

3. A formalized business relationship is best. However strong your relationship is now, you’re bound to have disagreements with any business partner. Drawing up a written agreement for your partnership (and including the expectations from #2 above) is a must. Some entrepreneurs are reluctant to take this step, as it may seem as though a written agreement demonstrates a lack of trust. On the contrary, a written agreement for a business partnership is simply good business and is designed to protect all involved parties. The bottom line is that you’re much more likely to be sorry you didn’t create an agreement than that you did.

4. Priorities are important. We all want to be successful entrepreneurs and make a lot of money, or change the world. But it’s important to prioritize your family relationships over business. It’s heartbreaking to hear of families that have been ripped apart by financial or business disputes. At the end of the day, you can build another business or make more money, but you’ve only got one family for life. Remembering that can help put disagreements into perspective and avoid the nasty fallout of a family business gone badly.

5. All-business is no fun. Although you might have a lot of fun working your business with family members, it’s important to set aside “family-only” time too. If all you ever talk about is the business, not only will your relationship eventually suffer, but you’ll drive the other members of your family crazy! Take time out from business to do the things you would do together if you weren’t business partners. Try going out to lunch or for a round of golf without talking about business at all. If you do what it takes to maintain a strong family bond, it will only serve to support your working relationship.

Is working within your family business a dream come true, or complete nightmare? Let us know on the Continuity Family Business Consulting Facebook Wall, linked HERE. 

For more information on Continuity FamilyBusiness Consulting, visit our website: ContinuityFBC.com.

When Working In a Family Business, Having to Prove You Deserve to be There is a Job in Itself!

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There are hardening pressures when working in a family business, having to prove you deserve to be there, not entitled to the position because your father owns the company.

Eliza Browning is the VP of Crane Digital, where she oversees the company’s online business and digital strategy. Before joining Crane Digital, Eliza worked in digital media for news organizations including CNN, ABC News and the AP, never imagining she’d end up at her family’s business.

Crane & Co., was founded in 1801 in Dalton, Massachusetts. It’s one of the oldest family companies in the country, with ownership recently split between family and private equity shareholders. Eliza never thought she’d work there, but when she decided to make a career move, she needed to prove herself.

“When I came back to the company that’s been part of my family for more than two centuries, to open a New York office and lead Crane’s digital business – I wanted to prove myself,” says Eliza in an article for INC.com. “I pushed myself harder to show that I could lead the division in a new direction – not because of who I was, but because of my skills and experience. I wanted people to see me not as a Crane, but as another employee.”

To be accepted and most importantly respected by her colleagues, Eliza needed to be more capable than non-family members, which meant putting in longer hours with frequent weekends in the office. “They weren’t required by my managers or peers, but I required it of myself,” says Eliza.

About a year into her time at Crane & Co., a fellow co-worker called Eliza “stunned and embarrassed” to say she had just found out she was a Crane family member. “I laughed and told her it was the best compliment I’d been given since joining the company” says Eliza.

How was your transition into the family business? Did you feel the pressures Eliza did? Share your experiences with us on the Continuity Family Business Consulting Facebook Wall, linked HERE.

Developing Next-Generation Leaders

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One of the most common mistakes advisors makes when preparing families for business succession planning is they often narrow their focus to the single individual that they deem most capable of running the business upon a CEO’s retirement.  To truly make sure that families retain their core values while maintaining strong corporate governance and sound strategic planning, advisors should consider all next-generational family members and groom them to fit individual unique leadership roles. At Continuity Family Business Consulting, we focus on all members of the business. 

Many Next Generation (NextGen) family members are ill-prepared to take on the responsibilities of leadership roles in their respective businesses.  This can easily be avoided if the NowGen helps the NextGen family members develop a trifecta of core traits that are essential to running a business, which are self-confidence, an internal definition of success and people skills.

Below is how each of the trifecta of core traits is defined in the blog article Developing Next-Generation Leaders on FFI.org. 

Self-Confidence is achieved when someone deeply understands who he or she is and where his or her strengths lie – knowledge essential to navigating the challenges life presents.  Unfortunately self-confidence cannot be taught in a short period of time it is developed over years, from personal conquests and sometimes yielding to life’s obstacles.  Far too often, however, NextGen members lack self-confidence due to the fact that they’ve been sheltered by the life style that allowed them to enjoy wealth and a security blanket of their parents, and most times both.  It’s never too late to change, through 360 evaluations mentoring and peer-to-peer counseling, NextGen family members can restructure their perception of their strengths and weaknesses and learn how they can achieve overall improvement.

Many children are not given much of a choice or are pressured into following in the family business and do not have a chance to accurately express themselves and pursue their passions.  This can be very subtle for example including work in their day to day conversations perhaps around the dinner table every night.  Children are asked less often how their day went leading them to believe that they can only win their parents recognition by expressing interest in the family business.  When this child matures and eventually enters the work environment in the family business they experience feelings of entrapment.   As advisors, we must help NextGen family members establish their own definitions of success by expressing interest both inside and outside the family business.

Successors are often ill-prepared to manage the complex inter-personal relationship dynamics intrinsic to the family business environment.  A well rounded set of skills is essential to running a successful business.  For example one with outstanding technical skills may flounder when it comes to resolving conflicts of understanding workplace behavior, people skills are essential to running the family business at an optimal level.  As advisors we must also help NextGen family members round out their social skill sets by furnishing them with tool chests of communication and conflict management strategies, while giving them a forum with which to practice these skills before they officially assume leadership positions.

Family members must generously invest in the next generation with time, money, energy and wisdom from their own lives if they expect successors to advance a legacy of integrity and value.  Continuity Family Business Consulting can help both the NowGen and the NextGen prepare for the next steps within the family business structure. For more information, visit ContinuityFBC.com or call us at 877-925-5149.