A list of the biggest pitfalls plaguing today’s family businesses and a game plan for resolving them.
Lesson 1: Establish Job Descriptions
Clearly defined descriptions are absolutely vital in any business, whether large or small, a family-run business or publicly traded. Carefully thought-out job and well-written descriptions ensure that all aspects of the business are being tended to. Additionally, they help management make better hiring decisions and give employees a roadmap to success.
The lack of clarity in roles can be especially troublesome for senior executives and ultimately can lead to friction and deep rivalry among them. With everyone trying to stake out their own piece of the pie, people will inevitably be vying for the same piece.
Lesson 2: Establish Performance Measures
With no clear job descriptions, there are no clear ways to evaluate an employee’s performance. Take the time to create a measurement tool that you can use to judge each employee’s performance. This is your mechanism for holding people accountable. It will also help resolve any suspect of favoritism from non-family employees.
Lesson 3: Strong Leadership from Non-Family Members is Essential
Many family business owners maintain an open door policy for family members, offering anyone who would like to work for the business a job. These jobs are often management positions. As a result, many business owners are unable to hold family members and non-family members to the same standards and many employees become resentful of what they view as favoritism amongst the family. It is extremely important that some members of the management team be non-family members and that some of the day-to-day decisions fall on their plate.
Lesson 4: Profits First, Family Second
With no job descriptions, no performance measures, and too many family members clamoring for power, it’s easy to see how family tension can mount. In fact, owners can become so consumed with maintaining family accord that the business literally falls apart underneath them.
Every minute of time that is spent dealing with a family-related issue is a minute that could have been spent driving sales and adding to the bottom line. And during work hours, being 100 percent committed to managing the business and the bottom line has to come before all else, including personal relationships.
As a manager, you can’t waste down time dealing with the business of family. You want to concentrate on the business of business. You want to concentrate on making a profit and then profit management.