4 Key Components to a Successful Family Business

In my work with family businesses, there are four components that I have found to be crucial. These include managing conflict, succession, communication, and roles.

Manage Family Business Conflict

As part of a family business, you know how quickly conversations can degenerate into conflict. Arguments are more likely in a family business because family members are more comfortable with each other (and therefore less censored) than regular co-workers. Not only can workplace conflict hurt relationships among family members, it can reduce your credibility and professionalism with other employees.

To get better results and enjoyment from your business, you and your family can:

• Recognize the causes of business disagreements.
• Change the course of communication before conflict develops.
• Better understand family member’s views on business issues.
• Assertively state your thoughts and opinions.
• Develop a system for handling disagreements in a private office (not in front of employees).

Do you think you and your business will perform better with lower conflict? I bet so.

Plan for Change in Business Structure & Successio

Your business will eventually change over time. You may consider bringing on junior partners, promoting someone, or creating new titles and responsibilities for people. Family members, business partners, or investors may consider a change in the business structure. Planning for family business succession is a key component to the success.

To effectively plan for your business’s succession, you should be able to:

• Openly discuss issues related to succession.
• Learn how people really feel about taking over the business--don’t assume that your son or daughter really wants to or feels comfortable telling you how they truly feel.
• Address potential challenges to a new partnership or business structure up front.
• Anticipate family members’ and employees’ positive and negative reactions to changes.
• Ensure a smooth transition into your new business structure.

Enhance Family Business Communicatio

Many of the family businesses I have worked with surprised employees (and even me!) by how much they argue. In your family, it may feel normal to have disagreements or even a heated argument. It may blow over and no one is bothered much by it.

Even when this enters the workplace, it may still feel natural to you and you may not even notice - but other people do. And it often makes them feel uncomfortable. Simple conflicts and communication difficulties can block your business’s ability to thrive. The good news is that these challenges are easy to address. It’s often better to have a neutral third party:

• Point out communication problems.
• Coach family members on developing new communication patterns.
• Establish regular times for family business members to have meetings.
• Make meetings more effective and efficient.

Clarify family member business roles

The fourth key point is role clarification. A common problem in many family businesses is that individual roles and responsibilities tend to get blurred. Have you experienced this? You and your family members step on each other’s toes and it isn’t clear who’s in charge of what or whom?

Business roles are different from family roles. This can become confusing – not just for family members, but also for your employees, and even customers. An absence of role boundaries often results in communication difficulties and conflict.

To have a thriving family business you need to:

• Clearly identify and label specific business roles for each family member and employee.
• Ensure that each individual is content with his or her business role.
• Outline job descriptions and responsibilities for each individual.
• Create clear roles for new hires.
• Establish the organization’s hierarchy and determine who reports to whom.

As a family business, you have a unique opportunity to thrive. In my experience, family businesses have more passion, creativity, and loyalty than the average business. Once you harness these things and address the four components of conflict, succession, communication, and roles, your business will thrive. And on a final note, don’t forget to spend quality non-work-related time with your family members.