Running a family business comes with a special set of challenges.
The term “family-owned business” tends to conjure an image of a small-scale, locally run coffee shop or hardware store. In reality, family businesses account for the majority of the global GDP. Some of the biggest brands in the world – Walmart, BMW, Ford, Comcast, etc. – fall under the umbrella of the family business.
One of the biggest difficulties that family businesses face is family business strategic management. With numerous cooks in the management kitchen, it can be tough to come to a consensus on things like long-term goals, more immediate objectives, and the implementation of procedures.
In this post, we’re going to give you 6 tips for effective family business strategic management. If you’re finding the top brass of the family business at odds about the big picture, keep reading and we’ll help you figure out how to get on the same page for a better chance at long-term success.
1. It’s All About Communication
It’s easy to think that, because you’re family, you’ll always be on the same page about where the business should be going. You may have similar thought processes, but you’ll never be inside anyone else’s head, even if they are your sibling or parent.
The best thing for family businesses to do is to over-communicate as much as possible. This will help you avoid miscommunication and unnecessary conflict at all costs because you’ll always be laying everything out on the table.
If the ship is going to move where you want it to, you have to be steering in the same direction. That goes for setting bigger goals, as well as creating plans for how to achieve them.
2. Make Everyone Feel Like Family
Family businesses often have family members at the very top, but that doesn’t mean the whole enterprise is comprised of family members. You’re bound to have important people outside of the family helping you to make big strategic decisions. You may even have investors that will have a say in the future of the company.
The key is to keep everyone on the same wavelength. Treat all of the non-family members exactly how you treat family members and you’ll be able to create a sense of family that permeates the entire organization.
When you can create cohesion within, not just the top brass, but the entire company, it’s bound to move in the right direction. People from all backgrounds should feel comfortable voicing their opinion about strategic decisions.
Yes, you’re in a family business, but at the end of the day, good ideas and execution are what make a business work. Letting smart people give their input is only going to help you succeed.
3. Putting People In Positions to Succeed
Every family-owned business operates a little bit differently, but the most successful ones know that you can’t wedge people into certain positions just because they bear the family name. You need to put people in the right positions to succeed if the business is going to succeed.
The important thing here is to be able to identify where each person’s talents lay. When you can do this, you can ensure that everyone’s doing something that they enjoy and that they’re good at.
While we’re at it, participation in the family business should always be optional. You can’t force your child into your succession plan just to keep the business in the family. If their heart isn’t in it, the business will go downhill eventually.
4. Don’t Fear Change
To succeed in an increasingly complex marketplace, you have to be okay with diversification and change. Family business management can become rigid when one or two people are at the top making all of the decisions. When there’s no one to answer to, then it’s difficult to see right from wrong.
If you’re the one at the top, always be analyzing the market and where new opportunities might be. By nature, family businesses experience fewer bureaucratic setbacks because the family name holds most of the power.
This presents a special opportunity to make drastic and unexpected moves into different sectors without much pushback. At the same time, you must make these decisions tactfully, or else they could blow up in your face. In these circumstances, it can be extremely helpful to involve a family business management service to advise you.
Family business management services can work with you to determine what the best moves for the company are. If this includes diversification, they’ll help you figure out where opportunities are and where roadblocks may be hidden.
5. Keeping Succession In Mind
Heading up a family business requires you to pour lots of sweat and tears into your work. Eventually, however, there will come a time that you don’t have the drive to keep going. The last thing you want is to have to make your succession plans last minute.
If you’re the unequivocal leader in the room, you should always be talking to other family members and analyzing their performance. Keeping the conversation open about who will bring the business into the future is the best way to go about it.
Often, it’ll be clear who has the right makeup and desire to run the company, but sometimes you’ll have to make difficult decisions. The earlier you start thinking about this, the easier the decisions and discussions will be.
6. Considering Consultation
Family businesses can be complicated. Not everyone’s born to run a company, and with family, personal issues can penetrate business life much easier. If you’re having trouble integrating your family into the family business, then you might benefit from family business management services.
Having a consultant work with you on everything from leadership development and executive coaching to team cohesiveness and continuity planning can be a game-changer. At Positively People, we’ve been helping family businesses navigate these trials and tribulations for years.
We’ll work with you to come up with the best way to run your business. We’ll assess your current way of doing things, then develop techniques and exercises to bring out the best in the entire family.
Finding Success in Family Business Strategic Management
Now that you know how to tackle the bigger picture with family business strategic management, you can start improving your family enterprise ASAP. Remember, just because the business bears your family name doesn’t mean that you won’t need a bit of outside help.
Contact us at Positively People to find out more about our consultant service and how our strategic solutions can help your family business thrive.