Strong Family Relationships Can Be a Help to Firms By ERNEST A. DOUD JR. Healthy family relationships drive businesses forward, whereas conflict-centered family relationships drive businesses down. Strength and unity of the family management team sends important messages to four key groups: employees; customers; suppliers; and competitors. Effective working relationships and a unified management team send good news that can pay dividends. Your employees will consider your business a good place to work. The dividend a more productive work force. Your customers will perceive you to be a dependable supplier with whom they enjoy doing business. The dividend customer loyalty. Your suppliers will treat you with the respect and service reserved for truly valued customers. The dividend dependable sources of supply. Your competitors will regard you as a force to be reckoned with. The dividend better competitive positioning. Conversely, the absence of these qualities sends negative messages to your four most important constituencies, which can add up to bad news for you. In non-family businesses, developing good working relationships is basically a business issue. However, because yours is a family-owned business, the interplay between family and business is substantial. Your challenge, therefore, is two-pronged, because family behavior patterns invariably spill over into the workplace. The reality is that you’ve been family members longer than you’ve been business associates. By the time the next generation comes into the business, the parent-child and sibling relationship patterns have had years to develop. They are deeply ingrained and have tremendous emotional “clout.” It is no wonder that most families find it difficult to separate their family roles and their business roles. I can’t recall a single family business with which I’ve worked where family roles have been kept totally out of the business. I’m not even sure that total separation is a good idea. After all, family bonds can add important strengths to the business. Families who are able to bring those strengths to bear in their businesses are those that have built healthy family relationships. Here are just three of the many ways in which family relationships directly impact business relationships. 1. How the family handles “power”: When children are young, authority is centralized in the parents. Ideally, the family decision making process becomes more decentralized as the children grow older. For a business to be well managed, some authority needs to be delegated. Families that allow and encourage appropriate participation in family decisions find it easier to effectively delegate authority in the business. Family businesses in which power remains highly centralized with the founder/leader typically mirror an authoritarian family power structure. 2. How the family handles interdependence and independence: Because families are support systems, it is second nature for family members to depend heavily on one another. That’s good, but that’s the easy part. The hard part is for families to effectively support each individual’s need for independence. Businesses benefit from interdependence because it fosters teamwork. But they also require independence which promotes individual thinking and initiative. When those two needs have been balanced at the family level, it is likely to be reflected in the business. Family members can be responsible to one another and to the business, yet have freedom to act independently. When the family’s emphasis on interdependence is too strong, family members may find themselves in the business out of a sense of obligation rather than because they want to be there. Lines of authority will be “fuzzy,” and individuals will have difficulty operating without undue interference in their areas of responsibility. 3. How the family handles disagreements: Many families don’t handle disagreements very well. Families depend on good relationships for stability, so head-on confrontations can be seen as threats to that stability. When we were kids it was easy. If brother or sister hit us we told Mom and she dealt with the problem. As adults, a more direct approach is needed; but old habits are hard to break. Most often, when two family members disagree, we will still take that conflict to a third party in the hope that someone else will deal with it for us. Nice try, but it doesn’t work. If the family has learned and practiced direct confrontation of family issues, then business disagreements can be productively resolved. Ernest A. Doud Jr. is the managing partner of DoudHausnerVistar, a consulting practice focusing on assisting clients to successfully manage family/business dynamics. Developing a Plan for Family, Management In the midst of the constant challenges of business, winners still manage to build strong teams: a strong management team to keep the business profitable and ahead of the competition, and; a strong family team that supports the successful execution of the game plan for the business. Here are some ideas that can help you, your business, and your family be winners on both counts. 1. Make sure the business is properly staffed and organized. You need the best players you can find and attract. Once you get them, make sure they: (1) know what their positions are (i.e., prepare and maintain accurate, up-to-date job descriptions); (2) know how to play their positions (i.e., prepare and invest in a management training and development plan and program); and (3) learn how to work together as a team (i.e., provide opportunities for team building). 2. Develop a game plan for both your business and your family. The planning process is the most practical and effective team building exercise we have ever seen. 3. Make yours a plan-driven business. Business planning takes two basic forms long-range “strategic” planning and annual operating planning and budgeting. Your strategic plan should contain a mission statement that answers four questions: What business are you in? Why are you in business? Who are your customers? and how do you want to be known? Ernest A. Doud Jr.
