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8 Ways Founders Can Keep Family Peace in Your Family Business
John Anthony April 12, 2018
From Walmart to Comcast to John’s Pizzeria, most US businesses are family-owned. Along with the routine challenges of running any business, families face additional pitfalls. That is why it is critical to hold regular family ‘shareholder’ meetings to discuss personal issues as they relate your family life, your business, and your future. 

Over the years I have seen some pretty “intense” business disagreements among family members. Here are a few pointers I hope you will find helpful to manage those tough moments.
Adjust your communication – Most people recognize the importance of workplace communication. Sometimes family members fall into poor communication habits at home, they then bring into the work environment. Examples like cutting off other’s conversation, outshouting another to get your point across, or passively keeping the wrong thoughts to yourself create workplace havoc. Habits like this quash innovative ideas and cause non-family employees to lose respect for the owners. Coach all of your employees to listen to what is said, reflect on it and then respond.

Agree how decisions will be made – Founders are generally the ones who make major decisions and employees accept their final say. When family members are involved there can be more push back. A good decision-making practice is to plan up front who will make the final decision. Then collect all the ideas and make the choice. This affords the opportunity for diverse ideas, eliminates many conflicts, and establishes clear accountability. Consensus planning may seem more democratic but can foster costly compromises and should be limited in use.

Respect the work-life balance – Founders frequently rise around 4:30 AM and work until 10 or 11 at night, especially when getting their companies off the ground. This schedule may be inspired, but over time it shortchanges health, personal life, and family time. Even if working family members are not clock watchers, everyone defines a ‘hard days work’ differently. Make breaks, time off and vacations a fundamental part of your schedule for family and non-family employees.

Define expectations – Roles and goals help everyone align their activities toward meeting your business objectives. When family members confuse their shareholder hat with their employee hat it creates conflict and animosity from other workers that can hurt performance and even lead to turnover. On the day they start work establish positions, responsibilities, and expectations for each family member. Conduct frequent informal reviews so everyone knows where they stand.

Respect the right to win and lose – Allow family employees the room to succeed and to learn from their mistakes. Sometimes founders give more latitude and tolerance to non-family employees than to their own kin. (The opposite can happen too.) Unnecessary oversight or ‘reeling in’ of a family member’s designated authority creates animosity that may lead to clashes. When non-family employees concentrate on owner’s poor behavior, it lessens their ability to focus on their work. Use the review process to help your family and business succeed.

Learn to disagree and maintain the relationship – During a tumultuous day, a family member might clash with you over issues. As the founder, you want to end the drama and get the right answer implemented. Your first response should be to listen to thoroughly understand the other person’s point and, if appropriate, select it. If your method proves more effective and the resistance continues, explain why the issue must be addressed your way. If disagreement still persists, let the family member know that you understand their view and will discuss it in the shareholder’s meeting, but need them to do it your way for now.
Base compensation on merit and skill – With family members, it is easy to let personal needs effect compensation. But a salary should first be based on the value of the job to your business, then on the individual merit and performance level of each family member or employee in that job. You may create a performance bonus or profit sharing program for incentives. A clear reward structure for all employees preempts the temptation for family members to treat their business like an ATM.

Advancement opportunities for non-family employees – Since most senior positions will be filled by family members, non-family employees live with the realization their advancement is limited. If not addressed, this can discourage talented employees and create an entitlement sense for some in your family. As an owner, your challenge is to hire and keep people the best people possible. Honesty, personal development, appropriate rewards and recognition all foster better workers and longevity. There will be some family considerations, but all should know that, in general, the person best suited for a position, is the one who gets the job.
You may already use some of these practices with your non-family employees. However, because of the long emotional history and daily informal interactions we have with our families, we often forget to treat them with the same professional thoughtfulness as those who are not related.
Small business founders are the backbone of America’s prosperity. Families are the backbone of founders. Treat them well!

John Anthony

John Anthony has 30 years experience helping small business owners build flourishing business and personal lives. His unique program has been used by successful executives around the nation. If you are interested in having skilled workers and more well-paying clients, contact me for a free strategy session below.
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