Running The Family vs. The Family Business

Written By: John Spence
As I look around Gainesville, I see many, many highly successful family businesses; however, in my 20 years as a management consultant, I’ve also worked with some extremely dysfunctional family businesses. Working with your husband or wife or having the kids and in-laws involved in the company can make it an extremely joyful place to work — or, frankly, a living hell. Based on what I’ve seen that works and doesn’t work, here are a few of my most important tips for running a successful family business.COMPETENCE BEFORE KIDS
The future of your company is directly dependent on the quality of the people who you can get, grow and keep on your team, which means you need to focus on hiring only the best talent regardless of last name. If a family member is not fully competent in his or her job, then they should not be working in the business! That doesn’t mean you can’t give them a paycheck and tell them to stay at home or go do something else; however, letting someone from your family who is incompetent come into the office every day sends a strong signal to every other employee (and your customers) that you are not serious about running a successful business.

Having family members work in your business can become very stressful and emotional if the business is not doing well or they are struggling as employees. One of the best ways to keep emotion and personality out of the situation is to create exceedingly clear roles, responsibilities, and expectations of exactly what they are supposed to do and the results they must deliver. Sit down with the family member (when everyone is calm and focused) and develop a list of specific, measurable, and binary goals or metrics of precisely what they are responsible for. The reason it is so important to get the goals and metrics highly specific is that it will allow you to talk about data and facts, not opinions and emotions. If one of your family members is responsible for selling $1 million in products this year, it is very clear if they accomplished the goal or not — there is no guessing. Actually, it is critical to do this with all of your employees if you want to run a successful business, but if you want to keep the family together, it is especially important that you remove as much emotion and personality as possible out of management decisions.

Every successful family-owned business I’ve ever dealt with has learned that there is a time to work on the company and a time to work on the family. They create clear boundaries of when it is appropriate to discuss business issues and when they need to stop talking about the company and focus on being a family, having fun, relaxing and enjoying each other. Yes, every now and then emergencies pop up and business will bubble over on family life, but those are rare occasions, and as soon as the emergency is passed, it’s back to blocking untouchable family time.

One of the biggest problems I see in many family businesses is a lack of a clear succession plan. It’s uncomfortable to talk about mom or dad leaving the business or passing away, so many people put it on the back burner with the intention of getting to it “one day.” Then, some sort of emergency happens and suddenly there is a bitter internal rivalry about who has control over the company. I have watched several highly successful businesses go into bankruptcy while children and inlaws argued over who mom or dad wanted to run the business after they were gone. It’s a shame to see a great business and all of the employees lost for lack of a clear succession plan based on competency rather than birth order, favoritism or whoever has the best lawyer.

Family businesses can be fantastic. I can easily think of a dozen family-owned businesses in Gainesville that are superbly run companies, employ a great deal of our local residents and have a huge positive impact on our community. If you’re in business with your family or plan to go into business with your family, I hope you’ll follow.

JOHN SPENCE has been recognized as one of the top 100 business thought leaders and as one of the top 500 leadership development experts in the world. He is an international keynote speaker and management consultant and has written five books on business and life success.

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