5 Tips for a Successful Family Business

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A guest post by FiveHive community member Amanda Kidd

Family businesses accounts for more than 50 percent of the US gross domestic product. This is a testimony to the kind of power and influence family businesses enjoy all over the world. On the one hand, family business is a synonym for trust and security. A family business is always a sign of positive brand identity. Generation after another one creates their own success stories. For customers a family business also serves the purpose of a good inspirational story. On the other hand, personal problems like divorce, health issues and family disputes can often end up affecting the business. People also claim that family business is still reminiscent of the kind of aristocracy our society has demolished for meritocracy.

1. O captain my captain
Good Leadership is undoubtedly the core of any business. Family business generally finds them in decline once the patriarch is out of the picture, either due to failing health or death. The workers long associated with the business can feel detached or unsure of the new leadership. This kind of leadership vacuum can lead a family into real trouble. Lack of leadership can also give birth to unresolved conflicts and diverging views on the future of the company among the family members. A chain of command that also works as a contingency decision maker is a must for dealing with such situations. Such kind of chain of command if nurtured properly and given sufficient powers can give the organization the kind of leadership that is required in the times of crisis.

2. Method and order
The above mentioned conflicts can be easily avoided or overcome if the present leadership looks for method and order in their day to day functioning. There are three necessary components for maintaining family business successfully. To begin with, every family member should be absolutely clear about what is expected from them and what their contribution is in the bigger picture. Secondly, the chain of command must not be altered or defied under any circumstance or crisis. Thirdly, a comprehensive and futuristic vision for the company is the glue that binds people together. It is important to mention here that all these measures can vary on case by case cases.

3. The Third eye
A successful family business also depends on the non family members who are equally dedicated to their work and enjoy respect and reputation within the organization on the basis of their sheer hard work. Involving such members in the major decision making process and giving them a voice is essential in maintaining objectivity in business. Such individual can not only fill the leadership vacuum but are also voice of sanity in case of a dispute.

It is very important to understand that family business is a holistic identity, that it should not become a ploy to settle scores or run your writ. Individuals are crucial but only as long as they are supporting the team.

4. Solution to problem
Problems are essential part of any system. Problems do come when in the way of business. The best to deal with them is to show faith in the person who is making the decision. One can obviously suggest some major issues to be implied but the final decision should be respected. If the situation persists for a long time, reflects a deeper problem rooted in the system. Cannot be processed until the underlying patterns and structures that produce it are carefully considered and addressed. If the problem is new, with a brief history, compared to the first. In short, systems thinking require an assessment of performance over time and between generations.

5. Power of Objectivity
At E-Myth Worldwide, many of our clients are family businesses. For help and advice outside the company it is good practice for any business owner, and perhaps even more critical for owners of family businesses. Knowledge and objectivity that directors, coaches and mentors can be critical for growth and success of the company. Despite discussions on this type of deviation can be uncomfortable for someone in a relationship, family members, which can be particularly uncomfortable. But the fact is that companies are sometimes uncomfortable, it is simply not moving. All my experiences have told me that until you face and recognized this fact, its growth potential was at a standstill.


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