The founders of a family business make it possible for future generations to benefit from their vision and entrepreneurial spirit. A true leader inspires success. When considering succession in family business, the founders or leaders of the company want future generations to have the same level of motivation, drive and passion for moving the business forward.
A properly constructed family business advisory board gives owners access to high-level executive and management talent beyond those employed by the company. Advisory boards create a forum in which active owners, in concert with other advisors, impact the strategic issues facing the company. The board makes non-binding recommendations on strategic issues.
Every family faces the possibility of a key executive in the family business suddenly being taken either by accident or natural cause. Life can be fragile and no person is exempt from such forces. Strategic planning for the family business requires the family to prepare for the unexpected with the development of an emergency action plan.
There can be advantages of nepotism. Experience has shown that nepotism works if and only if the values of the family members are congruent and the successor is fully competent. Every company needs a source of competent, dependable employees, and this is where the advantages of nepotism can come into play.
How a family business is structured can have a very strong influence on how well the business operates. A family business organizational structure should include a hierarchy in which people have clear responsibility for a job, have the authority to get the job done and are held accountable for the outcomes.
Transfer of a family business ownership from one generation to another can involve a series of complex financial transactions. In the United States, there is a limit on how much one can gift to children without paying a tax. Tax laws vary from one country to another, which is one reason a fair family monetary policy is essential.
When family members are not able to abide by the Power of the Golden Share, a family business can suffer. The key to success in many family businesses is abiding by the rules of International Best Practices for Family Business that include clear responsibility for positions and accountability for performance and outcomes.
Family business elders often have words of wisdom for business employees. With an ability to focus on what is important for success, elders are able to concentrate on the business at hand instead of being distracted by other factors. Elders tell the stories about the business and the people who nurtured the legacy that originally allowed the business to grow.
There are many dimensions of family business protocol. While protocol varies from one family business to another, some of the necessary basic elements include: defining the purpose of the family business, clearly stating who owns the business, determining who is responsible for what, and committing to mediation or binding arbitration when disagreements cannot be resolved.
Family business success stories can be very motivational and inspirational. In some cases, effective business communication can make a substantial difference in the ultimate success of a family business. Clear and constructive communication and listening to what others have to say can have an overwhelmingly positive impact on any family business.