The Four Pillars– Alignment, Boundaries, Communication, and Competency
“A New Lens for Seeing Family Business” (Download Presentation PDF Format)
Alignment in a family business means building coalitions and moving toward the same target. Family businesses are resilient when family members, owners, executives, managers, and employees are united toward the same goals. Family businesses face unique issues that expose them to internal risks. Without clear strategy and leadership alignment, family businesses are vulnerable. Misalignment creates discord, tension, and conflict. Alignment creates a parallel process that overcomes complacency, increases organizational harmony, and promotes profitability.
Unclear Boundaries are the root of many problems in family business. Family businesses have three components—the family, ownership, and enterprise—where boundaries must be clear and constantly maintained. Family business leaders must define roles, responsibilities, accountability, ownership, owner and operator prerogatives, and employee responsibilities, as well as rules for handling personal matters. When your business is large enough to have non-family professionals and a board, clear boundaries prevent conflicts of interest and authority complications. Also, clear boundaries will guide the ways family members interface with the business operations and governance.
Communication is a recurring issue that owners and executives identify as a major obstacle to productivity. Clear constructive communication must always be the goal. In a business with more than 200 employees, about 14 percent* of the workweek is wasted because of poor communication between staff and management. All communication is grounded in relationships. Unless we’ve been otherwise educated, most of us unconsciously enact a style of communication we learned in our families and carry it into the workplace. Whether it’s resolving relationship issues, confronting challenges, managing conflicts, or planning for long term success, effective communication guarantees that every situation will be addressed and resolved in a thoughtful, deliberate, constructive, and comprehensive way. (*T. Harris & M. Nelson, Applied Organizational Communications: Theory and Practice in a Global Environment)
Competency is the capacity to deliver results that ensure continuity and stability. Families in business must understand how family dynamics affect sound business practice. From those making decisions in the board room to those carrying out the day-to-day operations, everyone must contribute to the success of the business by knowing how to perform his or her position at the highest level. Because of unique and subtle connections in a family business, competency standards must be clearly established, applied, reinforced and rewarded (or not) at every level in the company. Competency leadership principles and procedures must be consistent with the company strategy, while encouraging every employee to have a sense of ownership and investment, and to think and act like a leader.