So, Whoâ€™s Gonna Run Your Family Business?
The answer to this question for many family business owners is, â€œI am!â€ They think they will live forever; and that the business will prosper and continue to put unlimited cash into the pockets of family members. Oh, that such a thing would happen, but the reality is, it doesnâ€™t work that way.
The best answer to this question is grounded in sound business practice. No business will be successful if the leadership is not competent.
In family owned businesses, the matter is complicated by the fact that the premises in the family and in the business are not the same. Because the foundation for acceptance in the family is different from the business, there is a fundamental â€œdisconnectâ€ between the two systems that many people do not recognize.
The premise of the family is to raise responsible adults who have high self-esteem and can function independently in this world. Love and acceptance in the family should be unconditional. The premise of business is to earn profits and compound the value of the total asset pool. Acceptance in the business is conditional, based on competence and the ability to perform in a professional manner.
Families who donâ€™t understand these differences will use the business to complete the family task. Families who confuse these tasks create huge problems for themselves and others.
Thus, it is necessary to establish â€œRules of Engagement,â€ a policy for how family members will be permitted to participate in the family business. This often manifests itself in the form of a Family Business Employment Policy. This will be the subject of my next several posts.
Does Your Family Business Need Help?
Family Business Matters has extensive experience assisting family businesses. With many decades of experience, we understand the wide variety of challenges that families face as they work together to build, grow and sustain a thriving family business generation after generation. Through conferences, continuing education programs, family business retreats, speaking engagements and private family business consulting services, Family Business Matters has assisted more than 450 family-owned businesses around the world chart their way through family business issues of all shapes and sizes.
For more information on how Family Business Matters can help your family business survive and thrive, please contact us today at (970) 948-5077.