The family that runs a business together does not necessarily stay happy together. Problems may arise when there are too many members of the family involved in one company. There could be a conflict of wills and of management styles, sibling rivalry, generation gap and others.
Family business expert Alejandrino Ferreria gives useful advice to help family businesses thrive while at the same time maintaining the ties that bind the members together.
- Family members should know where they stand. The one who is more able becomes the manager, and the rest will have to accept it.
- Having clear job descriptions helps family members to be more mindful and responsible of their share in the business.
- One must distinguish between the worlds of business and family. These worlds must be clearly separated in the family members’ minds.
- The decision maker must be respected – “With the family, the parents are followed. In business, the person who has the function of responsibility makes the decision.”
- Family members must be exposed to the venture to become responsible owners. “They must understand the logic of the industry and the functions of the business. This will make them effective strategists and monitors of the enterprise. The exposure to the nitty-gritty of the business will allow the potential managers in the family to surface.” This also helps assure a seamless succession.
- In case of irreconcilable differences among family members,the option of hiring a manager outside the family may be considered. Another option is to go public. “Owners can buy each other out at the current market price. Sell it to people who will give the best price for the firm. However, if the family is interested in keeping the business, then it must do all that it takes to sustain it despite the challenges.”
Adapted from : The Family Way, Entrepreneur, January-February 2012
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