Family owned businesses present golden opportunities for family feuds. The business manager comes with an extra challenge: not just to run the business well but also how best to serve the interests of the household. In the case of family based businesses, disagreements about the business present a frequent and serious challenge for several concerned. It is section of the manager’s responsibility to make certain these disagreements are taken seriously and resolved for the sake of both the business and the family that owns the business.
Many marriages and families have already been destroyed by quarrels about the business. Many businesses have also been destroyed for the same reason. Lawyers, marriage counselors and business coaches typically check for not only who owns the business enterprise and how the ownership is structured but how the family will relate to the business. On a somber note, for example, they will encourage the family to protect the business against divorce, death and inheritance taxes. Painful as that could be, it is better to address these issues at the start of the business, well in advance before any tragic events occur.
feud questions of the business against day to day meddling by family members, however, is something that falls for you as the business manager. It really is your responsibility to defend your turf. You, not family members, do the managing. Bring to bear sound business practices, articulate them frequently and defend them always. Remember, at the root of all too many eternal family quarrels and feuds are disagreements over three questions. Even when family members intervene to get themselves hired in to the business the discussion still boils right down to these three questions:
Who should be in charge?
Is the wealth being justly distributed?
Is the business being properly managed?
Sound business practice begins with making sure everyone involved agrees with their responsibilities. The Board makes policy. The manager operates the business in line with the policies laid down by the Board. The Executive Group of the Board provides day to day support for the manager and oversees the implementation of policy. The owners have the effect of making sure there exists a Board and that the Board develops policy good wishes of the owners and also the demands of sound business principles. Translation: when family members come to one to discuss policy changes, refer them to the Board. That is the Board’s responsibility. Caution: usually do not give all of your opinions about policy to members of the family. Give them to the Board. Tend to your responsibility. Run the business within the policies set down by the Board.
To those who ask this writer whether it’s far better have a non-family member manage the family owned business I say no matter. What matters is that the manager be well suited to do the job. If the manager is usually to be a family member he / she still needs to take notice of the professional guidelines of managing and not take sides or participate in any family disagreements concerning the business. In other words, do not wear two hats simultaneously. Involvement by the manager in family politics will be the kiss of death for the business enterprise and for the family.
About those three questions: the Board ought to be responsible for policy and the manager should be in charge of running the business enterprise. Whether the wealth is being justly distributed is for the family and the Board to work through. Whether the business is being properly managed is for you personally and the Board to decide. Family businesses that do not have a Board and Executive Group are well-advised (by you) to obtain them in place and start using them. Don’t allow you to ultimately be substituted for the Board.
Family-owned businesses are well served by creating a Board that operates well, an Executive Group that does an excellent job of assisting and supporting the manager, and a manager who actually runs the business and does so professionally.
That, in a nutshell, how how family-generated stress is kept at the very least and how you, as the manager, avoid needless grief. The solution when a family member really wants to be hired by you for a posture that’s open? Yes, if that person is qualified and company policy allows it. No, if that person isn’t qualified or company policy will not allow it. After you give the answer, relax. No stress no worry. That’s what good company structure and sound policy do for you and for the family.