Family owned businesses present golden opportunities for family feuds. The business manager has an extra challenge: not just to run the business well but also how best to serve the interests of the family. In the case of family businesses, disagreements about the business present a frequent and serious challenge for all concerned. It is part of the manager's responsibililty to make sure 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 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 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. Painfulas that might be, it is better to address these issues at the beginning of the business and well ahead of time before any tragic events occur.
Protection of the business against day to day meddling by family members, on the other hand, is something that falls to you as the business manager. It 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 into the business, the discussion still boils 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 to their responsibilities. The Board makes policy. The manager operates the business according to 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 are responsible for making sure there is a Board and that the Board develops policy in line with the wishes of the owners as well as the demands of sound business principles. Translation: when family members come to you to discuss policy changes, refer them to the Board. That is the Board's responsibility. Caution: do not give any of your opinions about policy to family members. 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 is best to have a non-family member manage the family owned business I say it does not matter. What matters is that manager be well suited to do the job. If the manager is to be a family member he or she still needs to observe the professional guidelines of managing and not take sides or participate in any family disagreements about the business. That is to say, do not wear two hats at the same time. Involvement by the manager in family politics will be the kiss of death for the business and for the family.
About those three questions: the Board should be in charge of policy and the manager should be in charge of running the business day to day. Whether the wealth is being justly distributed is for the family and the Board to work out. Whether the business is being properly managed is for you and the Board to decide. Family businesses that do not have a Board and Executive group are well-advised (by you) to get them in place and start using them. Do not allow yourself to be substituted for the Board.
Family owned businesses are well served by developing a Board that operates well as a Board, an Executive group that does a good job of assisting and supporting the manager, and a manager who actually runs the business and does so professionally.
That, in a nutshell, is how family-generated stress is kept at a minimum and how you, as the manager, avoid needless grief. The answer when a family member wants to be hired by you for a position that is open? Yes, if that person is qualified and company policy allows it. No, if that person is not qualified or company policy does not allow it. After you give the answer, relax. No stress and no worry. That what good company structure and sound policy do for you and for the family.
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