Stop The Vanilla Blog

No Business Success is Worth Failure at Home

Leader

“If you want to ruin your family business, give it to your eldest son.” That’s an anonymous quote that really challenges how family businesses handle their nepotism strategy, or as we like to call it your family strategy. It raises this simple question that all family businesses need to answer: Does your last name guarantee you a job in the family business?   The answer to this question for each family business is as important to family members as non-family members.   Regardless of what your opinion is on nepotism, what my 15+ years of working with family businesses has illustrated to me is that the most successful companies have proactively developed and communicated their family strategy to all stakeholders of the organization.   An effective family strategy not only communicates if family members will be employed, but how it will be determined what position each family member fills.

I am currently working with a family business that is transitioning from the third generation to the fourth generation. The family strategy of the third generation was that any family member who wanted a job would have one. This applied to blood relatives as well as in-laws.   As a result, there are more than ten family members in the business.   However, there was very little thought on what position each family member should fill.   As a result several family members are in positions that are not a fit with their natural gifts and talents. This skill set misalignment has led to several unhappy and underperforming family members. It has created several strained relationships across the family and company.

I am currently in the process of developing the strategic plan with the fourth generation and they will have the opportunity to define their own family strategy. We also have non-family members on the planning team so it will be a very healthy discussion on how the company wants to move forward with its family strategy.

One of the many blessings of having a family business is the opportunity to employ family members. However, from experience I can tell you that how a family manages its nepotism strategy has a direct correlation to how successful the family business is both from a financial and family harmony perspective.

To be effective, all family businesses should be proactive in discussing a family strategy and then come to an agreement on that strategy. I can totally relate to this because we are having the same discussions in our business with my son. I have learned from this experience that clarity has become the focus in our relationship. We must both be on the same page as we prepare for the future.  Neither of us wants to jeopardize the healthy relationship we currently have.

I have a client who has not had the family together for Thanksgiving in 15 years because of broken relationships due to the business and its lack of a family strategy. Through the strategy & talent planning process the company defined their family strategy and I am happy to say that they had Thanksgiving together this past year. No success in business is worth failure at home.

Here are some important questions to discuss and ask when you are defining your family strategy:

  • Does being a family member guarantee you a position in the company? What favor is provided to family members that want employment in the family business?
  • ow do you How do you define a family member? Does it apply only to blood relatives or does it include in-laws as well? How far does it go? For example, does it include cousins?
  • Have you clearly defined the key accountabilities for each position? Are you using behavioral science/assessments to make sure each person (family and non-family) has the skills that match the requirements of the position?
  • Does each family member have 100% role clarity in their position? Do they understand their responsibilities and who they report to?
  • Have you defined the process to address underperforming family members and non-family members?

Make sure that all family members understand the family policy so there are no hard feelings. Be consistent with the policy, as inconsistencies will create more issues. Consider how the non-family team members are impacted as well. Have your human resources department and other advisors get involved in the process, and seek counsel in this area if you don’t have that expertise.

I have seen family businesses destroyed because of family conflict and mismanagement. However, I have also seen family businesses create wealth and joy for generations. There’s not one right answer for every family business, you just need to be proactive in developing a family strategy that creates harmony and optimizes the financial performance of your organization. Remember, Those Who Plan – Profit!

Make It a Great Year – Start Today!

Success Ahead

I want to give you one simple tool to help you become better in all the areas of your life: as a spouse, business person, leader, employee, father, mother, son, daughter, and friend.

That simple tool is a “Life Map.” It’s a one page personal plan that helps you achieve success in all aspects of your life.  I am consistently working with clients and friends with their life map and I strongly recommend you start creating yours today.

The life map includes three columns.  Starting with the right column you begin your life map by defining your legacy. How do you want to be remembered when you leave this life?  Next, in the center column you write down your long-term objectives that will achieve your legacy.  Then in the far left column you write down your annual objectives that will help you accomplish your long-term objectives. Simple, but very effective!

It is best to complete your life map by going away each year for a couple of days to a quiet place where you can think and sort out your future.  Then each week (I do it every Friday) you review your annual objectives and develop action plans for the coming week to achieve them.

For example, I developed my first life map about four years ago. It has changed my life forever. In my legacy, I want my kids to view their dad as a mentor and adult friend they can talk to about anything.  That starts by spending individual time with them now.  So my annual objectives include going with them to concerts, events and just being together.  One of my business objectives is to be a respected author and speaker.

As with any plan, discipline and accountability are necessary. If you need to find someone to hold you accountable to your life map, share it with a close friend or mentor.  How do you want to be remembered? What will you do in 2015 to build that legacy? You can do it. You just have to get started today.

Go to www.stopsellingvanillaicecream.com  to download the life map template and create your personal plan to make 2015 a great year for you. Remember, Those Who Plan – PROFIT!

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