7 coaching tips to help family businesses succeed

Approximately 80-90% of American businesses and over 70% of European businesses are family owned or managed. The strength of family businesses is that the ‘family’ culture tends to attract loyal employees and customers by creating a connection that fosters both loyalty and longevity. In addition, they are frequently built from the ground up with little borrowing and typically play a huge part in the economy of all countries.

However, the overlay of family dynamics on a business can present unique problems because these dynamics are often out of sync. With nearly 40% of American family businesses due to pass the reins to the next generation over the next five years how can family businesses meet these challenges?

1. Selecting and preparing successors

In family businesses it is often taken for granted that a family member will take over the reins, but this may not be good for the business nor actually what the heir apparent wants. A coach will ask the business owner what the plan is on their retirement – who will run the business if it is to be passed on to a family member? Does this family member want it? Have they the right experience or skills? The coach can help the family explore the best succession plans, such as the heir working outside the family business for some time to gain experience, he or she working through the various roles or departments and/or setting up a complementary ‘lab’ within the main company as a testing ground and to help bring their skills and vision into the main company.

2. Creating productive roles for family members

Sometimes jobs are created for family members without interview or necessary skills, which can cause conflict with non-family members in the business especially if they are put into management positions. A coach would ask: Do family members abide by the same rules for timekeeping, holidays, expense claims, for example, as non-family members? Does the family member have the necessary experience and skills for the job they are doing? If in a managerial role, what training is in place and/or planned to help them grow and learn?

3. Attracting and retaining non-family managers and employees

Retaining them is the key thing here. Are employees able to progress their career a coach may ask, for example, if they are unrelated to the ruling family? If the line manager is related to the boss, how does a non-family employee voice their concerns? Will it be held as a black mark? How does the company deal with ‘sharing information’ between family members about their employees? How are complaints dealt with? How are the roles and responsibilities defined between two or more related company directors? An employee may get conflicting messages or end up feeling torn between equal but different ‘bosses’.

4. Fostering open and respectful communication

What may be acceptable communication within a family unit may not be appropriate in a work environment. It is too easy for family members to forget what is or is not appropriate at work – couples should be reminded that shouting, bickering and nagging are not easy for other employees to see or hear, and neither is canoodling or love talk. A coach can help the family see the importance of being as courteous to family members as to anyone else, and may also be able to help resolve conflict where it occurs.

5. Developing mutually agreed visions for the business

In my experience this is often not seen as essential in family businesses and they miss out on the guiding light that a clear vision gives an organization. Coaching can help the family focus not just on WHAT their vision is, but also help them come together to discuss it and have it agreed by all the family members as a unit. A coach will also remind them that a vision is only worthwhile if it is stuck to and reviewed regularly by all concerned.

6. Compensations strategies for family members

Pay is often low with no annual review, and they are often expected to work above and beyond the call of duty without much, if any, compensation or recognition. In some family-owned businesses it can be seen as heresy if they don’t want to join or want to leave, and redundancy may be a moot subject if they are laid off. This can cause massive morale problems and bad feeling. So what employment contracts are in place for your family employees? How often is it reviewed with family members? Do their pay and responsibilities match non-family working at the same level? Is there an ‘exit clause’ ?

7. Defining job roles and responsibilities

It can be a bit like Fawlty Towers where everyone does everything – or is expected to – and the different roles can too easily become blurred between family and business. A coach would ask: Does each person have a job description? Is this reviewed regularly and reflect the true situation? Where do the lines of command and responsibility run within the company? Are they written down and adhered to? Does this blur between family and business? For example, does the Brother who is the boss of the company also act like he is the boss of the family, for example? Remember that just because you are the parent or the boss within one area, this does not mean you can automatically take that role in the other area.

When a family business has a clear vision and focus on the actual business, including having clear policies that treat everyone equally, letting managers make day to day decisions, having policies in place for succession and looking to maximize business opportunities, then this, counter intuitive as it may seem is actually better not just for the business but for the family as well.