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04 Nov, 2009

7 tips about the unique challenges of family businesses and how coaching can help

Posted by: The Coaching Academy In: Coaching Articles|Life Coaching Articles

“7 tips to help family businesses handle their unique challenges” By Bev James

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 family 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 the 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?

Bev James, MD of The Coaching Academy shows us how a Family Business Coach can help them do just that.

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.

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?

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’.

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 courteous to family members as it is to strangers, and may also be able to help resolve conflict where it occurs.

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. And remind them that a vision is only worthwhile if it is stuck to and reviewed regularly by all concerned.

Compensations strategies for family members

Pay is often low with no annual review. 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’ ?

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 – i.e. 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.

Click here to find out more about our Small Business Coaching Diploma.

5 Responses to "7 tips about the unique challenges of family businesses and how coaching can help"

1 | LIz Tyas-Peterson

November 5th, 2009 at 12:13 pm

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Having coached in small businesses I can agree with the above article whole heartedly. Recently I have been involved in coaching situations that should never have arisen, clearly defined roles are essential as is clear communication and the vision and goals of the business been known and understood by all concerned. Succesion planning is essential if everything that has been built up is not to be lost. Business coaching there is a real need for especially in todays economic climate.

2 | Jacqueline Pigdon

November 5th, 2009 at 1:12 pm

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I agree it’s paramount that family businesses know their roles. For all to know their Dharma which is their duties in life and their Karma how they go about fulfilling those duties and role both within the family and the business.

Jacqueline Pigdon

3 | David Brient

November 5th, 2009 at 5:36 pm

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Hi , everything you say makes good practical sense…the only real obstacle I have found is that family businesses and their owners tend to be particularly adverse to any kind of coaching or intervention in their business. I would love to hear how you have cracked this niche as it was originally my intention to focus here, having had 20 years experience in a family business which went sour, I wanted to help others!
However I gave up trying to coach in an area where people simply were not interested.
David Brient

4 | Jon Daniels

November 6th, 2009 at 8:58 am

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Really eye opening article Bev, I had never thought of a family business coaching niche but can certainly see how it could have a massive impact

Jon

5 | Chris Farrance

November 11th, 2009 at 3:17 pm

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So the anecdote goes real men don’t eat quiche neither do they ask for directions. My sense is they don’t ask about coaching either and therefore it’s a tough sale to small business owners.

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