Why Defining Roles in the Family Business Is Critical to Your Success

Operating any successful business can often be a hard slog, especially in the early years. But running a family business adds an extra dimension to the task. That said, a well-managed family firm can seem to almost purr like a well-oiled machine, whereas a dysfunctional clan enterprise may be perpetually locked in conflict.

The best family companies have a far better than average chance of business longevity, but a malfunctioning family outfit rarely stays around for long. So, if you want to set up or develop a family business which will prosper and stand the test of time, here are some things you should put in place right from the outset:

Roles need to be defined and written down

Misunderstandings and disagreements happen in every business, but if you’re unprepared, they can be so much worse in a family context. You would never attempt to manage non-family staff on the basis of verbal agreements, so to do so just because you are related is bound to lead to problems.

If it’s proving tricky, let it be known that you consider these formal written documents essential because they support and protect the family.

Agree that work is discussed at work – and family matters at home

Another practical rule which preserves what’s special about family relationships: ‘Family’ talk at work can be very divisive, and more so if it continues within earshot of customers or non-family employees.

Any business that allows, or even promotes, this kind of informality will find it hard to maintain a proper focus and runs a real risk of not being taken seriously within the marketplace. If necessary, it can be pointed out that those family members who are uncomfortable with this rule need to be aware of other employees that are outside the family.

Communicate

Good communication is the essence of getting everyone in the business ‘on the same page’. Taking short cuts just because you happen to know the people very well can have highly unpredictable outcomes and can easily become a recipe for disaster.

Maintaining absolute transparency is a core requisite if you want to build trust and shape the corporate values of your business. So, don’t be tempted to misuse family ‘understandings’ as a substitute for proper business dialogue.

Reassess roles every so often as the business changes

Sometimes certain family members just ‘fit’ a role e.g. a good cook may relish working in a restaurant kitchen, while a naturally outgoing person may be a real bonus in a front-of-house role greeting diners, and someone good with figures may get to look after the office and admin side of the enterprise. But inevitably, every business has some less attractive jobs, so it’s only fair to agree to rotate such tasks on some sort of regular basis.

Furthermore, reorganising roles from time to time can be really invigorating for a family business which may be starting to tread water. It can also be a means of strengthening the company by ensuring people get a broader view of the business, rather than being obliged to remain in one job at which they may happen to excel. Just be sure that it’s introduced with plenty of warning and communicated in a fair and equitable way.

Don’t prioritise family roles at the expense of business roles

It can sometimes be tough to maintain a business focus in certain circumstances e.g. if a family member has childcare issues or medical problems. But the yardstick should be what is fair and realistic for any employee, rather than what you ‘should’ do for family. And at a management level, being asked to accommodate a family member’s unrealistic extended leave of absence can have significant consequences for the business, and for good relations with other staff.

Anything which could be construed as ‘favouritism’ must not be allowed to develop e.g. giving family members the ‘pick’ of a duty roster. But on the other hand, neither is it acceptable to treat any such relatives more harshly or require them to observe significantly higher standards than would otherwise be demanded, simply because they are part of the family.

A business team which works well is an asset to any company, but a great family team which is well managed can supercharge this effect. Getting rid of the potential for day-to-day family disharmony is an essential first step in building a really strong family business reputation which everyone can share and be proud of.

Matthew Hernon is an Account Manager at Dynamis looking after Business Transfer Agents and Franchises across BusinessesForSale.com and FranchiseSales.com.