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Keeping it in the Family
Family disharmony = Business disharmony
Disharmony within a family is normal. Intra-family squabbles tend to remain within the walls of the home. But when a family unit overlaps with a business unit, it is not uncommon for the disharmony to spill over where it can become a disruptive force on the business. The disharmony can flow both ways. When conflicts arise within the business, the discord is carried back to the kitchen table.
The detrimental effects of family problems on the business are felt at all levels of operation, from the completion of basic tasks to hiring and retaining quality employees. Feuding family members can unintentionally sabotage the progress of the business by creating an unpleasant environment for non-family employees.
The Importance of a Family-Business Strategic Plan
Businesses must engage in a strategic planning process in order to ensure that its mission and its business goals are achieved. The family-owned business needs to engage all family members in a strategic family plan with a separate family mission, goals, responsibilities and roles. Determining what is important as a family and agreeing on values can shape the business mission in a way that all family members fully understand the stake they have in building a profitable business.
It is recommended that an advisory board be created that can advise the business leader and provide guidance on company policies. The board should be comprised of family members and outsiders who bring relevant business experience. These advisors can bring objectivity and counter the emotions of the family members.
Family is Family, but Business is Business
As part of the family-business strategic plan, roles and responsibilities can be assigned to each family member that is applied separately to family goals and to the goals of the business. All members must agree that family issues remain at the kitchen table and that if any family discord is carried into the business it will be considered a violation of company rules that will be met with appropriate penalty.
As a business unit, the family members need to establish specific and strict guidelines and qualifications for roles and responsibilities within the business. Family members need to agree to their respective areas of responsibility and, if someone feels shortchanged, a specific plan for advancement can be developed that includes a timeline and milestones for achievement. It is important to provide family members with a path to achievement that makes each of them feel like an important part of the business.
Succession planning should begin while the children are actively involved in the business. They should be a part of the process of establishing long term family and business goals. As time passes, it may become clear that one or more of the children are not suited to be a successor, so it will need to be determined what, if any, role they might have with the business.
For the children that express an interest and demonstrate the competency and temperament needed in a successor, a clear development path should be laid out that will enable them to develop the skills and achieve milestone goals. It may be advisable to have an advisory board create a set of standards and qualifications that must be met so that an objective measure can be taken of competing children.
For children who don’t make the cut, there needs to be path for advancement, as with any career opportunity, that keeps them encouraged and interested in pursuing the goals of the family business. Often times, they are assigned to the advisory board where their input is a vital part of policy development. Children who are discouraged or who develop jealousies may have to be weaned from the business so they don’t become a disruptive force.
Seek Professional Guidance
It may be important to hire a business consultant or financial advisor who specializes in family businesses. They can provide the objective and stabilizing influence that can counter the emotional biases of family members in the planning process. The consultant/ advisor can play a facilitating role on the advisory board so that the input of the family members can be weighed equally with the input of the non-family board members for a balanced approach to the planning process. This also can ensure that the consultant maintains an ongoing relationship with the family business.