Values in a Family Business
Many business leaders like to tout, “We’re just like family here!” If this were true, then the business would experience the challenges that come from running a family business.
A true family business is different than other businesses. It has it’s own set of unique problems.
Family Business Challenges
Here are two common challenges that come from running a family business:
- Control. Working with family members can be complicated. If a family member isn’t performing as expected – or desired – it’s not so easy to just fire them. They’re still family.
- Succession. A common problem is the founder wants to hold on to his/her equity. They’ve built a successful business and want to see it continue on after they retire or step away from it. What the business needs is new leadership from someone who is as invested in it as the founder. But the best person might not be family…
There’s also an important distinction about running a family business:
Business is about generating revenue and making a profit.
Family is about preserving relationships and providing support.
Combining business and family doesn’t always mix well.
Sometimes the best option is to NOT mix family and business. Running a family business is not for everyone.
Yet many still do.
Family Business Values
According to the U.S. Census Bureau, about a third of businesses in America are jointly owned and operated by married couples (where one leads and the other supports, or they both lead). In addition, other family members, such as children, parents, siblings, and extended family, also support the business in some way.
In spite of these challenges, there are some common benefits derived by family-owned, family-run businesses. These show up as values.
Even if they are not publicized or openly discussed, there are certain values that are evident in many family-based businesses, such as:
- Loyalty meaning steadfast in allegiance or duty; unwavering in devotion; commitment
- Persistence meaning never-ceasing; obstinately refusing to give up or let go; continuity
- Relationships meaning a state of connectedness between people; association; kinship
Each of these (as with all values) can be viewed as a positive AND negative. On the surface, such values are powerful and rich with potential. But if taken to the extreme, these values are also like chains holding the business back from realizing its full potential.
In other words, strengths can also become weaknesses.
To preserve strengths and minimize weaknesses, here are two recommendations:
- Define roles and responsibilities. Unlike an employee’s job description, the roles of a family member in business can vary, crossover, overlap, and change. But there is great value in clarifying roles and responsibilities. It provides a means for communicating when one is operating outside their area of focus, or allocating tasks, or deciding who should handle specific issues as they arise.
- Have regular meetings. Establishing regular meetings with a defined agenda is especially beneficial for a family business. This brings focus to specific areas of the business and provides a structured forum to discuss key issues that might be difficult to address otherwise.
Lastly, recognize that running a family business is also about leaving a legacy.
A family business that continues to provide value to customers, jobs to employees, increased equity to shareholders, and even adding value to suppliers, is an important legacy. Preserving a family business is one way for family members to continue making a difference in the world long after they are gone.