Family owned and operated businesses are the backbone of the New Zealand economy. Some of these businesses are among the most successful in the country.
Commitment and culture are often inbuilt strengths of the family business. So too is pride in the business. Wrap it all up together and they can produce a major competitive advantage. This helps achieve higher profit margins, higher returns, faster growth and greater resilience.
The business environment is forever changing. This presents both challenges and opportunities for the owners of family businesses. There are many strengths which stem from a strong family culture and values. Not the least of these is their agility.
Yet change can be particularly tricky in family businesses. The following 5 points might help with managing these changes:
- “We've done it that way since grandad’s day” doesn’t stand anymore. If commercial reality requires change, then change.
- The objectives of different individuals may change over time. Respect this and ensure it is voiced.
- Look outside the business a little more. The services of an external advisor might provide a more objective view. This can be important when planning and decision-making.
- Be clear on which issues are family-related and which are business-related. Make sure you’ve got the right framework to deal with these.
- Appreciate that change may impact on people in the business and in the family in different ways. Acknowledge this.
Don’t make the mistake of assuming that because it's family there is free and open communication. Often, it’s the absolute opposite. Family dynamics, hidden agendas and sensitive issues can complicate matters. So much so that often the unspoken understanding is “let sleeping dogs lie”. Is this what you want?
Encouraging and improving the communication within a family business doesn’t happen overnight. It requires the right settings for family members to express their views. Everyone must have a voice and be listened to. More often than not, agreement goes a long way further than demand.
Commonly made yet simple to fix, often overlooked with sad consequences, here are 9 mistakes...