Family firms with healthy business practices and family relationships easily outperform the competition. Family members in well-functioning family firms report that nothing comes close to the depth and joy of family contact. Moreover, these are the firms that enjoy multiple generations of family succession, as well as prosperous longevity of the business.
Here are nine common characteristics of thriving family businesses:
1. Family members are able to communicate effectively with each other, expressing and acknowledging each other’s feelings, wants and ideas openly and clearly with an attitude of acceptance of differences. And there are no secrets.
2. The family simultaneously encourages and supports individuality in its members, both as it pertains to their strengths and weaknesses and especially as it affects the family business.
3. Conflicts and disagreements within the family are managed with respect and openness. The family is fundamentally focused on achieving “win-win” solutions.
4. Leadership is present and clearly defined. Leadership demonstrates competence, vision, respect and superb communication to all its employees, vendors and customers.
5. Management, business and operational structures, processes and systems are efficient, effective, well documented and regularly scrutinized for improvement, as well as necessity.
6. The family business has an active board of directors or advisors comprised of at least two non-family members.
7. The family is consistently able to identify when to use criteria that place the family’s needs first and when to use criteria that place the needs of the business first.
8. Family members who join the firm must meet the same job qualifications, performance evaluations and compensation standards as non-family members.
9. The family business has a “Family Council” that meets at least annually and includes all family members, including spouses and children over the age of 16. The Council’s purpose is to build family and business communications and planning. It further assists and prepares family members for possibly joining the business in the future.
Identifying and developing the core competencies and attributes that predict family and business success and health are imperative. The family businesses that are the healthiest will survive for generations. Families that can separate family issues from business issues, while professionally managing their organizations, will thrive.
Everett Moitoza is principal of Moitoza Consulting and Barbara Draper is the director of the University of NH Center for Family Business. The Center for Family Business in the Peter T. Paul School of Business at the University of NH has been educating, training and working with family businesses throughout NH and northern New England for more than 22 years. Moitoza can be reached at moitoza@comcast.net and Draper at Barbara.Draper@unh.edu. For more information, visit www.moitoza.com and www.familybusiness.unh.edu.