Mom and Pop have worked hard to establish their business. They worked long hours, sacrificed personal wants to achieve business needs, learned from their mistakes and risked their life savings. They scraped and scratched to reach a stable income and profit. Through it all they raised their children and presented them with a role model of persistence, dedication and self discipline.
In time their children began to do odd jobs around the business At first they emptied garbage containers, swept floors, filled shelves, served customers and gradually advanced to the “till.”. They expressed an interest in working in the business full time. Mom and Pop thought this was a good idea and just maybe through their help they could begin to take some deserved time off.
As the children advanced in years and became a “fixture” in the business, trouble started brewing. The children began arguing among themselves and with their parents. Mom and Pop felt they were losing control because the children no longer “listened" to them. To add to the strain, Mom and Pop were now fighting with each other and the children were playing one parent against the other. Emotions were running high and cracks in the family and the business were widening.
Sound familiar? This scenario often plays out in a family owned business. If Mom and Pop recognize that they are in trouble they may seek out help from a Business Coach or a mentor. In most instances parents don’t reach out soon enough and the family ends up broken and the business falters. If you are in this situation, choose the former and not the latter. There are very practical ways to resolve the issues, even when in a state of emotional turmoil.
Here are eight strategies I have employed when working with family owned businesses.
1. Renew Marital Relationships. When communication becomes strained between Mom and Pop, the first order of business is for them to work on their own relationship. This requires a commitment to reduce the emotional distress and find solutions between themselves and with their children. If the issues are deep seated I recommend a marriage counsellor and without breaching confidentiality the marriage counsellor and I work as a team. He works with the couple on the marital relationship and I work with them on the business. In many instances a marriage counsellor is not needed, but what is needed is an agreement about what is important in their relationship, the different roles they play in family and business, their need for personal and business balance; and how they will move forward with strengthened “love, respect and forgiveness.”
2. Recognize the Power Shift. It is important for Mom and Pop to understand that the power and control they had when their children were young has changed. “Power” is a loaded word, but that is what parents have when children are young. Successful parents provide guidance to their children and nurture their talents and gifts. They also have “power” - the “power” to say “yes” and “no” and to set the ground rules for acceptable behaviour. They can, and often do, control their “comings and goings,” what TV programs they watch, and the use of cell phones and the Internet. Some assert their power with strict authority and don't leave much wiggle room for the children. Others are too lenient and give their children too much wiggle room. As children become adults, some parents wisely learn to relate to them as adults in their own right. Some parents don’t. – they continue to treat their adult children as young children and try to exert parental power and control with the same approach they did in the past.
When children grow into adulthood there is a power-shift within the parent-child relationship. Parents relate to their children differently, and likewise children relate to their parents differently. A lack of understanding of this power-shift is particularly problematic when adult children remain part of the business. Why? Because business and family affairs remain intimately bound together and family members have difficulty separating what goes on in the family from what goes on in the business.
In a family owned business the power shifts from parent-child to employer-employee. This is a significant shift and both parents and children need to find ways to accommodate it. If they don’t it will negatively affect their relationship. Parents need to break out of the parent-child mode and relate in a more business like employer-employee relationship; and the child needs to break out of a child-parent mode and relate in a more business like employee-employer relationship. Both need to focus on what is in the best interest of their business and what is in the best interest of their family.
3. Prepare a Charter of Expectations. This is a written Statement of Expectations built on common family values. The Charter of Expectations grows out of open dialogue among the family members resulting in agreements about how they will communicate, relate and treat each other. The intention of the Charter is to remove the pent up emotion around the relationship and defuse destructive behaviour; and, develop a renewed family and business culture based on openness, honesty and respect.
4. Clarify roles and responsibilities. Set out clear roles and responsibilities for all members of the family and have them hold each other accountable in the same way a non-family employee based business would operate. Define job descriptions and create an organizational chart for each of the positions and show how they relate to each other as one team. In many businesses the organizational chart remains in the background and what comes to the foreground is people working synergistically in a positive team effort. Families in business need to understand their roles and responsibilities within the team and work effectively together.
5. Manage Performance. Apply the same performance enhancing strategies as non-family businesses. Develop fair performance expectations and measure performance against results. In other words, Mom and Pop treat their children as employees in the same way they would treat other employees by giving attention to job performance, skill enhancement and employee development. Allow the children to learn the business from the ground up; and, if they possess leadership attributes and management skills promote them to positions that fit their skills and attributes – not by a sense of entitlement. Performance management between parent and child is one of the most difficult transitions each has to make, and requires honest dialogue between them about its purpose, objectives and process.
6. Change Reporting Relationships. If possible have the children report to someone else other than the parent. This provides breathing room between the parents and their child and gives the child an opportunity to learn about employer-employee relationships from someone other than the parent. In this instance the child’s supervisor must be a positive mentor and guard against any sense of favoritism towards the child.
7. Expand Experiences. Have the children seek employment outside of the family business where they are required to produce and perform like any other employee. Their experience will bode well if they decide to re-join the family business. If they are open to learning in those other organizations they will bring back new insight and ideas to improve the business’s operations and services. Upon their return parents would be wise to listen to their children and initiate appropriate changes.
8. Develop a Business Plan. Engage adult children in assessing the strengths and weaknesses of the business and involve them in developing its future direction. Every business requires a business plan, but a business plan for a family operated business is a critical requirement. It brings the family on the same page and provides a deeper understanding of the short and long term measurable objectives for the company. I find that when everyone understands the direction of the business and how each contributes to its success there is a renewed commitment within the business and improved relationships within the family.
When the transition from parent “young child “ to parent “adult child” goes smoothly, a more collegial relationship develops and each has a deeper understanding of how the business operates and how to support each other in family. In the business they understand the employer-employee relationship, their roles, responsibilities and accountability. They have job descriptions and are clear about where they fit within the business. Everyone is involved in developing a renewed direction for the business and promoting a healthy workplace culture. Communication among the members are respectful and adult in tone. All contribute to achieving results and building a successful business. The foundation is laid for a potential “partnership arrangement” and eventually the transfer of ownership from parents to children. Outside the business the family enjoys being family with shared meals, carrying on family traditions and supporting each other. In the end the pieces of the puzzle fit together and reflect a healthy symbiotic relationship between business and family. Does this mean there are no more tensions within the business or family? The short answer is no, but the family now has the tools to resolve the differences and communicate more effectively.
For those who operate a family business where family trouble is brewing, there is hope and help – reach out and grab it. Your business and family deserve it.