As a family business, making business decisions can be cumbersome. Similar to non-family businesses, your decisions weigh heavily on the success of the business. In particular for family businesses, these decisions may also impact the family harmony.
Joe Ambrose, Executive Director for the First Bank Center for Family-Owned Businesses said, “As with other relationships, family businesses have their fair share of conflict. Although this seems contrary to maintaining peaceful family relationships, but, in fact, open and honest discussions can be a pathway to achieving greater harmony.”
In order to have effective discussion and decision making while balancing both the business and family components, clear guidelines and expectations should be implemented for how and when to handle business-related matters.
Below are four tips to help you balance the business with family business decision making.
1. Identify the reason for the discussion.
At the beginning of the meeting, communicate why you are gathering. Be clear on your expectations for the discussion and what you expect to get out of the discussion. For example, is there a building that is no longer needed but has been in the company for a long time? Or, is there an original location that isn’t bringing in enough revenue or underperforming? Some discussions may include topics that produce an emotional response from a family member due to past involvement or connections. It’s critical to elaborate on the circumstances of the situation, both past and present, so that everyone has a clear understanding for the discussion.
2. Facilitate open and trusting conversations.
One of the most important factors in making any business decision is maintaining open, trusting conversations, but this is even more critical for family businesses. Because the family is woven into the business, these conversations can hold more weight and affect family members differently. Ambrose explains, “While family harmony is seemingly an ideal scenario to be achieved, it shouldn’t come at the expense of constructive, open, and honest conversations.” During these conversations, family members may have differing opinions than you, or think one solution over the other is ideal for the company’s future.
“Acknowledging and searching for ways to resolve the issues can lead to a greater understanding of each family members’ feelings. Keeping these suppressed can lead to destructive conflict that endangers both the business and the family,” said Ambrose. Facilitating open and truthful conversations can also enable discussion on the advantages and disadvantages of each decision and the steps that are needed to fulfill the group’s decision.
For advice on managing conflict, watch our Managing Conflict in a Family Owned Business webinar.
3. Focus on how outcomes can affect the business.
Some family members may propose a solution that contradicts yours. While emotions may be present, it’s important to focus on the impact a decision will have on the business. Recall why you are gathering and compare how each possible outcome will affect the business. How will the business be affected if a location that isn’t bringing in enough revenue closes? What about the clients that use that location? Is there another location nearby that they can use? Is the staff improperly trained at said location? Do they need additional training from an outside company? Determine the short-term and long-term implications of what the decision will have on the business and talk through any challenges that may occur as a result.
4. Set boundaries for when business discussions can take place.
Clear boundaries can help reduce unwanted business discussions at inopportune times. Identify set times for when discussions can take place, like during work hours or on Monday nights. Consider when it’s appropriate for business discussion during other times, like during a family outing, during holidays, or a family vacation. Establishing set times and expectations can help reduce business matters seeping into family time and unintentionally excluding key family members from discussions or decisions.
When a business decision needs to be made, it’s critical to keep an open mind and focus on how those decisions will impact the future of the family business. Analyze how a decision will impact the business and ensure that business related conversations take place during the agreed upon times.
Could your family use some effective strategies for managing and resolving conflict when it comes to your family business? At our webinar titled, “The Right Way and the Wrong Way to Resolve Conflict,” our special guest Kaitlyn Erb, consultant with CMA, discussed effective methods and best practices to help manage conflict within a family business, while also maintaining harmony within the family.
For more information on how First Bank can help your family business achieve long-term success, reach out to us at the First Bank Center for Family-Owned Businesses.