Operations >> Browse Articles >> Family Business


Family Business: Managing Family Members

Family Business: Managing Family Members

One of my passions in life is working with family owned businesses. Family businesses enjoy a success rate far greater than other kinds of businesses. In the US, family businesses provide 65% of all wages. This group is the backbone of our country and will likely be the group that pulls us out of our current recession. This group is not without challenges, as I often hear the following:

- “We can’t talk about the real issues”

- “We seem to have differing expectations about how to handle the business”

- “As the family and business grow, we’re facing more confusion and conflict”

Every family business member feels differently toward the business: some hate it, some love it, to some it is a dream come true, to others it is a nightmare.

A couple of key points on managing family in a family business:

1. Keep an Open and Clear Line of Communication

When it comes to any business, communication is important. In a family business it is crucial to success. Make sure before you start a business with a family member or hire a family member, discuss individual roles and responsibilities, clearly define expectations, and make sure everyone is in agreement, before you proceed. If you take the time to do this, you will avoid potential threats down the road.

2. Be Logical, Not Emotional

It is often difficult to be objective when you are dealing with family. Feelings are hurt easily, and it is a common reaction to get defensive instead of taking the time to look at the issue from a logical perspective. Before you make a decision or comment, try asking yourself, “How would I handle this situation if I were dealing with a non-family member?” Ask yourself that same question every time you need to make a decision regarding a family member. The goal is to train your mind to be more logical when dealing with emotional situations. Be sure to clearly explain your decision to your family member as you would to a non-family member.

3. Reward Competence, Not Genetics

A good business owner or manager will reward their employees based on performance, family members should be held to the same standard. If a family member is not qualified to be the VP of your company, hire someone who is. You may think you are doing a good thing by providing a family member with a job, but if they are not qualified, they can do more damage than good when it comes to the success of your business. Not to mention that nepotism is a fast way to alienate the non-family members that work for you.

4. Be Fair, Not Biased

Family feuds are better left at home. If you have conflict between family members at work, encourage them to work it out, outside of the office. If they are unable to do that, treat the situation as you would if it were between non-family members. In some cases you may need to discipline them or ask them to go home for the day. Under no circumstances should you engage in the conflict. If you take sides, you are now part of the conflict. The same rule applies if you are dealing with a situation involving a family member and a non-family member. To be an effective manager you need to have the ability to be fair and rational when running your business.

5. Take Time for Each Other Outside of the Office

Believe it or not, all work and no play will drive your business and relationships into the red. Make sure you not only nurture your business, but take time to nurture your family relationships as well. Try going out to dinner together once or twice a month, taking a weekend trip away from your home and office, or trying to plan at least one longer vacation each year to get away from it all. Be sure that no matter what you do, have fun, and do not discuss the business. Take the time for yourself and your family, and as a result it will be better for your business