Alan O'Neill: 'Decisions that make or break a family business'
Family businesses have long played a very important role in the Irish economy however, they are not without their challenges
Alan O'Neill, author of Premium is the New Black is Managing Director of Kara Change Management, specialists in strategy, culture and people development. Go tokara.ie
Of the 280,000 SMEs in Ireland, almost half of them are family businesses. As the backbone of our economy, they play an essential role in corporate life in Ireland. With a very wide spread across the country, they provide employment to many in urban and rural areas.
We have a long history of family dynasties in this country and many have prospered through the generations. The Mahony Family of Toyota fame is just one example of a family that is now successfully entering the third generation. You don't need to be reminded of the less successful ones.
I was brought up in a family business where three of my brothers joined my father's construction business. I too gave it a try until I discovered that mistaking a dirty skylight for a floor gets you quick entry to A&E.
Nevertheless, I saw first-hand the positives and the challenges that go with the day-to-day operations of a family business.
The challenges for day-to-day operations in family businesses
The passion and the enthusiasm of founders in particular, shows in the energy that they bring and the hours that they put in.
When that positivity extends to the rest of the family members that may have since joined the business, that's terrific. It can be infectious. However, it's not always such plain sailing. Over the years I have consulted with various family businesses big and small and I know that the challenges should not be underestimated.
One challenge is when family members join up with a sense of entitlement.
Because of their relationship with the founders, it makes some think that they should get preferential treatment over non-family members. That might be around position, responsibilities, tasks, hours worked, time off, decision-making, salaries, performance and productivity.
Unless nipped in the bud from the very beginning, unfortunate norms can develop that are hard to reverse. Non-family members that witness that can feel the injustice which then negatively effects the overall culture.
On the other hand, the reverse of this can also be true.
In their determination to succeed, founders might take their family members for granted. Simply because they are family, founders might have expectations that are just too high. If they expect them to work longer hours for less money and be available even on days off, that's not fair.
Sometimes too, family members speak to each other with a tone and in a way that they never would or could, with a non-family member. That too can be hard for non-family colleagues to witness, as family conflict causes embarrassment or forces people to take sides.
Home life for the family members too can suffer. Work-life balance is gaining a lot of traction as a concept in corporate life. Employers have a responsibility to be more aware of supporting their employees to achieve a healthy and sensible balance between work and home. In family businesses that notion is often absent as work discussions continue at home over breakfast and dinner. That's tough on those working in the business and even for those that are not.
Tips on how to manage the family dimension in day to day operations
1 Revisit your north star. What is the objective and purpose of the business. Creating a business just to achieve an income and lifestyle can lead to complacency and a lackadaisical organisation.
To counteract that, many family businesses write vision and mission statements to help clarify their ambition. When that is communicated to all, including all family members, it reduces ambiguity. That brings order and structure to your business.
2 What values and behaviours do you hold dear and that you believe will set the tone for how people work together?
These too should be written down so that when inevitable conflict occurs, the values can be used to shape a resolution.
3 Plan your long-term strategy and refresh that each year.
That then leads to the next preventer of conflict, structure and organisation charts. A clearly defined structure shapes the roles that are required to deliver the strategy.
4 If this exercise shows that certain family members are in the wrong role, then you have two choices.
You can either make the change or else develop that family member to be better able to do the job.
5 Convene weekly and monthly meetings, with clear objectives, an agenda, and all actions and decisions documented.
J&C Kenny is a distributor of wines, beers, spirits and soft drinks based in Galway. Although founded in 1979 by Jackie Kenny and his wife Carmel, their three daughters Cliona, Orla and Aoife subsequently joined the business, taking up key positions to drive the business forward. While none of the girls were ever invited to join, they all left other careers voluntarily to join the family business. That tells me something about their positive family dynamic.
Weekly meetings are an essential platform for their action planning and are now embedded in their diaries.
The Last Word
In my tips above, I have removed emotion and tried to be practical and objective.
If you are a brand-new startup, you will find these tips easy to implement. However if you are already up and running for some time, you may find them more challenging.
Emotion, sentiment and relationship tension can hold you back and it can be awkward to approach such topics. But if that's the case, seek outside help. You don't have to do it on your own.
Alan O’Neill, author of Premium is the New Black is Managing Director of Kara Change Management, specialists in strategy, culture and people development. Go to kara.ie
In association with RGON, specialists in Employee Engagement Surveys — www.rgon.ie
Sunday Indo Business