Family businesses are loved for being warm, friendly places to work. Like a giant ‘family’ in fact and it’s something that you always loved about it when you came to help your Mum or Dad in the office when you were younger. But now that you’ve taken the reins you’ve noticed how SUCH an informal culture - where everyone is great mates and nobody is really accountable – means that the business has lost its sharpness and isn’t making the most of opportunities for growth.
The first problem is the lack of accountability. Yes, there is some management structure in place and technically everyone has to report to someone else but when they’ve all been there for 20 years and have become good friends, nobody actually cracks the whip or holds people accountable. In fact most people just see your Dad as their real boss and he’s great mates with everyone! It would make things awkward and difficult if he were to hold people to task or fire them and it’s not that kind of company. However it also means that the business isn’t working at its full potential, people aren’t driven and hungry – they’ve just become very comfortable and complacent. This is bad news for any business.
The second challenge is that this unstructured culture means you are holding onto dead wood and are losing out on the brightest new talent. Young, ambitious people who want to see a clear ladder for growth and development. They want to be part of an innovative, vibrant company that’s going somewhere and has big ideas. They’re not interested in working for a company which feels stagnant and slow to change.
Put yourself in their shoes – you’ve just come out of uni, they world is your oyster, you’re excited and driven to begin your career. You go for an interview at this local family business which everyone says is such a nice place to work, everyone is really friendly. Yet it hasn’t really grown much over the last few years, the same people have been there for a LONG time, it’s a bit clicky because they’ve known each other for so many years and people are just waiting for their retirement, there’s no real career progression plan, the company doesn’t do anything particularly innovative or ground-breaking. It’s just a very nice, stable, local family business. But without much oomph.
The third problem with having no formal structure, procedures or policies is that nobody is exactly sure of what’s expected of them and that makes it hard to let them go when they’re not performing. Job descriptions, company handbooks, new staff training – all of these basic things help people to understand where they fit in the company, what’s expected of them, and what the procedures are if they don’t fulfil their role properly.
Now, you might not be a business driven by sales targets and KPIs, and that’s fine, but if you don’t help people define their goals then, when they fall short of your expectations, you will have to have some very difficult and uncomfortable conversations. Far better that each individual person knows exactly what they need to achieve and this will give them clarity and focus.
So how can you, as the next generation with BIG ambitions for the future of this business, bring in some much needed structure without upsetting and ostracising everyone who’s part of the company’s fabric?
Number ONE – it’s important to tackle this lack of accountability with a new management structure. Historically everyone has pretty much only reported to your Dad and he has a brilliant way of being everyone’s best friend. Which is a fantastic skill to have when people are the heart and soul of your business. But not always much good when it comes to making sure people are performing. So now that your Dad isn’t involved in the day-to-day running you can implement a new management structure.
This doesn’t have to be anything scary or complicated. But you will be able to identify a few shining stars - people who excel at what they do, are great with people and can head up parts of the business. In fact why not let them come to you? Let the whole company know that you’re looking for a few key people who want to step up and work alongside you in your quest to grow the business. This inclusive approach of adding a simple layer of management means will shake the cobwebs off, bring your real champions to the fore and help people understand that there’s no room for complacency any more.
Number TWO – if you want to attract brilliant new people to your family business then it’s crucial that you create personal development plans. Again, these don’t need to be particularly complex but it means anyone thinking about joining your business can see future potential for themselves. And it’s not just about money. In your plan talk about opportunities for personal growth, expansion of roles, innovative thinking, what you do differently as a company, social impact, training. Not only will it attract a different calibre of people when you’re recruiting, it’s also a great exercise for you to do with your existing team who will be excited to be part of it and hopefully will want to create their own plan!
Number THREE – get everything written down. Policies, procedures, a company hand book, job descriptions, targets and goals, employment contracts. If it’s written down, people can refer to it and there is NO room for any misunderstanding. If someone isn’t performing, it won’t come as a shock to them when you have to pull them up on it and tackle it. If you think someone is taking the mick with sickness or holiday, you’ve got a clear, firm policy to refer to. This will immediately alleviate the problem of having to have tough conversations with people who you consider friends because it will be very black and white. In fact I bet that just by doing this exercise you’ll find most people will step their game up a notch. Most people work better when they have real clarity and understanding. Having everything written down safeguards you, and your employees.
So lets recap on three things you can do to create more structure in your family business so that you can grow –
ONE – bring in a new management structure. Move away from being a dictatorship where everyone reports to you and let some of the shining stars in your team step up.
TWO – create personal development plans. Not only will this help you attract brilliant new talent who want to be part of an exciting business, it will also encourage your existing staff to develop personally.
THREE – Get everything written down. Having formal policies and procedures leaves no room for grey areas and takes the emotion out of things when you need to hold people to account.
So as you go away to try some of these things, I’ll leave you with one final thought – the more successful your family business, the bigger your family’s impact.
Author: Amalia Brightley-Gillott, MD & 2nd Generation
Family Business Place