Nonfamily businesses can learn a lot from family businesses, says Henry Hutcheson, a certified Family Business Advisor and founder of Family Business USA consultancy.
“Family businesses outperformed non-family businesses during the boom years leading up to the 2008 recession, and during the 2001 and 2008 recession years,” according to a recent Harvard Business Review Study.
Hutcheson notes that family businesses were less likely to lay off workers during lean times, and they were more likely to maintain an emphasis on socially responsible programs.
He adds that while many businesses survived the recession, many were forced to close their doors.
“The factor that enables family businesses to rise to the top is trust: Family members can potentially trust one another far more than non-family members,” Hutcheson explains. “But trust can erode – when a family member can’t or won’t perform at the necessary level; when there’s a sense of entitlement; drug abuse; laziness. And that can have serious, business-killing consequences.”
“If the business is professionalized, there will be a way to deal with those issues. But too often, safeguards are not in place,” states Hutcheson.
Keep the lines of communication open. Schedule regular family meetings to discuss issues of concern and topics such as business transition, business performance and responsibilities. Include all family members, no matter where in the hierarchy their jobs fall – exclusion creates animosity. Create a family manual that lays out the ground rules for how the meetings will take place to ensure everyone gets a chance to be heard and impediments to communication are left at the door.
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