Trying Times for Family Businesses

These are clearly stressful times for us all.  Family businesses are no different, as they navigate uncharted territory from applying for essential business status and PPP to managing cash flow and a remote staff.

So family business owners, do you find your team not communicating well, not on the same page, arguing, or just straight out confused?  This crisis is a test of your innovation, supply chains, culture, and very resolve to keep the family business functional.

A 5D life event such as COVID-19 is why every family business should have Governance is place. 

But what is Governance?

Governance is a written document that clearly establishes the interface and rules of engagement between the family and the business. This document provides the structure to facilitate communication and guide the problem-solving processes that impact family and non-family members alike.  

Governance can take the form of a family constitution, a family council, an owner’s council, and/or a board of directors. These types of frameworks will help to define family member roles, shareholder roles, as well as providing guidance to the executive team.  

Imagine having a board of directors during this tumultuous time right now. A board consisting of both family and non-family professionals – smart people – who could help the leadership team navigate these choppy waters.  What kind of focus and confidence could that bring your company, your employees, your family and the community? 

I have yet to meet a family business that didn’t want to improve its communication and family harmony among the family branches.  Too often they shrug their shoulders as to say, “Well, that’s just the way it is in a family business.  You know, it’s complicated.”

It is complicated, but that doesn’t mean there aren’t ways to improve it beyond the infamous ‘wish strategy’.  This is why your Family Business Governance should be built before you need it. 

All businesses have challenges, and family businesses are no different. As I’m sure you know first hand, problems are exaggerated in a family business, because of the complexity created by the combination of love, money, and power. 

The inherent emotions of family issues and relationships can make things difficult. Governance gets the business-aligned, builds trust, opens communications, and dramatically improve your chances of making it to the next generation – especially in times like these.

The coronavirus pandemic has changed our world.  As we now begin to start re-opening the economy, we are not going back to the way of operating as we were in February.  It is a whole new world. The question isn’t how does this new world impact your business, but how will your business change to deliver impact in this new world of doing business?  

If Governance is missing in your organization, read this white paper and then email me to set up a call.

@2019 Compass Point LLC - All rights reserved