FAMILY DYNAMICS / GOVERNANCE
This article is part of the “20-Year Look Back” series by Tom Garrity, founder and managing partner of Compass Point Consulting, as he shares insights and reflections on two decades of supporting family business owners.
As you read that word, I’d be willing to bet a feeling or image immediately popped into your heart and mind. It might have filled you with joy…caused you to sigh…or both simultaneously. Regardless, it’s a strong bond.
Running a family business is a lot like any other business. There are sales goals to meet, market trends to monitor, supply chains to navigate, stakeholders’ expectations to manage and people to hire, fire and develop. Pretty much the same… UNTIL you add FAMILY.
Building a strong family of character IS your competitive advantage. An advantage few family businesses truly achieve, and non-family businesses can’t duplicate.
Looking back over the last twenty years of being immersed in this unique and diverse niche, I’ve gained valuable insights and learned several lessons regarding families in business along the way.
It’s not good for the heir-apparent, not good for employees, not good for the company culture, and potentially devastating to the bottom line and legacy of the family business. Leadership at the helm of a business requires a completely different set of skills than the ownership of a company. Do you understand the difference? Do your kids, spouse, siblings, and cousins understand there is a difference?
When done right and SHARED with everyone, core values are the compass of the company and act as a course corrector, helping the team navigate times of growth and inevitable challenges. These guiding action-oriented statements provide structure for the workplace culture, performance expectations, and leadership development. It must also be clear that they are non-negotiable for ALL employees – family or not. If someone can’t align with the core values, then wish each other well and move on.
It sounds like fluff, but this statement is a family business truth and most consultants avoid this piece – family harmony and its counterpart family drama. And yet, it’s the most transformational and foundational piece to building a legacy company. Harmony is the ability to communicate, nurture relations, and resolve conflicts. It’s the glue in your family and the keystone of the company’s culture. Don’t neglect it.
If family members are genuinely interested in working in the business, then design their path. As per point number one, that path is not directly to a senior role. It means starting at the bottom and learning their way up. Working for someone else is equally valuable and can provide real-life lessons needed to effectively contribute to the family business’s future.
There will be lots of opinions, disagreements, and even some rifts. No one is perfect. That’s the wrong goal. The goal should be – needs to be – to leverage the bonds of love, commitment, and your family’s values to support one another as we all try to be the best versions of ourselves. That shared journey of becoming that best version will strengthen the bonds of your family – AND the family business.
Family businesses are inherently in it for the long haul. Of course, being operationally and financially sound are paramount. But so too is being emotionally healthy. Just like your business plan, brand standards, and sales goals, you need to plan how the family will successfully navigate being in business together and stay a family in the process.
If you’re not sure where or how to start that family business navigation plan, I encourage you to take a look at our strategic framework. If it seems like the right fit for you and your business, let’s set up a time to talk.
BLOG | LEADERSHIP
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BLOG | LEADERSHIP
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BLOG | EXECUTION
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