This article is the second in 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. If you missed the first post, you can find it here.
Product. Team. Customers. Processes. Sales. Revenue. Profit. Cash.
These are the elements to any good, viable business.
A real epiphany for me after 20 years of working with dozens of businesses with amazing products and services is that good and viable is not “good enough” for a family business. While ALL those elements must be present and well-managed, there are actually other dynamics at play to build a sustainable family business.
In addition to a good and viable business model, you EQUALLY need a family unit and ownership circle that work well together, are aligned, and communicate well with each other and the business.
This synergy and alignment take energy, planning, and awareness on the part of a business leader. So why can it be such a barrier to true success and legacy creation for family businesses?
Simple. It’s a matter of hats.
Let me explain.
A family business owner must wear a variety of hats:
The challenge is in understanding which hat to wear, when to wear it, and when to switch.
These “hats” are a euphemism for the many distinct groups created with the overlaps of the 3-Circle Family Business Model, with the three circles being Family, Business, and Ownership.
A totally different dynamic arises in the business when you ARE a family member in a family business system, as the boundaries between family, ownership, and business become blurred. What might be the ‘right’ or ‘easy’ business decision or ownership decision may feel like a betrayal to the family. Enter fear and dysfunction in the form of conflict, relationship rifts, addictions, etc…
The key to success is treating each domain as crucial to the entire system, and that each domain needs its own governance and structure in order to be the ‘best’ domain it can be for the health of the entire system.
If the system wins, everyone wins. If one domain of the system is broken or dysfunctional, it can – and will – destroy the entire system.
Choose your hat wisely and wear it well.
Need help working through the many family business hats you are required to wear?
Reach out and set up a call to talk through your highest priority or most pressing challenge right now.
No sales, just a free exchange of ideas.
Or mark your calendar for my upcoming “office hours” session on June 22 or July 27 to lean in and learn how to navigate the challenges inherent in a family-owned business. Click here to learn more…
BLOG | FAMILY DYNAMICS / GOVERNANCE
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. And then, there are family dynamics to consider as you chart your business's course and build a strong family business.Read More
BLOG | EXECUTION
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BLOG | PEOPLE / TALENT
Questions are the best way to identify problems and help people find the answers. A question for you… Do you question WHAT you do, HOW you do it, and most importantly WHY you do it?Read More
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