Family and business relationship

Managing the family part of the family business is the key. Succession is one of the most difficult challenges that family businesses face and can become a challenge when the older generation does not permit the younger generation the needed room to learn, develop and grow.

In what way is starting and running a family business harder these days than in the past? They have experiencesfamily assemblies once a year, for example. Just because the person is a family member does not mean he will be best suited to a given job, and a company that hires only relatives may end up having some bad apples. Others can fail, for example, if they dont manage generational transition.

They have fun, and they talk about what the purpose of their family is, why they stay united. Its nepotism at its worst. A good business practice should try and induct the children of the management through a carefully planned progression, wherein the relationship is allowed to evolve in a phased manner and with enough intermediate layers put in between to help manage this relationship.

When you add the confusion of roles to the lifelong relationship, it is fraught with peril. Its their place. Across the transition from induction to the full integration of the individual joining the business, specific vital rules need to be adhered and, the gospel truth is zero tolerance for emotions and any personal conclusions. While dealing with the individual family member, parents or elder siblings who are at the helm of the business have to do the balancing act to ensure organizational fairness and maintain the corporate environment.

They will delay their own retirement and discussions about bringing in the next generation too long, and if you wait too long you cant. What's your advice for working with your older parents in the business?

The other thing that is so different is that owners are people. Are you the CEO, dad, mentor? Oftentimes, relationships between parents and children, or among siblings, tend to deteriorate due to lack of communication within the family.

There should be preparedness for such inductions, and if a parent is a boss, then to ensure smooth transition, because due process and caution should be exercised. Org, an offshoot of Entrepreneur and Innovation Exchange ( eix.

It is a vulnerable time when the older generation doesnt want to get off the playing field. It's even better if you draw out partnership contracts that lay out in simple legal terms the nature of the business relationship. Who am I talking to?

Realistically, it is harder to stay together and connected and they need to do it in person, so they really have that connection. Most Popular Logo Return to Top Connect Hearst Newspapers Copyright 2021 Hearst Newspapers, LLC.

Families also tend to be more willing to make sacrifices for the sake of the business. The paradigm shift is needed in the parents attitude to ensure a certain level of fairness in his/her role of a boss to avoid it getting marred due to personal inklings and perceptions that can significantly impact the desired outcome.

The personal differences that usually confront this individual during their transitions, or over the lifetime in the business, are not just about the business strategy, board governance, or routine management issues, but more of personal disputes and emotional outbursts. Entering the family can be a one-way street with no exit plan. Attracting family members to your business is getting harder.