A family business forum has revealed the keys to generating and maintaining a successful firm. A one day event in Sydney and Melbourne explored the intricacies of working with family, and how to ensure growth and sustainable leadership.
Professor John Davis of the World Business Forum led the World of Business Ideas one day event WOBI on Family Business.
So how can you effectively run a family business? Check out these four key points:
4 top family business tips for success
Establish cohesion in decision-making
It’s natural for families to try to avoid conflict. So it’s crucial that a family firm ensures there is a decision-making protocol. This will clarify who makes what decision within the business.
Davis says there needs to be some formality in communicating this. “These decisions must be spoken about and agreed upon openly, and adequately documented once an agreement has been made. After this has taken place, all relevant parties must be notified.”
Identify key roles and responsibilities
Davis highlights the importance of family members understanding exactly the role they play within a family business.
“In order to achieve this, family businesses must add structure to job functions, reporting relationships, and career paths,” he suggests. “Be sure to define these reporting relationships and communicate them transparently with all employees, whilst also allowing non-family managers the ability to supervise and mentor family employees.”
Work towards achieving unity in a family business
Family unity is one of the keys to a lasting family enterprise, says Davis, but it needs constant attention. Communication is the key to achieving common ground , he says.
“All conversations, including the difficult ones, must be handled civilly, and remember that communication has two dimensions – what is being said, and how it is said – and it’s important that you do both well. Be sure to draw boundaries around business versus family conversations, and always show appreciation for family members when doing so.”
Prepare for succession and growth
How do non-family members fit into the firm? Adopting external advice and support can be a challenging but important process. Davis suggests family owned and operated businesses must maintain momentum by steadily growing their financial assets, developing and training employees effectively, and maintaining group unity.
“To maintain momentum, businesses need to be prepared and willing to transition. For a family business, this may mean hiring a non-family member to take the reigns and lead the business through such a transition.
“Whether it be a family or non-family member chosen to lead the business into the future, it is important that systems for a successful handover are in place to ensure that the person in line is well equipped to lead.”