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Thursday, April 24, 2014
Trinidad & Tobago Guardian Online
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Rewards, conflicts in family business
If you are part of a family who owns a business and you work for that organisation, you probably regard it as a tremendous gift and an incredible challenge. However, other times it can appear to be the most frustrating decision that you have ever made. There are difficulties and conflicts. One of your family members may be the most difficult person in the world to work with.
Misunderstandings can have serious consequences, and working out relationships with parents and/or children can seem at times to be impossible. While most family businesses would say that satisfactions greatly outweigh the frustrations, the difficulties sometimes arise almost without warning. Or did you miss the warnings?
Family businesses have special problems along with the usual business challenges. Every family business founder dreams of passing the business on to his or her heirs. Yet that remains more a dream than a reality. Research indicates that fewer than a third of family businesses make it long enough to be passed on, and only half of those make it into the third generation. In family-based companies, whether large or small, the worlds of work and family are deeply intertwined, and love and business are often in conflict.
The family’s habits often find their way into the business and work related emotions are transferred into the home. In fact, it is not uncommon for business families to have intergenerational feuds, problems in communication, and difficulty in separating family priorities from business choices.
What is a family business?
A family business is any business where more than one member of a family takes on management or active ownership responsibility. You have a family business if you work with someone in your family in a business you both own or which you may someday own. The essence of a family business is that blood, work, and business ownership are held in common.
It should be noted that family business is big business, but is often neglected business. If one is to conduct a simple exercise and list some of the businesses that comprise the top industries (construction, retail, and manufacturing) in T&T, we can observe that more than ninety per cent (90 per cent) of these enterprises are family businesses.
Unique peculiarities of family business
First, it is believed that family businesses need to take account of more issues than ever before. In particular, everyone needs to be more aware of one another’s feelings, goals and desires. Senior members of family businesses need to be aware not just of how things are going today but of potential difficulties they may face tomorrow.
Second, communication about differences is better than avoidance or ignorance. The family has to talk about things, especially in times of generational transition (succession), and there is usually a lot to discuss. One has to share more than just their positions on specific areas. People in families who work together have to let each other know about their values, their personal goals and about how they see the business and the future.
When they come upon differences, they have to be committed enough to each other to stick with the conflict until a resolution is reached. Third, it is the responsibility of every family member to make the situation better. One cannot opt out of major decisions, or withdraw and say you are not involved. There are no victims in a family. Every person can make the family and the business a better place to live and work.
Fourth, the whole family, not just the patriarch or head, must work together and create the future of the family and the business. The future is far too complex, and different people and groups involved are so varied, that one person cannot plan alone. Hence, such important decisions cannot be left to chance. Everyone must be involved, and it’s hard work that takes time. There are no short cuts or quick fixes.
Finally, the issue of succession planning comes to the forefront. This is the most challenging element confronting family-based businesses. It is an issue that can be viewed in three phases:
1) the founder of the family business must prepare himself/herself that the time will come for him or her to pass on the leadership of the business enterprise to one of his/her children or relatives.
2) the organisation must also be prepared for leadership succession. Within this transition period, it is imperative that all the strategic planning systems are put in place and the communication channels to non-family members and staff must always be open.
3) and most important, the chosen successor must be prepared to take on the mantle of leadership.
In a family business, you have two relationships with every member of your family who works with you: your business relation and your personal relationship. Problems arise when you attempt to transfer aspects of one relationship to the other. Hence, the onus is on the individual to manage his/her dual work/family relationships in order to achieve closeness, personal satisfaction and productivity.
Jai Leladharsingh is the assistant manager (human resources, workforce development and business process—Coosal’s Group of Companies.
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