Unfortunately, some operations need to be made aware of these common mistakes to clearly identify the barriers preventing the success they seek.
I’ve outlined some of the more common mistakes I see family businesses make that inhibit their ability to reach their full potential. Though not a comprehensive list, those itemized here provide an overview of the types of mistakes and oversights that, once addressed and overcome, will allow greater progress to be made.
Not having meetings
Many family businesses believe that because they are “just a small business,” they don’t need formal meetings. The most common excuses I hear include: They are too busy, it’s hard to get everyone together, they aren’t sure what to talk about, participants feel like meetings are a waste of time or every time they have a meeting, it ends up being a string of complaints and disagreements.
If these are the reasons, then the unfortunate reality is: Leadership has failed. Leaders need to create an environment in meetings where people feel they can contribute, gain valuable information and discuss issues of high importance without it being a waste of their time. Meetings are most effective and efficient when there is a consistent meeting agenda, a set time limit, each person has an opportunity to speak and the meetings end with clarity on decisions that were made.
Lacking clear accountability
Family businesses are the most difficult environment to establish and reinforce accountability. Moms and dads love their kids, they want what is best for them, and they want to give them every opportunity to meet expectations. Unfortunately, Mom and Dad don’t like to be the sheriff.
Without clear consequences for poor performance, inappropriate behaviors or failing to follow procedures and policies, family members and employees will eventually focus on doing what they prefer to do and perform at the minimum acceptable standard. Over time, our best employees will leave for a more positive and rewarding workplace environment.
Developing a structure of responsibility, where accountability is incorporated into the system, is the most equitable (and least emotional) solution. This is accomplished by creating a simple spreadsheet that details what each employee is personally accountable to perform.
Believing you are ‘too small’ to need a professional culture
The standards in your family business need to include a desire for high levels of professionalism, which can be defined in different ways. Every business needs to define it in their own terms.
There are many advantages to a professional business environment, regardless of size and number of employees. It provides clear behavioral expectations for your family and staff, and garners respect from the community, your vendors and other professionals.
Our vendors, customers and individuals in our community make deliberate choices as to whom they prefer to do business with and with whom they will associate. If they have a choice, they will work with someone they believe will consistently perform at a high level of professionalism.
We naturally seek to be around individuals who are respectful, have high integrity, are gracious in all situations, attentive and polite. We want them to be punctual, dependable, loyal and cooperative. In contrast to these desirable traits, we tend to avoid those who are gossipers, thrive on drama and focus on negativity and pessimism.
Similar to other areas of our culture, establishing professionalism as a part of our culture feeds on itself and encourages everyone involved to model this expectation of personal behavior.
Lack of structure and governance
Structure and governance in an organization refers to knowing who the top decision-makers are in your company, the process by which they make decisions, the chain-of-command to ensure that those decisions are acted upon and the general organization of responsibilities. Without clear governance and structure, family members and employees may assume they have much more control and authority than their positions warrant. They might believe they can give instructions and orders to anyone they wish, make purchases without authorization and change procedures to fit their own preferences.
Addressing this oversight of governance requires developing a clear structure that includes an organizational chart, job descriptions, chain-of-command and a method of accountability.
Structure ensures that responsibilities are fairly divided and each person only has one boss at a time. When properly executed, your structure also addresses the fact that not everyone has the same skills, competence levels, passions and other traits that make for a successful employee.
Not having a vision and mission
Your vision and mission statements provide important clarity for the direction of your business, a statement of how your values will be expressed, your long-term plans and goals, and provide clarity for your employees so they can make decisions aligned with your values.
Family businesses that lack a clearly defined and written vision will tend to make impulsive, ill-fated decisions; take opportunities that arise without considering the long-term impact on the company; and have a more difficult time helping employees gain a sense of purpose in their daily activities.
Final thoughts
I’ve personally seen the negative, sometimes disastrous outcomes that occur when these mistakes are made. These issues are often barriers to the full potential the family could achieve if they take the initiative to create and implement these important documents, strategies and actions.
You may feel that some of the strategies mentioned here are not a good fit for your situation. I would recommend, though, that you consider each one carefully and determine if perhaps one or two of them deserve your attention.
