In my experience with family owned businesses, I have discovered that if owners would follow two simple rules, their lives would be both more prosperous and harmonious.
familyRule #1 is applied by the best employers regardless of their type of ownership. Rule #2 applies to the unique challenge for family firms. Breaking this rule can jeopardize your most valuable entities: your family and your business. It is natural to want to share the spoils of business ownership with family. However when family members are exempt from the same accountability and performance standards as other employees, who is really being served?
The answer to the third question is not always readily apparent to the senior family management anxious to share prosperity with other family members. Often there is a desire to pamper their offspring in the workplace or shelter weaker siblings from the realities of the corporate world. How can such good intentions go awry?
The resulting poor profit performance damages family relations (often irreparably) as finger-pointing sets in and futures are jeopardized. Treating your family like employees is a critical challenge for family firms. Failure to meet this challenge has damaged and even destroyed both businesses and families relations. What measures has your family firm taken to avoid the inherent pitfalls?
While these issues apply to traditional organizations, family firms simply have more challenging dynamics.
