Never put business before family. ~ Walt Disney
Family businesses have the potential to provide employees with a sense of belonging and community. Thus, creating a different kind of loyalty that many employees simply don’t experience at other companies.
While this seems like it could be a recipe for success, it comes with its own set of challenges that many companies never have to face. Despite their importance to the global economy and their prevalence across industries, family businesses can be just as susceptible to problems as non-family businesses. One of those issues is cultural.
Family businesses can be trickier to navigate than other forms of business. Because family is involved, there are more variables at play. Personal relationships and emotions can get in the way of making business decisions that are in the best interest of the company as a whole.
People who build family businesses are not classically trained. They have to deal with an enormous amount of politics. You think corporate politics are tough? Go work for your dad or mom. ~ Gary Vaynerchuk
Therefore, it’s important for family-owned businesses to establish an intentional (not accidental) culture early on and focus on maintaining that culture as the business begins to grow and expand. That way, all employees feel like they are part of the same team, no matter what their relationship is to the actual owners.
Building and Maintaining Culture in Family Businesses
Building and maintaining a strong culture starts with discussing your values and identifying what you want your business to stand for. You should be explicit about your values—you should not just assume that everyone will share them or know what’s expected of them or the company. Be sure to integrate these values into every aspect of running your company, from hiring decisions to communication.
Include them in your employee handbook, make them a part of new employee orientations, or even work with a coach or consultant who can help you identify ways that you can reinforce these values on a daily basis.
You want to make sure you hire, fire, review, reward, and recognize people based on their living the company values. These aren’t just pretty words. They’re who you are at the core. And people who live the values are “right people” in the company. Those who don’t can cause irreparable harm in ways you don’t even know until they are gone.
As you grow, be sure to revisit these values at least annually and make sure they still reflect who you are as a company. And make sure everyone knows about them—there’s no room for assumptions in a culture deliberately founded on stated values.
I have a family business client who defined their values and quickly realized why they were having issues with some of the people on their team. They weren’t really on the team! They were simply there for a paycheck. When the owners decided to let the people go, the impact was immediate in the company. It was as if the whole company took a deep sigh of relief. No more walking on eggshells, no more relying on people who didn’t want to be held accountable, no more dreading coming into work! The atmosphere is now one of joy, excitement, and the creativity (and revenue growth and profitability) has gone through the roof! Getting the right people in the right seats starts with identifying and living the company values.
Characteristics of a Healthy Business Culture
Over the years, some family businesses have built incredibly positive cultures which enable them to thrive in ways that other organizations cannot. What makes these businesses special? And how can you ensure your business falls into this category?
Here are some qualities of a positive, sustainable family-business culture:
- Core Values: Family businesses have unique characteristics that make them challenging to manage. An obvious one is the emotional complexity of working with family members, which easily can compound into a culture where the emotional conflict is rampant and interferes with the organization’s ability to survive. The most successful companies have robust corporate cultures that are grounded in a core set of values that provide employees with guidance on how to resolve conflicts. Family-run businesses with strong cultures have an internal process for resolution when disagreements arise among family and non-family members who work together. Hopefully, you don’t have to deal with these types of disagreements often, but if you do, it’s important to establish a system early on for how to handle them.
- Open Communication: Another characteristic of a strong sustainable culture is open communication. Essentially, that’s simply the act of creating an environment where team members feel comfortable speaking up about things they like or don’t like without fear of retribution or punishment. This kind of trust is vital to the smooth operation of any organization. A family business should strive to encourage open communication among all its employees, which will allow them to identify problems early and take steps toward resolving them before they become bigger issues that negatively impact the business. Communication is critical to success in any venture, including a family business. And when you’re talking about a dynamic that involves multiple generations and multiple people, communication is vital.
- Clear Vision: When a company is growing and scaling, it can be easy to lose sight of the culture you worked so hard to build. A strong sustainable culture requires that your business is incredibly clear on its purpose, vision, and values—and that it holds people accountable to those ideals, regardless of position or pay grade. That way, your vision stays intact, your company can grow with intention, and you have the power to keep attracting the right people who share your values. As a family business scales, it’s even more important to maintain a strong sense of culture. After all, family businesses are often founded on strong values like loyalty and trust—and those aren’t just ideals; they’re the foundation of your operations.
- Development: A strong sustainable culture has many characteristics, and one of the most important aspects is a commitment to ongoing development in the workplace. Training is an essential function of any business. In addition to teaching employees the skills they need to succeed in their current roles and responsibilities, training can also help employees prepare for future responsibilities and take on more challenging tasks. Ongoing training not only helps employees develop professionally and better retain them over time but can also help them make significant contributions to the company’s bottom line.
- Succession Plan: Having a robust succession planning process is one of the hallmarks of a strong sustainable culture. Succession planning identifies and prepares future leaders for key roles within the business at an appropriate time. It allows you as founder/owner to let go of controlling every aspect of the business and begin to cede control to others in the business. A well-executed succession plan provides continuity for employees, customers, and other stakeholders after current leaders retire or are no longer active in the company’s daily operations.
If the culture you want to build doesn’t already exist the way you want it to within your team, you will need to be intentional about what you do want and work at it constantly. If you don’t, other cultures may encroach on your own and water down your awesome values. A great place to start is an honest assessment of your existing culture. Building a strong, sustainable culture within your family business is absolutely essential to its long-term success. It’s a challenging process that will require you to make sacrifices and have difficult conversations. But the results are worth it in the end.
Coming together is a beginning; keeping together is progress; working together is success. ~ Henry Ford
We have helped many organizations identify their vision, values, purpose/passion, and create that intentional culture that truly reflects who you are as a leadership team, as a company. If you would like to find out more about how we might be able to help you and your organization, reach out to us at Sandi@ApexCatalystGroup.com. We love to help growing companies!