It's safe to say that any family-run business (including couples, parents, children, siblings, and the like) is a family business. Its management isn't in the hands of an outsider—it's under the control of family members and involves a kinship bond.
However, there are many challenges associated with this issue. The occurrence of generational conflicts, excessive protectionism and the distribution of positions based on kinship (not merit) can generate serious problems and affect the health of the enterprise.
Below, we explain how to optimize the management of a family business and ensure that conflicts are avoided or managed. Keep reading!
One of the biggest problems in managing a family business is the lack of clarity regarding the rules of the game. How should profits be divided? What is the order of succession for the company's leadership? What is the decision-making process?
Therefore, the first step is to establish clear rules. To do this, it's recommended to hire a specialized family management consultant or to convene family members to reach a consensus and create a mutually agreed-upon contract.
Some professionals, simply because they are part of the family, are better compensated (in terms of career and salary) than their non-related colleagues. This affects employees' motivation and sense of justice, in addition to generating serious interpersonal conflicts.
Therefore, it's necessary to develop a strong sense of meritocracy. Every professional will be rewarded for their contributions and achievements, not necessarily for their degree of kinship. Therefore, well-established objectives, goals, and indicators are essential.
It's not because you're in a family that communication It becomes easier—quite the opposite. Often, it's more difficult to hold a family member accountable, to talk about their mistakes and areas for improvement. Therefore, communication sometimes breaks down.
Therefore, invest in communication. Hold regular meetings and select a moderator to ensure any conflicts are resolved quickly. Establish a feedback culture where family members feel comfortable giving and receiving regular feedback.
Finally, be careful not to lose focus. In the company, the family comes together to make the business a success. success. Everyone must work with enthusiasm, intelligence and integrity, otherwise they may lead the enterprise to failure.
By prioritizing family members, the company's interests can be overlooked. For example, some professionals may increase a relative's salary to make them happier, but in doing so, they reduce the organization's profit margin. So remember: stay focused on the business.
Finances are a delicate matter, especially in family businesses. Therefore, it's important to properly separate personal and corporate accounts, preventing the company's and its managers' funds from getting mixed up. Otherwise, the likelihood of family conflicts will be greater.
Now you know how to manage a family business and avoid unnecessary conflicts. It all starts with clear rules, which must be understood and embraced by the family. Furthermore, it's important to foster a sense of meritocracy, improve internal dialogue, maintain focus on the business, and separate personal and corporate accounts. With these tips, success is easier!
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