A critical and often overlooked factor in your company's success is the company's organizational structure. One critical area to look at is whether your business is a family business or not? Some people wrongly assume this makes little difference to a company's effectiveness; however, research proves this is a dangerous assumption to make.
Research suggests that 70% of the family run businesses that do not succeed (family owned companies have a life expectancy of just 24 years) fail because the owner/manager did not appreciate the dynamics of managing such a family business.
What is a family business? The definition of a family owned business has been the subject of much debate however for the purposes of this article I will keep it simple. A family owned business is one in which a family own a majority stake (ie.51% or more).
Given the amount of conflict that exists within families, is it any surprise that companies that are family businesses allow some of that conflict to affect the company? This is a perfectly natural thing to happen and it is important to plan processes and systems for dealing with this before it happens, rather than wait till emotions are heated and tempers have flared.
Another crucial factor to explore is succession planning in a family business. In my research on this subject I have found this to be an absolutely critical part of ensuring a company's long term survival. If you do not put in adequate systems and guidelines around this area you could be in for serious challenges when passing the torch onto the next generation.
Strategy formulation in a family business is another key area to look at for maximum growth and effectiveness. It is crucial to get this area right as strategy is the core building block of any company. What can happen is family based dynamics and conflicts get in the way of proper creation and implementation of strategy. It's important to not let these factors get in the way of your company implementing the right strategy if it's to survive long term.
Business survival can be challenging and it can be even more challenging if there are family conflicts in place. To ensure the survival of your family business you need to make sure that you are dealing with potential issues proactively through putting in place processes and guidelines rather than waiting till challenges arise.
Different family owned businesses will have different levels of relationship to the problems I have been talking about (largely dependent on how much family involvement is there is in the business). So this is largely a general overview of some of the issues you may face. The next best step is to raise these issues in your business so you can ensure the long term future and success of your family-owned business.
Research suggests that 70% of the family run businesses that do not succeed (family owned companies have a life expectancy of just 24 years) fail because the owner/manager did not appreciate the dynamics of managing such a family business.
What is a family business? The definition of a family owned business has been the subject of much debate however for the purposes of this article I will keep it simple. A family owned business is one in which a family own a majority stake (ie.51% or more).
Given the amount of conflict that exists within families, is it any surprise that companies that are family businesses allow some of that conflict to affect the company? This is a perfectly natural thing to happen and it is important to plan processes and systems for dealing with this before it happens, rather than wait till emotions are heated and tempers have flared.
Another crucial factor to explore is succession planning in a family business. In my research on this subject I have found this to be an absolutely critical part of ensuring a company's long term survival. If you do not put in adequate systems and guidelines around this area you could be in for serious challenges when passing the torch onto the next generation.
Strategy formulation in a family business is another key area to look at for maximum growth and effectiveness. It is crucial to get this area right as strategy is the core building block of any company. What can happen is family based dynamics and conflicts get in the way of proper creation and implementation of strategy. It's important to not let these factors get in the way of your company implementing the right strategy if it's to survive long term.
Business survival can be challenging and it can be even more challenging if there are family conflicts in place. To ensure the survival of your family business you need to make sure that you are dealing with potential issues proactively through putting in place processes and guidelines rather than waiting till challenges arise.
Different family owned businesses will have different levels of relationship to the problems I have been talking about (largely dependent on how much family involvement is there is in the business). So this is largely a general overview of some of the issues you may face. The next best step is to raise these issues in your business so you can ensure the long term future and success of your family-owned business.
About the Author:
About the author: Dr. Marc R. Dussault gives expert advice on how to ensure stability and profitablity during family business succession planning within a family business. Visit his site to learn more about the challenges and solutions around company succession
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