The Family Communication Program
Ensuring that the family can communicate is vital to a healthy business. To this end, it is important to create structures to communicate within the family.
Generally, owners are hesitant to construct these communication structures because they are afraid of having to deal with any conflict, either within the family or within the business. They also fear losing control of the business as the accountants and lawyers transfer assets to the next generation. They are concerned that their wealth will be eroded.
Also, there is often a belief by the entrepreneur or owner that all this is not their problem, it is someone else's problem. It is important for the owner to understand that while this may be the prevalent thought process, it does set the family up for failure. Where attention has been paid to managing the business, the family business has a chance to move from one generation to the other and continue in an appropriate format. Without Mom and Dad telling the family what is important to them and putting plans in place to support what is important, it is impossible for the children to make decisions about what is right for the business and family.
Take a look at the many tools utilized within The SuccessCare®Program to increase communication and minimize conflict.
- Every family business should have a Family Charter.
A Family Charter is a decision-making tool that sets out the values that are important to the family and the rules for resolving problems in a united and peaceful way. It is not intended to be a legal document (as is a Shareholders' Agreement), but a reference point that clearly sets out the criteria for the goals, management philosophy, share ownership, working relationships, family relationships, and succession of the family business.
The key to avoiding serious conflict is to involve family members in the process of creating a family business charter. Set aside the time to discuss the components and get consensus. Refer to the charter often to clarify direction and resolve conflict.
Reassess the charter every couple of years and make adjustments to reflect any important internal and external changes.
- Depending on the size of the business, it is appropriate to also have a Family Council.
The purpose of a Family Council is to create a structure for business and family issues to be discussed in regular meetings. The structure will vary with the family relationships, the size of the family and the size of the family business.
Creating the structure is important because it allows a place for people to talk. The Family Council sets out the important principles that come from Mom and Dad. This is their family leadership role. The rules around how the Family Council works, and the actual holding of the meetings, are ways to engage direct family members as well as spouses and children.
- An Outside Advisory Board is a non-regulatory body that can include other entrepreneurs, professional advisors, trusted friends and other non-family members.
The role of the advisory board is to mentor and direct the family business in such areas as planning and decision-making. Research has shown that board members bring additional perspectives to the table and can greatly improve the quality of the decisions made.
- Again depending on the size of the business, the Family Participation Policy is an important tool.
This policy sets out the criteria around whether family members and/or their spouses are welcome in the business and what they need to do to participate in the business. It also relieves some anxiety that family members will not be disowned from the family if they don't participate in the business.
- A Family Business Annual Shareholders' Meeting is an extremely worthwhile inclusion.
This is a program focused on celebration and education. It is a step-by-step process to bring family members into an ownership role within the company while allowing the entrepreneur to continue his or her leadership.
The annual shareholders' meeting helps improve the communication between family members. In addition to being a time of fun and celebration, it is an opportunity to state and clarify the facts of the business. Typically, family members appreciate this event and are further energized about being in business together.
- If a conflict situation does arise, our Conflict Resolution Process is very effective.
In this process, we facilitate the conflict resolution by focusing on the facts and dealing with the issues promptly and fairly. We then create a structure that will allow future issues to be dealt with routinely rather than sporadically or in crisis mode.
This resource is a component of our Conflict Management Process.
To further discuss implementing family communication strategies to enhance your business, please contact Daphne McGuffin at (800) 598-6400.
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