by Leila Dorari

Stewardship theory claims that family members provide upscale specific knowledge and strong commitment to a firm. A family-run business encloses many advantages in terms of flexibility, innovation, quick decision making, matched relationships, high employee engagement and loyalty. In addition, the family name and essence, the shared values and family dreams, as well as the productive communication play a vital role in every family business.

Nowadays, companies may develop strong employee engagement toward the business if the organisation’s vision and mission are backed by corporate values. Therefore, solid and strong values can positively affect the sense of pride and kinship of each employee. In a family-run business, these values help the exchange of binding employees into committed members as these values are more emotional, extra humane and fundamental. What is more, great entrepreneurial families use their values to help conduct core decisions related to strategy, alternations, structure, company culture, employee recruitment, governance and succession as the most important one.

In its own way, each family business is one-of-a-kind and complex. Nevertheless, there are typical rules of engagement for dealing with the employees who are related by blood or marriage. We bring you some of these rules to help you avoid some family related mistakes.

Family Business Tip #1: Every Member Should be Accountable and Responsible

In a family-owned businesses, some issues come to the surface between members of the family due to personal problems. Family businesses are, more than any other business, always prone to such conflicts and that can generate negative emotions and distressing feelings not just for the close kin, but for non-family employees as well. In order to avoid conflicts, every member of the family should, therefore, be accountable and responsible for the relations with others in order to avoid conflicts and increase engagement toward the family and the business as well.

Family Business Tip #2: Empowerment and Fair Conduct

If you want your non-family employees to trust you and feel motivated, you need to empower them and make them feel like they are personally invested. By empowering them you will also improve their creativity. Most important to a family-run business, all employees must feel like they have the same opportunities toward professional development and growing with the business. As it happens, each employee has his or her skills, needs, and motivations, and because of that must be acknowledged like all his colleagues in a fair way. On top of that, the leaders and managers need to handle and communicate with the personnel in a respectful manner.

Family Business Tip #3: Setting the ground rules

Determine career paths and clear rules because being a leader is not the only role for the family business successor. A family member should exceed all the basic requirements of full-time employment and that includes work as an adviser, board member, family-foundation leader, and responsible and active investor. It’s crucial to develop the paths available and to explain how family members can commence each of them. Clear ground rules and supervision are necessary. These include a clear rule about social structure, precise entry and exit fundamentals, and settings for development. Here, relationships play the critical role. To manage and navigate the challenges given by intergenerational succession, disputes within the family and other issues unique to the family businesses is not easy. Therefore, it would be wise to partner with experienced family lawyers, who can help you sort everything in the best possible way, the way that would not affect other business-related matters.

Family Business Tip #4: Professionalise Your Business

You should not muddle family decisions with business decisions. It is not okay to let your family employees do something that non-family employees would be fired for. For instance, you should not let them use the services of the IT to set up their home Internet router. Or misuse business budget for their family vacation and pass it off as business spending. This will not have a good impact on other employees and will make them feel insecure and demotivated.

Jane Hilburt-Davis, family business consulting specialist, says: “You have to professionalise the business. Ask yourself what you would do if this person was not a family member.”

The family-run business is a long game to play. However, they are particularly positioned to attain a good outcome, although they cannot become great alone. To generate the power needed to move to the higher level an effective mixture of family and non-family members, who more often than not feel like they’re being a part of the family, is necessary. Many owners have grown up with a stewardship model, choosing the best person for the position, regardless of family connection. Family businesses who appreciate this fact have attained greater heights.

Have you worked for a family-run business? What were the ups and downs you encountered? How did family politics affect employee motivation? Tell us in the comments below!

Further reading:

• Practice: How to develop your company’s value stories
• How to visualize your organization’s core values
• Nine proven ways to start a business with your spouse
• Value exercises to build vision within your company

Photo: Unsplash