Managing a business is tough, but running a family owned construction contractor business is even tougher. Internal conflicts, family matters, business concerns, and ownership transition make running the business very complicated and emotionally charged.
The causes are usually the same—an inability to separate family from business needs, conflicts of interests, differences of opinion in how the business should be managed, intense rivalries, and, of course, the egos that come into play. In addition, there are instances where the second and third generation often has less appreciation for what their predecessors did to make the business a success. Some don’t have the same drive, commitment, or construction savvy.
REAL-WORLD SCENARIO
Is your family-owned business positioned for success? Are you confident it will grow and prosper into the future? If something happened to you, are you confident your business would run like a well-oiled machine? Have you established quality relationships with both family employees and non-family employees? Do you need help? Consider this scenario:
The president of a successful equipment distribution business decided to turn his business over to his son. The president was a smart businessman. He was well liked by contractors, employees, and suppliers. Even though his son had worked in the business for almost 15 years, he lacked sophistication and didn’t know how to develop strong employee and customer relationships.
Once, when the president was suddenly hospitalized, the son was lost. He wasn’t sure what to do first. As a result, employees gained little confidence in him. They are worried that the company will fall apart when the president turns the business over to him. While they talk about the situation with each other, they are not comfortable sharing their feelings with the president.
TIPS TO AVOID THE BLUES
Share vision and values: To achieve success as a family owned business, every family member should share the same vision of the business in the future. If family members do not share the vision of the founder or top executive, they have to be comfortable enough to express their feelings. Ultimately, everyone must be on the same page to avoid constant conflict.
Set clear roles and responsibilities: In many family owned businesses (especially those that are start-ups), everyone does a little of everything. Whether yours is a new business or one that is well established, family members’ job roles and responsibilities have to be clearly defined. Expectations should be set with clear agreement what each member will be accountable for.
Manage the business like any other business: Many family owned businesses operate with an informal management style. This is especially true with contracting businesses. There may also be disparity in how each member leads. This can frustrate employees, inhibit the growth and profitability of the business, and prevent it from reaching its true potential. Every manager in the organization should lead in the same way, setting high standards for performance and being an example for others on staff.
Challenge the status quo: Maintaining the staus quo is the kiss of death for any business. Efforts must be made to ensure the delivery of superior customer service and new ways of doing business must be considered. Some family owned business owners unknowingly try to preserve the status quo. This is especially true when a new idea is proposed by a family member or younger employee. A common phrase is “we’ve always done it this way.” The owner/contractor is more comfortable doing things the same way because that is how he or she gained success. But these attitudes can frustrate employees and can hamper business efforts in a contemporary world.
Avoid and manage conflict: No business or family is perfect. But if there is conflict and feuding among family members, it will be impossible to establish a positive work environment. A dispute between family members will impede high levels of teamwork and customer service. Work out problems and come to a consensus for the business’ sake.
Establish healthy boundaries: Try not to talk about business at a family event for more than 15 minutes. It is not fair to your family. By all means, refrain from arguing in the workplace. It makes everyone uncomfortable. You can’t expect your workers to be professional if you and members of your family are not.
Don’t alienate employees: Don’t create two types of employees: family vs. non-family. Conduct performance reviews for family and non-family employees alike. Refrain from showing favoritism or giving special treatment to family members.
Avoid alienating employees by practicing nepotism. Hire, promote, and pay people based on their actual merits, abilities, and contributions to the business. If you don’t, the non-family employees will lose their motivation. They may feel like a promotion is out of their reach because they aren’t a family member or a friend of the family.
Create a culture of open communication: Effective communication with all members of the organization is critical. Non-family employees shouldn’t feel like family members are more “in the know” about what is happening with the business. Establish a culture of open communication where everyone is well informed on what’s going on and plans for the future.
Make employees feel like family: Treat employees as well as you treat your best customers. Make people feel they are working with you and not for you. Hold employee appreciation events and annual picnics. Include employees’ families at these events.
Create a succession plan: Sooner or later, you will retire. If there is not a succession plan in place, you are setting your business up for failure. Be prepared with a succession plan to ensure your business lives on long after you are gone. ■
About The Author:
Christine Corelli is the author of five business books including the best selling Wake Up and Smell the Competition and, Capture Your Competitors’ Customers and KEEP Them and a popular industry speaker. She has worked with numerous contractors. To learn more, visit www.christinespeaks.com, or call 847.581.9968.
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Modern Contractor Solutions, September 2013
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