“My team are so amazing, they’re like a family to me.”
This is one of those phrases that, in some form or other, is a regular feature of Helm events. Founders have often started and grown their business by gathering around them a bunch of fun, hard-working and like-minded people. High-performing teams can sometimes get so close that they can feel like the ideal of a family - all high-fives and shared histories. If there are rows or problems we all pull together to resolve them, right?
Well, there are a few problems with this. For a start, families are like noses, in that we mostly all have one and they all smell different. It is rare for a family to be quite as happy as the ideal we often imagine. But we mostly (and yes, mostly there is working quite hard -there are plenty of situations where this isn’t the case) tend to get along and stick together. It is rare indeed to be kicked out from a family because of under-performance, or because the budget is so tight there is no option but to downsize.
You can describe your team like a family if you like, but remember this is just an analogy and at some point you’ll need to actin the interest of the business. You might even be planning to sell or exit -again, not really typical family activity.
So imagine what it’s like when the business really IS a family. At a recent lunch we gathered a group of Helm members, all of whom run a family business. Some were part of first generation, husband and wife teams, some were leading a business that had been passed on for generations. Others were second generation, having taken the reins from a founder parent. Whatever the situation, there were remarkably consistent experiences:
1. The shift from one generation to the next is almost always tricky, especially where there is a strong founder handing onto the next generation.
2. Many second-generation CEOs feel a sense of imposter syndrome("I'm no good. I'm only here because of who I am, not what I can do")but many take the business they inherited to new places and levels. This was the case for a couple of the businesses at the session. They had taken bold actions and drawn on experiences from elsewhere that allowed a bigger vision for the business.
3. Things don't get easier after four or five generations. There are still many of the same pressures and, indeed, sometimes there may be a larger burden of expectation not to mess things up.
4. The recruitment and retention of good people is a huge challenge for many family businesses. This, of course, is true for many businesses right now. But there is often a feeling that it can be harder to find people who are the right “fit” and an added concern of the damage that someone who’s not right could do.
5. Running a business is all-consuming and that isn't great for work-life balance. This is compounded in a family business, when it can dominate all family gatherings including mealtimes.
6. Couples working together can find this situation even more pronounced, as the business becomes the only thing in their lives. One tip suggested was to try and shut down work conversations in non-work situations(meal times, date nights etc). Carve out time for yourselves.
7. Family businesses often seem to lack the formal structures other businesses depend on, adopting instead whatever structure reflects the needs and situation of the family at that time.
8. Non-participatory sibling shareholders is a common and tricky issue, and one best dealt with sooner, rather than later. And it is certainly worth dealing with before questions of inheritance become a real issue.
9. The issue of succession and who to pass a family business onto, has a major impact on decisions about when to step back and whether to sell. Many who take on running a business founded by their parents didn't initially want anything to do with it.
Is it good or bad to treat your business as a family? It can build strong bonds of trust and loyalty, but makes it harder to get rid of under-performing or disruptive elements. Now deal with this when your business really is a family