Chronic disorganisation causes unnecessary problems for family-owned businesses, reports Triangle Business Journal. This disorganisation is often a spill-over from a disorganised family life and can result in gross inefficiency which impacts on workforce morale, productivity, and eventually, profit. Don’t let chaos and disorder ruin your family’s business! Take these five simple steps to get your family enterprise working like a slick and well-oiled machine.
Don’t let chaos and disorder ruin your family’s business! Take these five simple steps to get your family enterprise working like a slick and well-oiled machine…
A family assembly is an official forum where all members of the family can discuss business issues and how family issues impact the business. The family assembly will meet periodically – usually once a year.
A family council is a governing body elected by the family assembly to deliberate on family business issues.The family council will meet more often, perhaps once a quarter.
A constitution outlines the family’s commitment to the core values, vision and mission of the business.
A governing body is a group of people mandated to govern an organisation. In a typical family business, these governing bodies include:
Chaos often ensues when various parties are unclear on what it is they’re supposed to be working towards, how they fit in with other parties, and how they’re expected to fulfill their duties. In order for each of the key governing bodies to function effectively then, their roles, responsibilities, duties and functions must be clearly set out.
In a first-generation family firm, the CEO is, in all likelihood, the founder/owner of the business, through in subsequent generations it can be a non-family member. Responsibilities and duties include:
Explains John A. Davis, Senior Lecturer in Entrepreneurial Management at Harvard Business School, a Board of Directors is legally elected by the business owners and has legal responsibilities and powers. These include:
Davis advises against enrolling family members, close family friends or associates, like the family lawyer or accountant, on the Board of Directors.
Shareholders are individuals who own shares in the business; usually family members. Amongst other things, they have a responsibility to:
While they don’t play a direct role in managing the company, decisions they take at shareholder’s meetings (by way of a vote), must be implemented by the company directors.
The Senior Management team takes on the specific day-to-day management of the business. They’re responsible for organising and directing the actions and activities of groups of people, monitoring their work, and taking any necessary corrective action.
Your senior management team can comprise family and non-family members. However, cautions Davis, where family members are concerned, always ensure that they’re up to the job with the appropriate education, skills, expertise, and experience.
Written policies and procedures may seem very corporate-like for a family business, but setting out these policies in procedures in a written document keeps things crystal clear when issues, disputes, or challenges arise. Include your business’s organogram the name and description of each operating unit and who heads it up, as well as remuneration and benefits policies, human resources policies, and other basic business procedures.