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Family Sites Catalog

Jun 22

Minding your business – guidelines to manage a family company

Usually, family businesses are the backbone of national economies. They often generate half of the total gross domestic product and over 70% of job creation. People like to work for family businesses because they feel part of an organisation that values its members. Sadly, only one-third of family companies survive into the second generation and less than 15% into the third one. 

Why? Because most managers don’t treat the venture as a business, but as the extension of their family. For a company to be successful, its managers need to follow some guidelines. 

They never create a job for a family member

Either the business has an opening a qualified family member can fill, or it doesn’t. If there is a match between their skills and the position, they hire them, but they never create a job only because a family member is unemployed. Only the family companies that use business central systems survive the second and third generation because they maintain profitability.  

The family members work somewhere else before joining the company

Before they apply for a position, they need to prove to themselves, the management, and the other employees that they have skills useful for the company. It is not critical to work for a company in the same industry, but it would be helpful to know to use tools like business central norge. It’s also healthier for the organisation to hire someone with outside experience because it brings fresh ideas. 

Family members and other employees have the same benefits

Some family members try harder when they work for their own venture, while others don’t try at all. The manager should motivate them, as they do it with any other employees. They should assign them tasks like acquiring tools for digital transformasjon, creating marketing campaigns, and designing products. They apply the same rules to all employees and ensure they adhere strictly to policies. Family members should receive authority and responsibility only when they are ready for it. For parents, it’s challenging not to second-guess their children’s decisions even if they offered them the authority to decide. 

Family members report to non-family employees

Only because someone has the same surname as the owner, it doesn’t mean they should receive preferential treatment. Also, not everyone holds the same level of authority. A successful family business has both family and non-family employees, and all have equal chances to hold a management position. 

A clear succession plan

Everyone in the business should know what the perpetuation plan is, and what they’re expected to do when the current manager retires. The owner should not expect its family members to read their mind; they should pay attention to the performance of each employee, and decide to whom they’ll pass the agency. The last thing a business needs is the aggressive behaviour of an unhappy child. Rivalries between family members often destroy companies. Professional counselling is always a mitigation tool family business can use to keep their operations successful. 

 

 

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