Bringing family members into a business always carries an element of risk. Conflict between siblings, cousins, parents, and their offspring can damage the business and family relationships. Family businesses encounter many problems, but having close relatives on board can be a good move for those with a strategy for avoiding conflict.
One of the biggest challenges is creating boundaries between personal and business relationships. Five years ago, Adam Foster, director of The Fibro Guy, brought his wife into the company as a safeguarding lead. With her business knowledge and her social worker background, he considered her the best candidate for the role. However, he was also aware of potential downsides to the arrangement.
“Work can easily bleed into our personal time together, which is why work-life boundaries are essential,” he says. “Having a dedicated finishing time, as well as rules of no shop talk when on dates, helps to create a good balance. On the upside, as she has watched me build the business and support us both over the years, she is incredibly invested in the business, much more so than if she was just a normal employee.”
One key to avoiding conflict between family members is being clear about what their duties are and what is expected of them. When Philip Bacon, director of Bacon Marketing, needed help with his business, his sister was the first person he turned to. In approaching her, his strategy was to treat her like any other employee.
“My top priority was being clear about what was expected of her; that way, there should be no arguments or bickering, as siblings tend to do,” he says. “As a partner or an employee, they should be treated the same as others in the business. Two years on, there’s been no conflict between us or anyone else on the team.”
Before bringing family into the business, it’s essential to have the tough conversations, finding out about their aspirations and goals ensuring they align with those of the business. Having proper documentation is also essential. When working with family members, it’s easy to trust them and rely on verbal agreements. Documenting everything will help clarify issues that may arise and, if necessary, can serve as evidence.
Andrew Tropeano had worked at a consulting firm as a sales rep and an account manager before attending New York University business school. After graduating, he joined his father’s video production business, NewsWatch TV, and immediately took responsibility for business operations and video production. His younger brother also joined the company and took over the sales function due to his external experience in that field.
“Our father never had any roles outlined for us before joining, however,” says Tropeano. “We naturally migrated towards roles that suited our experience and passions, and so far, it’s worked well.”
He sees it as crucial for family businesses to implement hard-set rules on when work can be discussed, how meetings are run, and who is in charge of what responsibilities.
He says: “Meetings are run with strict agendas and rules, and responsibilities for every role are drawn up, agreed upon, and put into writing. It’s natural for family members to feel a false sense of permission to meddle in another family member’s department. But agreeing to it formally, in writing, sets boundaries that are hard to overlook. It’s also critical to respect one another and not allow childhood pasts to cloud judgment.”
With rules in place and the written agreement of everyone, regular, frequent and open communication further helps to strengthen the family bonds within a business.
Dmitry Sokhach, founder of Admix Global, says: “Every business needs good communication to thrive, and it is essential when dealing with family who may expect priority over other employees. For example, if you have upcoming promotions or succession plans, it is important to be open and honest.”
He also warns against showing favoritism. Blood is thicker than water, as the saying goes, and it could be easier to consider putting a family member in a top position instead of another member of staff. “For your business to thrive, you need to be objective,” he says. “If the family member doesn't have the qualifications or experience that the role requires, avoid assigning them to it, no matter how compelled you feel.”
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