Why do Family business leaders stumble?

The lack of quality communication

between family members often end up tipping the scale to the wrong side.

Good afternoon everyone, we are group 3 and we are here to present on the
topic “Family Business and the art of communication”.

We, together, as a group discussed about the various communication problems

that each of us face in our family businesses. There were a lot of common
problems among all of our group members which we are going to throw a light
on.

Over to _____________

Moving on to some of the common problems faced by our group members in

their family businesses.

1) Lack of openness: The first point is the lack of openness. Failing to be

open to and recognize the importance of Openness to the family
business community and family members is often the biggest problem
that a family business in India faces. Those who best understand the
complexity of family businesses are family business owners. When it
comes to clarifying family, business and ownership, success, or family
corporate governance issues, nobody understands better than your
family business peers who are facing or have faced the same situations.
The relief that is felt when someone receives advice from another family
business owner who was facing the same dilemma is precious.
2) Responsibility and roles between family members are unclear:
Everyone likes to know what’s expected of them. This is true in any
relationship – we hear it in marriage vows between two partners
committing to sharing their lives together; we see it in strong business
relationships; we practice it in our friendships.
So why is it that in family businesses, sometimes roles and
responsibilities aren’t clearly outlined or assigned? According to family
business coach Pete Walsh, “Many family businesses avoid clearly
outlining roles and responsibilities because they somehow feel greater
clarity and responsibilities might lead to greater accountability which
could lead to difficult conversations about performance.”.
3) FAMILY ISSUES SEEP INTO BUSINESS: This is one of the all-too-common
family business problems and unfortunately, it’s so easy for it to happen
within a family-run enterprise. Just as “drama” is wont to creep into
 close-knit business relationships, it seems that family businesses are that
much more prone to this kind of trouble.
Whether it’s due to disagreements about the company’s future, making
major changes to internal policies or external product and service
offerings or difficulty influencing a family member, things can get sticky
and fights can break out. Ensuring that everyone stays happy and that
things don’t get ugly can be a job all on its own.

4) Non-Family Employees: In a family-owned business, problems with

defective communication strategies often arise when key information is
only shared with part of the family, while leaving others, and any
nonfamily employees in the dark. In a non-family business, roles are
fairly discrete and well understood. A manager has an explicit role to
play – as do executives, employees and everyone else. When managers
communicate with employees, they typically don’t have to juggle
multiple roles. However, a family business combines personal and
professional roles in a way that can make communicating complex.
relationship problems among family members may cause many of
these businesses to fail. In addition, non-family members may feel
threatened by employees who are related to the owners. Business
owners and leaders in this environment, need to understand their
power and how their behavior affects others.

Solutions
Lack of openness: Surprisingly, openness to family members, especially next
generation family leaders, is another issue globally. Family business owners
from different parts of the world all affirmed that next generation family
members have a different focus and mindset. They are more ecological, more
sustainability-oriented, more innovative and more self-centred. They perceive
the world differently. Many next generation family members choose to start
their own business – a decision “tolerated” by many family businesses with a
long history. In my experience the selling long-standing family business and
then using the profits to create a new family business made up of several
companies – a plausible action that to some extent represents the continuity
of family business.

History demonstrates that family businesses hold the key to longevity:

adaptation. Look at any long-lasting family business and you will find that its
story is about constantly adapting to the external environment. In today’s
complex business world, openness to the family business members is the key
to taking the family business to a new level of development.

Responsibilities:
There’s no question that performance-based conversations can be
awkward, but they’re so important to the health of your business.
However, failing to make a conscious effort to hold these discussions will
quickly lead your family business down the path of ruin.
To combat this common family business problem, meet with your entire
staff periodically – no less than twice a year – to talk about business goals
and plans. Ask the collective group to participate and share their thoughts
and suggestions for improvements.
Be sure to also sit down with each member and talk about their specific
roles, responsibilities, and goals within the family business. This is a great
way to ensure everyone feels they are valued and that their voice is
heard. Ensure that there’s a strong sense of accountability present so that
once the lines are drawn, everyone knows how to drive within them.

Family Drama:
Family drama can come from several different sources and every instance
requires a different kind of finesse. Longtime entrepreneur and business
consultant George Isaac suggests, like Dr. Davis, establishing a governing arm
and, also, including a board of directors or advisors (one or a few, depending on
the size of the business) comprised of non-family members. Often, it’s better to
have an objective view from someone (like your favorite business coach) who
won’t be swayed by underlying family dynamics.

Isaac also suggests having specific policies and processes in place to deal
with family issues both inside and outside of work. Often, home disputes
don’t get left at the door and can wedge their way into the workday. It’s
important to acknowledge this and make a point to approach each issue
with an understanding of this fact.
Running a family business is a great way to bring your loved ones closer
and create a lasting legacy. Despite these common problems, it’s possible
to include everyone who wants to participate and work toward a common
goal.
By ensuring you communicate effectively and are open to discussion, are
upfront about roles and responsibilities, and actively manage family
challenges both on and off the clock, you’re sure to lead a winning
venture that you can pass on to future generations.

Employees:
 1) Some of the most qualified and valuable employees may not be
relatives. Non-relatives may feel they have less job security than other
employees and this is an important area for open communication. Job
security fears head on and clearly communicating to non-relatives how
valuable they are and what opportunities may be available to them.

ENCOURAGEMENT OF FAMILY MEMBERS

Another source for dispute is that family members may have personal ties
that inhibit expressing their opinions. Eddleston, Otondo, and Kellermanns
write about enlarging family member’s participation in the decision-
making process to reduce relationship conflicts. They recommend
intensifying the family member’s participation in the decision-making
process because that will encourage family members to voice their
opinions (461). My comment: the authors’ advice sounds consistent. A
schematic decision-making process that requires the attendance and
opinions of several members may reduce needless inhibitions because the
members feel needed and appreciated. For example, managers (children)
who restrain their valuable counter-proposal because they are afraid to
hurt the CEO’s (father’s) feelings will lose this anxiety when the
involvement in the decision-making process regularly asks for their
opinion. Kelly, Lewa, and Kamaria provide another approach for avoiding
personal ties in the business environment. They carried out a study that
applies a social network and strategic leadership theory to an examination
of founder centrality in family businesses. Their advice is introducing
leadership training to improve the management congruence, which
motivates the free exchange of ideas between the organization's
members (383). In my opinion, this advice is very useful; when all
managers successfully pass leadership training and learn how to
communicate appropriately, several conflict-areas in the family business
will not exist anymore. Defined standards allow the management to
appear congruent, and develop uniform customs of how to communicate
their opinions reasonably. For example, when discussing important topics
between the responsible managers becomes daily routine, then restrained
opinions will no longer be of concern.
Cultural Shift

Family and Family Business Culture: Daughters-in-law often face the daunting
task of adapting to the culture, traditions, and values of another family, after
marriage. In business families, the values and culture of the family are often
reflected in the business and can be challenging for an outsider to imbibe. She
has to internalised the family tradition and culture and realise the value of
respect, hard work, family bonding, and sacrifice. She should start by assisting
in the business activities. She must train herself for the role, initially taking part
in smaller tasks and activities and then scaling up to bigger roles and
responsibilities.

Authenticity is consistency: A recent survey shows that most organizational

change efforts fail, not because of poor planning but poor execution. This makes sense
from the employee perspective. The initial display of effort and personability leaders
show is the hook. It’s what grabs employees’ attention but it won’t hold it for long.
Companies underestimate just how intelligent their employees are. After the initial
change is announced, they’ll be watching leaders with an unblinking eye for any
indication it’s not real.

Leaders need to be sincere and authentic in order for culture changes in workplace in
the workplace to be successful. As McKinsey & Company writes, “CEOs who only
give lip service to a transformation will find everyone else doing the same.” Leaders
must be cognizant about the values they reinforce at every step of their follow
through.

To be authentic, leaders must be consistent. Consistency is how “change” transforms

from a disruptive, unwelcome presence into the company’s new normal. If a leader
says integrity is a new core value, that person, more than anyone else in the company,
is responsible for performing their job with integrity every day, until it’s clear to
employees what integrity look likes. If the company announces they’re becoming
a flat organization, leaders can’t get upset when lower-level employees try to act with
a newfound authority.
If it sounds like building authenticity and sincerity takes time, it’s because it does.
Employees won’t believe in change overnight, but each day leaders are consistent
with the values they want to uphold, it lays another brick in the foundation of trust.
The authenticity will show as leaders, over time, become visibly connected to the
message they preach. And when employees believe that their leaders are authentic, the
desired changes will take begin to take root in their daily behaviors.