It’s Not Business, It’s Personal – Why Family Businesses Need Management Consultants

It’s Not Business, It’s Personal – Why Family Businesses Need Management Consultants

Family businesses account for a whopping 70% of all businesses in Australia!

And they are significantly different from regular businesses. Some of these key ‘quirks’ include:

Competing Drives. Common business goals like profit or expansion often find themselves challenged by family goals (like keeping everyone in the family employed).

Competing Hierarchies. As the hierarchy of the business never mirrors that of the family, there are inherent tensions for those unable to cleanly separate the two (try being your father’s boss!).

Emotional Stake. Non-employee family owners want, need and sometimes deserve a role in the business’ strategy, culture and governance system. More so than regular Company Directors, family members can have a large emotional stake in the business. This affects decision-making.

Non-Meritocracy. Non-family employees have to accept non-meritocratic decisions such as the hiring and promotion of family members who may not be the most qualified for the position.

Generational Perspective. Owners and managers of family businesses often think beyond the “present value of cash flow” time frame. Emotional attachments to the business can mean that preserving the institution takes priority over economic rationality.

Beyond general advice, we have helped family business’ in these 3 concrete ways:

1. Facilitating Communication. For one family business, one of our consultants sits in for Board Management Meetings to facilitate communication between family members that don’t speak to each other. We keep the meetings flowing productively and efficiently.

2. Task Assignment. For another father-son team, our consultants independently analysed the capacities of the family members and assigned roles and tasks accordingly. This again reduced conflicts and increased productivity.

3. Skills Training. Where skills gaps have been identified in family members unable to perform their jobs to expectation, our consultants have provided business coaching and mentoring. We view competency as an on-going journey and often continue to provide guidance as needs and challenges arise.

Taking the above aproach will go beyond solving your everyday operational issues. It will keep the business running smoothly and growing steadily.

However, the ultimate challenge for a family business is our little passion: succession planning.