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3 big challenges faced by family businesses

Author:
Kat Birett
Marketing Manager
Holocentric

LinkedIn Profile

I've worked with many successful Australian family businesses over the years from a variety of industries - retail, construction, media, wholesale distribution, manufacturing, I could go on for days. What I love about family businesses is the tenacity each of them demonstrate. They're resilient. They're amazing.

I have invested a lot of time in building strong relationships (because it fascinates me), but also I want to learn what keeps them up at night, and what makes them succeed. I have seen a real mix of personality types and traits whilst doing so! I feel fortunate to have built lifelong friendships with many of them. Some of these Australian family businesses have mentored me and given me sound advice, especially when I embraced my entrepreneurial spirit and started an online business project many moons ago. 

I felt it was fitting to share some of my learnings from family business, bearing in mind that these challenges are felt in various degrees depending on organisation size:

1. Roles and Responsibilities 
So, who does what? Do family-owned business really need job descriptions? What happens when someone is juggling multiple hats - sales and marketing one day, HR and legal the next? Not knowing who does what and when creates a lot of confusion for everyone involved.

Having job descriptions can help solve a lot of issues relating to this. It also keeps family members in the business accountable and weeds out anyone who is just going along for the ride. In family business, this type of behaviour really hurts. 

It's simple. Get everyone on the same page and provide clarity - this will get things done more efficiently (and effectively) - so results will only follow.

2. Generational Conflict
I often use the analogy of 'Ma and Pa fighting' to describe this. In family business, sometimes this can be the case! This is when leaders of the family-owned business are stretched in two different directions. This creates confusion in procedures, processes, and discomfort among staff. I know firsthand what it's like when you don't know who to side with. Emotions run high and it affects everyone.

Sometimes it's caused by resistance to change and having trouble letting things go. Other times, it's simply having confidence and trust in older generations to make only good business decisions - why fix something when it's not broken? 

Transitioning from a rigid mindset is a big challenge and reaching out to a trusted advisor or an external source can help solve this.

3. No Exit Strategy
When it's time to move on, it's almost impossible not to let emotions influence decisions. Who can continue your legacy? What skills are needed? What resources are needed? How do you transfer duties from one person to another whilst continuing with business success?

Working closely with someone and coordinating a decent handover will alleviate some concerns, but is this done? For a family business, capturing all this generational knowledge and learnings from years of experience is pure gold.

Don't leave it to the last minute. Capture processes and procedures now. Check them regularly and make sure they're up-to-date. What's available in the digital landscape to make this easier? Digital work instructions, linking of documents, a central repository - that's where it's at. Treasure all that information, don't let it go.

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