By David Najor :: Wednesday, August 15, 2012 :: 14092 Views :: :: Business & Finance
The biggest challenge for Chaldean family businesses is being isolated from the outside world says small business consultant Norman Haisha. Chaldean’s work long hours, weekends, and holidays. The incredibly long work schedule is a huge sacrifice. Another is the boundary issue. Chaldean business leaders are often forced to look at all family and business challenges as being intertwined. So they’re making business decisions based on family issues and vice versa.Great Chaldean family businesses share certain traits: loyalty among the team, vigilance and competitiveness in their fields.
Those that pass successfully from one generation to the next have a sense of cohesion because, deep down, Chaldean family members really do care about each other and they can get through the hard times. They’ve found ways to manage conflict—not always resolve it, but manage it. They’ve also figured out ways to make decisions when there are differences of opinion. Yet, real pitfalls lurk.
The payoff for family businesses that can make it, though, can be great. “When a family business works well, you can’t beat it,” says Haisha. Family businesses “pull together for the right reasons and it’s not just for profit sake. Profit is not the purpose, but only one of many ways to stay alive and stay fulfilled. That type of thinking means it’s for the good of the family, good for the employees, it’s good for the community, and it’s long-term. It’s really hard to compete against them. You think about a business that is saying: I’m going to sacrifice so much for my family, my employees, and my community.”
So how can Chaldean family businesses avoid the pitfalls? Here are some keys:
YOU HAVE TWO EARS AND ONE MOUTH.
Chaldeans are passionate and driven. That zest and drive can get in the way of communication. Communication is essential. While close family members tend to have insights into each other’s thinking, it’s essential they hear each other out on business matters, rather than assuming they know each other’s views.
The lesson is: Enhance your listening skills. Employ active listening techniques.
During conversations, our energy tends to be mainly focused on ourselves and our own responses instead of understanding what the other person is actually saying, Haisha says. “But what we need to say is: It’s OK to take time out. It’s OK to listen. That, to me, is absolutely vital.”
FIGHT INSULATION BY SEEKING COUNSEL FROM AN ADVISORY BOARD OF EXPERTS.
Jenna Kuza, operating manager for her family’s Cottage Pizza franchise says “I don’t think you can name one long-term successful family business— and by successful, I mean of any substance—that’s had longevity and not used an advisory board,” Kuza says. “You need an outside perspective. That’s what I think is a common pitfall for Chaldean businesses.”
No golf buddies, not your attorney, not your accountant—they don’t belong on the advisory board.
Think of the critical success factors for your company, and then choose impartial experts in those areas to be on your advisory board, Kuza says. Example: You run a restaurant. One critical success factor is food; others are government regulation, marketing and location (real estate). “Once you get a handle on critical success factors, you then go seek the best and the brightest who have the knowledge, skill and experience in those arenas,” Kuza adds.
The advisory board adds knowledge, skill and experience that go above and beyond the family members. You need people who will tell the truth because they have nothing to lose. “Otherwise, you get in a situation where the king has no clothes. Everyone’s afraid to tell the truth because they don’t want to cut off the gravy train,” Kuza says. “You need to have people around you who you can trust to tell you what’s in your best interest, not theirs.”
Usually advisory board members are paid for their time, but being that Chaldean’s are largely a community of entrepreneurs it is more common to have advisors help one another freely.
HAVE A STRATEGIC PLAN
Strategic planning means creating a plan of action which, Farouk Yono says, should ask: Where is the business going? What are the goals? How will we get there? Who will do what? What are the time lines?
Strategic planning is especially critical for when there’s a transition of leadership because, Yono says, “if you don’t know where the business is going, how do you know what’s expected of the next leader to get it there?”
MANAGE CONFLICT BY DOING THIS...
A certain amount of conflict is healthy. Businesses need diverse opinions. The trick is to manage conflict. And you can manage it, Yono says, by managing expectations. There are two key pieces to this:
1) Anticipate someone else’s reaction. If you’re unable to anticipate someone else’s reaction before you say something that may be volatile or testy, then don’t just come out with it.
2) Anticipate the consequences. “I think we then move to try to give the other person the benefit of the doubt. Hopefully,” Yono says, “we can minimize conflict.”
In family businesses, “the relationships are more tender and deeper and the consequences are greater,” he says. For instance, if you’re rude to someone in the supermarket or in another car on the highway, that’s one thing, but if you’re rude to your sister, she’s hurt. “There’s much more at stake. The consequences are greater.”
REALIZE THE KEY FACTORS IN A GOOD FAMILY BUSINESS ARE… GOOD BUSINESS FACTORS
A family business that’s successful long term has a board of advisors and a board of directors. They communicate the goals of the family and the goals of the business, and they run the business like a business.
A major challenge in a family business is figuring out how to minimize the next generation’s sense of entitlement—“a brutal epidemic in this country today,” Yono says. “It’s critical to help try to minimize that. We need to talk about it and help our kids understand that even though we’ve given them a lot, it’s their turn to take over and their turn to earn.”
One strategy: Don’t simply give the business to the next generation. It’s “very important” the transfer involve a combination of a purchase by the younger generation and a gift, he says. “There are two kinds of ownership—there’s a material ownership and there’s an emotional ownership. Emotional ownership can come in a far deeper sense,” Yono says, “when it’s earned.”