The definition of objectives is an essential part of the design of a strategic plan for a family business. The team/family needs to concentrate on proposals; these are basic for taking responsibility and guaranteeing progress towards a positive outcome and the common vision.
… I can’t conceive of a good business plan that doesn’t have clearly defined results and establish a time frame for the following up of objectives.
Apart from patrimonial objectives, which can only be tailored for each case, the following are also important for the family business:
5 Best Practices for the business family:
The first objective for the business family to reach is to be clear that the company must be run on established best practices.
Creation and Investment in Family Talent
Business families must reserve a high % of their investment for training people, given that the people who will continue the business are relatives who can guarantee quality in the highest positions. To bring this about it is necessary to ensure that the competences of each one of them are a good fit and adequate for the needs of the family business project.
Investing in training family talent keeps that talent at home. This is a clear way to increase assets as talent is one of the most important.
Little by little, one of the tenets that characterized family sagas is being broken down; that is that the idea that different members of the family will specialize in the same aspect of the business. Currently, it is more important to maintain a diversity of profiles for the good management of a business.
The commitment of family members (ie: the shareholders) requires a constant process of analysis and evaluation of the company, both in terms of internal functioning and of response to the environment, the competition and society. Being fast to react, including by revising protocols, brings guarantees of maintenance and/or growth.
We haven’t invested as much in R+D as them, but we can lessen the impact of this innovation by boosting one of the values of our products.
Maintain a good name
Most business families think that their business is a valuable inheritance and not only a financial asset and that this needs to be administrated correctly. Their attitude and way of doing things are fundamental in instilling a sense of pride in the good name of the company through the generations. This is transversal in all decision making.
Business families are motivated by a shared family legacy and wanting to maintain the good name of the family; the smooth running of the business is a key means of ensuring this.
Family firms and social corporate responsibility (CSR)
The social corporate responsibility of the family calls for the business family to commit to the social environment and is one of the key factors in deciding the distribution of profits obtained in this model of business. One of the keys that drives business families to take socially responsible actions “naturally” is that they have been educated to do so in the family.
Staying positive in a family business – unless it is dysfunctional – is easier than in other types of company. This attitude helps to overcome difficult periods. Optimism on the part of the business family makes it stronger and less likely to withdraw in times of crisis.
Heterogeneity and homogeneity The richness of paradox
Families are factories that produce human personalities
“It’s hard to believe that they grew up in the same environment,” says the father, “our children are so different.”“It’s impossible to say what we’ve done differently,” says the mother
In families, like most social groups, the members are heterogeneous, and this is precisely what should be valued most. This characteristic by itself can become one of the biggest family valuables.
Despite this, the fact is that the business family as a collective, needs to develop in a homogenizing framework, where all concerns and roles dance to the same drum, so that they can take advantage of the diversity of personalities that make up the family.
The value of the black sheep in the family
Probably the greatest exponent of diversity in the family is the black sheep. This means the person who defines himself or herself as such or, is considered to be by the rest of the family.
What is the most positive potential value?
This personality, recurring in many, families can create conflict, but they can also be given an important role: that of being the catalyst for exponential growth of the family business.
The black sheep shows up the weaknesses of an established system.
The keen vision of the black sheep may be initially conflictive, but is often able to bring inputs that provoke reflection and help the rest of the business family to grow.
Paradoxically positive, the take away message for the black sheep and the rest of the family is exactly the same: accept diversity and encourage respect and tolerance.
In short, be more tolerant, as a family and as an individual, while both can still be what they want to be.