Just about every business has one: the parent who either started the family business, ascended to the throne, or had the bright idea to buy the life-changing endeavor. Either way, he has the power to bring you into the company or kick you out, to raise your salary or lower your expectations. We’re calling him “Dad the Decider” because he’s the guy who makes the final decisions on just about everything. He may have gotten to where he is by exercising authority, but he can’t get to where he wants without restraint. His biggest frustration is that he’d rather run the business, not the family.
As the business grows, so does his family’s involvement; the more the family is involved, the more chance for conflict. By no means does he want to ever harm his family’s relationship’s, but — true to his passion — he has a business to run.
In the mind of the Decider, the business needs responsible adults behind him. The bridges that we cross of embarrassment and immaturity bring uncertain feelings at times of if we made the right decision bringing the kids into the business in the first place. At times, patterns develop where they are so wrapped up in themselves, they can’t see serious business issues at hand, much less on the horizon. There is a fear that begins to develop — that the business we have worked so hard to build will collapse from right under the self-created stress. The problem is this is true.
Studies show that one-third of family-owned businesses survive into the second generation. Only 10 percent make it to the third. These aren’t really the odds individuals wish to hear, but being forewarned of that, family-based issues are the greatest threat to family-run businesses.
If you’d don’t take action, the odds are against you from the get-go. Home life only adds to this initial frustration. Once, this was a refuge, now it’s just an extension of the establishment. Who do we protect? The children or the business? This becomes dinner conversation. Are we grateful for a successful opportunity? What better way could we have provided for our children?
Looking back, as we all do when faced with parental challenges, we imagine the hard times we went through in the industry — remembering our mentors, how we worked most nights and weekends and made our job the priority. Customer service and professional conduct seem to have taken a back seat to sibling rivalries and hurt feelings. This builds an uncomfortable atmosphere for everyone at the establishment. Employees pick up on family drama almost immediately, sad but true.
How do we put a lid on these infectious squabbles? Was there ever a way to really quell the storm when they were kids? Maybe by pretending the issues didn’t exist or thinking they would go away by themselves? These aren’t the answers; nor is pulling rank.
There are some tried and true avenues that have been taught through the industry that rank among the top in letting calming heads prevail.
Here are some lessons I’ve learned as Dad the Decider — how to handle family-driven issues within your family business:
· Pay as much attention to the family-driven issues as you would your customer-driven issues.
· Change from being in command to being the compromiser.
· Don’t try to solve all the family business issues alone.
· Predetermine the “rules of the business,” including operational standards, before the family joins you in the business.
· Encourage family members to work within the industry somewhere else before joining the family business.
· Don’t pay more than the appropriate salary for the position. “Pay market rates.”
· Remind family that they represent the company at all times, in and out of the establishment.
· Everyone needs to look at the business as the opportunity of a lifetime. You have; they, if wanting to follow, need to have the same outlook.
· There are always two key parts to family businesses — one who makes the operational decisions and one who handles finances (dad and mom). You end up leaning on each other, for better or worse; remember that. The CFO is the next power position in the family business.
Robert Molinari is the owner of Uncle Sal’s Restaurant & Bar, a family owned and operated restaurant in Scottsdale, Ariz., which provides classic Italian cuisine.