Issues happen in family run businesses that you seldom encounter in other businesses…and they can be pretty challenging. Here are a few.

Issues in Family-Run Businesses - CVC Coaching

  1. Birth order: People tend to see the older child as the stronger person or the best leader and put them above the others siblings. But the fact is, the oldest sibling is not always best suited for that role. Problem: you want the right person in the right position whether they are family or not.
  2. Preferential treatment: Children and other relatives of the owner get special treatment. This can go two different ways: one, they are given more leeway in performing their duties; or, they may be expected to be more perfect than their co-workers. Both of these can cause conflict at home and at the office.
  3. Inner-family socializing: Some owners favor relatives with whom they socialize outside the workplace. On the other-hand some relatives and their spouses never get along well with other members of the family, and these feelings, whether positive or negative, can spill over into the work arena.
  4. Family discord: Family members fighting to be “the best” in order to gain position or approval from the upper- level management can be the source of intense and uncomfortable rivalry.
  5. Compensation: At times a family member will be hired at a higher pay level than others in the company in similar positions. On the other hand, some are hired at lesser pay to help the bottom line of the company. This never works because everyone needs a salary equivalent to someone else in their job.

These are just a few of the problems that often occur in family businesses. But, fortunately there are ways to minimize the negative issues associated with working with family members.

First, make sure that everything that occurs, including the delegation of responsibility and authority, decision-making, promotions, monetary changes and other things that happen is based on an objective assessment of skills, abilities and personality traits.

Second, leave your family issues at home. Even though this seems impossible everyone must agree to make it happen. The workplace is no place to air family issues. This will be totally detrimental to a productive work environment. Family issues remain at home and work issues remains at the office.

Third, you must establish clear channels of communication. Issues need to be dealt with in a timely manner and not allowed to get out of hand.

When a relative is at a level of management for which he is not suited, people will tend to skip over them in the chain of command to avoid a problem. Treat family and non-family members the same whatever the situation.

Family-run businesses can operate smoothly. But the basic rules outlined above must be applied. Otherwise, the result is chaos, stress, and management in disarray. No business can prosper with that result.

We have specialized coaching for these challenges. It’s what we do here at CVC Success Group, so give us a call today!