5 Elements Of A Peak Performing Family Business
By Kyle Danner
I worked in and owned a business with my family for almost 20 years. When I share this with others, their typical response is, “I could never work with my family,” followed by stories of just how dysfunctional their family is.
It makes for juicy conversation at a cocktail party, but it raises the question: How do you create a family business that performs at its best rather than its worst?
It is possible for the family and the business to work together in harmony. Some family businesses are able to navigate the challenges of mixing family and business, resolve conflicts before they become toxic, and unite everyone under the same clear vision. I call these companies Peak Performing Family Businesses.
Not every family-run company will become a Peak Performing Family Business. In fact, many go under before the next generation can take over. But, it is possible for any company to become a Peak Performing Business. All you need is to follow the example of businesses that have created productive, profitable, family-run organizations.
In my experience of working with my family, along with advising family business owners and next-generation leaders, I found that Peak Performing Family Businesses share the same characteristics. These are the five elements they have in common — and how to use them to improve your business's chance for success.
5 Elements Of A Peak Performing Family Business
1. Know Yourself
Peak Performing Family Businesses are guided by a team who knows exactly what their role in the business is. While this is about family business, it starts with you.
Why are you in the business in the first place? Is it to lend a hand during a busy season or a place to land while you decide on the next step in your career? Or, do you eventually want to take over the business from mom and dad? Whatever your reason, be honest with yourself and your loved ones.
Once you have identified your drive, be clear on the strengths you bring to the table and how they can benefit the family and business. It’s tempting to join the company if there’s an opening, but if it’s a poor match for your skills and your personal vision, it will lead to frustration for everyone involved.
2. Know Your Family
Every family has its way of solving problems and managing differences. That’s a nice way to say “fighting.” The difference between a family business on the edge of a blowout and a Peak Performing Family Business is that the later has a firm understanding how the family reacts to conflict.
Knowing your family's patterns of behavior is essential to removing the roadblocks that keep the family and business from moving forward. Does a certain topic make Dad upset? Does Mom react well to positive criticism? What does the family do when faced with confrontation?
Knowing your family’s strengths is just as helpful here as knowing their weaknesses. Every family has its struggles, but yours also has unique strengths that can set your business apart. Plus, aligning everyone’s talents to the task at hand boosts productivity and reduces the tension that comes with mixing family and business.
3. Think Big Picture
It’s easy to confuse roles and responsibilities in the family business. Sometimes you’re a parent, sales manager and major shareholder at the same time.
While many people say they keep family and business separate, those lines are easily blurred. When a family member is struggling at work, the desire to swoop in and save the day is strong.
Occasionally, that’s needed. Everyone missteps. However, if it becomes the norm, it undermines their development, distracts you from your responsibilities, and weakens everyone else’s performance. Peak Performing Family Businesses understand that what's best for the family and the business might mean making hard decisions. Be aware and intentional about the role, or roles, you play, and how they may conflict so, you can make more informed decisions.
4. Build Value
Peak Performing Family Businesses focus on building a company that’s transferable, whether it’s to the next generation or an outside buyer. Establishing and communicating policies, processes, and practices is essential. It includes managing not just the financial capital, but the human, customer, structural, and social capital too.
By following a value-building strategy, the business is better positioned to serve the family’s current and future needs. This allows you to support the family long after retirement.
5. Take The Long View
Most family businesses are closely held entities not subject to the demands of outside shareholders. They benefit by investing resources that may not yield immediate results but will pay off in the long term.
They tend to think in generations and not just financial quarters. When planning, consider how life events such as births, graduations, weddings, and retirements will impact the family and business. More than likely, the wealth the business generates will be needed to finance these significant events.
Ready To Transform Your Family Into A Peak Performing Team?
Family businesses are in a critical time of transition, and a peak performing team is needed to weather the change. Aligning everyone’s strengths, while taking a big picture approach that includes a value-building strategy with an eye to the long view, will ultimately serve you, your family and the business.
But getting the family on board can be challenging, especially if conflict exists that is putting strain on relationships.
Let's do it together. My Peak Performing Family Team training will help your family prepare for what's next. The six-month project helps family members discover one another's personal strengths and their role in the business — all while teaching them a new level of collaboration and productivity they didn’t know was possible.
Click the button below to learn more!