Fourteen Traits of a Successful Family Business
By James Olan Hutcheson
 
        Conflict can be a major factor in determining the success of any business.  This is particularly true for family businesses.  To many, "family business" means conflict.  With family feuds often making headlines, it's surprising how many family-oriented businesses continue operating.  About 75 percent (some studies indicate 90 percent) of all business enterprises in the United States today are family-owned and managed.

They can't all be failing.  Conflict is normal and at times, routine. It's only when conflict is not managed in a positive way that it becomes a destructive force.

Owners and managers of family businesses should reflect on their success.  Families that maintain successful businesses tend to approach family and business issues with a "continuing education" attitude.  Winning family businesses demonstrate certain traits.  They:
 

1) Have leaders who lead a balanced life-it is not all work or all play.
2) Communicate regularly-they have a system in place that fosters both playful and serious talk.
3) Agree on the business purpose, and have clearly defined business goals.
4) Plan, plan, plan-strategic, marketing, estate, disaster, financial, etc.
5) Share power-everyone who can add value is allowed input and not all decisions are de facto by the majority stockholder.
6) Have entrenched traditions-everyone has family traditions whether they plan them or not.  Traditions can keep a family connected.
7) Have similar values-big differences in some values make it tough to ever share a common outlook.
8) Compete in more stable markets and industries-they are not into fads, fashions or trendy ideas.
9) Grow slower-rapid growth is difficult to manage.
10) Remain small to medium in size-pressures mount when a famfly business tops the $2 billion mark.
11) Have strong and capable competition-monopolies do not succeed in free markets. (Muhammad Ali is considered the greatest because he had a Frazier, Norton and Foreman to topple).
12) Exude passion for the business-these families tend to think beyond "getting rich" and emphasize the family legacy.
13) Know their customers-it's common for these businesses to have long standing personal relationships with customers, vendors and business partners.
14) Have governance-in order to grow, a company's leaders must be open to objective evaluation and feedback.  A board of directors or board of advisors works wonders for a family business.
        Conflicts in any business are inevitable.  It is important that owners and managers of family businesses recognize their uniqueness.  Family businesses should ask the following questions.  Has the family enjoyed working together?  Has the business achieved its expected performance?  What core values can be built upon to strengthen the business and bring the famfly closer together?



James Olan Hutcheson is the president of ReGENERATION Partners, a Dallas, TX-based consulting firm devoted to helping families resolve conflicts and improve business performance.


 
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