FPMG Announces Strategies to Overcome Family Business Challenges

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Many family businesses were likely the beneficiary of Small Business Saturday, during which $5.5 billion was spent at local businesses throughout the country, but as any savvy entrepreneur knows, revenue alone won’t guarantee business success, and that goes even more for family businesses.

FPMG Announces Strategies to Overcome Family Business Problems

FPMG Announces Strategies to Overcome Family Business Problems

The behaviors that might work around the dinner table don’t necessarily translate into the workplace. As a matter of fact, without some form of behavior modification, family businesses can quickly find themselves in peril.

Many family businesses were likely the beneficiary of Small Business Saturday, during which $5.5 billion was spent at local businesses throughout the country, but as any savvy entrepreneur knows, revenue alone won’t guarantee business success, and that goes even more for family businesses. FPMG, a performance management firm, has identified a number of strategies family businesses can use to help them overcome the unique operating challenges they face.

“All families have their own ways to communicate with each other (or not), but the behaviors that might work around the dinner table don’t necessarily translate into the workplace,” said Denise Federer, Ph.D., FPMG’s founder. “As a matter of fact, without some form of behavior modification, family businesses can quickly find themselves in peril.”

FPMG believes communication is the solution to overcoming most issues in family businesses, so it suggests that every family business incorporate the following two practices into its operating procedures:

  •     Regular communication. This sounds like a no-brainer, but it’s surprising how many times family members feel out of the loop with respect to what’s going on in the business. Communication can occur through formal family councils and meetings, where the agenda is business-focused, as well as through informal channels like family retreats, dinners and vacations, where business and non-business topics are discussed.
  •     Regular education. Never assume that family members have the requisite skills in effective communication, conflict resolution, listening, negotiation, assertiveness and other areas that are crucial to business success. Provide ongoing training to ensure that all family members have the knowledge they need to add value to the business and do their jobs well.

FPMG notes that when conflict does occur—as it invariably will—it’s important to separate the person from the problem. This is true when resolving a conflict with anyone, but it’s especially critical when dealing with a family member.

“Attack the problem rather than the individual and focus on your interests rather than your position,” Federer said. “Make your interests known, but also understand those of the other person…and make it your goal to create a win-win situation based on mutual gain.”

According to FPMG, simple conflicts, those occurring in the “here and now,” can often be resolved quickly. More complicated conflicts—those that have a lot of history behind them and are more likely to revolve around family issues—must be approached in a more structured manner, and this is where rules of governance can come into play.

FPMG believes there will be fewer opportunities for conflict if business “rules” like these are clearly spelled out:

  •     Entrance requirements
  •     Paths to promotion
  •     Salary schedules

“These rules of governance provide you with documentation to back up your positions and they also promote a sense of fairness, something that’s especially important to the non-family members of the business,” Federer said. “Above all, you must treat family members like any other employee, with one major exception: it might be to your benefit to pay family members to stay home if they’re non-functional at the business.”

About FPMG
FPMG is a Florida performance management consultancy dedicated to guiding successful people to be their best. Based in Tampa, we help you uncover the non-financial issues that impact the bottom line. FPMG offers consulting for family business problems, financial advisors legacy advising, leadership development, and more.

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Dr. Denise Federer
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