In Argentina, there are between 1,000,000 and 1,200,000 family businesses, they represent about 75% of national companies and provide about 70% of jobs. On the other hand, 70% of family businesses do not reach the third generation.
The biggest conflicts do not happen in moments of stagnation, they appear when growth jumps occur: increase in demand, loss of registration and organization, sometimes exponential growth triggers out of control.
The main threats to efficiency are disorder and lack of transparency. When we are part of a family business scheme, everything influences and everything mixes, putting order is the first step to guarantee the health of the company. We cannot ignore an emotional charge born from the common history.
Here are the 6 steps to apply:
“Don’t do things you don’t know about.”
1-Define the roles, responsibilities and functions of collaborators, including family members. Sometimes we behave as if we were sending Djokovic to play in the soccer world cup and Scaloni to coach the basketball team. Each team member performs better in certain positions according to their skills, doing it by intuition or request does not lead to optimal performance.
Organization for key moments
2-The Family Protocol, a fundamental tool to put in writing the operating rules and the transparency system.
3- Create a Family Council, a space where everyone can participate, and a member elected by majority assumes the coordination (it can rotate annually). To set up committees with clear managers, decide strategic issues within a certain period, reporting to the board of directors. Professionalize decisions; avoid informal meetings or in front of members outside the council and facilitate the creation of codes, procedures with a general plan that impacts not only the business, but the entire clan.
4- Rethink driving to move to a multigenerational direction open to build together. strengthens the company and is more sustainable, we first need to define the conditions to make it possible.
5-Productive communication
Establish policies for the participation in board decisions; report of activities carried out by shareholders and any other formality in the processes, as if it were not a family company. The remuneration of each member must be specified in writing. Work on the concept of “shareholders” or partners in the form of compensation for family members.
Systemic vision prioritizing the common well-being
6-Clearly establish leadership, roles and competencies from the outset. Constitute all the formal steps to give it entity, and in no way support it only in verbal agreements. It is indisputable to have a updated organizational chart, and job descriptions (including relatives) profile, mission and functions, as well as scalability.
And finally, every six months, plan the succession issues and family protocols to be implemented (if they are set from the beginning, much better). Maintain the course of a business culture developed by each family member who works in the company; the policy of dividends, withdrawals and participations; how the new generations will be incorporated, and will mediate in conflicts of any kind. Principle of equity (which is not the same as equality): each one deserves a fair and balanced salary for his performance.
Limiting the number of relatives on the payroll: It is not advisable to fill the company with friends and family commitments, it directly threatens the business.
Cecilia Chitarroni
Professional Ontological Coach and Writer
Ig @ceciliachitarroni/
youtube @CeciliaChitarroniCoach
[email protected]
https://linktr.ee/ceciliachitarroni
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by CEDOC