Three Ps for families in business that want to thrive

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A family in business is unlikely to go far without education.

The typical parent often emphasises the importance of education to their children. However, this emphasis rarely manifests itself in issues related to the family business.

This is proven by the almost predictable frequency with which incidences of family feuds and reported failures of family businesses go public.

Here are some of the key ways business education can support families in business, and enable them embrace their chances of thriving for generations.

  1. Pause, reflect – and nudge

The bulk of families in business, almost by default, focus most of their energy on the day-to-day running of the business – and rightfully so.

But they hardly pause to look at the larger long-term picture of what they’re doing. And so, for education to occur, pressing the pause button is perhaps the best bet to trigger a family business education journey.

The family has to pause and reflect on basic things, such as: Do we have a board? How are we running the board? Is the next generation being developed? What happens to this business after the founders leave? What of the ownership and the wealth created?

These are seemingly simple questions, yet most families don’t actively seek to educate themselves in getting the answers. These are ‘core life questions’ that ought to be well considered. Which is where the nudge comes in.

After such reflection and after experiencing the nudge, a family is likely to progress into discovering how education will benefit them in one, if not more, of these two areas: people and processes.

  1. People

Human resources, both family and non-family, are at the heart of every family business. Allocating resources into developing the education of the family group will undoubtedly bring rewards ten-fold.

While many family businesses focus on team building and leadership training, there isn’t sufficient focus on a crucial component of family business: governance.

This is an area of training that includes the family history, its vision, being responsible stewards of family wealth and decision making.

All of these involve the potential transfer of skills and enable the family to make informed decisions that support the preservation of the family legacy and its business.

  1. Processes

It’s crucial that everyone, including family members not involved in day-to-day on-goings, understand the business’ processes and activities.

Education, especially if it’s institutionalised in the family business, can help here. This may be through inductions, site visits or even through more formal structured learning.

A local family-owned business, for instance, can offer its teenagers a compulsory, structured training programme as part of the preparation of the next generation.

It can also undertake customised training programmes for its members to develop capacity in engaging in emotionally charged conversations, including succession planning, share distribution and the role of outside directors.

It’s a win-win, for the family and its business when systems are put in place to ensure the development of family members is an ongoing process.

While every family business will hit a pothole or two along its journey, education can help it be better prepared to manage and navigate the pitfalls.

The writer is a family businesses consultant at the Institute For Family Business.

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