Family Business Matters

Many of these columns have focused on big, strategic moves family businesses should make to enhance their success with estate plans, management succession, family employment, compensation, governance and conflict management. A degree of certainty on these important issues helps family members make better decisions and maintain relationships.

Challenging as the big issues may be, many family businesses are derailed by the little things. Seemingly minor events, an unintentional sleight, unequal time spent with different family members or an offhand remark becomes the spark that ignites a forest fire in the family firm. Consider whether some of the following concerns place your family business at risk for a blowup.

WORKING TIME

When working together in business, our human inclination is to notice how coworkers use their time. Even though family members have different responsibilities or roles, our tendency is to want to see everyone working the same number of hours. But, this often isn't the best strategy for a successful business. Some work inside and some outside, some are with people, some with equipment and some with technology. Some put in long hours at certain times, while some are steadier year-round. Some family members are more efficient with their time.

The overall result of these differences is some family members often feel they are working harder than others, which may be the case. Feelings of resentment can arise about perceptions of time spent working. These problems often start small but, over time, develop into a real relationship problem in the business.

EXPENSE EQUITY

When the comparison shifts to money and the expenses paid by the business, conflict can heat up in a hurry. What if one family member eats lunch out most days and pays with a company credit card, while another brings his or her lunch to work? Or, what if one occasionally fills up his or her personal vehicle's gas tank at the farm? What about paying for a spouse's expenses on a business trip?

One meal or tank of gas by a family member may not be a firing offense. However, over months and years, frustration and resentment about what the business covers and whether people are taking advantage of the business and each other can create a serious wedge between family members.

ATTENTION

If a grandparent takes one grandchild on trips more frequently than others, it doesn't mean the other grandkids are loved any less. But, it probably doesn't feel like that to the others. How people are included in business discussions, whether they go on trips together, even the number of meals eaten together can create friction when compared with other family members. Again, it isn't one meal or one trip, but, instead, the accumulation of time spent that increases friction.

A REMEDY

It is ideal, but naive, to expect people not to compare how they spend their time, the money of the business or the attention they receive from others. Consider two strategies to address these issues. First, commit to checking in with other family members. More often than not, the offending family member isn't aware of, or being held accountable for, their work habits, use of company funds or time spent with others. Simple awareness can go a long way. Second, when it comes to time and expenses, consider crafting a policy that spells out what hours are expected and what expenses are covered. Good policies can prevent problems and are often routine in non-family enterprises.

There are always challenges in working with family members. A commitment to communication and a few key policies can help clarify expectations and prevent these small issues from becoming large headaches for your family business.

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Editor's Note: Write Lance Woodbury at Family Business Matters, 2204 Lakeshore Dr., Suite 415, Birmingham, AL 35209, or email lance@agprogress.com.

(AG)

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