7 secrets of success r )ur lamily business rn yo

f-rHnNce. cHANcE. cHnNce. we \-zhear about globalization. speed. technology, virtual workforces, labor market, outsourcing, belttightening, etc. These and other forces may change the daily challenges of work, but the basic principles of leading a family business effectively remain unchanged.

Although everyone likes to talk about leadership (and it is clearly very important), it is not the antidote to all problems. The message of leadership is repackaged, over and over again, with a new twist or a new voice beckoning us to follow.

Compare the marketing of leadership to the principle of weight loss-consume fewer calories than you burn. This principle is very simple at its core, but as it is packaged and marketed, its complexity can become dizzying.

The problem with many of today's family business executives is not a lack of knowledge or inspirational leadership, but rather a lack of application of knowledge. In other words, there is frequently a knowing/doing gap.

Leading a family business has, in many ways, not changed over the years, and spending time trying to invent new leadership techniques is probably not a good use of time. Assuming that you have a solid understanding of your business and industry, your time and energy is well spent on specific actions and implementation. Consider these well-known "secrets":

{ . Focus. Identify your market, your competitive advantage, and your firm's expertise, then stick to it. Staying on course with what you do best is often an operational challenge for entrepreneurs. Maintain your focus by automating, streamlining, or outsourcing functions that are not core to your business.

A recent study found that the most profitable companies sold fewer products and had fewer customers and suppliers. Their conclusion, "complexity leads to overhead that results in increased expenses." Adding complexity generally leads to increased sales with eroding net margins, while focused operations are usually more profitable. Identify the most profitable services, plants, products, salespeople, or regions in your busiNESS,

2, Plan for Success. Planning is one of the most well-founded principles of personal and business effectiveness. Although the time horizon is shorter in today's fast economy, planning at all levels within your company (as well as among the shareholder group) will significantly improve the likelihood of hitting targets. Effective planning should trickle down through the business. Each level of planning inside the business should provide the context for the next level and result in a better organizational alignment.

A solid strategic plan is important, but remember, "The devil is in the details!" Companies that are diligent about translating strategies into specific, individual performance objectives tend to operate more effectively and efficiently.

3. Communicate. Communica-tion sounds intuitive enough, but many families in business simply miss the mark. In spite of numerous efforts by management, lack of communication is predictably the number one complaint resulting from employee opinion surveys. A closer look at the data states that employees really want/need answers to four questions:

. Where is the business going? (Strategy)

What are we doing to get there? (Plans)

What can I do to contribute? (Roles)

. What's in it for me? (Rewards)

Ensure that these questions are answered before communicating about other topics. Leaders from today's most successful companies argue that, "Leadership is Communication." Therefore, to be an effective leader, ensure that communication is a top priority and is honest, consistent. and two-way.

4. Define Processes. Underdevel-ooed infrastructure

(systems, processes, structures) is one of the most common risk factors for family businesses. Are your processes and systems?

Clear

'Replicable

Documented

. Supported by tools

Easily accessible

Although it is always easy to say, "We need a new system," it is better to streamline the manual systems before changing technical systems. Many companies who reverse this order simply end up automating inefficiencies.

As an acid test for how well the processes are defined, documented and consistently used by employees, ask, "How easily could we franchise our business?" Effective processes enable management to work "on" the business rather than "in" the business.

5. Design your Culture. Culture can be very complex. Pared down, however, it is all about behavior. Simply put, you want to design systems to reinforce behaviors that support your strategy. Cultures are created and reinforced by:

. Rules and policies

Goals and measures

. Staffing and selection

Training and development

Ceremonies and events

Leadership behavior

Communications

Rewards and recognition

Physical environment

Organizational structure

One family management team was experiencing tremendous growth and was concerned that they might lose the autonomous culture of the company. Unfortunately, the incredibly detailed policies they implemented gave the opposite message to most employees.

Another company recognized that in order to grow the business they needed to give senior managers more accountability. The c.e.o's leadership behavior (micromanaging), communication patterns (informal and haphazard), and employee development (minimal) continued. As a result, the management team (family and nonfamily) never jelled. Needless to say, this company's growth was very turbulent and slow. This latter example is not unusual to see in an entrepreneurial family business.

6. Select and Train. You can

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