4 minute read
Family business decision making
f PERSONALITY differences contribute a lot to business, but they can also lead to misunderstandings during discussions.
Are dictatorships best? Family business decision making
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BY RURAL WEST
We would never suggest that we knew all the answers to this question, however, we have observed some of the pitfalls of this method.
These include: • Grumpy people • Time spent complaining rather than working • Missing of great ideas • Delays to progress as suppliers are given conflicting messages • Only one family member being happy. The list goes on… The key is often that people have become used to a particular style of decision making. Sometimes these are developed when children join the business at a young age and need directive guidance, which does not change over time. Amazingly, we find 50-year-old clients that have never found a way to challenge, or interrupt, being directed despite their gaining skills, knowledge, and ideas worth contributing. Everyone will approach this in their own way but the idea of resolving this is likely important to gain the input of all parties to maximise the benefit to the business. There are numerous resources, but our encouragement is always for families to find a way that suits them. This can be done in a useful, constructive, and effective way, maintaining good family relationships. Across all the ideas there are some common themes. • Personality differences contribute a lot to business, but they can also lead to misunderstandings during discussions. It is worth remembering that to get the best out of people they need to contribute in a way that fits their personality.
Allow time and space for everyone to comment.
Some people like to think things through thoroughly, others are good at generating many ideas.
• Awareness of the personalities around you can lead to development of great ideas and outcomes. • Allowing time and space for everyone to comment and requesting comment from them. • Being able to clarify what has been said before moving on to ensure understanding. Often, we have found people’s words and intentions are perceived differently to how they are intended. It is surprising that some of our work is simply allowing this
clarification to occur. It seems that while all parties had heard each other, they had not understood what was meant. Many times, this new understanding has people sorting difficulties for themselves. • Having a team being together and being committed to the business usually leads to the formation of a great family business. Motivational theory says that alongside money, what motivates people is their sense they are doing something worthwhile, being acknowledged for their contribution and that what they are contributing to fits with their values. Family businesses can be really good at this. Our experience is that the recognition and development of these areas is always seen by all members to be extremely beneficial. Pressure causes tensions where people may start to behave slightly differently and are less able to hear the ideas of others. What adds to resilience of businesses at these times is having ways to work together and acknowledge when the pressure is affecting both the business and the family unit.
Working with a family recently, it became quite important to separate time for business discussions from family time.
While one member was able to talk at any time, the others found it too difficult and needed a time to think through business matters separate to personal discussions. Some of the work done in this area has come up with ideas for family meetings. While not suggesting these fit all business situations, there may be aspects that are relevant (see Family meeting tips). Setting up a meeting may appear simple but can be difficult to carry out and can lead to the breakdown of the meeting process. There are times when resolving personality-based differences or longstanding ways of decision making that are losing effectiveness, can be very difficult for the family(s) involved. In our experience, often the smoothest and easiest way is to bring in external professional expertise, which can provide clarity and allow the family to decide a way forward that works for them.
USEFUL RESOURCES
• A Guide to Communication for Farm
Families — GRDC • Farming the Business Manual — GRDC
MORE INFORMATION
Rural West is supported by the State and Federal governments. Rural West works with a wide range of primary producers and regional small business owners experiencing financial difficulty to improve their position and profitability. Call 1800 612 004, email enquiries@ruralwest.com.au or visit ruralwest.com.au for more information.
Family meeting tips
Effective family business meetings can:
✔ Add structure and discipline and encourage positive habits ✔ Build the team dynamics and strengths ✔ Develop trust and shared understanding ✔ Increase efficiency, productivity, and creativity ✔ Build on the ability to effectively plan improving outcomes.
Effective meetings are possible by taking some simple steps:
✔ Develop a clear set of meeting guidelines — one speaker at a time, give everyone the right to speak or to pass ✔ Develop a meeting agreement together ✔ Ensure all stakeholders are involved ✔ Set a regular day and time that fits with everyone ✔ Develop a meeting agenda ✔ Identify the meeting type — operational (deals with operational issues) or strategic (deals with strategic issues) ✔ Alternate and share the meeting chair and secretary role between individuals to develop skills and share experience ✔ Allow for last-minute agenda items at the start of a meeting ✔ Keep meeting minutes ✔ Have a clear process for decisionmaking ✔ Bring in experts if support, information, and ideas are needed ✔ Importantly, stick with the process for at least six months to develop and see the benefit ✔ End meetings on a positive note.
