How to Make Family Members Accountable in Business
How to Make Family Members Accountable in Business
No matter how well received, changes are always tough on a business. A certain amount of lag is to be expected as new joiners to the business get their feet wet.
But how much underperformance by a family member in the business is too much? When does “normal” transition pain become a symptom of a much deeper disease? Should it result in firing the family member? How can you know?
In our work with businesses around the world, we’ve discovered how crucial it is that existing owners develop a set of performance guidelines that include corrective action for underperforming successors and other family members working in the business. In a sense, this means having a conversation now about the set of circumstances that might provoke a conversation in the future between stakeholders and the incoming successor or other family member.
The key questions that need to be asked in this initial planning:
What should we do if key stakeholders are unhappy with the successor or family member?
What should we do if business operations suffer?
What should we do if sales or other key performance metrics lag?
Of course, those terms need definition. What does it mean for stakeholders to be “unhappy”? How what does it mean for operations to “suffer” or sales to “lag”? That said, these questions should lead to the setting of key performance indicators so that there is clarity in measuring performance. and enforcing accountability.
Have you defined expectations for family members working in the business? And have you put in place a course of corrective action in the event of their underperformance? With a plan in place, remaining stakeholders will be empowered and equipped to evaluate the family member's performance and enforce a level of non-arbitrary accountability.
Rather than leading with feelings of dissatisfaction, these stakeholders can hold up a clear standards and structure future conversations around transparent expectations. This makes for a more straightforward and productive conversation.
By the way, if you are not sure about how to setting your successor or other family members up for success, get in touch or this step-by-step guide conversation guide by a psychologist may help.
Succession Strength, Inc keeps businesses in business for generations. Learn more about our Succession and Business Transition services. If you are a family business, take the survey today to assess your family business succession efforts.