Six secrets of successful family business By James Lea
O
ne of the common characteristics of those who want to do well in business without working very hard is a conviction that success is just a matter of learning the right “secrets.” Some people make a lot of money reinforcing that notion by hawking “secret strategies for solving every company’s 10 worst management problems” and “big time CEOs secrets for getting to the top and staying there.” There are secrets for sale to help with everything form beating expansion capital out of your banker to changing lead into gold. I checked with a few well-run, profitable familyowned businesses to see if I could pry loose some secrets of success to sell at conventions and thus ensure the comfort of my old age. At first I encountered suspicion and snide retorts, but then the secrets really started to flow. Let me try out a few on you. • Secret #1: Work 12-hour days at every opportunity: This might take some explaining, because most people would hesitate to describe a 12-hour workday as an opportunity. But most families who succeed in business would agree with Thomas Edison that success is a mix of “10 percent inspiration and 90 percent perspiration.” The secret of building a solid, enduring family business is that everyone who’s seriously involved in it has to work and work hard. • Secret #2: Don’t take other family members for granted: The glue that holds most successful family companies together is compounded of mutual affection and admiration, shared goals and complementary skills. The “secret” is that the family members working together treat one another with at least as much respect and courtesy as they show non-family co-workers. The special capabilities and value of the family members you work with should be reflected in your behavior toward them. • Secret #3: Keep two hats on the hat rack at all times: It is written in Lea’s Laws that you don’t
have to love everyone you do business with, and you don’t have to do business with everyone you love. The people in charge of successful family businesses wear two big, tight-fitting hats. They’re good family members, but they also take seriously the responsibility of leading and maintaining discipline in their companies. You can love your son (the sales manager) even as you chew out the sales manager (your son). It’s a matter of keeping both hats close at hand and switching them at the right times.
Lea’s Law: You don’t have to love everyone you do business with, and you don’t have to do business with everyone you love. • Secret #4: Don’t adopt business practices that clash with basic family values: It’s important to sort out and disentangle business realities from family preferences, but it’s foolish to ignore the interdependency of the two. Pushing suppliers into
a corner, for example, by driving their prices below the break-even point may give you a couple of extra bucks in profit. But if it’s inconsistent with the family’s values and ethical standards, the practice can create more friction and fragmentation than it’s worth. Consistency between the family’s fundamental principles and the way it does business is a key component of success. • Secret #5: Take some time off and some time away: A potential problem for families in business is the pressure of being constantly with the same people. It can be especially tough on spouses in business who are literally together 24 hours a day. But even parents and children or brothers and sisters who work and live or socialize together can get tired of on another. Successful family businesses deal with that risk by admitting that it’s a risk. They schedule time away from one another, and some even adopt a policy of spending holidays apart. • Secret #6: Be proud of your company and your family and let the world know it: If that’s your name on the door, you have a doubly important role both inside and outside the business. Customers, suppliers and others you deal with tend to think of you as The Company, regardless of your title. Employees expect you to take a genuine interest in the productivity, their problems and the quality of their outputs. Your pride in the company, in the work it does and in the family that stands behind it can have an immense management and marketing value. Family members involved in successful family businesses really let that pride shine. Now that everyone knows some of the secrets of success in family owned business, we should all go forth and prosper. Just don’t forget that Secret #1 is hard work. ✔ James Lea is a professor at the University of North Carolina and a well-known family business speaker, author and advisor. Reprinted from bizjournals
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