Family Business – Building a Performance Based Culture

April 29, 2013 | By | Add a Comment

At the start of a family business, one or two members of the family create a new entity that they own and is their baby, from top to bottom. In most cases – at this stage – the success or failure of the enterprise depends on how much money is in the bank at the end of the month. The single measure of success is survival.

As the business evolves and grows, new ways to measure performance of the business and, more importantly, individuals who work in it, need to be put in place.

For owners, for whom the business is their life, it might seem anathema to their way of working to feel ‘measured’. Shaking off the homely feel of the business to be driven by processes smacks of the very ‘corporateness’ they sought to avoid when they started out.

And whilst it might not be vital to create a sterile monster in ways of working that so embody (and even hinder) the largest of organisations, it is very important that a family business creates simple structures to ensure that everyone on the payroll delivers. Indeed as a check and balance on the owners own perception of how they are doing, it might well be even more important for them.

Here are three simple steps to ensure that the performances of individuals are maximized:

1. Clear Expectations

There is nothing wrong with demanding good performance from employees, be they family or non-family members. Indeed, many individuals thrive on being stretched and challenged, as long as they have a clear understanding of what’s expected of them.

What is vital is that they have precise information about what is expected from them in the role they do. This can easily be created as a job description or job definition on one sheet of paper and may be the start of an evolving process where gaps are filled in over time, to be even more defined.

2. Recruit for Capability

Even before managing performance, it is vital to recruit the right people in the first place. With a clear job description in hand, tailoring a recruitment process to accept only individuals with the capability (or the potential) to deliver at least the job description is critical. In family businesses, this can be even more challenging, as there are likely to be family members who will join and need to be assessed objectively as an appropriate fit.

For family members, there is nothing to say that any individual artificially introduced into a business has the right credentials for the role they are being shaped for. This can make recruitment decision-making all the more challenging. As long as there is awareness of this issue and bearing in mind that the business purpose may well be to provide employment for family members, it is a challenge that can be overcome with planning and development.

That said, it’s not productive, nor is it of value to any individual, to force them into a role they are simply not suited for.

3. Reviewing Performance

Much is made of the whole rigmarole of performance reviews, yet they need not be such a burden. By spending time with people regularly, informally talking with them about their job, much can be achieved on an ongoing basis to review performance. See it as the automatic pilot on a plane making minor course adjustments over a long journey.

Once or twice a year, taking time to listen to an individual talking about their performance in a…

• ‘What went well?’
• ‘What could you do to be even better?’
• ‘What new challenge do you want to investigate over the next few months?’
• ‘How can I help you?’

…framework, will pass ownership back to them and make the atmosphere friendly, collaborative and positively anticipated too.

In a family business, the challenge is to maintain the friendly culture, maximize performance and develop everyone to achieve their potential, including those family members who are working in the business too. It’s important to raise the game and move past family attitudes and into the demanding real world of business, if future success is to be assured.

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