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Family Business Roles: Part II
February 26, 2008
In my last post I described a commonality in family businesses – the lack of clearly defined roles. I described the family roles that exist along with responsibilities. Now for the business roles:
The Entrepreneur – The founder’s role carries the ability to do whatever you want, as the business is an extension of you. You bootstrapped it and built it and have always considered this your deal. As the business grows and moves into the future, you need to lead the way in professionalizing the business and planning for succession. It would be a shame for all your hard work to die with you.
The Shareholder – Shareholders vote and make business decisions. You want a reasonable return on your investment, so learn to make good ones. You may have received at least a portion of your stock via gift and don’t have the emotional connection of having your own skin in the game. You need to understand that you have an investment in a company, the same as you would have if you inherited stock in Berkshire/Hathaway (well, maybe not exactly the same). Your job is to make sound business decisions. Use your head, not your heart – your heart is for family decisions. You must reinvent the 1st generation mindset. You may think that if you are the only shareholder, then you are only responsible to you for the decisions you make. But there are many “stake” holders. The entrepreneur and shareholders must develop a stewardship mentality regarding the business. It’s not just about you. Your family, employees, vendors, and customers are all depending upon an ongoing relationship with your business.
President/CEO – This role is responsible for the direction of the company and its performance. You may also be responsible for the connection between the shareholders or board of directors and the operating management. Articulate a vision and hold others accountable for achieving it.
Managers – This role is responsible for the performance expectations of their particular department. You can’t do it yourself. Learn to influence those under you to get the job done. Influence is leadership. Your business rises and falls on this principle. As a family member manager, it is vitally important for you to understand this and not assume positional leadership – i.e., “because I have the right last name and am a manager, you should do what I say.” You must develop as a leader.
Employee – As a family member employee you are under the microscope and everything you do is scrutinized. The non-family employees/managers want you to succeed, but they are not going to make it easy. Your behavior, attitude, and work ethic are way more important than whether or not you have talent. No one cares how talented you are until they know how good you are. Exhibit a positive, team player attitude and work hard. You are a potential successor, but you must earn the respect of those you would someday lead.
Next we will look at the dysfunctional roles family members often play.
Posted by Jeff Faulkner on February 26, 2008 | Comments (0)
