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5 Keys to Creating a Positive Culture in Your Family-Owned Business

 October 18, 2018   By Patrice McGuire

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5 Keys to Creating a Positive Culture in Your Family-Owned Business

In the 25 plus years that I have worked with leaders in a variety of organizations, I have found that each family-owned company has their own unique cultural challenges.

There may be personal family issues that creep into the work environment such as arguments witnessed by non-family member employees. Non-family leaders and employees in the organization may have doubts about their ability to move up within the organization or feel undervalued. Employees may even grumble to one another about nepotism. 

Family-owned businesses can often lack intention around planning for succession and developing their employees.  

One of the organizations I am working with, I’ll refer to them as “Company A,” will soon be led by a fourth-generation family member.  The challenge is real for this up and coming leader because there is no development plan in place.

She continues to work in her marketing function with no strategy or plan for her development.  Soon she will lead the company but has no mentor, no plan and no support from the highest level of current leadership, which includes other family members.  

Another company I have worked with, let’s call them “Company B,” is currently led by a 35-year-old, third generation family member.  His transition from a “traditional” sales role into the Presidential role has been a life-long journey. He has changed the culture from a top-down, “command and control” culture to one that welcomes ideas and feedback from employees at all levels.

Here are some of the things the leader of Company B has done to create a culture of mutual respect:  
  • He has developed his leaders to let go of “control” and develop their people 
  • He recognizes employees for a job well done
  • He values their contribution
  • He makes a conscious effort to talk to people and be approachable

The journey has been slow and steady, yet he has been mindful and deliberate in changing the culture into what exists today.

As a result, employees like and respect him.

Here are five keys you can implement to create a positive culture in your family-owned business:
  1. Check your ego. 
    Recognize that your family name speaks for itself.  Others may see you as intimidating and unapproachable simply because of your connection to the business.  You may find that they may not speak up or offer feedback because they don’t want to offend the family or the owners. Seek out input from non-family members.
  2. Nurture family relationships. 
    When employees experience family members arguing or talking negatively about one another, it lessens leadership credibility.  It sends a message of “we are not on the same page.”  You don’t always have to agree, but you do need to be respectful of one another.
  3. Establish values. 
    Agreed upon values are a way for family members to foster a culture that represents who they are and what they believe.  They have a foundation to create actions based on their values, and those actions create a strong culture that people feel an emotional connection with.
  4. Develop others. 
    One organization spent 17 years developing the next owner of the business.  Previous family owners invested time, money and resources in developing their successor.  They prepared him to
    be a good business owner who understood all aspects of the business right down to managing the books and dealing with difficult customers.
  5. Invite innovation. 
    Open your mind to different ways of thinking and doing.  Invite input and ideas from those that work for you at every level.  Encourage ideas from long-term employees as well as new hires.  People have ideas, you just need to ask.  Be inviting, accessible and approachable.

The heirs that lead their businesses successfully create an intentional culture that is attractive to professionals of all ages, maintains their family legacy and supports financial growth.

At Living As A Leader, we offer a Leadership Development Series designed to produce leaders that can positively shape the cultural environment, reduce turnover and achieve crucial business initiatives. We do this by providing training, coaching and consulting with a focus on pragmatic communication tools for leaders at all levels of your organization.

For more information, contact Steph Kotlarek at skotlarek@livingasaleader.com

About the Author


Patrice McGuire

Facilitator and Coach, Living As A Leader®

Patrice has more than 25 years of human resource and training experience, working with leaders at all levels from financial services, manufacturing, retail, engineering and service organizations.

Email Patrice Patrice's Bio

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