There’s a lot to be said for building a profitable business with your loved ones by your side, but business matters with family members can be fraught with emotion. Communication skills are important to the success of any business—but it’s especially important to implement formal communication processes when it comes to working with family.
There are countless thriving family-owned businesses in Canada today. In fact, family enterprises account for 63% of private sector firms [1]. While running a business with family can be hugely rewarding, it’s definitely not always easy. Like all businesses, you need to carefully weigh every new opportunity and work through every business challenge all while balancing family dynamics.
Luckily, you don’t have to figure it all out on your own. Family enterprise advisors (FEA) have specialized expertise in supporting family-run businesses and an understanding of the complex dynamics that arise when the personal and professional are closely linked. Based on their expertise, one of the most effective ways of maintaining a strong business and good relationships is effective communication.
An important first step towards better communication involves implementing formal methods for how, when, and with whom business matters are communicated. This move is not only good for business, but also for maintaining family relationships.
Without formal communications processes in place, it becomes easier for certain parties to be left out—either intentionally or unintentionally—leading to factions. Before you know it, owners are operating as individual adversaries rather than as a single team. A good communication process makes it easier to identify—and work through— differences of opinion. For example, if one group of owners is risk-averse and another is wants to take on some risk to realize an untapped growth potential, they need to settle on a direction before the business can move forward—formalized communications can help spur that conversation and navigate potential issues before they become problems.
Creating a forum for communication is central to any effective communication strategy. This gives people an opportunity to raise issues, work through challenges, and allow everyone to participate in running the business. For some businesses, this could be relatively simple—like holding regular family meetings. Depending on the size of your business, you may choose to bring the entire family together or limit meetings to family members over a certain age—or even blood relatives without in-laws. As your business grows, you may want to introduce a board of directors or an advisory board. Additionally, appointing an impartial individual to facilitate family meetings to ensure everyone’s voice is heard would be considered best practice.
In deciding which path is right for you, it can also be helpful to recruit the assistance of a professional family enterprise advisor. These specialists can help you implement appropriate communication structures and develop rules to enforce them. They can also play a role in the meeting room to make sure processes are followed and that concerns are aired in a professional way.
Communication can be simple, but it’s rarely easyTaking a proactive approach to family business communication can help you do more than address challenges in a diplomatic and open way. It can also give you a chance to regularly clear the air of any issues among family members that can affect the smooth running of day-to-day business as well as your ability to make bigger decisions. To learn more about how you can improve your family’s business communication processes, contact a Grant Thornton Family Enterprise Advisor.
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[1] Family Enterprise Xchange, September 10, 2019. “Family Businesses Generate Almost Half of Canada’s Private Sector GDP and 7 Million Jobs According to New Conference Board of Canada and Family Enterprise Xchange Report.” https://www.newswire.ca/news-releases/family-businesses-generate-almost-half-of-canada-s-private-sector-gdp-and-7-million-jobs-according-to-new-conference-board-of-canada-and-family-enterprise-xchange-report-858070827.html
[2] John A. Davis. “The Three-Circle Model celebrated 40 years in 2018.” https://johndavis.com/three-circle-model-family-business-system/ (accessed March 10, 2020).
