A healthy family business requires a delicate balance between work and life, a long-term strategic plan, an open and innovative culture, a commitment to performance, and a purposeful impact.
In our decade-plus of family business consulting, we’ve identified these five critical elements that provide insight into how to achieve and maintain a thriving family business.
By prioritizing these key areas, family businesses can establish a foundation for success, overcome common challenges, and make a meaningful impact on their communities.
1. Establish Work/Life Balance
The physical and mental health of the people involved in your business should be one of your highest priorities.
If you want the people on your team to give their best to your organization, they must be as physically and mentally healthy as possible. And that doesn’t happen by accident. Good health comes from good habits, discipline, and long-term commitment.
As leader of your family business, it’s important for you to model the behavior you expect from everyone else – both family and non-family members of your team. Establish boundaries that prevent burnout, disengagement, and loss of purpose.
If you set the standard for things like staying off email after hours or while on vacation, or making time for healthy lunches and regular workouts, others will follow. And we predict your business will be better for it.
Each family business is different, so healthy boundaries between family and business – and what that means to you – is something you should take the time and effort to define. You can engage a family business consulting firm to help with this process.
2. Invest in Long-term Strategic Planning
The healthiest family businesses are those that regularly engage in long-term strategic planning – organizing all stakeholders behind a common goal.
This kind of exercise helps assure alignment, while also identifying strengths, weaknesses, opportunities and threats that have the power to shape the organization’s future.
A healthy long term plan for your family business takes into consideration the needs of your customers, your employees and other stakeholders. It also defines how you can meet those needs in a way that reflects your family’s values and the culture your family business has created over time.
Smart long-term planning can help a family business balance the legacy of its founders with the realities of transitioning a thriving business to future generations.
3. Develop an Open Thinking Culture
We’ve found through our experience in family business consulting that businesses employing an open systems approach are healthier and better positioned to stand the test of time.
With an open systems approach, information passes freely throughout the various layers and departments in your organization.
Ideas are welcomed from every level and team members feel comfortable, and even rewarded, both for sharing their opinions and for bringing forward information that can help the business better serve its customers.
And if everyone involved in your business is clear on its values, those values can drive the thinking and innovation that leads your organization to success.
Empowering future leaders to voice recommendations and their vision for the future not only develops alignment, but also provides the guidance and confidence they’ll need to be successful when they take the helm.
4. Develop an Organizational Performance Plan
Every healthy organization measures its success against a well-organized performance plan – and its associated metrics.
This also means having clearly defined responsibilities for all levels of leadership, including all owners, your governance board and the top management team.
A good organizational performance plan also will include clear metrics for talent management, innovation, and succession planning.
This includes how you recruit team members, how you mentor and develop them throughout their careers and how you retain them as productive and engaged team members who are appropriately compensated for their contributions.
5. Consider Your Impact – and Make it Positive
For many clients we’ve worked with over the years, a prosperous business isn’t the only end point.
Many family business owners also are committed to ensuring that their organizations act as a force for good within their communities.
In today’s business and social environment, it’s a powerful statement to divest from harmful production processes and to make a path for your business to engage in corporate social responsibility, sustainable development, and community philanthropy.
And it may be a must-have, not a nice-to-have.
Customers expect more from the companies they engage with than ever before when it comes to both sustainability and social responsibility. The same is true of employees, who want to work for organizations that are purpose-driven and led by a team that has the greater good in mind.
A healthy family business requires careful attention to balance, planning, culture, performance, and social impact.
Family businesses can create a strong foundation for success and avoid common pitfalls by focusing on these five essential elements.
By taking this approach to your family business, you can build a legacy that lasts for generations.
If you’d like some outside perspective on how to bring more balance to your family business, we invite you to set up a consultation with one of our family business advisors to discuss our family business consulting services. We’d love to help.