Family Business Management Policy

• It is necessary to decide how the family business will be managed by the family members. Answering the following questions may help:
  • Will the business be managed by the owners or their children and family members throughout its life or the management may be given to outsiders?
  • Will the family remain in power and control of management throughout the business’ life or it may be shared with non-family professional executives?
  • Will only the family member managers always take all the key decisions in the business or the professional managers will also be involved?
  • How will the business involve outsider professionals in senior or top positions?
  • In which areas or functions the outsiders will be allowed to lead?
  • Till which extent will they be given independent responsibilities and authorities?
  • Will outsiders always remain under the family members, regardless of their seniority?
• It is advisable that the ownership and management of the business are kept separate, if the company has grown to a size and scale where only the family members can’t manage it successfully.
• If the business has to continue to grow, it will require different types of talent and abilities. These talents and skills may not be always available within the family when it is required.
• It is always advisable for the founder(s) to be open-minded about appointing the right people in their business team, regardless whether they are from the family or not. The interest of the business should be given the highest priority which selecting team members for the business.
• If we insist upon depending only on the family members and relatives to hold the responsible and powerful positions in the company, we will not be able to attract the right talent which may be available in outsiders. This may always keep the potential and the size of the business limited.
• In today’s globalized economy, right competencies and talent can help drive businesses to scale newer heights. If we fail to identify and hire the right talent, we won’t be able to grow the business rapidly or to its fullest potential.
• So, it is very important to welcome outsider talented individuals as the key members of our business team on professional basis, if the business situation so warrants. These professionals should be given independence to function within their domain or functional area if such freedom is needed and if they qualify for and deserve the same.
• Remember, the independence will need to be given not only in responsibilities, but also in authorities.
• We should encourage the promotion of merit in the company. If the family members are competent enough to take the business to its highest potential, they must be given an opportunity to lead the business. That decision should be based on merit and not on relationships.
• Any progressive individuals having competencies to work at senior levels will expect to see their personal growth prospects in our company. If they realize that in a family owned company their growth will always be limited by the presence of some family member and that, too, not by merit, no good people would continue in our company for a long time.

(Expert advice to GROW your business wherever you are, whenever you want.

SMEBusinessGuide.com… https://goo.gl/E3pfoQ)

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