Co-authored by Ramia Marielle El Agamy, Editor-in-Chief, Tharawat Magazine
And it’s 2018. Whether it’s in our personal or professional lives, a new year brings with it the perfect opportunity to choose a new and better path. To break old limiting habits and create new ofones that can bring about personal, spiritual, or financial growth.
We’ve all had experience with adopting New Year’s resolutions that haven’t made it to Valentine’s Day. Whether it was going to the gym regularly, quitting smoking, or eating healthier, these self-promises probably seemed destined to fail from the start.
That’s why the key to making your 2018 resolutions a success is to focus not on denying yourself in your personal life, but rather bettering yourself in your professional life. Whether you are a founder, second generation family member, or someone soon to join the business, there are practices and habits you should adopt for the betterment of the family-owned business.
To help provide some focus and insight as to how you can make 2018 a year of improvement, here are our 10 new year’s resolutions for the family-owned business.
COMMUNICATION
Resolution #1 – Clearly Establish Your Culture and Values.
Family-owned businesses are different from all others in that they are not always driven solely by improving the bottom line. Of course, profitability is important to any business but with family businesses, there is often a culture that places genuine value on the other family members, their employees, and customers. As such, it is crucial to run business operations in a more humane and compassionate way that factors in their needs as well.
In other cases, family-business culture can mean more of an open-door policy at the top rather than a gated hierarchical approach that is found in many corporations. Whatever your unique business culture is, be sure to communicate it to all levels of your business. If everyone is not on the same page, the benefits of this business culture can be seriously hampered.
Resolution #2 – Work on Dysfunctional Communication
We often don’t realize how significantly a lack of communication negatively affects the business. Pride, ego, and hurt feelings can prevent family members from operating the business at a top level.
Mai El-Kinawi is an expert on communication within family businesses. She recently told Tharawat Magazine: “Good communication is the key to a healthy relationship. That applies to personal relationships, to business relationships, and especially the family business relationships. The most important and least used tool in communication is paraphrasing. Just repeat what you heard, more often than not you will realize that you misunderstood what you heard and it gives that opportunity to give the benefit of the doubt. Put yourself out there and say this is what I heard, is that what you meant? And then there’s no misunderstanding.”
GROWTH
Resolution #3 – Improve Personal Growth As A Means to Business Growth
It’s very easy for any of us to get stuck in one way of viewing the world. Our thinking and behaviour can become stale and predictable. As a result, the business trajectory can be limited. So make 2018 the year you get out of your comfort zone and embrace different ways of seeing the world.
One family business CEO who has adopted the philosophy with amazing results is chocolatier Gary Guittard who says, “I think it requires acceptance and understanding of yourself and listening to others. I think listening, and accepting your own shortcomings lead to knowing yourself. And when you know yourself, you’ll know how to make yourself a better person. And you’ll be more acceptant and more flexible, and less biased. All of the stuff that I think allows you to have a wider perspective in the way you deal with people, and ideas. It leads to a more creative approach to life.”
Resolution #4 – Look for Non-Traditional Business Opportunities
One of the important reasons for learning to see the world through a different lens is to enable yourself to spot new and potentially lucrative business opportunities. The business landscape is changing faster today than ever before. Just when we think we have solid footing, the earth opens up beneath us.
One of the best examples of a company that survived by constantly looking for new opportunities is Crane & Co. The company that was once dominating the paper and stationery industry found new skews as the world changed around them. Crane & Co. CEO Charlie Kittridge explained, “There used to be 90 paper mills in Massachusetts in the last century. And now there is one, outside of Crane. So, we have tried to build on our expertise and find relevancy in the marketplace. If you look to our past, you can see a variety of different products that we made. Ranging from carbon paper to graphing paper, stationery, ledger paper, and even men’s shirt collars. And then we went to more high-tech water filtration applications. And we actually have a product on the Mars Rover.”
GOVERNANCE
Resolution #5 – Create a Succession Plan
Building a successful family-owned business is one thing. Having it succeed from one generation to the next is something completely different. Too often, founders put all of their thought and effort into building the business and not enough into planning for the day when it is time to pass on the baton.
For many, it is difficult to look forward to the day they will no longer be in control of the organization they built with their own hands. For others, it is something they assume will happen naturally on its own.
Nothing could be further from the truth. If you do not have a succession plan in place, make this one of your top priorities in 2018. Cinthia Varela, CEO of AEF Peru explains why this is crucial, especially in the long run.
“I think what you see is there is success handing control from the first generation to the second generation and even third generation. But when you get to the fourth generation, the success rate is very low because they don’t have the correct succession process in place.”
Resolution #6 – Educate Family Members Who Are Not Yet Part of the Operation
Here is a simple, yet often inconvenient truth – not everyone in the family is cut out to be part of the family business. If someone enters the business operation with expectations that are not aligned with the business, it can cause more than family headaches and stress. It can negatively affect the financial prospects for the business.
If there are younger family members who will soon be going off to study and are thinking of one day joining the business, take the time now to bring them in and teach them about the business. Beyond basic business operations, educate them in the culture and values (remember Resolution #1?) of the company and what it means to be part of it.
This will give them either greater motivation to study hard and come back to be part of the family tradition and avoid a potential disaster down the road when it becomes apparent they are not a good fit for the business.
TECHNOLOGY / DIGITALIZATION
Resolution #7 – Create a Digitalization Strategy
Now that 2018 is upon us, it can no longer be said a digitalization strategy is something to look at later in the future. The future is now.
Even if you are in an industry where adopting technology or digitalization does not appear to be a priority for you, look a little closer. Every business can benefit from a well-conceived and executed digitalization strategy. Perhaps there is no greater example of this that with Antoine Leloup, CEO of Dress in the City. Dress in the City is a fashion/tech company that has in-person pop-up stores where customers can shop for second-hand clothing. What makes this venture unique is that once there, the transaction plays out exactly as it would online. There are no cashiers and no money exchanged in person.
“We did our first event, it was a proof of concept event, at the end of 2015. That was a pop-up store in a shopping mall. We took it to one of Europe’s leaders in shopping malls and they fell in love with the concept. Why? Because it’s not just a new and innovative commercial concept. For the shopping mall, it was a way to create a new service for the customer and to do some really big business which would entice people to come back to the shopping mall. We did modestly through September of last year and it’s really quite recent, since December 2016, that we are scaling up. We have 30 unique events planned for this year. One event lasts 10 days in a shopping mall and one event had 30,000 visitors in our pop-up store so it was highly effective.”
If an in-person second-hand clothing operation can thrive from a brilliant tech strategy, your business can too!
Resolution #8 – Be the Disruptor, Not the Disruptee
As technology rapidly changes all around us, new business opportunities and threats present themselves at a similar breakneck speed. One day you are Blockbuster sitting on the throne of your industry and before you know it, Netflix has usurped that throne and your business is essentially finished.
Make 2018 the year you proactively seek opportunities to use new technology to open new revenue streams that will bolster your business in the long term. Look for niches that are not being addressed by other businesses currently in those fields.
It’s been said that in sports, the best defense is a good offense. The same holds true in business. Become the disruptor in 2018.
KNOWLEDGE
Resolution #9 – Safeguard Institutional Knowledge
Many times, a family-owned business is the result of one founder who has built the operation almost single-handedly. For all of the success that has been achieved, this often leads to a core vulnerability in the organization. A significant amount of the institutional knowledge resides with the founder or with the generation currently at the wheel. In this scenario, could the business survive in case of unexpected events?
This year, make it a point to preserve and protect the crucial institutional knowledge within your operation. All trade secrets, special processes, or whatever may be unique to your business needs to be captured in either document or video format so it doesn’t get lost when founding members move on.
One great way to make sure key processes survive generations is to make them part of the onboarding process when new employees join the company.
Resolution #10 – Grow Your Knowledge Outside Your Comfort Zone
In running or working in a family-owned business it is easy to become an expert in that industry. It doesn’t take long to feel like you have PhD level understanding of the intricacies of your given field.
The other side of that coin, of course, is that it is easy to have a fairly narrow or limited worldview. We often aren’t learning new things or expanding our horizons beyond what is relevant to the business.
So, this year be sure to broaden your knowledge beyond your field or industry. Expose yourself to works of art and literature. Take up that new hobby that you’ve been toying with in your mind for years.
By broadening your horizons, you’ll be a more well-rounded world citizen. And in turn, who knows what that could mean for your business?
There really is only one way to find out.