Observations
When left to fester: issues become problems; problems become tensions, and tensions become conflicts. Inadequate attention to issues, as a result of inadequate problem-solving systems and skills, are a common cause of conflict in family businesses and in the business families that lie behind them.
Families may be: (a) inclusively engaged as collaborative problem-solvers; (b) reliant on leaders / key individuals to deal with most of their significant problems; (c) unable to make any choice at all, since one individual (variously called “Patriarch”, “Matriarch”, “Tyrant” or “Dictator”) wields all the power, or (d) unwilling or unable to deal with some, or many of their problems, at all.
- Organised and inclusive business families develop, adopt and implement problem-solving systems. They also teach, use and respect the skills required to solve problems and that help to make their systems work well, for them. They deal with lots of issues, but seldom suffer serious conflicts.
- Strongly and wisely led family businesses, and the families behind them, develop, adopt and implement reliable systems and processes, and train their people to use them for effective problem-solving. Their systems usually distribute responsibility for problem-solving to appropriate individuals, throughout the business and the family.
The business leader, usually the Managing Director or CEO, is ultimately responsible for all decisions made. However, the system requires most problem-solving to be handled by others – so business continuity and family succession are assured. Then, if the current leader is abducted by aliens (much less messy than being run over by the proverbial “bus”) there are systems and people in place who can step up and take over.
These businesses and families also have to deal with lots of issues, but they also seldom suffer serious conflicts.
- Dependent and subservient families don’t develop appropriate problem-solving systems, or individual problem-solving skills, because the one or few individuals doing the heavy lifting don’t want to be controlled by formal systems, nor do they feel they need, or value, anybody else’s support. They tend to prevent challenges to their pre-eminence by excluding others from any significant problem-solving.
Ironically, that may not stop them blaming others when things go wrong.
And it may be great for the family business and the family, at least for as long as the leader has their marbles, but it leaves them vulnerable when the self-appointed hero can no longer perform. Since they have no, or inadequate systems, and nobody has been trained to succeed the leader, as chief problem-solver, neither the family business, nor the family, will have effective people or systems to rely on in their time of trouble. They’ll be left exposed and vulnerable, at a time of maximum uncertainty.
These businesses and families often suffer serious, and frequently fatal, conflicts.
- Businesses and families that muddle through without having any effective problem-solving people, systems or skills tend to have a short shelf life. “Hope is not a Strategy” and few, if any businesses that aren’t good at solving problems last for long. The same goes for families, which are also complex systems. They tend to just split apart as the next generation grows up.
Put a family into a business to create a family business and problems get even more complicated – with increased risks for the family and the business.
Muddler businesses, and the families behind them, seldom last out even a single generation. They either fold or implode as a result of their ineptitude, or from their conflicts, or both.
Excellent problem-solving abilities are an essential attribute of a good leader. Lack of competent problem solvers in a following generation, whether caused by genetics, parenting, or as a consequence of decisions made or avoided, creates a major challenge for succession planning. If there’s a good enough individual in the next generation to develop, a serious investment in personal coaching is probably required, along with and enough time to do it. To avoid needing to sell the business, they may need to appoint a non-family CEO, either on a transitional, or permanent, basis.
Solution
All complex systems, including families, businesses and family businesses, are constantly engaged in solving problems to ensure their basic survival, and to enable them to thrive.
Ultimately, people solve problems, either directly, indirectly, or by using tools. The sooner a problem is identified and resolved, the less opportunity it has to grow into a tension or conflict. Ipso facto, better problem-solving skills reduce loss and damage on a day-to-day basis, increase efficiency, and improve profitability.
Despite the best possible planning, people, training and systems, problems can and will arise in almost every area of operation. So it makes sense to train all staff to be problem-solvers, in addition to teaching relevant technical and practical skills, to create an organisation-wide, “can-do” culture. Culture comes from the top, so leaders and managers should model problem-solving mind-sets at all times, and support a culture of accountability, rather than a culture of blame.
Specifically:
- Create or enhance existing Business Plans, including Succession Plans, to identify key business activities, and the critical business functions that support them.
- Create detailed narrative job descriptions to define roles, responsibilities and authority levels for key individuals, across the organisation. Use KPIs (key performance indicators) to enable meaningful measurement of individual performance, including effectiveness of problem-solving, in each role.
- Measure individual performance quantitatively, by assessing actual results achieved against targets and budgets; measure performance qualitatively, through 360 degree reviews that ask other staff how well an individual has performed in certain areas of responsibility. A problem-solving staff member, supervisor, team leader, manager or business leader is usually admired and supported by their co-workers and staff.
Providing projects for collaboration within families (eg: family projects, philanthropy, investing etc) presents great opportunities for family members to work with each other, and across generations, on tasks that require collaboration, analysis, problem-solving and various other skills. A family can use such stratagems to train and assess nextgen members – to both increase their skill levels and to assess their attitudes and abilities. All of this helps to ascertain what their potential roles could be in the family, and / or in its business, in the future.