What is at the center of healthy family and privately owned businesses?

 

A balance of three distinct business system dynamics

Ownership/Governance System The business must analyze its mission and goals, legal form, distribution of ownership, and the feasibility of forming an outside board of directors. The business must ensure that it has:  Clear mission and goals Functional board of directors with outsiders on it Sound succession plan for transfer of ownership over the generation

 

Business System

The business must analyze its mission, strategy, structure, technology, culture, and its reward and information systems. Realizations must include:

• Process (communication, decision-making)
• Knowledge developed and mobilized as collective intelligence
• Knowledge used to adapt to changing environment and produce a sustainable, competitive advantage for the business
• Decision making based on knowledge and expertise
• Organizational learning that develops new competencies and effective behaviors
• Responsibility spread throughout the company/family
• Succession planning done early 

 

Family System:

The business must analyze its roles and relationships, cultural patterns/values, decision making, and communication and conflict management. The business must work to ensure the following:

• Family has the ability to resolve conflicts and make decisions with mutual support and trust
• Boundaries between work and family are appropriate and respected
• Knowledge is used wisely and isn’t blocked by unresolved relationship problems
• Communications are open and clear
• Individuals are flexible and able to use advisors wisely
• Family has clear goals and navigates toward them with good direction and leadership
• Transitions are managed and marked by rituals
• Intergenerational boundaries are appropriate and respected