Family enterprises face a series of threats to sustainability, which makes it crucial to have an effective organization. The threats include an understandable inclination to place family members in high-level positions regardless of their qualifications, the tendency to become overconfident when performance is strong, the failure to be forward-looking at all times, and the likelihood that family considerations will be allowed to compromise key business decisions.
A commitment to implementing the following steps can help every family enterprise develop a strong foundation for sustainability:
1.
Human capital must be continuously enhanced through professional training. Every family member, including the CEO, must be required to make a strong commitment
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perhaps a minimum of 40 hours per year in a classroom environment.
2.
Organizational structures must be put in place: clear job descriptions; regular reviews; well-defined objectives, both individually and organizationally; consistent accountability; and the regular communications needed to ensure that all employees understand both the company's challenges and its progress.
3.
A constructive culture must be created that fosters foresight and openness to change, supports individual career development and growth opportunities, provides compensation and bonuses that are aligned with corporate goals, ensures the ability to be heard and fosters a belief that management decisions support corporate sustainability and individual job security.
4.
An effective, forward-looking planning process must be established. At least one family member should be tasked with tracking significant industry and economic trends.
5.
The family must respond proactively when performance lags or serious threats to sustainability arise.
6.
The family must be able to make collaborative decisions, with all parties given a real opportunity to contribute to key discussions. In many cases, the use of a trained family clinician to facilitate these conversations should be strongly considered.
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