The Advantages and Challenges of a Family Owned Business

Family Business account for over 80% of all US businesses, contribute 50% of our Gross National Product and provide half our workforce. However only about 10% of family businesses make it to the third generation due to the unique challenges family companies encounter.Starting a Venture with your Family…There are certain advantages to starting a family venture:- Initial costs and losses are easily shared.
- Later success benefits the family as a whole.
- Enables the family to be together.
- Family may trust each other more than outsiders.However, there are many challenges which come up during a start-up venture that need to be addressed:Tips for Spouses jointly running and starting a business:– Follow business rules; romance is for non-business hours.
– Clearly define each spouse’s role.
– Accentuate each other’s talents.
– Keep business and personal life separate- understand the inherent conflicts of interest.
– Set strong ground rules and understand you won’t always agree.
– Define your expectations specifically and clearly.
– Set aside family time.- Involve young family members in the business for fun, short tasks and jobs.
- Have a system for recognizing and rewarding hard work and accomplishments of family.
- Understand clearly what the business relationships of Family are.
- Have a solid Business Plan which clearly defines the company structure, responsibilities, roles, strategic direction and so forth.
- Clearly identify who is the lead entrepreneur.
- Identify the strengths and weaknesses of each family member.
- Understand each family person’s business experience and background.
- Establish how much money each family will contribute.
- Agree up front how equity will be divided.
- Honest and clear communication between family.
- Professional, business environment and structure.
- How and where non-family will be incorporated into the venture.If You Join an Early Stage Family Venture…Advantages for family persons joining a new family venture are numerous:- Family can help and are inexpensive during the development period.
- Family wants the opportunity to help the business as it benefits the family as a whole.
- Flexible hours, days and pay are attractive to family member initially, using minimum resources.
- The business brings family back together.
- Family members join the family venture because they are frustrated with their current work place and environment.Issues to consider for an early stage family Venture:- Largely interpersonal issues. Experience role reversals.
- Resentment can build if a family member isn’t adequately challenged and rewarded.
- Issues concerning power, rivalry and jealousy are common between family members.
- Take in consideration a family member’s personal interest, skills, experience and training when assigning areas of responsibility.
- Define, exactly, each family member’s area of responsibility.
- Define who each family member is accountable to, as well as, for.
- Determine compensation structures- salary, bonus and equity stakes.
- How will a disagreement be handled?
- What will be done if a family is not contributing?
- If a family member wants out, what is the buyout plan and continuation plan?
- Are you going to allow family members to be non-participating, passive investors in the business?Best Advice: Defining upfront the various rules, expectations and structure unique to a family business is vital for its success. These unique requirements need to be well developed and delineated in the Company Business Plan and continually discussed in periodic family meetings. This way, every family member feels they are vital and contributing to the overall strategic direction and future of the family venture.Joining a Family Company As a Mature Business…This can be the biggest challenge for a family member: Where do I fit in a Family Business which has been in operation for a period of time and/or for successive generations? Some characteristics and challenges to consider for a later stage/ mature family business:- Having a policy that everyone starts at the bottom and works his or her way up through the ranks no matter their experience level, can initially set back family members joining the existing enterprise. However, they will soon realize it is very important not to show favoritism between family members and non-family employees. This nips in the bud issues of favoritism, entitlement, jealousy and resentment.- Family members can sometimes be transient, interim or temporary employees to help during seasonal demand, a particularly tough business environment or during high growth periods. This phenomenon can increase spirit de corps, but it can also cause strife. Again, having family meetings to decide such matters and ensuring the majority is on board with bringing in temporary family help, is critically important.- Some family members may use the business as a stepping stone on a career path or starting their own venture. Planning for this potential loss and contingency should be part of every family business’s Management Plan. Also, establishing non-compete rules upfront and protecting the proprietary nature of the business if a family member moves on should also be part of the Company’s Planning Structure.- The issue of the family successor is huge in a mature family enterprise. How will a family business choose its next successor? Is there room for the next generation? What are the expansion options for family members? Is the Company growing enough to support new family blood? Does the current management structure and style permit the flexibility and latitude the next generation seeks? This all speaks to the importance of having well developed; family- contributed Business Planning in order to maintain successive-success for future generations. This phenomenon becomes more urgent and important in maturing family operations. We deal with this future outlook issue in subsequent section in detail, along with conflicts, limitations and issues faced by a family enterprise.Advantages a mature stage family business enjoys are numerous, but the following are common, and often, keys to success:- Each family member is contributing to the overall benefit of the entire family.
- Family members can enjoy making and reaching goals together,
- Be a member of a very special team which is very close knit.
- Everyone pitches in to do the hard work- getting things done, that “need doing”.
- Family teamwork translates into identifiable and quantifiable progress.
- A feeling among family that is “our business”. It is “what we do”. It is all about ownership and legacy.
- Special attitude shared by family members pushes them to work hard for the success of the business.
- Bringing in new life, new skills and added experience into the maturing business.
- Mature family companies often have and keep market advantage and competitive edge as new generations often ensure the company doesn’t stagnate.

Know Which Laws Come Under California Labor Law Posters?

California employers need to post labor law posters including CA minimum wage in addition to all federal and state regulations. To ensure compliance with the labor law posters mandates, employers must display both state and federal laws in a conspicuous place at every worksite. There are a number of firms that publish all-in-one labor law posters. These kinds of posters offer economical poster compliance solutions to employers. Some poster firms even offer year-round free updates for a small additional fee.California State Labor Law Requirements include OSHA, Payday Notice, Emergency Phone Number, Time Off for Voting, Discrimination and Harassment, Whistleblowers are Protected, Access to Medical Exposure Records, Family Rights Act, Unemployment Insurance, Unemployment Insurance Benefits, Minimum Wage, Workers’ Compensation, No Smoking Policy and Paid Disability Leave.Federal Labor Law Requirements include Equal Employment Opportunity is the Law which also includes NEW GINA in effect November 21, 2009, Federal Minimum Wage 2009, USERRA – Uniformed Services Employment and Reemployment Rights Act, OSHA – Job Safety & Health Protection, Employee Polygraph Protection Act, Family and Medical Leave Act, IRS Withholding Notice, Anti-Discrimination Notice and Payday Notice.Occupational Safety and Health Protection Law (CA Code of Regulations, Title 8, Section 340) requires California employers to ensure that the workplaces are free of health or safety hazards.Payday Notice (CA Labor Code 207) requires the employers to notify employees regarding their payday schedules.Emergency Phone Number (CA Code of Regulations, Title 8, Section 1512(e) is an essential poster that lists the emergency phone numbers required during injuries or accidents in the workplace.Time Off to Vote Notice implies that employees are entitled with the right to take time off to vote in case they are not able to do it outside their working hours.Discrimination and Harassment notice conveys the zero tolerance policy of California State on discrimination since discrimination at workplaces against employees or job candidates is a severe crime in California.Whistleblower Protection (CA Labor Code 1102.8 (a)) poster is meant to inform whistle blowers regarding their rights and protections. In case they have reasons to feel that these two areas are violated, they should contact the authorities over the phone numbers given in the notice.Access to Medical and Exposure Records (Cal/OSHA, 3204) requires employers to enable the employees with access to medical and exposure records.Family Rights Act Notice A & B grants employees the right to avail of up to 12 unpaid weeks under certain situations including pregnancy or when they need to attend to the medical needs of a family member reported with serious ailments impairing their ability to work. Under specific categories involving family members and military, they can avail of up to 26 unpaid weeks off.Unemployment Insurance and Benefits requires employers to display this notice since employees must gain access to this insurance or file a complaint. They are entitled to get unemployment if they happen to get unemployed due to no fault of their own.Minimum Wage (CA Labor Code 1183(d)) lets the employees know their rights regarding overtime and minimum wage payment rules.Workers Compensation Law (CA Labor Code 3550 (a)) is a notice that informs the workers that they can file a claim for any injuries or illnesses that happen while they are on the job.Further to these California labor law posters, the two other posters required are Smoking Policy (CA Labor Code 6404.5) and Paid Disability Leave California.

Managers Coaching in the Workplace

Workplace coaching has been for the reserve of executives or individuals within organisations. Now organisations realise that managers using coaching skills can provide direct performance and business benefits.More than 70% of organisations with any formal leadership development activities use coaching as an important part of that. The Chartered Institute of Personnel and Development (CIPD) states that line managers typically deliver 36% of the coaching to their reports, while HR and Training and Development specialists were delivering 30%.This suggests an expectation for line managers to deliver more coaching.I will start with defining what is coaching in the workplace, and what it is not. I will cover how it works as a development tool, the topic of the Manager as coach, their roles and responsibilities; the deliverables to the business and the pros and cons of delivering coaching.I will cover how a manager can coach, who they will coach, and different styles and to conclude the issues that it may raise, how they can be recognised and some solutions.How does it work?
Organisations realise they can improve the performance and motivation of their people through coaching. A coaching style of management is preferred to the traditional command and control approach.Coaching is a more a management style rather than a tool. Application of coaching has many examples; delegating, problem solving, team building, planning and reviewing.Coaching embraces 2 fundamental principles, that of awareness and responsibility. Huge potential lies within all of us. What blocks that unleashed potential? Restrictive structures and company practices, the lack of encouragement and opportunities offered, and management style of the company. The most common internal block is self belief. Building self awareness, responsibility and self belief is the goal of a coach.Awareness can be raised by focussed attention and by practice. It is the clear perception of the relevant facts and information. It helps in recognising when and how emotions or desires distort our own perception.When we accept, choose or take responsibility for our own thoughts and actions, our levels of commitment increase, and so does our performance. Performance is likely to improve if someone chooses to take action, rather than being told.Effective questioning in conversation best generates awareness and responsibility. Questions should be open beginning with words like what, when, how (much/many), and who. Why is discouraged as it suggests criticism. Questioning will follow the coachee’s train of thought. If they appear to be going way off track a simple interjection like “I notice we haven’t talked about”, helps bring things back on course.What should we ask, and in what sequence? Several coaching models exist. The most familiar is the (T) GROW model. The G is for Goal, setting the agenda for the session as well as the long term aspiration. The R is for reality, exploring the current situation. The O follows for options or courses of action. Finally W is for what is to be done, when, by whom (the way forward).Other coaching models exist, such at the SHOOTS model. Here they cover Seek to understand, Hone the goals, Objectives set, Options and action planning, Try it out, Success review. One further coaching model the “Coaching path”, is another.The Manager as Coach the pros & cons
Can a manager coach and do their own day job? With the demands placed on managers these days, adding one more task to their list of objectives in an ever demanding workplace.Organisations realise they can improve both the performance and motivation of their associates through coaching. Focussing on encouraging people to think for themselves, a coach provides support, challenge, feedback and guidance, but rarely answers.A survey conducted by the Chartered Institute of Personnel and Development (CIPD) suggests managers who have been trained in coaching can also self coach. While operational coaching carried out by line managers will help to improve performance, it is dedicated internal coaches who will bring about long-lasting behavioural change that can really add value.Dedicated internal coaches within an organisation must raise the question of value for money and cost effectiveness. My own observations of cost-cutting programmes, flatter organisations, and the need to demonstrate value for money leave little room for a coach to exist as a dedicated resource.There are some additional pros and cons for coaching a team From the perspective of the coach is a successor could be created, avoiding team members being “off the job” to develop skills, and could be cost effective. The downside to this is that they (the manager) feel their own job may be jeopardised, it can be time consuming, and giving people responsibility may encourage them to dispute the coach’s authority. The manager in coaching may develop a lack of confidence if the coaching experience does not go well.For the team the benefits are that they will be coached by someone who knows them and their development needs. Development is part of the job and is therefore directly relevant and useful, and it makes work more challenging and interesting. The downside could be if coaching isn’t taken seriously.Coaching may not always be appropriate. A manager may have to switch from a coaching role to a directing role and then back again. As long as this is explained to the team this should not cause an issue. If not then the behaviour can be seen as ambiguous.For the manager to be successful he needs to build rapport with the people he is coaching. Without this coaching will have limited benefits. The relationship will often be one to one, however in the case of a development or performance focus; the manager may have to report to a sponsor to give feedback. All parties will need to know this from the start.How can a Manager Coach?
Organisations need to decide how coaching will be deployed, who will do the training (internal/external) and how many managers are to be trained. This would usually be led by the HR function, supported by senior management. This could be built into the organisations objectives and targets. By the creation of a “coaching culture” coaching will be more readily accepted.Various coaching models are available for the manager as coach. The most common is (T)GROW. Used effectively it’s relatively simple to use (previously discussed). Regardless of which model the coach chooses to take, it will give them a repeatable model to use. One disadvantage of having many managers coaching in organisations is standardisation, a model will help.Assuming the manager has received coaching training, and is now armed with a repeatable model to follow, what next? There are several dimensions in the coaching relationship to consider. One is between the coach and the coachee (team or individual).A third dimension which is the manager to the organisation. This may mean reporting upwards on progress and developments of a coaching relationship.A manager can coach in various ways; coaching downwards, meaning coaching individuals who report directly. Coaching upwards, meaning the relatively unusual situation of coaching ones superior. This can be dangerous as a senior manager may ask for honest feedback, but does not want to hear the truth! I would advise extreme caution in this situation.Coaching sideways, meaning coaching colleagues peers or equals in the organisation. This occurs in different areas and can benefit the coach, coachee and the organisation with an exchange of views and knowledge. It allows challenging questions to be asked, which might not necessarily be raised if one had expert knowledge of the functional area.Team Coaching, is another dynamic where a manager can apply his coaching skills. For a team there are times when coaching intervention will be effective. These are the beginning, midpoint and ends. The beginning helps establish boundaries, identifies what to do regarding tasks and timings. This helps the group to have a good launch, and can significantly enhance member’s commitment to the team and the task. At the midpoint failures and successes can be shared, as well as experiences. Teams are able to review how they have worked together and will be open for some coaching intervention. The end of a task or performance should be time for lessons learnt for future project work.These 3 coaching interactions can be summarised as motivational in the beginning, consultative at the midpoint, and educational at the end. Evidence suggests that coaching a team in between these points in the cycle may have small beneficial effects.What issues does it raise?
There are three angles, the coach (manager) the coachee (individual and team) and the organisation.In all organisations politics have their place. It is important to remember that as a coach your role is non-judgemental. The manager needs to recognise when there is a conflict of interests and flag at the earliest opportunity. By finding themselves “in the middle”, this is potential for stress. Managers should be aware and take early action to avoid this situation.In commercial organisations, Return on Investment (ROI) or at least a clear measure of how coaching will impact the organisation is required. Few initiatives will be approved or deployed unless there is a clear measurement system. This is where a “coaching culture” may support the initiative. Being incorporated into the organisations missions, and values as well as one of the organisations corporate objectives will support success and adoption.Tracking success of coaching can pose a headache. Process tools & guidelines will help with this. For example specifying how long the coaching will last for, the assessment instruments and agreement as part of the contracting phase.One issues a manager may face when coaching in an organisation is that of standardisation. For example coaching models, how information is recorded, and how coaching sessions are conducted.A barrier to coaching is the perception the time to do it. Small companies and some owner managers are likely to complain that they don’t have the time to do everything. Smaller companies tend to have fewer dedicated resources. However it is accepted that some smaller businesses fail as a consequence because they had not adequately developed their key staff.Managers as coaches may well come across the international dimension and are an aspect that the manager as a coach needs to be aware of, even within a single organisation. This is particularly relevant in a more diverse workforce.Managers ought to understand how development impacts on people in the organisation. Managers need genuine interest; otherwise they may only pay lip service to the “coaching culture” or their organisations “strategy and vision”. In hostile environments (such as fast paced manufacturing) with aggressive attitudes and styles, change needs to happen quickly, and coaching is not automatically chosen.Autocratic environments where management “tell” their associates display language and behaviour in direct conflict to the coaching style. If managers have to “tell” their associates, they handle and remove any ambiguity in their role as coach. As long as this is explained to associates this should not cause an issue.If time is upmost then telling will be the fastest way. If the quality of the result is upmost, then coaching for high awareness and responsibility is likely to deliver. If maximising learning is upmost, coaching will optimise learning and retention.Coaching is a tool for people development. What if there is nowhere for the people to develop to? Organisations adopting flatter and leaner structures, particularly in the light of current economic situations there may leave little scope for individuals to move unless someone leaves. Succession planning helps here but people may have to “stand still” for some time.As a consequence of downsizing individuals find them with even higher workloads than before. Organisations typically shed jobs and restructure with little thought as to how the business processes and people are affected.Other organisational barriers to coaching success are lack of time, where the managers did not feel that they had the time; they want things done now so revert back to “command and control”.Fear of skills coaching used, for managers who can’t or won’t coach will oppose its use. They may feel weakness in their ability. Fear from the associate’s side their mangers are not confident in their role as coach, and some associates may be better than them. From the manager’s side there is the fear of the coach, that the coach can perform better than them and perceive it as a threat. There is the fear of risk, that if it does not bring the results that are expected (whether reasonable or not) that it would be a waste of money (externally provided), or resources and time (internally provided).Coaching is not a “catch all” for everything and everyone and the manager needs to recognise when coaching is not appropriate. As a guide but by no means exhaustive, when faced with the following situations, a manager may question if coaching is appropriate. If a criminal act is committed, serious health or emotional problems, stress, and substance abuse.Conclusion
Coaching has been recognised as adding value in the workplace, not only for high achievers and executives. Responsibility for delivering the coaching still rests largely with the line management team in an organisation ( 70%).Coaching is applied in a non-directional, non-judgemental way. Before improving performance awareness and responsibility need to be raised. Coaching models exist to aid the manager the most common being (T)GROW.Coaching may appear an additional task on f the manager’s already heavy workload. Done correctly, it allows the manager more time on core tasks such as long-term planning and objective setting. In developing staff it avoids them being “off the job” to develop skills. There are occasions where a manager will have to “tell” staff and needs to be handled by them appropriately.Coaching can be done at various levels within an organisation, team, individuals, peers, superiors or themselves. It is important for the manager to recognise when coaching is not appropriate and seek assistance.The manager needs to be aware of any conflicts of interest, particularly in the area of values and beliefs. A demonstrable measurement system will support the coaching approach. The standard of training and ongoing support to coaches is important to ensure that a coach does not have a negative effect on the workforce. Cultural and diversity dimension also needs to be considered.Coaching is clearly not a “catch all” or a sticking plaster for a manager to heal over their areas of responsibility. It is extremely powerful when used as a management style, supported by a strong and visible coaching culture within an organisation.The final question I would raise to any organisation not using, or considering using coaching is why would they not want to benefit from the overriding benefits that it can yield?