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Relationship Turnaround: One Family Business’ Success

April 29, 2013

passing the batonSmall to medium sized businesses fuel the economy.  Many are family-owned and run.  Recently, we’ve been hearing a lot of stories about these companies in various stages of transferring the business to the next generation.  The common thread through all of them is that the leaders bring history and a deeper level of intimacy to the boardroom, one that doesn’t often exist in non-familial relationships.  This means that emotions can run hot and high and sometimes interfere with focusing on the business.  Below is an example from Keith DeFreitas on how to avoid this problem by approaching things systematically.  This family took overpowering emotions out of business decisions and added them back in a positive way to their family relationships.

An entrepreneur, also known as dad, started his company in 1964.  He has since grown the company to 60 employees and around three million dollars in revenue.  Dad had a vision and was comfortable running the show as an active CEO.  Expanding his business beyond himself, he added his son as General Manager.  His daughter-in-law also joined the team in a role that was vital to customer satisfaction and revenue generation.  An area where results were not being met, in fact it was losing ten thousand dollars a month.  A steady leak this size could eventually sink the ship.

This isn’t a new problem and it has been addressed many times by many companies.  Although in this case, we have to add in the dynamics of family history, emotions and blame.  Dad blamed daughter-in-law for the losses and son in turn got angry with his dad for blaming his wife.  When I arrived to help dad’s organization I learned this was a multi-year problem.  One, they said, that could never be fixed.

I smiled as I enjoyed a flashback in my mind to 1995.  I could hear Michael Tatham Sr. saying ‘let’s talk about the power of process.’  I remembered how Boot Camp turned on the lights in my mind.  We were ‘as lost as a ball in high weeds’ until he showed us how working relationships change when the work changes.  Now I needed to ignite the same epiphany for dad.

I helped dad realize that he had good people, like his daughter-in-law, stuck in a bad process.  As long as the process remained broken, daughter-in-law could work harder and harder without success.  Berating the family would not solve the problem.  Only solving the performance problem would help.  So that is what we did, without taking the responsibility away from daughter-in-law.

Dad already knew the three familiar operational truths:

  1. Improve the process
  2. Train the people on the new process and their roles
  3. Enable the process with appropriate technology

They weren’t being focused on because of the relationship distractions.  He needed to learn what I call the unappreciated fourth truth in order to focus on the real issue.  A lesson I learned from Michael.

  1. Process improvements have the power to improve working relationships

The results were better than dad thought possible: The area started yielding happy customers and positive cash flow.  Daughter-in-law could showcase her abilities and reconciled with dad.  Son also reconciled with dad and family interactions became enjoyable both at work and home.  This was more than a financial turnaround.  We achieved a relationship turn around.