Coaching Strategies in a Family Business

Profile Picture of Post's Author Mark Uhlenberg | Posted August 25, 2021

Sorting Through Additional Layers

To start off my post this month, I want to set the stage by sharing a few famous quotes about families. . .

“A happy family is but an earlier heaven.” – George Bernard Shaw

“The other night I ate at a real nice family restaurant. Every table had an argument going.”  — George Carlin

No matter which quote lands closer to home for you, if you’ve done work with family businesses you know there are additional layers of complexity and challenges that cannot be ignored (at least not for long). In my coaching career I’ve worked with many family-owned businesses. Some have been enormous enterprises, spanning multiple industries and locations, others more modest sized – all, however, came with their own special set of unique difficulties and possibilities. And all have required a very deliberate, planned approach.

The Systems Approach

Regardless of why I was invited to work with these businesses, my approach in helping them navigate through whatever was hanging them up was based on developing specific strategies in three key areas – business, family, and ownership. These areas are tightly interwoven and inextricably connected – think of them as a system. Effectively dealing with systems requires a systems approach. This simplified definition of “systems theory” helps shed light on why the systems approach fits so well:

“. . . a theory of interacting processes and the way they influence each other over time to permit the continuity of some larger whole. Systems act so as to continue. Systems change because their own balances are not optimal or because they are influenced by other systems.” Source: sciencedirect.com

There are rules that govern the behavior of a system. They include:

  • Any element within a system cannot be adjusted or manipulated individually without creating impact on the other areas of the system.
  • Getting entrenched in just one part of the system reduces control and impairs influence on the larger system and its parts.
  • “Fixing” one element or process within a system may screw up another element or process in the system!

Thinking in terms of systems is a must when coaching a family business and helping them work through the many opportunities and challenges that invariably present themselves.

Business Strategy

Historically, family businesses didn’t always focus on the business as a separate entity from the family. Family and business were more like one big ball of complexities. I think pulling the business aspect away from family so they are able to work on becoming more business-focused is necessary. Not separating them greatly hinders their ability to effectively address the roadblocks and difficult discussions all families find themselves facing at some point in the future. Two key inflection points for family businesses are generational shifts and transitions, and business failure in long term profitability. With commitment to maintaining a strong business focus, I’ve seen my clients grow exponentially around business strategy and management. You will make progress towards a more viable family business if your family chooses to dedicate strategic focus to these areas:

  • Goals/Milestones
  • Planning
  • Structure
  • Leadership
Questions to ask:
  • What are some of the biggest business challenges and opportunities you’ve faced over time?
  • What do you speculate are the greatest opportunities you’ll have in the next 5-10 years?
  • How will you position your family business to be successful? Will you focus on:
    • managing performance?
    • operational excellence and innovation?
    • organizing for success?
    • creating new alliances?
    • other?

Family Strategy

Some years back I had a powerful conversation with a coach colleague at a seminar during a break in speakers. I shared about my work with family businesses. The good, the bad, and the ugly were shared. I was all about systems and business. After she listened for a while, she said, “Mark, you know family IS a strategy.” The lights went on for me when I heard my colleague express it that way. If you have a strategy, then you have a plan and tactics in place. You start getting intentional. When family IS NOT a strategy in your business then you don’t focus on HOW family will work, operate, lead, and own the business.

If you have a strategy, then you have a plan and tactics in place.

Eric Flamholtz and Yvonne Randle wrote a book called “Building Family Business Champions.” I highly recommend it for any family in business and anyone working with family businesses. The key is that building a sustainable family business means the family is championing that to happen. AND even if you don’t have family ownership, BUT you have families working within your business…you have a family business. Below are the key focus areas that MUST be discussed by a family in business.

  • Relationships
  • Vision
  • Plan for Decisions
  • Transition
Questions to ask:
  • What are the biggest challenges of families that work together?
  • Will they be different in the future?
  • Do your family relationships enhance the success of the business? How?
  • How do you articulate the values of your family business and demonstrate them to everyone?

The key is that building a sustainable family business means the family is championing that to happen.

Ownership Strategy

Interestingly, most family businesses mix their family, daily operations, business decisions in one big meeting — and never distinguish the difference between management of operations and businesses from leading the business as an owner. Owners in family businesses often have several roles they play depending on the size and the amount of control some family members want to exert or maintain.

Ownership is a completely distinct domain that requires a different and longer view than getting the chores done today, or getting things shipped out of the warehouse door by end of day. The areas below are key focus areas that may not seem unique, but they are often not done adequately and at the right time. Notice that family really owns the vision, but owners need to bring a sense of values and commitment. This is where you begin to gain tremendous traction.

  • Manage Equity
  • Long Range Capital
  • Values
  • Commitments
Questions to ask:
  • What are the criteria for ownership in your family business?
  • How do you prepare and develop your next generation for ownership?
  • How do your business conversations differ from your ownership discussions? Your family discussions? Do they?
  • How do you address the following?
    • Equity and Capital Management
    • Long Range Planning
    • Setting Direction

My Lessons…

Perfecting a Systems Approach

It is necessary to focus on systems to gain long term traction with family members in business together. Unfortunately, relationships across/within the family and within generations have been and will always be the demise of viable and profitable family businesses. Regrettably the family is often permanently or irreparably harmed and divided because they failed to make “family a strategy.” If you love your family, you will do the hard things first. The time to start on these things is now. Get some help — families need outside facilitators who will say what needs to be said. Don’t work with someone who wants to be your friend. Find a coach or consultant who is willing to be fired for saying what needs to be said and will focus on:

  • Pulling family and business apart to work on each separately before putting them back together.
  • Building structure that keeps the family honest and reflects their true vision for the business.
  • Ensures that processes for management are intentionally defined and not left to evolve on their own.

Get some help — families need outside facilitators who will say what needs to be said.

Building a Strategic Leadership Blueprint for the Future

This is something we do with all of our clients, and it creates an immense amount of awareness for the shared future the family and key stakeholders want to achieve. However, the biggest thing it does is to get the family to align together. Alignment is vital to any successful business, but it is so critical to a family in business together.

  • Goals and vision for the future are evolving through every chapter of the business; they need constant attention.
  • Creating value through skilled communications will get you to about 80% of where you need to be.
  • Relationships need to be healthy and built upon commitment to each other as individuals and to your role in the business.

Alignment is vital to any successful business, but it is so critical to a family in business together.

Leadership Development

This is so big and broad — but every business needs leadership at every level and in every critical function. Not every family member wants to lead the business or has the capacity to lead. That doesn’t mean they are not an active member of the family or business if they don’t choose to lead. In fact, they may be an owner and not active in the day-to-day business at all. This just means that regardless of whether it’s a family member or not in a leadership role, the leadership capacity of the business will impact your family and business greatly.

  • “Family is a strategy” for business success requires strong leadership and guidance on exactly how family will “be” in business together.
  • Engagement of everyone in conversations of leadership is vital. It’s not just for one family clique to decide and announce. Decisions get made together.
  • You need to clearly define “commitment,” so that when you say what you will do there is accountability. Sad as it seems, accountability is lacking more in family-owned businesses than nonfamily ones.

Think About This…

I hope you got some fundamental insight into the intentional idea of “family as strategy.” There are great resources available to help any family business not just survive but thrive – I recommend you seek them out. Supporting and coaching families in business has been the most rewarding work I’ve ever done. GPS Dairy Consulting has resources and connections to help family businesses directly through consulting and even educational offers like the Leaders Forum every November.

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