Family Business Management Strategies


Uploaded by WellsFargoBusiness on 26.05.2009

Transcript:
If you own a family business, you know that it can be very rewarding and very challenging.
Running it takes a good plan, effective communication and solid execution. Hi, Im Nelson Davis,
and today on the Wells Fargo Business Insight Series were talking about strategies you can
implement to manage a family run business more effectively.
Joining us is Elly Valas, a family business consultant and the CEO of Denver-based Valas
Consulting Group. Elly, welcome. Im delighted to see you today.
Thanks for having me, Nelson.
Now, youve worked with so many businesses to create their strategic plans. What should
they take into consideration when planning the management and organization of their businesses?
Well, I think there are some real basic but very important questions that owners of family
businesses need to ask about hiring. And the first thing they need to ask is, if they have
a family member thats coming in, they have to say what are the skills that that family
member has. The second thing you have to do is you have to assess the needs of the job
that you have open. Then, once youve analyzed what the candidate has, what the job needs,
then you can figure out what do we have to do to perhaps educate this candidate so that
he or she can be successful in the role that she takes in the company.
What strategic plans should be in place for success?
There are three kinds of plans. One is theóit should be obvious, but maybe notóthe business
strategic plan. And Im talking a written business strategic plan, a written plan that has a
mission statement. What does the business do? The goals, how does the business define
success? Is success that we just make a dollar or is success that we make a difference? What
are the objectives? How are we going to plan? What actions are we going to take to reach
those goals?
So we have a business plan now. What other kind of plans are involved?
Need to have a family strategic plan. Id like to see all families develop a mission statement,
a mission statement that says as a family, this is what were going to do.
Business, family, any other kind of plan?
Participation plan.
I like the sound of that.
What do you have to do in order to be able to participate in the family business? Do
you need a college education? Do you need a trade school education? Do you need experience
outside? Do you need references from somebody that youve worked for as a teenager? What
do you have to do to be able to participate in the family business?
Very insightful, Elly. What are the unique challenges that family businesses have that
other businesses may not have to face?
Personnel challenges, hiring challenges, promotion challenges. What do you do about promoting,
say, a daughter or a nephew whos maybe been in the company two yearsó
Mm-hmm.
óover another child or another niece or nephew whos been there 10 or 12 years, when you realize
that boy, after two years, that ones got it; hes just got the stuff to be the next CEO?
Or what do you do when you have a really competent, really able family member who wants to join
at a time when, really, there are no openings, and maybe the company cant afford any kind?
So what else is there beyond those hiring challenges?
One of the big challenges is that both the business and the family depend on the same
pot of money, so that if the business isnt successful, youve got financial strains on
the family.
Yes.
But on the other hand, it works the other way, too, that the success feeds both the
business and the family.
Those are important challenges. Walk us through a few solutions to them.
Well, when it comes to the personnel issues, I think the big thing is treat the family
business as if it was arms length.
Mmm.
Treat that family member whos coming in who wants to be promoted or who needs a raise
as if he or she didnt belong to the family. And when it comes to the part about living
off the same pot of moneyó
Yes?
[Ellie Valas] óI think that comes to a basic business principle. Its profit, its growth,
its running your business like a business, not like a family piggybank.
It sounds like treating people with respect and integrity.
Absolutely.
You know, clear communication of strategy and values is key to a successful family business.
Thanks for your tips and advice, Elly. Appreciate it.
My pleasure, Nelson.
[Nelson Davis] And thank you for joining us for this segment of the Business Insight Series.
Now to learn more about how Wells Fargo Business Banking can help you, visit wellsfargo.com/biz.
In the meantime, we wish you continued success.