OPENNESS

 

In organisational theory, it is believed that open systems (ones that receive input from the environment) tend toward higher levels of organisation / energy while closed systems can only maintain or decrease in organisation / energy. In other words, the success of any organisation relies on its ability to create and sustain energy through openness and feedback. 

Here are three management structures guaranteed to create the all-important open system.

Develop a Leadership Team. 

As the leader/owner of a family business, you know what you know. That is the good news and the bad news. Once an organisation reaches 20 employees and/or RM30 million in revenue, it becomes virtually impossible to keep an ear to the ground, hand on the rudder, and head above water all on your own. It is time to enlist the perspectives of others in order to stay on top of all issues that arise.

To that end, take a look around your organisation and identify a select few outside of the family who can provide you with all vantage points on the business, including the ability to discuss “sensitive” topics that would remain underground should an issue involve a family member. Aside from genetics, diversity of thought, position, tenure, and strengths are essential components to building a team that will foster an “open system”. 

After identifying your leadership team, hold monthly meetings to report and stay current. Develop ground rules and a code of conduct to ensure expectations are clear.

Establish an Advisory Board. 

Every business, regardless of size, structure, or genetic makeup, needs both the motivation and objectivity that only an Advisory Board can provide. If the success of an organisation depends on a consistent exchange of information and feedback, then the establishment of an Advisory Board is crucial.

While you have your Leadership Team in place to bring diverse perspectives from within the company, you now need to engage members who can deliver viewpoints outside of your organisation’s peripheral vision. Advisory Boards not only provide well-timed reality checks, they can also increase accountability at all levels. When more than one family member is involved in the business, increased accountability can be invaluable in ensuring all parties are treating the business as a business and not a personal hobby or personal bank account.

As with developing your Leadership Team, aim to seek diversity within your Advisory Board. Involve those not only from your industry but from others as well. Also, try to place at least one member who has grown a company from your size to the next level. Their insights will prove invaluable to you!

Hold Family Meetings. 

The third component rests within the system itself - the family. After all, it is why the business exists in the first place and its importance should not be minimized.

As a family member, the long-term success of the business can be no more important to anyone than to you. As the saying goes, “Blood is thicker than water.” Which is great, of course, unless your family consists of one or more vampires hungry for a good old-fashioned bloodletting. After all, what family worth its salt does not like to take a stab or two at other family members?

As family members, you are cut from the same cloth and the germ of brilliance that was shared by the founding member(s) will reside in the next generation as well. That rich soil must be cultivated. For smaller companies, hold at least one family meeting a year where each member actively involved in the business is represented. For companies that employ many family members, hold this meeting but also form a ‘Family Council’ with decision-making power to sort through any issues that arise from those meetings.

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