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Know the roles played: the parent vs. boss dilemma in family businesses

May 02, 2017 11:25AM ● Published by Neighbors Magazines

by Scott Lebin

The small family owned business has been the bedrock of Geneva’s unique downtown for decades.  Both small shops and large businesses in Geneva have had generations of family work or continue the tradition of their founders in the perpetuation of the business.  The successful founders have often used some effective guiding principles in incorporating younger generations into their businesses.

One of the methods of training a new family member entering a business, regardless of educational achievements, was requiring the individual to start at the bottom.  The reason for this was very sound.  If a family member were going to ever understand the business and potentially someday run the enterprise, it was necessary that a family member knew all aspects of the business.  The individual must learn to stand in the shoes of all employees to experience their contributions, their needs, and their frustrations with different aspects of the business operation.

Thus, the new or younger family members working in the business would help to stock shelves, clean bathrooms, unload merchandise, and work with customers.  These tasks were not meant to be punitive assignments but were essential to the worker’s understanding the importance of all tasks needed to form a successful business.  Successful owners knew that the most important element of any business was the customer and that all aspects of the business that made direct contact with the customer had to be a positive experience for the customer.

The business owner had to wear two hats.  The book Hats Off to You by Ernest A Doud, Jr. and Lee Hauser, Ph.D. discuss the dual roles played by family business owners.  This book discusses the dilemma faced by family businesses where the owner must decide when he is acting as an officer or owner of the business and when he/she is acting as father or mother.  The roles often require delineation and must be clearly identified by the type of communication that is needed.

Those of us who have a family understand this because there are times when we are required to fill various roles.  The head of the house, whether father or mother, is the chief executive officer.  One is often the Chief Financial Officer, CFO, while the other acts as the Chief Executive Officer, CEO.   If you have ever said, “I don’t care what other people are doing, in this family we act this way,” you are filling the role of the CEO.  If you have ever said, “You need to pay for that out of your allowance, so save up enough and you can have it” you are acting as the CFO. 

If you have ever said, “Just give me a hug, you’ll be fine” you are acting as a mother or father.  So even in the family unit we clearly play different organizational roles.  We need to know what role we are playing so that we have clarity about what we are trying to accomplish.

In the same way that the family brings understanding to how small business owners act, we need to understand that there are many elements that go into running a successful small business.  One person or one family member often must play many different business roles.  As a result, the more roles one individual plays, the more complex it is to maintain relationships.  The key is to make it clear that the emotional side of the relations involving love, empathy, and joy can’t always be the focus of the communication although those aspects should never be lost from the relationship. 

Successful businesses that last generations, have learned to clarify, identify, and define the different roles needed to run the business.  A successful family who will hopefully last generations as a functioning and effective family group could often benefit from defining roles in the same way that the successful businesses in Geneva has succeeded through the passing of the businesses from one generation to the next.

Investment Adviser Representative of and securities and investment advisory services offered through Signator Investors, Inc. Member FINRA, SIPC, and an SEC Registered Investment Adviser. Lebin Financial Planning is independent of Signator Investors, Inc. 199-20170405-362817

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