Family businesses have thrived in America for many years. Consider the success of Wal-Mart, run by the Walton Family, or Ford Motors, run by the Ford family for over 100 years. At present there are roughly 5.5 million family owned businesses in the United States generating more than 50% of the GDP. So when people say it’s a family run business, you should take them seriously.
But what is the secret sauce behind successful family businesses? Does everyone have to agree on everything? Nope – people can have opposing views when it comes to marriage, favorite teams, climate change and even politics. However, they need to have a shared vision. Yet that’s only part of the secret sauce. Good communication is another key ingredient, but I think perhaps the most significant ingredient when it comes to a successful family business is self -determination.
Self-determination. It is the process by which someone controls their own destiny. In a family business, you do just that by providing everyone with a larger stake in the business. If each person has the opportunity to be both part of the family unit while developing as an individual, through self-determination, the business and the individuals can both excel. This is not always easy in a working environment, especially under an autocratic leadership style, which is fairly common among entrepreneurs who run family businesses. Such entrepreneurs do not let the family members/employees flex their muscles, offer input or display their abilities, which explains why second and third generations often elect not to stay in the family business.
I find that in our business, along with my brother, who is family, we have a number of employees that feel like we are one big family. Rather than being an authoritarian, I make suggestions as to how they might do something and ask the team for ideas. It helps them learn while also promoting their sense of inclusion. And, in fact, many times the craftsmen have great suggestions because they know how to do things in a better way than I do. Family businesses, in which everyone wants to excel as a family, and as individuals, will have more people committed to reaching that shared vision.
It’s not unlike how it works in your family life. As you encourage your children to seek out answers, find solutions and make decisions, you will feel a sense of pride in their accomplishments, as will they. The same holds true in a family business…or business in which your employees have a sense of family.
And, like many family run businesses, you can also benefit from increased profits.