As someone who grew up in a family business, lives in a family business, and has worked as the senior HR director for two other family businesses, I feel qualified to offer a few pointers on some of the challenges of running a family business.

My main advice for anyone who wants to start or grow a family business is to always treat it as a business, not as the family!

Lois A. Krause, MBA, SPHR, SHRM, SCP
Lois A. Krause, MBA, SPHR, SHRM, SCP

What do I mean by that?

  1. Institute best practices and procedures for hiring, training, etc., that would be appropriate for any business and apply them to family members and nonfamily members alike. Be sure everyone in an executive or managerial role understands these practices and procedures.

Be careful when assigning managerial roles; don't make the mistake of giving a family member an area of the business to manage and then change your mind about it the next day. Be sure the person has the credentials to do the job, and then let him or her do it. (You wouldn't hire a nonfamily member to do a job one day and take it away the next, so don't do it to family members.)

  1. Create an atmosphere of open communication with all employees. (Of course, you'll need to keep some information confidential.)
  2. Keep family squabbles out of the workplace.
  3. Make sure the family members in the business are actually interested in being there. If they are, ensure that they have the right education and skills, or point them to educational or professional development opportunities to help them get those skills.
  4. Times change and markets change, so make sure you allow family members in the business to contribute in any area they happen to have expertise in.
  5. Make sure you have family time apart from the business. You'll be better able to keep the business end of things in perspective.

If you struggle with any one of these six points, you can call on outside advisers and other resources for help, including CBIA and several colleges in the area that have classes on family business management. Some advisers and classes offer guidance in financial matters, whereas my expertise leans more towards the organizational development and human resources side.


About the author: Lois A. Krause, MBA, SPHR, SHRM, SCP, is a human resources consultant with KardasLarson LLC. She has special expertise in labor law management and works with senior business leaders (many of whom run family businesses) to minimize their exposure to liability and enable them to grow their organizations.

For additional insights on working with multiple generations, implementing new ideas for growth, minimizing family conflict in the workplace, hiring family members, and transitioning a business to the next generation, check out the webinar on family business success recently recorded by Lois and her KardasLarson colleague Leesa Shipani.