There’s a lot of criticism these days about the vagaries and personal politics involved with family businesses. As the chief financial officer of a 74-employee, second-generation family business, though, I’d say that any business would do well to adopt some of the underlying principles of a well-run family business.
My older brother and I took over Noble Industries Inc., a camera, film-processing, and gift-shop chain near Boston, when our parents retired in 1993. I replaced our mother as finance chief, while my brother serves a dual role as chief executive officer and as a buyer for the 43-year-old company. Our sister is also a buyer, and our other brother works in shipping, receiving, and maintenance.
Certainly we have our squabbles. But in some respects, and without planning it that way, family- business practices bear a strong resemblance to current theories about the values and practices that define a successful business.
Respect and trust. First among these values is our abiding respect and trust for one another– a critical component of any relationship between a CFO and his chief executive. With this understanding always in the background, we can address problems directly and introduce criticism into a conversation easily. For example, if inventories get out of line because of poor buying decisions by my brother or sister, I have no problem asking, “What were you thinking?” And they have no problem explaining what went wrong. As any management consultant will tell you, candor and mutual confidence among key executives help resolve business problems efficiently.
Open-door management. A good time to meet with the people you work with directly, I believe, is early and often. As siblings, the members of my family walk into each other’s offices informally and as needed–a policy that carries over to nonfamily employees as well. Although our open-door policy can sometimes mean explaining a decision when you would rather be attending to something else, overall it makes for a better-informed, more- productive workforce.
Strong corporate culture. By nature, family businesses nurture the cohesive corporate cultures that other businesses must work hard to create and maintain. Of course, in a dysfunctional family this spells disaster, but in a solid family enterprise, the advantages are tremendous.
We’re especially careful to hire people whose style, as well as skills, mesh with others’. We need much more diversity to fill our workforce than just our family can provide, of course. But by carefully identifying nonfamily staffers and treating them like family, we can “extend” the family. The third buyer in our three-buyer organization, for example, was chosen because she works so well with my brother and sister–she complements their strengths yet shares their values.
Shared Vision. The foundation for a strong corporate culture is, of course, a shared vision. My CEO-brother and I are constantly revising the business plan we first wrote when we took over the business. It’s not a great work of literature, for sure, but it is our agreed-upon direction, and we share it widely with employees. And the fact that this vision is so deeply rooted in our corporate history and our corporate history is so intimately known, means that the vision translates into day-to-day performance as well.
Strong customer and vendor relationships. Many books have been written recently about the importance of focusing on the customer and building a strong supply chain. A well-run family business does these things intuitively, treating vendors and customers with the warmth and courtesy they would show family friends. Many, in fact, are remembered as the folks mom and dad signed up way back when.
Parts of this sketchy model seem to be taking root at nonfamily companies–including that giant among our film-developing competitors, Wal-Mart. Employees at Wal-Mart stores make a special point of welcoming shoppers when they walk in the door, for example, as the Noble family has always done, and as I can only imagine Sam Walton once did himself.