Common Traits To Be Found In Successful Family Firms

Here are six characteristics of a solid, successful family owned or other closely held company. If you see your own company reflected in all of them, be proud of your achievements. If you see your company in only a few – or none – of these characteristics, then you have some important goals to work toward.

1 The solid, successful company capitalizes on its strengths and acknowledges its limitations. It flexes its strong competitive muscles of technical knowledge, efficient processes, employee loyalty, a precise pricing formula and family interest and support.

But the company also knows the limits of its strength and works within them. It does three things well but not the fourth. It covers one region effectively but not two.

2 The company welcomes individuality, promotes organizational and family cohesiveness, and practices transparency and integrity in all its internal and external dealings. This is characteristic of a company that’s grounded in, and powered by, well articulated personal, family and business values.

3 The company rewards employees on the basis of merit and performance, not relationships. Run a business as a business and a charity as a charity, and keep the two entities, with their two distinct purposes, separate.

A business should strive to meet the needs of those who benefit from ownership, but it should never be sacrificed to those needs. That includes insisting that every employee, regardless of the family name, pull his or own weight.

4 The company clearly describes jobs and defines responsibilities and requires accountability from each person at every level. There’s zero tolerance for featherbedding or for a 50 percent effort that expects a 100 percent salary. This company grows and thrives because mature, responsible people work together, each contributing ability and commitment, to achieve shared goals. There are written policies on business behavior and unpleasant consequences for misbehavior.

5 The company is a satisfying place to work for owners and employees. The hours may be long and the jobs may be demanding, but there’s a team spirit that keeps everyone pulling in the same direction. Credit is given where credit is due.

6 The company is able and willing to change to meet changes in the marketplace and in family circumstances. Changing in anticipation of marketplace and family changes produces an even greater advantage, of course. But even reactive change is better than sitting with eyes shut and ears covered.

Solid, successful family owned or other closely held companies are led by people who keep up with customer and industry trends, work to improve their own skills and support employees’ professional development. They take their responsibilities seriously, they deal ethically, and they love what they do.

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