Larry Page, the Google founder, is quoted as saying he thinks Google should be more like a family. Well that will be one big family with the current employee count!
There are arguments both ways. A family will usually have a strong culture, a circle of trust, unwavering support for each other, willing to go the extra mile and a safe environment to be critical. You tolerate a lot from your family, applaud even if they sing off key, watch their childish paintings and admire them as if it is art. This is great but won’t necessarily help them to become the next Pavarotti or Andy Warhol.
Downsides of working with family members would be that some poorer performers are allowed to continue their work and that could demotivate employees, also emotions and situations that have nothing to do with your business could now impact decisions and sub-optimize the strategy.
We all know the famous Italian families that work together in their unofficial businesses highlighted in many movies and TV series but there are also major companies still run by families, Wal-Mart, Ford, Koch, Hyundai to name just a few. About one third of companies in the S&P 500 are family run or controlled and a good many outperform their peers.
According to a study by Texas A&M the reason behind the success is that family businesses have a longer term view on investment, are more stable and inspire more trust in their employees and gain more commitment from their employees.
So what does that mean for you and your management style. Should you create a family like culture in your company or department?
Inviting your staff for Thanksgiving and your birthday party may be taking it a bit too fare but let’s try to take advantage of the points that make family business successful while avoiding the pitfalls of working with family members.
The main points family owned and run businesses have in common that set them apart from non-family companies are:
- Being cost conscious, have a low level of debt
- Low employee turnover, retaining talent
- Small acquisitions and staying true to the core business
- Long term view on investment, accepting losses to gain a market
Nestlé and Johnson & Johnson are good examples of non-family run companies that have learned how to behave like a family and outperform other peer corporations, so it is possible.
Although the strategy and financial planning are topics for a general decision at board level, keeping the cost down and working with your team so you can help their performance, gain their trust and retain talent, should be something all managers at every level are working on every day.
Just don’t have your employees call you Uncle Bob or refer to your CEO as DAD.