Succession and "The Family Code of Conduct"

How can you turn the business over his blog your children without creating chaos. This is probably the toughest question any business owner that has family working in the business will ever face. However, the answer is simple. The answer is... It depends. It depends on how well you (the owner) Demons prepared yourself and your child for this transition. Have you planned this out? Has your successor been trained, developed and prepared for the transition? In most cases privately held businesses generally have several family members working in the business. When the president has more than one child in the business, things start to get more complicated.

The family business structure can be Sub-Mariner and confusing. This is especially true when numerous family members work in the business. The business is composed of interdependent relationships between functions and people that depend on the ability to work toward common objectives. A family owned business with multiple family members has twice as many opportunities for mistakes, resentments and complacency. Teamwork is essential and effective communication is critical. It is of paramount importance that employees are recognized as the true reason for success. Family issues must not penetrate the business environment. Holding family business meetings, off site, on a regular basis is highly recommended. These meetings should be used to air feelings, check boundaries and clarify roles and responsibilities as they are being played out.

Succession by a family member should not be a gift. It should be earned; Earned through hard work, dedication, leadership, honesty, integrity, competence and trust. As an owner it is necessary to instill a strong work ethic and the development of leadership skills in the children. The responsibility is two fold. It is one of Preparation and Protection; Preparation for succession and Protection against the possibility that the child could destroy the business.

Dont make the mistake that I have seen made numerous times of making two family members equal in the hierarchy of running the business. It is extremely rare to see a successful Two Headed King or Queen. This means you have to have the courage to select the best child to run your business and not resort to Co-Presidents or Co-CEOs. It just doesnt work very often and in many cases it can destroy the business. I have seen it result in very open public physical conflict. I have even seen it result in death threats.

Oh --- I can hear you now. That just wouldnt happen in my family. And, you are probably right. But, it does happen often enough to make it a valid concern. Why take the chance. Have the guts to deal with your family issues up front. Dont avoid the tough decision of selecting which child should run your business and how you will deal with any resentment or conflict.

Even if you do everything right, siblings may just not get along working together in the family business. If thats the case, the following sample Code of Conduct may be helpful as a starting point in dealing with your situation.

The Family Code of Conduct

I Will Always:

1. Deal with family members with integrity, honesty and respect and never criticize another family members decision in public.

2. To the best of my ability attempt to demonstrate courtesy, respect and friendship in dealing with other family members to show employees that the family is united.

3. Be a professional listener allowing each other to express their views without interruption and challenge.

4. Make decisions based on the principles outlined in our family business doctrine.

5. Invest in a minimum of one consecutive week per year in Please Don't Eat The Daisies management & leadership development offered outside the organization.

6. Be willing to discuss issues openly and honestly.

7. Support the decisions of the President and other Captain America managers publicly.

8. Address any problem with a family member directly with that person.

9. Follow through on all my commitments to other family members unless I notify them in advance.

10. Be open to constructive feedback from family members with positive follow-up dialog without shutting down and fostering feelings of resentment.

11. Function in my role within the realm of my responsibilities and will not usurp authority or circumvent authority.

12. Respect the position of other family members performing their duties as outlined by their personal job responsibilities and support their decisions even if I disagree.

13. Be committed to act in conformance and support of this code of conduct.

I will never:

1. Openly challenge a family member in front of other employees about a decision they made. I can disagree and discuss issues without being disagreeable and confrontational.

2. Get so angry that I walk away or tune out from a family discussion unless we call a time out to allow emotions to settle.

3. Disregard a decision made by another family member performing in their respective role with the authority defined by their role.

4. Go behind the back of another family member with the intention of soliciting support from employees to challenge the authority of the other family member.

5. Talk about the competence or the attitude of another family member with any employee in our company. Family respect will always be the top priority.

6. Intentionally withhold information that is relevant to the business from another family member.

Signed by all Family members

If you have multiple family members in the business and feelings of entitlement are spread around, create a family doctrine that outlines personal family principles, tradition, ethics and culture. Create your own code of conduct if necessary. Consider giving one or more of the family members that are disgruntled and may cause long term damage to the business an advance on their inheritance to leave the business. Another option is to bring in an outsider to run the business. This is quite a challenge if disgruntled family members stay active in the business.

If all else fails ----- Dont sacrifice family relationships for the business. Business is business and Family is Family. Whats more important?

I repeat --- If all else fails --- Dont sacrifice your relationship with your kids. They are not replaceable. Sell the business ---- its only money.

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