Everyone is entitled to privacy. The same goes for juristic entities, like a business.
Unlike the general public, shareholders are entitled to know an awful lot of sensitive stuff about their business: financial records, major deals, trade secrets…
And that’s where things get fuzzy in family businesses. Just like your grandparent’s home is always open to you and your cousins, most family businesses let anyone in the family through the front door. Sometimes literally, sometimes metaphorically.
Although leaving all your doors open exposes the business to meddling by family members who have no direct stake in the business, being too secretive can starve the business of vital support and cohesion. Keeping the next generation locked out makes it harder to bring them in when it’s their turn at the helm.
But don’t be haphazard about your communications. Poor comms is one of the biggest reasons family businesses disintegrate or fail to pass to the next generation.
Effective comms builds that most valued intangible asset in any family business: trusted relationships. Family businesses can build social capital among the family that a regular business can never achieve.
Being in a family business doesn’t remove your duty to clarify your communication policies. My rule of thumb is that it’s OK to be informal when the business is small and the family members in the business are all from the same household. As soon as family in the business spans more than one home, it’s time to formalise how communication happens.
Look at the different types of information, job functions, your channels – meetings, email, grapevine etc. – and technology, then decide:
- What will you say?
- Who is allowed to know?
- What won’t you say?
A family business is like a Venn diagram with 2 overlapping circles: one for the business and the other for family. People in the family circle who aren’t in the overlap should be excluded from the “need to know” audience.
But they’re also not your regular Joe Public. They deserve their own PR campaign.
If you want to build a business that provides for your family, keep the family on your side.
(Image credit: Moula)