man • age • ment n. the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively.
One of the key issues for family enterprises, no matter where they are in their life cycle, is building and managing the business of the family business. Professionalizing the family business – transitioning from an informal management style to a more formal one, isn’t easy. But it’s an important undertaking for any family business interested in sustainable growth, and should also be considered a critical, foundational element of generational transitions.
Family business management involves multiple dimensions, including the development of structures and processes to enhance business operations; increasing sophistication in dealing with strategic, customer, financial and other business issues; and developing skills and perspectives to more effectively manage family relations. Because of the complexities, professionalization should be approached as an evolutionary process best accomplished over a period of time.
Some key family business management issues include:
- Developing a dynamic business model
- Choosing the best growth strategies
- Creating high-performing executive teams
- Reorganizing corporate structure
- Enhancing functional areas such as accounting and finance, IT, human resources and administration
- Identifying and developing new leaders
- Implementing family business compensation systems
- Perpetuating family values
- Utilizing directors and outside advisors