My wife, Joy, and I were enjoying a pleasant dinner out when something in our conversation reminded me of an issue that needed our attention back at the office. I mentioned it to her. She scowled and said, “I’m not working now.” With my sincere apology we rescued our evening together. My miscue of inadvertently mixing business with pleasure was a reminder of how important it is to have clear boundaries about what is appropriate and what is not appropriate when you are in a family-owned business.
In a way, it’s like baseball. Here in the Twin Cities, the Minnesota Twins play over eighty home games each summer. Yet before each game the managers and umpires get together at home plate to review the ground rules. They do this to prevent a dispute in the frenzy of the game about what will be fair and what will be foul. In a related way, it is not unusual for people in a home business to start playing their game of business without setting ground rules or neglecting them as I had when my wife and I were having dinner.
Many home businesses employ only a few people and they are likely other members of the family. This can blur the boundary between what is family and what is business. And when someone feels the boundary has been crossed both the business and family relationships suffer. A balance between business and family activities is required and that all parties understand and accept.
It takes structure and formality to create this balance. On hearing this, many of my clients in family businesses have said, “We don’t need all that structure and formality because we love each other.” My response is, “It’s because you love each other that you need structure and formality.”
I recommend ten important guidelines that you might use to set ground rules that help maintain the balance between your family and your business. In my experience this can increase the probability of your success both as a family and as a business.
1. Understand your purpose, goals, values, and state them clearly in a written business plan.
2. Set clear guidelines about roles, responsibilities, and decision-making.
3. Express your appreciation, recognition, and love for each other genuinely and often.
4. Commit to building the emotional equity of your family just as you build the equity of your business by having fun with each other and celebrating family rituals such as holidays, birthdays, anniversaries, etc. Take time to celebrate whatever achievements you can; they become group expressions of gratitude.
5. Determine clear expectations about money; build a compensation system that is based on the 4 Ps (Position, Percentile, Performance, and Premium).
6. Formalize and write down all agreements.
7. Establish a clear method of communicating and managing differences that emphasizes a strong commitment to the direct discussion of issues.
8. Speak your truth without judgment, criticism, or blame when discussing issues.
9. Develop a dispute-resolution approach that is win-win if there is an impasse. Consider forming an advisory board to help with mediation.
10. Institute regular routines to help everyone in the home business manage stress and let off stream. For example, include regular breaks that promote meals out of the office, walks around the block, time for personal reflections or moments to feel gratitude for your blessings.
Some of these recommendations may seem too formal, but they are especially helpful so that everyone knows what’s fair or foul. Ground rules have been helpful to Joy and me. Reach out to your colleagues and business advisors if you stall in creating your business’s ground rules. They will be eager to help you keep your family-owned business on track for continued prosperity and success.
