By: Dhania Puspa Purbasari
Family businesses are a common phenomenon worldwide, with many large corporations starting as small, family-run ventures. In Indonesia, family businesses play a significant role in the economy, with numerous medium and large enterprises managed across generations. However, behind the success of family businesses often lies a considerable challenge: maintaining a balance between close family relationships and the demands of professionalism in business operations. This article will explore how families can effectively manage this balance and how professionalism can help sustain and ensure the success of family businesses for future generations.
Why is This Balance Important?
One of the main challenges family businesses face is integrating personal relationships with professionalism in decision-making. On one side, there are emotional ties and family bonds that must be preserved, while on the other, businesses require rational and sometimes tough decisions. Failing to strike this balance often leads to conflict, uncertainty in succession, and even the downfall of the business.
- Maintaining Harmonious Family Relationships: Families running businesses together often face challenges in preserving internal harmony. Business decisions can become highly emotional because they involve people with personal relationships. Without clear boundaries between family and work, differences in opinions that should be business discussions can turn into serious family conflicts.
- Professionalism as a Pillar of Success: On the other hand, professionalism in family businesses means treating the company like any other business entity, where decisions are based on data, analysis, and logic. This includes separating personal roles from work responsibilities, ensuring transparency in decision-making processes, and appointing the right people to the right positions, without prioritizing family ties.
Challenges in Balancing Family and Professionalism
- Conflicts of Interest: One of the biggest challenges in family businesses is conflicts of interest. Family members often feel entitled to certain positions within the company, even if they lack the necessary qualifications or experience. These conflicts can disrupt productivity and create ongoing tensions.
- Appointments Based on Family, Not Ability: In many family businesses, family members are appointed to strategic positions based on their relationship rather than their professional abilities. This can harm the company because unqualified individuals may hold critical roles. It’s essential to ensure that appointments are based on qualifications, experience, and competence rather than family connections.
- Poor Communication: In family businesses, communication is often hindered by emotional ties. Family members may hesitate to voice disagreements or criticism out of fear of damaging personal relationships. On the contrary, open and honest communication is vital to running a healthy business. Families need to create an environment where everyone feels comfortable sharing their opinions without fearing negative impacts on family bonds.
Solutions to Maintain Balance
To overcome these challenges, clear and structured strategies are necessary. Some steps family businesses can take to balance family relationships and professionalism include:
- Implementing a Clear Organizational Structure: Every business, including family businesses, needs a clear organizational structure. This means defining the roles and responsibilities of each family member involved in the business, based on their capabilities, not just family ties. A clear structure ensures that business decisions are made more rationally and transparently, reducing potential conflicts.
- Managing Expectations: One of the best ways to maintain harmony in a family business is by managing the expectations of family members. Each family member must understand their role in the company, how they can contribute, and when they should step aside if they lack the necessary skills or experience. This can be achieved through open and honest communication between family members.
- Training and Developing Family Members: To remain competitive and successful, family members involved in the business must receive adequate training and development. This helps them enhance their skills and ensures they can contribute professionally. Involving external consultants or mentors can also provide an objective perspective in business development.
- Hiring Non-Family Professionals: One way to maintain professionalism in a family business is by bringing in non-family professionals to hold strategic positions. The presence of individuals not tied by family emotions can ensure that business decisions are made in the company’s best interests, not solely to maintain family harmony.
- Establishing Boundaries Between Family and Business: It’s crucial to have clear boundaries between family time and business time. For example, business discussions should not take place during family gatherings or social events. Holding separate meetings to discuss business matters can help maintain this balance and avoid mixing personal and professional life.
Case Study: Success in Managing Family Business
One successful example of balancing family relationships and professionalism in a family business is Faber-Castell, which has been managed across eight generations. The Faber-Castell family understands the importance of professionalism in running their company. They have set clear boundaries between family and business matters and brought in external professionals to hold strategic roles. As a result, Faber-Castell has survived and thrived for over 250 years.
In Indonesia, another example is the Martha Tilaar Group. In running the business, Martha Tilaar and her family have successfully separated roles and responsibilities. In addition to involving her children, Martha Tilaar also employs competent professionals to help manage the company, allowing the business to continue growing.
Managing Succession in Family Businesses
One of the most critical moments in a family business is the succession of leadership. Succession often becomes a source of tension within families, especially if there’s no clear plan. Several steps can be taken to manage succession effectively:
- Preparing the next generation early: Involving them in the business from an early stage and providing relevant training.
- Creating a structured succession plan: Clearly defining who will take over leadership and when the transition will occur.
- Transparency in the succession process: All family members should have the opportunity to be involved in discussions about the future of the business.
Balancing family relationships and professionalism in family businesses is a challenge that requires careful planning, open communication, and the implementation of the right strategies. By managing conflicts of interest, setting clear boundaries, and involving qualified professionals, family businesses can thrive and survive across generations.
If you are managing a family business and facing challenges in maintaining this balance, we invite you to join our family business consultancy program with experts from Qando Qoaching. This program is specifically designed to help family businesses manage conflicts, strengthen professionalism, and plan succession effectively. Visit our website at campsite.bio/qqgroup and follow us on social media for the latest information and tips on developing family businesses.
Let’s move forward together towards the success of your family business with support from our expert team at Qando Qoaching!
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