Four Key Ingredients to Family Business Success

Four Key Ingredients to Family Business SuccessAt the office, Alex Sutherland calls his boss by his first name, Ken. After business hours, he calls him “Dad.”“I have two relationships with him and it’s important to have some separation between when I am in my role as his employee and when I am in my role as his son,” says Sutherland, a wealth advisor with LifePlan Group, an independent Registered Investment Advisory firm. The difficulty of trying to manage a dual relationship is something common with those who work in family businesses. It’s easy to allow the personal to seep into the business and to allow business issues to creep into what should be private time.

“Having a father-son relationship in the business is extremely powerful when working with clients,” says Sutherland. “They get a feel for who we are and they want to know why we teamed up. It’s important to share that story because I think it creates a closer bond between us and the clients.” The Sutherlands say they have found ways to address the challenging issues that arise when family and business mix:

Separate personal from professional. In any business, challenges and disagreements will happen. “It’s important that each person understand that these are business feelings, not personal ones,” says Sutherland. “For example, when I make a mistake at the office and I am coached on how to improve, I know that my father, Ken is discussing who I am as an employee, not as a son.”

Keep communication open. In any venture, communication is critical even without family issues. Adding the family dynamic emphasizes the need for communication even more. “Ken and I are constantly talking about each of our goals and aspirations, so we are on the same page and there are no surprises or unknown motivations,” says Sutherland.  

Talk honestly about frustrations. “Not everything is going to go smoothly and there will be frustrations,” says Sutherland. “Talk it out. But make sure you do it behind closed doors and not in front of other members of your staff.”

Celebrate successes together. The Sutherlands say it’s easy to become bogged down in what each person in the relationship isn’t doing or could do better. They say it’s important to stay focused on the big picture and to celebrate the accomplishments. “Remember that it’s a privilege to work and build a business with a family member,” says Sutherland. “Approach it that way.”

Another major issue family businesses face is preparing to pass leadership duties to a successor, which is not something they all do well. A PricewaterhouseCoopers survey revealed that 40 percent of family business leaders are reluctant to pass the baton to the next generation, and 73 percent of family businesses have no succession plan.

Ken is determined to avoid any hitches with the LifePlan succession. He has been grooming Alex to take over since the younger Sutherland joined the business in 2012. “Even with our existing clients, we are training them to understand that we are both available to meet their needs,” says Sutherland. “I find that our older clients appreciate having a younger advisor available to them. And I think they like that he will be there for them for many years to come.”

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