When five o’clock strikes and you gather your belongings to leave work for another day, you want to relax and above all else, leave work at work. But what if you work and live alongside the same people? The challenges of operating a business elevate when you run one with a family member.
You have done all of your homework when it comes to financing and insurance and accreditation. You know how to run your business. But do you know how to successfully separate your work and home lives? We spoke to three successful O&P family business owners to find out what works for them: Cynthia Minelli, CPO, co-owner of Cocco-Enterprises in Trenton, N.J. who works alongside her husband since purchasing the business from her father in 1996; Séamus Kennedy, CPed, and co-owner of Hersco Orthotic Labs in Long Island City, N.Y., who works with his brother Cathal at the business they purchased from an unrelated family; and Gregory Gruman CP, president, chief operating officer, and fourth generation owner of Winkley Orthotics and Prosthetics which has locations in Wisconsin and Minnesota.
According to the Family Firm Institute, more than 30% of all family-owned businesses survive into the second generation, 12% into the third generation, and 3% of all family businesses operating at the fourth-generation level and beyond.
“The failure rate if you do nothing but look at the statistics tells you ‘we’re not going to make it; the odds are so stacked against us,’” James Hutcheson, founder and president of ReGeneration Partners told O&P Business News. “So knowing [the statistics], how do you improve them?”
Going into the family business seems easy enough. You know your family members better than you could know anyone else sending in a resume. As it turns out, it is this knowledge that could be detrimental to a healthy working relationship.
David Javitch, PhD, founder and president of Javitch Associates and faculty member at Harvard and Boston Universities suggests filtering out past experiences as best you can to get off on the right foot with family members in the workplace.
“They have to have the ability to look at the family member as another employee, and that is hard, but that is the basic code for survival,” Javitch said. “And be aware when those boundaries get blurred. They get blurred awfully easily because you have spent a large part of your life with these family members.”
These unclear boundaries can lead to key communication or other problems in an effort to spare personal feelings. Hutcheson explained that emotional confusion could result.
“You don’t know if you are dealing with a business issue or a family issue,” he said. “When you are in a family business, there are more consequences to decisions. If you are working with family, you make a decision that impacts the family and you don’t just turn it off on Thanksgiving.”
One of the most important steps in preparing for the challenges that working with family inevitably presents is to be honest about their existence.
“Don’t run from the conflict,” Hutcheson said. “Deal with it and realize that is a part of the ups and downs.”
In the long run, these challenges present learning opportunities and chances to push one another.
“If there is no healthy disagreement, you are not really challenging each other, so we don’t worry about that,” Kennedy said about his working relationship with his brother. “We disagree on things…but we have never [blown] up over an issue.”
Patience and communication are necessary not only in the beginning of a new working relationship but throughout the tenure of that relationship as challenges do not wane over time.
“Be patient,” Hutcheson said. “There will be ups and downs. It is not a linear, smooth growth where everything gets better day after day. It will get better and it will get worse…but you will take three steps forward and one back.”
Lay a good foundation
Proactive steps can help businesses get off to a smooth start or calm the rifts that have developed over time. It is important, however, to keep in mind that you cannot plan ahead for everything.
Hutcheson recommends an “appropriate governance structure” to avoid an undemocratic situation.
“Accountability is a good thing and governance is one of the ways you put accountability in place,” he said.
This governing body, however, should not be comprised solely of family members. An outside perspective, especially during sensitive talks, will be helpful in the boardroom.
“The way that you make that smooth transition is you put a couple of truly independent, competent people on the board. It is okay to keep the family members on there but you want to make sure that it is balanced,” Hutcheson told O&P Business News.
The “board” does not have to be an extensive board of directors. Smaller family owned O&P companies, however, should ensure that there are some independent decision makers in place for when that perspective is necessary.
An even easier way to lay a solid foundation is to promote open communication and create a type of code of conduct.
“You draw up a code of conduct or rules of engagement and…at the end of the day it is going to be simple,” Hutcheson said.
Create simple rules
Creating simple rules for family conduct may sound absurd, but home behaviors can often spill into the workplace. Discussing and sharing feelings about cell phone usage, interrupting or speaking out inappropriately toward one another, or about being treated like a child in the workplace rather than as a respected employee are all issues that should be covered during this time.
“All of these things are pretty common sense unless you are dealing with your own family,” Hutcheson said. “[Creating rules] is very cathartic.”
Javitch goes one step further and suggests allowing each person the power to step out of a situation where personal issues are being discussed on business time.
“Give each person the permission to say ‘time out, what we are arguing about is not about the business, it is about the family,’ and that should put a halt to that discussion,” he said.
These ideas sound simple, but saying them out loud to family members and having these discussions long before any problems arise can be helpful down the road toward the resolution of them.
Learn from the past
In a business that has years of family succession, heirs have both the blessing and the curse of being on the inside track of the establishment.
For Minelli, the family business where she has been working since the age of 17 was intertwined with her upbringing. She was a first-hand witness to the tolls that a business can take on a family and watched her parents’ marriage dissolve as a result.
With this in mind, she took steps to make sure that the same fate was not in store for her family.
“We make sure we take vacations that are non-business oriented and make time for our kids. We made sure we were involved in their activities afterschool,” Minelli said.
Juggling life this way brought other challenges that they learned to work around and eventually hired additional practitioners to carry some of the workload.
“It was tough working full time when my children were in school and feeling torn between changing my hours so that I could work around their schedule,” she said.
Gruman recalls the hardship endured by his father when he took over the business. As a lab supervisor, employees resented him for not having to work his way to the top, a ladder that Gruman was pleased to have to climb when he joined the company.
“He didn’t have a chance to learn the field and work his way up and earn the respect of the workers, so he was determined that when I started, he and I would have little contact and that worked extremely well for me as it turned out,” Gruman said. “I was sweeping floors at the end of the day and I had to empty the garbage and clean out the plaster traps…all the dirty jobs that nobody else wanted to do because I was the new guy and that is where I started.”
As a result, Gruman earned the respect of his coworkers and was viewed as more than just the boss’ son. This is the same practice he currently uses with both of his children who are employed by Winkley and working their ways through the ranks.
Kennedy takes pride in the retelling of the history of his business, although he and his brother came into it without a connection to the previous owning family. They are determined to carry on the respected legacies of which they are now a part with a personal touch. A strong lineage has a history of both success and failure. Navigating the two forces can be difficult, but is necessary to decide what is in store for the future of the business especially taking into account the new challenges that will arise.—by Jennifer Hoydicz
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