Learning to anticipate common family business issues can avert a future crisis
Usually we think of a founder’s health, or worse, death, when we think of contingency planning in a family business crisis. But reading the recent news there are other situations that can affect us almost as much.
FERGUSON, MISSOURI “IT’S A WAR ZONE OUT THERE”
How would your business continue to operate if there was civil unrest in your town. It doesn’t even need to be your location that is affected but a major market where your customers are.
DEMOULA’S MARKET BASKET FAMILY FEUD: COMPANY BOYCOTT
What happens when the conflict between two sides of a family escalates to the point of a work stoppage and customer boycott. In the Demoula’s case the employees and customers supported a boycott of the company when the board changed family management.
How Would Your Family Business Cope in a Crisis?
The above examples are extreme and not likely to happen in your family business. More likely your issues will involve the health of the founder, family conflict or a financial event.
The key is to identify, anticipate, and contingency plan for family business crises in advance. More…
“We turned her down, and later found out she had approached the union, to stage the union drive, in order to win her job back.”
As family business entrepreneurs, we often tend to manage by hunch, figuring things out as we go along, especially in the earlier startup years. Many of the issues we face as our businesses grow; we plod through, without much advice from outside advisors. Surprisingly, most of the time it works out well. For our family business, this time it didn’t.
We had been in business for about 15 years, and our compensation plan was pretty basic; salary plus a holiday bonus. The bonus was pretty much automatic. One year we decided to revise the bonus portion, realizing that as longer-term employees’ compounded wages increased, it was increasing the bonus portion disproportionately. We decided to cap the bonus for the highest paid managers.
One of our long-term managers became upset with the new bonus program and decided to leave the company.
About six months later we had a group of employees, petition for a union organizing More…