Running a family business presents a wonderful opportunity to create an organization grounded in close relationships. However, when issues arise, sometimes tough love is needed along with familial love. Sometimes, family members need to reevaluate their own characters as employees. Competency and Alignment are two elements that are essential to remember for the healthy growth of any family business.

Last week, I discussed the importance of Communication for creating strong, trusting relationships and Boundaries for upholding professionalism. This week, I’m sharing the rest of my advice for ensuring that your family business thrives.

Competency

Requiring competency is an extension of establishing boundaries. There must be a high level of competency throughout the organization. No business benefits from employing less than competent individuals.

Employees are motivated by recognition, opportunity for input and opportunity to do interesting things. The less competent employee will not get recognition, won’t be invited to give their input and will ultimately be shunted to the side doing boring tasks. When that person is employed in a typical business, it is easier to face their incompetency and help that individual find another avenue to fulfillment. However, when that person is in the family you have a real problem. You end up with an unhappy employee and an unhappy family member.

I urge families to require substantial experience from potential employees to prove competency. If a person is not a competent employee elsewhere, chances are they will not be a competent contributor in their family business.

Alignment

Alignment begins with you. That means in a family there needs to be a process whereby each employee finds out who they are as individuals, their values and the values of the family.

I like to have each family member develop a Personal Values Statement. Sometimes I add the task of creating a statement about how the individual wants to show up in this world. That is followed by family members developing a Mission Statement and a Vision Statement, both of which get posted throughout the company. The family can then be held accountable for what they say they will do.

Research on Values Based Leadership, and VBL-led companies, has demonstrated that when family business owners are clear about their values and fully aligned around those values, they become the guiding principles for operation of their business. In addition to being more profitable, businesses operating in this manner evidence a higher level of satisfaction among owners, non-family leadership and employees.

Successful, profitable management in a family business looks like any other business. The business offers goods and services at a fair market price, controls costs, pays fair market wages and is prudent with corporate finances. It treats all employees, family and non-family, with respect and kindness and cuts family members no slack. Family members need to stay longer, work harder and be humble about ownership.

If family business owners recognize the importance of Communication, Boundaries, Competency and Alignment, their companies will not only be successful, but healthy and happy, too.