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Family-run business: How to get buy-in for change

Your family-run business was established a decade ago and things have been great. Despite the occasional stress that comes with working together and keeping things civil over Sunday dinner, your company is growing like gangbusters.

But what if your family-run company needs to formalize processes, procedures and policies in order to continue to grow? How can you reduce resistance to change among family members working for the business?

The following four steps for managing change will help you garner buy-in for necessary adjustments to how your family-run business operates.

Identify the problem

The first step in helping people understand the need for change is to identify the issue. Be as specific as possible with both the problem and the solution.

For instance, does it currently take two days to validate a shipping address while the industry standard is four hours? Does that glitch in your online shopping cart result in a cancellation of 40 percent of sales? Are outstanding accounts receivable creating cash flow problems?

Connecting a problem to a specific process or procedure helps reduce the emotions or threat someone may feel when change is proposed. Identifying the specific problem and its impact on your family-run business also helps gain buy-in from those who think “but we’ve always done it this way and it hasn’t hurt us.”

For instance, maybe receivables are going uncollected because the company has outgrown Aunt Jane’s ability to handle accounting alone.

Be as specific and detailed as possible when discussing the issue and its ramifications. The suggestion that Aunt Jane hire help is less likely to be taken as a critique of her abilities if she’s presented with the specific problem, such as lost revenue, and proof of present inefficiencies.

Minimize resistance to change

Next, pinpoint the employees involved in the current situation and ask the following: Do they have the skills and tools necessary to resolve or reduce the issue? Have they found a solution? Have they tried to fix the problem before? What were those results?

People’s natural resistance is mitigated when they understand the need for change and help create new ways of doing things.

To promote understanding of the need for transformation, present the specific problem, the new target and a big picture explanation. For instance, the company must reduce verification of shipping addresses to four hours in order to reduce customer complaints and meet industry standards.

As you and the team brainstorm solutions, allow everyone to have a say.

Participation in the solution promotes buy-in as new processes are developed and implemented in your family-run business.

Involve the right people

Avoid a top-down approach when implementing a new process or policy. Family and non-family employees alike will resent and resist a new policy they feel they should have been consulted about.

After all, those on the front lines may have already recognized an issue and tried to improve it without your knowledge.

Involving the “right” people also means addressing any skills gaps. Hold a meeting to help identify whether you and the employee feel extra training will help. Or, are they burned out and ready for another role in the company?

It’s not uncommon, particularly during rapid growth, for family members to get conscripted to work in areas where they are needed, not necessarily where their skills are best suited. This may be an opportunity to resettle a valuable team member where they’d rather have been in the first place.

For example, say during the discovery phase you find that your online shopping cart problem requires IT expertise that far exceeds your 22-year-old son’s experience. A dispassionate explanation of the specific issue and its business consequences will help minimize hurt feelings, should you hire a senior IT executive.

A frank, business-focused discussion may reveal that your son welcomes the opportunity to learn from a more seasoned IT expert. Or, you may find that your son feels his strengths would be better suited to another area of the company, such as sales.

Remember to apply an extra dose of diplomacy and stick to the facts if a family member is simply not able to meet the business’s growing needs. Family member or not, no one wants to impede success.

Communicate the solution

Once you and your team have identified the problem and its solution, it’s time to communicate any upcoming changes before implementation.

Just as with the solution-finding phase, take the time to thoroughly explain why a change is needed. Convey a sense of urgency and offer details about the benefits to the company, and, ultimately, to the employees.

An understanding of the who, what, where and how of any changes helps gain support, not only from the individuals and department directly affected, but also from the rest of the company’s employees.

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