My doctor always wants to check my blood pressure as a quick indicator of my overall health and well-being.
In a family business, I want to look at your decision-making process and decision-making culture as a quick indicator of your ability to be a sustainable family business.
Unhealthy family businesses hoard all the decision-making at the top or in a few key places. They try to convince me that they know best, and for their family’s well-being, just a couple people are trusted and capable of making the decisions.
Healthy family businesses, and healthy families for that matter, realize that they need to empower family members to learn how to make good decisions.
I was fortunate enough to have two teenagers. Even though I was worried about their ability to make good decisions, I knew that it was in my best interest to let them make some decisions on their own as an important part of their learning and maturing process.
It was just like back in our family business when my uncle allowed me to make some key decisions about the inventory in my division and subsequently, I made a couple of bad decisions.
The beauty of it was, even though he was angry and disappointed, he went out of his way to not rub my nose in it. He used it as a chance to mentor me.
My own disappointment and anger proved to be a valuable lesson I’ve carried with me for the past 35 years of my career.
The mistake was a significant one in 1987, but in the whole arc of our 89-year-old business it was a small blip on the radar screen and an important lesson for an emerging leader.
Smart family business leaders find opportunities to allow their up-and-comers to take ownership and responsibility for decisions.
Not allowing people to make decisions not only causes resentment, it also robs them of the ability to learn, to think, and to demonstrate good, rational decision-making as a core business skill.
The healthiest families have clear roles, responsibilities and decision-making outlined for all of the family members to create a culture of individual responsibility and accountability.
I can’t tell you how many times I get in the middle of family business conflict because of blurred lines of responsibility and authority and pent-up hostility.
So hold a mirror up to your family business and ask the following questions:
- Are we empowering family members to get to make some of their own decisions? Are we hoarding decision-making in any way?
- Do we have clear roles and responsibilities and lines of authority to create empowered, responsible business professionals?
- If you don’t have clear decision-making authority what’s getting in the way? What are the long-term consequences to the family and business?
Luckily my teenagers made some good decisions and now in their late 20s are still making a few decisions that make me nervous but I can see they are well on their way to learning how to be rational, consistent and sound decision-makers.
Smart family leaders realize they’re not going to be around forever, and not allowing or not teaching their family how to make good decisions is a huge disservice to them in the long run.
Decision-making is one of the 50 skills in my Family Business Skills Inventory.
Email me and I’ll send you a free copy.
Pete Walsh is a demanding, courageous and playful Master Coach in Phoenix, Arizona. He is the founder of Peak Workout Business Coaching and the Family Business Performance Center. He can be reached at firstname.lastname@example.org.