Continuing its fourth generation of family ownership, Michael Dierberg serves as Chairman of the Board at FB Corporation (First Bank).
When I ask family-owned and other privately-held businesses about their competitive advantages, one of the most common answers I hear is about their ability to create a great environment for employees to thrive. Often, the culture of the organization is described as having a “family feel” in which employees feel closely connected to their colleagues, more engaged, face less turnover, and can be more nimble in how they anticipate and react to their customers’ needs.
So, how do successful family-owned and other privately-held businesses create great cultures? By playing to their strengths. Such businesses may not have the resources available at larger organizations to help them develop a strong culture, such as large human resource departments to maximize team engagement, and the depth of talented leaders at the top of the company. Yet what they lack in resources, they make up for in other ways.
Below are some key takeaways from experts, our own experience, and from other family-owned businesses.
- Make the most of your long-term perspective. A long-term perspective is perhaps the greatest advantage of family-owned businesses. Because family-owned businesses aren’t beholden to meeting an analyst’s quarterly earnings’ expectations, they can focus on the company’s and the community’s long-term interests. While a short-term focus can lead to bad behavior and a destructive culture, a long-term perspective tends to always line up with doing what’s right for the company, its employees, and its community.
- Stay closely connected to each other. Since family-owned businesses are often small to mid-sized organizations, such companies can use their size to their advantage by staying closely connected to each other. This is the foundation of building a family feel and fostering teamwork within the organization. Although silos occur at organizations of any size, connecting to others on a regular or periodic basis encourages employees to respect and value each other and to avoid the development of an “us-versus-them” mentality.
- Allow the company’s inner voice to shine. As the experts at CMA Consulting have said, “[Be] authentic and true to the company’s mission. Organizations that do this well know who they are and who they are not. Their engagement practices align with their employment brands, and their employment brands align with their customer brands, strategy, mission, and core values.”
- Involve your colleagues in setting the course. More than five years ago, First Bank engaged in the most extensive and consuming strategic planning exercise we had ever gone through. We were transitioning from survival mode during the Great Recession to deciding on our path to our goal of becoming one of the finest financial services companies in the nation. What made that strategic planning effort so successful, and of continuing relevance to our path today, is that we deeply engaged employees at varying levels throughout the company in that effort. The result was the development of a plan that was our plan, not the plan of certain executives or the family. It was a better plan because of the valuable input we received in developing it and led to greater buy-in during execution.
- Don’t let family dynamics get in the way of being nimble. As a smaller, purpose-driven organization, being nimble should be part of your DNA. But, often it is not because of family dynamics or other office politics. While solving those issues is rarely easy, commit as a team and as a family to not letting those things get in the way of making the right decision or making the decision in a timely way.
As with many things in life, creating a great environment for employees to thrive is more of a journey than a destination. Family-owned and other privately-held businesses need to continually strive to improve and foster a strong culture. But, with the advantages we have, a great work environment and culture should be one of our calling cards.