flevyblog

Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.
MANAGEMENT & LEADERSHIP STRATEGY, MARKETING, SALES OPERATIONS & SUPPLY CHAIN ORGANIZATION & CHANGE IT/MIS Other

Professionalizing the Family Business: Getting Ready

Editor's Note: Take a look at our featured best practice, Family Business: Governance (22-slide PowerPoint presentation). Governance of Family Businesses must include the concerns of the numerous and diverse third generation. Establishing a set of councils and boards is essential in addressing critical transition issues. With a Governance Model, Family Businesses can address acute short-term challenges and prepare [read more]

* * * *

Every firm will eventually reach the point when it has to professionalize the way it operates. This is done by instituting more rigorous processes, establishing clear governance, and recruiting skills from outside. Family Business is no different.

In the Family Business Survey, 43% of the companies believe that the need to professionalize the business is a key priority over the next 5 years. But the family firm has another dimension which other companies have to tackle: the family itself.

The issues in Family Business are much harder to address. They are more personal, more complex, and the risks if it goes wrong are potentially terminal. Many times, family firms fail for family reasons. It is no surprise then that the progress of Family Business when it comes to professionalization is slower.

Contextualizing Professionalization: What is a Professional Company?

Professionalization is more than a mere change in family management. A company is regarded as a professional when it has a high internal standard of performance and ethics which the company strives to achieve. A company is said to be professional when it has a culture that emphasizes on performance, consistency in rewards, adherence to the core values of the company, strives for fairness, and treats people like adults.

A Family Business can be a professional when family owners are good stewards and a high level of performance is encouraged. This can be achieved when the Family Business adheres to the 6 Pillars of Professionalization which can lead Family Businesses to be professionally managed.

The 6 Pillars of Professionalization

  1. Attract
    The first pillar is Attract, develop, and retain great family and non-family talent. The best position is for a family that produces a business leader with enough skills, good values, and has the ability to keep shareholders, employees, key customers, suppliers, and other loyal family leaders. A family must be realistic about its talents and passions to make rational decisions as to who will manage and lead the business.
  1. Ensure
    The second pillar is Ensure that the organization can always make a timely big decision. The best position would be when the business makes timely decisions about capital expenditures, organization changes, hiring of key managers or its strategy to succeed. Taking timely big decisions is essential in business more so when the business environment is very volatile.
  1. Strengthen
    The third pillar is Strengthen family discipline and commitment towards the business. There should be enough family discipline to act responsibly towards the business and adequate dialogue about important family business concerns. Family commitment to the business is of strategic importance.
  1. Respect
    The fourth pillar is Respect the management hierarchy and empower employees to make decisions. Family members must respect the hierarchy of the business and must involve non-family managers in decisions. The congestion of decision making at the top of the organization generates passivity, slows progress, and stifles creativity.
  1. Create
    The fifth pillar is Create systems to ensure consistently high performance and fairness. There is professionalism when family management is systematic within its Performance Management practices. We need to understand that systems are the fundamental driver of professionalism.
  1. Guard
    The sixth pillar is Guard your core values like a hawk. Employees must embody the core values of the business and the basic ethical standards of honesty, respect and fairness. The ethical dimension of professionalization is as important as the performance dimension.

The process Family Business Professionalization is one with a lot of challenges. Each pillar has its own challenges, as well as strategies to take to effectively put these pillars in place. Understanding these challenges and strategies provides companies the best direction to undertake the 5 Pillars of Professionalism.

Interested in gaining more understanding of the 6 Pillars of Family Business Professionalization? You can learn more and download an editable PowerPoint about 6 Pillars of Professionalization here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”

– Michael Duff, Managing Director at Change Strategy (UK)

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

“Several times a month, I browse FlevyPro for presentations relevant to the job challenge I have (I am a consultant). When the subject requires it, I explore further and buy from the Flevy Marketplace. On all occasions, I read them, analyze them. I take the most relevant and applicable ideas for my work; and, of course, all this translates to my and my clients’ benefits.”

– Omar Hernán Montes Parra, CEO at Quantum SFE

24-slide PowerPoint presentation
Family Businesses need to change and develop new strategies if they are to remain healthy and financially viable. The dynamic external environment, driven by increasing competitive markets, make it difficult for companies to maintain the status quo. Key issues stay constant year-on-year [read more]

Do You Want to Implement Business Best Practices?

You can download in-depth presentations on Family Business and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.

For even more best practices available on Flevy, have a look at our top 100 lists:

These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.

Readers of This Article Are Interested in These Resources


196-slide PowerPoint presentation
Introducing the Complete Family Business Toolkit: Unlocking Success for Your Family Enterprise In today's dynamic business landscape, family businesses play a significant role in driving economies and creating lasting legacies. However, navigating the complexities of running a family business [read more]


 
21-slide PowerPoint presentation
 
 
26-slide PowerPoint presentation

About Joseph Robinson

Joseph Robinson is the Vice President of Strategy at Flevy. Flevy is the marketplace for best practices in business management. Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. The documents at Flevy (https://flevy.com) are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience. Flevy covers 200+ management topics, ranging from Digital Transformation to Growth Strategy to Lean Management. You can peruse a full list of management topics available on Flevy here. Prior to Flevy, Joseph worked as an Associate at BCG and holds an MBA from the Sloan School of Management at MIT. You can connect with Joseph on LinkedIn here.

,





Complimentary Business Training Guides


Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function

  

  

  

  

  


The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

Flevy (https://flevy.com) is the marketplace for business best practices, such as management frameworks, presentation templates, and financial models. Our best practice documents are of the same caliber as those produced by top-tier consulting firms (like McKinsey, Bain, Accenture, BCG, and Deloitte) and used by Fortune 100 organizations. Learn more about Flevy here.


Connect with Flevy:

     
  


About Flevy.com   /   Terms   /   Privacy Policy
© . Flevy LLC. All Rights Reserved.