How do you manage a business run by the family and successfully maintain both the business and the family? On one hand, family businesses benefit, by their very nature, from significant advantages, such as stability, togetherness and commitment to success. On the other hand, connecting family and business comes with no small number of risks. Unfortunately, these risks can affect day-to-day management and prevent processes of change and growth.
We, at Sיtern Management Consultants, have extensive experience in helping family businesses. Our extensive experience makes it possible for us to observe processes, identify potential areas of friction and provide timely solutions that will help maintain the assets of the business and family unity.
Our advisory services help you to maximize the benefits of the family business, to cope professionally with difficulties and conflicts and to prepare the way forward for future generations. This is achieved by:
Formulating the business vision and goals of the family business
Designing the vision that will define the objectives of the business and the expectations of the family from it over the short and long term. From the vision we derive the personal objectives of every member of the family and the remaining employees in the business.
Building of mechanisms that will define in advance the organizational and business running, in a manner that maximizes the efficiency of everyone involved and prevents unexpected surprises later on. Advice includes:
– The hierarchy structure and areas of responsibility and authority of each of the family members working in the business.
– Processes for recruiting employees – whether they are family members or others.
– Establishment of an employment agreement for members of the family and other employees, which will predefine the employer-employee relationship and its rights and obligations, including termination of employment situations.
– Regulations for decision taking, standards for obligations and rights, promotion tracks, methods for evaluation and compensation.
Assistance in the establishment of a treaty or family law, which is a comprehensive document that includes agreements and understandings between the members of the family on subjects such as: methods of entry and departure from the business, working together, sale of rights in the business, involvement of family members who are not active in the business, their rights and obligations.
Separation of the business and family and the institutionalization of management
Definition of clear borders between the family and the business and the creation of a monetary and management separation, creation of management systems which includes active management and a board of directors, and institutionalization of management meetings in the business – including determining the frequency, method, participants and topics, and recording of minutes and follow-up after decisions have been made.
Establishment and operation of the board of directors / management council / board of trustees
Establishment and overseeing of a senior management team that includes the owners of the business and an external director. This body is the senior management body in the framework of the family business, and it is what steers the objectives of the organization, determines the strategy for their achievement and supervises performance.
Appointment of managers, monitoring and development
Appointment of an external CEO and determination of his authority, development and monitoring of managers and officials, development and monitoring of processes of change in the family business with attention to internal and external communications in the organization, handling of objections [conflicts?] and motivation and compensation tools, matching the organizational structure to the new situation.
Communications in the business and the family
Establishment of open and honest communication, for the creation of an effective dialog between the members of the family both at family level and in relationships within the business. Advice to families engaged in a power struggle, anger and frustration, with the objective of promoting a process of effective and positive change. The advice is for the entire family.
In cases of disputes between managers and business partners, we will fairly represent all the parties and attempt to formulate compromise in order to end the dispute. We will serve as a line of communications in cases of non-cooperation between the parties and we will assist with management monitoring or the provision of management services by outsourcing until a solution is found that is acceptable to the parties, with the goal of preventing damage to the business.
Transfer between generations – looking after the next generation and the founding one
We will provide practical solutions for the continuity of the business while ensuring the unity of the family: Regulations, cooperation agreements, employment agreements for family members, agreements for the transfer of property from one generation to another, retirement arrangements for the founding generation, preservation of the value of the private and business assets, division and transfer of shares, sharing of dividends and so forth.
Periodic status checks
Both the business and the family are dynamic systems that are open to change. What worked yesterday may not work today. Periodic examinations by a professional specialist facilitates the early identification of anticipated problems and the provision of solutions that will ensure the proper management of the business now, and its continuity in the future.
Family Economics Management
There is a requirement for educated relevant financial management for almost every family, at every stage of its life: Starting from the establishment of the family, through the growing up of the children and the ambition to save and achieve a variety of plans, through to the preparation for the senior years and risk scenarios. This is true sevenfold for families where one member of the couple or both of them are self-employed, where income is not fixed, and especially when there is no separation between the family budget and the business budget.
A consultant for management of the family finances from our Company, will map the needs, budgetary limitations and possible risks, and provide you with the tools and methods for management of the family budget and its separation from the business budget, achievement of economic objectives, savings on family expenses, moving out of risk situations and achieving financial independence.