Work-life balance is a fraught issue for many family businesses, where the boundaries between family matters and business matters blur. Family businesspeople will talk about the business in the car, out on the golf course or around the dinner table. What makes it even more complicated is that the needs of the business can be at their greatest at times when the needs of the family are at their most intense.
The challenge is making an effective trade-off between leadership of the business and leadership of the family. It’s about developing systems, policies, procedures and structures to manage it. Then again, the evidence suggests some are better equipped to handle it than others. The usual rule of thumb is the bigger the firm, the better prepared it is. Also, larger businesses tend to have boards and family councils, two mechanisms crucial for managing work life balance.
A recent survey by Family Business Australia and KPMG found that time poverty was indeed a big issue for family businesses.
Not surprisingly, the survey found that two out of three respondents believed family members worked longer hours than their non-family counterparts. Although this was less the case at larger firms, which have more formalised work practices. Significantly, large and multi-generational firms were more likely to be satisfied with their achievement of family oriented goals. On the plus side, the commitment shown by family members to the business would explain why family businesses tend to have higher productivity than non-family businesses.
However, this comes at a price. Balancing of business and family issues was seen to be the biggest challenge. Family business members were less satisfied with regard to what they were able to achieve around family oriented goals i.e. spending time with the family and quality of work-life balance. Only 49 per cent were “mostly” or “completely” satisfied about how much time they spent with the family and 55 per cent were satisfied with their level of work-life balance. In other words, work life balance is an issue for about one in two family business owners.
This is important because a lack of balance between family and business needs might have an impact on the performance of the business, not to mention the family, and it could also undermine any advantage of family members working together for now, and for future generations.
This is actually where the unique strengths of family businesses can come into play. Family businesses tend to be more flexible, creating more room for work-life balance.
Obviously there would have to be many constructive problem-solving conversations between family members and the best place to sort that out is through the family council (Clearing out the messy communication blockages, June 19), which basically acts as a contact point between members of the family and the business, and moderates problem issues. The family council acts like a board of directors for the family.
An example of this in action would be if a family business leader became distracted – the company’s board and the family council needs to sort out how to manage their absence and still keep the business running. That could mean working out the costs of temporary replacements, which has to be done in consultation with the family.
Angelo Coco from Family Business Support in Queensland says the council and board play an important role for family businesses that employ 10 or more and have a turnover of at least $2.5 million. Resolving the issues, he says, comes down to finding the right balance, something which could only be done through a council and board.
“The family council provides the process, it doesn’t produce the outcome,” says Coco.
“It’s like a facilitator to make sure that the family’s concerns, needs and aspirations get communicated effectively to the owners, who then communicate to the management by an advisory board or, in larger companies, by a statutory board.
“It’s a complicated process for the family to influence the business outcomes because it’s through two intermediaries, so the important thing is that the communication is effective. But the family only deals with family matters, and the family council makes sure there is a good process for them to communicate to the owners. And the advisory board or statutory board ensures that the aspirations of the owners get communicated effectively for management to implement.
“At the end of the day there needs to be a balance between what the business can produce and what the aspirations are, and that’s why there is always an issue.”
The other advantage in having a board, he says, is it brings in the perspective of outsiders. That puts those family businesses in a better position to deal with the vexed question of work-life balance. “They tend to have external influences, not just an internal introspective view on life.”