(Time to read this Blog is about 2 minutes)
Before we get to the main topic, here are a few things to get you thinking:
- My biz quote of the week:
“In survey after survey, the companies that are rated the best for ‘customer experience’ are also rated as one of the best places to work in their industry. This is not a coincidence!
So, what 4 or 5 things will you do, in the next 6 months, to be a better place to work? Ask your team for their input. Trust me, they have a list.”
- There’s no point caring if you don’t show it. In both our business and personal life, we say we ‘care’…but how well do we actually show it? If we don’t show it, they won’t feel it! How do you show that you care about your staff, or your customers, the environment or the community in which you make a living?
Back in my days as an award-winning retailer of ladies’ fashions, we offered a choice of 4 kinds of free beverages, electric massage chairs for husbands and boyfriends, a Pirate Ship Play area for kids, change tables with free diapers, wipes and cream for babies in distress, a stress-free return policy and an invitation to “Please take as many items in the Change Room as you wish.” Every year we raised thousands of dollars for Children’s Wish Foundation and collected thousands of winter coats for women in need. We cared …and we showed it. What might that look like in your business?
Now, to this week’s important topic:
‘Straight talk’ about a problem that can tear Partnerships & Family Businesses apart:
Here’s the scenario. Two brothers, each with 50% of the shares, contribute very differently to the success, growth and profitability of the business. But the brother whose performance is so bad that he’d be fired in an instant, if he wasn’t ‘family’, expects to be paid the same salary and receive the same perks and privileges as the brother who’s successfully running the company.
Two of my current Biz Coaching clients are dealing with this problem and it’s tearing their businesses apart. Here’s the answer. Business owners who also work in the business should get paid twice, because they have two very different roles in the business …employee and shareholder. First, they should be paid a salary that fairly reflects their contribution to the business as an employee. Second, and quite separately, if the business does well, they should receive a dividend compensating them for their role as a shareholder.
If they’re unproductive in their current job, and that’s hurting the business, they should be reassigned to a job that they can do well, and paid accordingly. Or they should find employment elsewhere. Way too many partnerships and family businesses become ‘automatic job machines’ for otherwise unemployable relatives…and this is a huge mistake! Business is too competitive and margins are too tight to permit this kind of mismanagement. You’ll end up with a business partially run by non-performing family members…and then the really good non-family management people will leave in frustration and resentment. And that’s the beginning of the end.
If the non-performing family member or partner is also toxic, which is often the case, there’s no place for them in the business in any capacity. This can be messy, gut-wrenching ‘stuff’, but it needs to be dealt with. Often, the only way to resolve the problem is with a shareholder buyout.
As I mentioned in last week’s Blog, I’ve just updated my insightful Biz Tool #A-11 that helps partnership or family businesses determine their ‘health’ and sustainability and identify what needs fixing. It takes just 6 minutes to complete. If you’d like to receive a copy of this insightful Tool, no charge, simply email me at email@example.com.
That’s it for this week…
Stay safe…live brilliantly!
Donald Cooper speaks and coaches internationally on management, marketing, and profitability. He can be reached by email at firstname.lastname@example.org in Toronto, Canada.