Saturday, September 21, 2019
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Your Family Business Culture – What It Is and Why It Matters

You may not even realize it, but your family business has a culture all its own, whether small or large, in its infancy or in its 100th year of business. In our article, Identifying and Understanding Your Family Business Culture, we discuss the most common types of family business cultures as outlined by W. Gibb Dyer, Jr., in his article “Culture and Continuity in Family Firms.” In his discussion about family business cultures, Dyer also recommends that family businesses take the time to assess their own cultures and to prepare for eventual culture changes as the family business evolves and passes from one generation to the next.

A family business culture is made up of many things, all of which have their foundation on the assumptions held by the family business leaders. These assumptions are the leaders’ views on things like whether people are fundamentally trustworthy, how much importance is placed on the past versus the present and future, how relationships are formed in the workplace, whether family should be given preferential tre ATM ent and more. It is these assumptions that form the basis for additional perspectives and values that tie into the family business culture.

Culture is also made up of the perspectives shared among the business leaders, those perspectives that govern how hiring decisions are made, how problems are solved, how employees are promoted and the like. Essentially, these perspectives offer rules that apply to certain situations. On the other hand, culture is also made up of values which are not situation-specific. These can include ideas on what’s most important, in an overriding fashion, about how the business is run.

Lastly, the culture as created by assumptions, values and perspectives are manifested in actual artifacts that employees and outsiders can see as representative of that culture… things like dress code, branding, the degree to which employees are required to behave in a formal manner at the place of business, and even the kinds of language patterns shared by the employees. When combined, artifacts are more than a collection of tangibles – they represent a belief system held by the family owners.

The reason all these are so important is because your family business culture comes through in things like its attitude toward technology, how non-family employees are treated versus family employees, how quickly your firm can evolve and adjust to changes in the marketplace or make decisions, hiring practices, how your employees treat your customers and how your employees represent your business brand to the outside world.

Your culture can even give your family business an edge over the competition. For example, many people prefer to deal with family businesses because they are perceived as more personable and friendly compared to larger conglomerates. Your customers like being a face and a name, rather than a number. The culture of family businesses also often promotes long-term strategic thinking because it is assumed that family members are in it to stay.

As you consider making an assessment of your culture, and how it impacts the success of your business, you may find it necessary to enlist the help of outside experts. In many instances, it is too difficult for family business leaders to assess their own assumptions, perspectives, values and artifacts to truly identify the kind of culture they have developed in their firm. For more on family business culture, see our article, Effecting a Culture Shift in Your Family Business.

Contributing Sources: “Culture and Continuity in Family Firms,” W. Gibb Dyer, Jr., published in The Best of FBR II from The Family Firm Institute; “Inside Family Banks,” Steve Cocheo, ABA Banking Journal, July 2011

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