Conflict-free Christmas for family businesses

IN THE Philippines, the Christmas season begins on the 16th of December and ends on the 6th of January, which is the feast of the Epiphany or the Three Kings. Christmas or Pasko is the most awaited celebration and the happiest event in the Philippines.

This is also the time of the year when all the members of the family get together.

Feeling the effects of the holiday season?

You’re not alone. Although the holidays are a special time to be with the ones we love and show them how much we care, holidays can be a stressful time for families.

Families are complicated things, and with different personalities around the house, things can get fairly tense.

Family members and dividend sharing

There is nothing like it for a family business to erupt into hard feelings that ruin the holiday season. This is a time when many family businesses begin closing the annual books – and family members who had all year to dream about big profits and large distributions often get disappointed by reality. It is also a time when many are hard-pressed for cash, when sales are down or work hours have slacked off and the paycheck has shrunk.

Stress due to expectations of a bigger dividend share and discovering that the value is smaller can easily be a source of tension. Especially when you worked so hard and the sharing is equal among working family members. Misunderstandings can lead to ill-chosen words. Words lead to conflict and presto, there goes the holiday cheer and goodwill down the drain or out the window.

In this season of hope and love, I have outlined my wish list for family members seeking peace and harmony in the family business. These are simple interventions I have initiated to narrow the generational gap between the parent or “survival” generation and the sibling/cousin or “quality life” generation.

Encourage live-work-balance in the family business

For families who work together, balance is important because the business is part of the family and the family is part of the business. The ramifications of losing balance can have long-lasting and unpleasant effects. Families should take advantage of the holiday season to employ a few simple techniques to enhance the value of their time together, so that getting through these tough times is much easier.

Reshape family communication and set up a conflict management system

Family discussions during family time (holiday or not) must not include talk about the business. Create a fun program that rewards those people who refrain from “talking shop” during family time and provides a friendly penalty program for those who do. For example, this could involve putting a hundred pesos in a charity jar every time business is talked about during family time or buying everyone brunch at a favorite family restaurant.

Expect quantifiable performance from working family members

Ask each family member to identify one goal that the rest of the family can help that person achieve in the coming year. Let each family member know what it is that he or she can do to support forthcoming efforts. Determine ways in which family members will check in with each other regarding progress on goals but avoid calling frequent business meetings during the holidays.

There are also a few rules of thumb that help to prevent conflict and that should be standard operating procedure for family businesses. Observe them if you already have them in place. Put them in place if you still do not have them in place. It will help not only your Christmas spirit and family relationships but also the business itself.

  1. Have only one boss. Having a single leader is less complicated from the point of view of corporate decision-making.
  2. Hire the right people, whether family or non-family, on the basis of
    qualifications.
  3. Full disclosure. Keep everybody informed, in writing, on a regular basis. If there are disappointments or surprises at the end of the year, it means there was a failed communication between working and non-working family members
  4. Declare profits, distributions, bonuses and disbursements on an objective basis agreed upon at the beginning of each year. Dividend sharing must never be a topic for debate at the end of the year. Be sure to keep adequate working capital and reserve capital. In other words, disburse on a sound business basis, not on the basis of family need.
  5. Keep the annual family meetings brief and results-oriented. Make sure there is ample documentation of details in writing several weeks before the annual last quarter meeting. Be sure to have that meeting!

Friendship and goodwill end at perhaps, on a commercial scale – if you let it. As age-old wisdom dictates, some things, such as Christmas, are priceless. Don’t let a needless business squabble ruin it for your family or your business.

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