Join Bob McGannon for an in-depth discussion in this video Set expectations by clarifying role boundaries, part of How to Start a Business with Family and Friends.
- A common phrase used to describe people with many responsibilities is chief cook and bottle washer. The depth of caring and concern that often exists when you're working on a business with friends and family can easily create too many cooks from everyone rushing to help prepare a good meal. Everyone can mean well, but having many people in your business, trying to do the same thing can create problems and is inefficient which not affordable in a small business. The common organization chart is a significant tool in a family business even if it's never shown to your customers.
Consciously sitting down and working out who will have primary responsibility for each step or activity in your business helps keep you from stepping on each other's toes. But not only that. The org chart can provide you with other benefits as well. It helps develop specialties. The tasks required to run a business are wide and varied. Unless you've run a small business before, many of those tasks involve a learning curve. Having designated colleagues working on specific tasks helps all of you develop a well-oiled machine where each of you get more efficent on fulfilling your responsibilities.
It enhances your consistency. A business that serves it's customers and works with vendors and partners in a consistent way, can improve it's perception in the marketplace. Assuming that consistency is good, of course. Having different people working with your customers in different ways can create confusion and expectation issues. Having the same people fulfill the same role helps promote consistency and professionalism. It helps with process handoffs. In many businesses, products or customer interactions cannot be served by one person playing one role.
Many people skills and capabilities may be required even in a small business. Having the same people serving each role in a process can enhance the effectiveness of what you produce. As you know what to expect from your upstream colleague and what you need to provide to your friend or family member that's downstream in the process. It can help keep the peace. You and your friends may be very capable, yet could take a different approach to accomplishing work. Dividing roles and responsibilites can help maintain good relationships by allowing your friend to do things his way while you tackle your work in your preferred style.
Although useful and necessary, creating organization charts in a business with family and friends can have some pitfalls. Here are a couple to watch for. Multiple bosses. The org chart must clearly state who serves as the boss especially when decisions are required when all of you aren't in agreement. Should that become a problem and it often does, writing up a clear process that you'll use to make decisions can be vital. I'll be talking about that in detail later in the course.
Overestimating capabilities. Deciding who serves in what roles ideally involves an evaluation of your personal strengths. Overestimating your capability to perform a task can create significant issues. I suggest using a personal strengths assessment for everyone in your business to help you objectively assign roles. Mindfully and collaboratively creating an org chart is an important component of success for your business. Do it correctly, and you can produce products like a master chef.
Neglect to do so or doing it poorly can mean your products are more like the average five year old's backyard mud pie.
- Clarifying roles and boundaries
- Discovering compatibilities and styles
- Understanding taxes and employee pay
- Having an exit strategy
- Communicating effectively
- Working day-to-day with family with friends
- Balancing family and business roles
- Handling a family crisis