Don’t Fall In Love With Family Culture
Many business owners experience a common problem as their business grows. The attributes that made them successful initially – e.g. innovation, hard work, tenacity, sales skill – become obstacles to future growth…
Once the business reaches a certain scale, founders need completely new skills – leadership skills. This is no different to any transition in any company when you move up from a predominantly technical role to a leadership role.
The interesting thing is that even incredibly successful business owners often can’t see the problem clearly enough to take the necessary action… the action that will supercharge business performance and take the company to the next level.
I often get a brief that goes something like this: “Marty, I want to make the business more professional, and structure it for growth… but I don’t want to lose the family culture!”
My response is always the same: “I hate to tell you this, but you can’t shift the performance of the business the way you think you want to, unless you lose the family culture.”
Because I spent the majority of my corporate career at the top end of large businesses, I know what good looks like – I understand the final destination, so it’s relatively straightforward for me to map a path to performance at scale.
But, family cultures feel good, especially to the people who are actually part of the family. Problem is, as the business grows, not everyone is part of the family, right?!
When people are treated more favorably based on their length of tenure or their relationships in the family hierarchy, irrespective of their actual performance, it’s a cancer. If you want to build a high performance business, that cancer has to be cut out.
Don’t get me wrong, there are positive elements to family culture:
- Loyalty
- Acceptance
- Identification and belonging
- Unconditional support
But there are also some negatives:
- Loyalty
- Acceptance
- Identification and belonging
- Unconditional support
Loyalty is an admirable quality, which many companies have way too little of. But loyalty can’t be allowed to override performance.
Being uncompromising about the minimum acceptable standard of performance… coaching and guiding your people to improve… and confronting them when they make bad choices can be seen as being disloyal in a family culture… but it’s also the only way to drive a culture that is genuinely focused on performance.
Acceptance is good too, but it shouldn’t be unconditional. You have to accept everyone for who they are, but you don’t have to accept the poor choices they sometimes make. Their performance and behavior need to be assessed critically, for better or for worse.
Family cultures say, “everyone has a place here”… performance cultures say, “everyone has a place here, as long as they’re prepared to live up to the standards we are aspiring to uphold.”
Identification and belonging are good too, but they often result in a level of cultural politeness that isn’t helpful – it generates groupthink, rather than the constructive tension that drives superior performance.
Your average people will love unconditional support, because there are no consequences. But your best people will leave so that they can work in a winning team – somewhere else.