Michelle Rodger: How family firms can manage the work life balance

Published on Saturday 1 November 2008 13:27

IT'S HARD enough to run a business these days without the extra societal pressure to have it all: a rewarding job and a happy (in itself rewarding) family.

But finding time for parents' evenings, homework and watching kids' sports matches in among board meetings, awards dinners and evening networking events is well nigh impossible.

Much has been discussed about the importance of the work life balance; indeed laws and regulations have been introduced and amended to protect such delicate harmony.

So what happens when your work is your life, and also that of your spouse and everyone else in your family? When you are involved in a family business, that elusive work life balance can prove even harder to find.

Yet about 65% of all Scottish businesses are run by families, and in these difficult economic times the immediate impact on the business is compounded by the wider personal and financial implications for those involved.

As the downturn starts to take a grip and the "fixes" proffered by the Government take time to filter through, what will happen to the traditional family business? What will happen to the families, the friends who work with them, and the suppliers and customers they have come to regard as family?

Family businesses are a huge contributor to the Scottish economy and the 900,000 individuals directly employed by them. The wider perspective reveals that the jobs of hundreds of thousands more suppliers and customers depend on them.

Edinburgh University analysed the top 250 companies in Scotland and 41 out of the top 100 were family-run. The UK family business sector has a turnover of more than 1,000bn, more than double that of the private equity sector, and employs more people in the UK than all FTSE companies combined.

So how will they survive? The answer lies in the fact that they are family-run. By their very nature they are tight-knit, values-driven, ethically sound, people-focused organisations that live and learn by their mistakes and the cyclical nature of the economic up and downswings.

Martin Stepek lived and worked through a number of recessions, indeed he lost his family business through a combination of recession and falling foul of one of the key factors affecting family businesses – working with your family.

He is now CEO of the Scottish Family Business Association but he remembers his first recession, aged 14, spending his Christmas holidays working by candlelight in his father's business during the Government-ordered three-day week.

The next recession came just a few years later. "I realised that everything is cyclical," he says. "And that's what family businesses have over other organisations: the historical knowledge and experience of how to deal with a recession, passed down through the generations."

Family businesses by their nature tend to be more cautious with their cash than other organisations, and it is that caution that will shelter most of them from the financial storm. Low gearing is peculiar to family-run companies and will be crucial over the next 12 to 24 months.

But the family aspect can just as easily cause a business to fail. Emotions run high within families even outwith a business, and the added pressure caused by a downturn can prove too much.

Having learned from its members' own painful experiences, the SFBA has recognised that unless these organisations learn how to manage their communications – internally within the family and with other directors, managers and shareholders – their much-loved business will undoubtedly suffer.

It is organising a series of workshops aimed at supporting firms through the economic challenges ahead, focusing on communication, support for recruitment – don't necessarily employ your family unless they are the best candidates for the job – and succession planning.

That's all well and good, but particularly these days your bank manager is a crucial part of your business and while banks clearly understand gearing and the likes, dealing with emotions, such as those present in a family business, is alien to bank managers.

One bank has, however, recognised the need to listen and understand issues other than purely financial ones.

According to Mark Sim, Lloyds TSB has been working with the SFBA on a three-year support deal, and uses specialist training in family businesses for bank managers to help them get to grips with their different mindsets.

Sim advises family business owners to explain to their bank manager all the various elements of their organisation which, by their familial nature, can be complex. Family business owners can be very wealthy, he says, and these assets may help shore up a company going forward.

Lloyds TSB gets it. It has clearly recognised that family businesses are the bread and butter of the Scottish economy, and as such, deserve the jam that is the best support available to them.