Trust is imperative for the success of any system. A marriage deteriorates rapidly when trust breaks down. It is difficult to manage employees who do not trust each other. Conversely, companies thrive when consumers trust their brands. Trust allows a freedom to think, act and be without fear of judgment.
The healthiest family enterprises are those that individually and cooperatively work at building that trust. In a family enterprise, trust between family members is a huge competitive advantage.
Transparency is a builder of trust. Transparency, by definition, means nothing to hide, even when mistakes have been made. Trust and transparency go hand-in-hand.
Here are five tips for building trust and transparency in your family enterprise.
- Involvement. Families who meet regularly, with the inclusion of spouses, to share, learn and discuss information relevant to the company and to the family have healthier families and businesses.
- Disagreement without defensiveness. Learning to respectfully disagree without becoming defensive is difficult for many people. In families, it is extremely hard: the tension between individuality and inclusiveness; the history of sibling rivalry for love and attention; the lingering feelings of not being valued – all of these attack our sense of self. Allowing disagreement without attacking increases the ability to be vulnerable, and hence builds trust.
- Sharing of tasks. Inevitably, people think back to group projects in school. Few enjoyed the process because either someone felt he or she had to do all the work, or someone wanted to control the whole project. There are two components to sharing of tasks: 1) letting someone else do things in the way they believe the task should be completed, and 2) completing the task in a reasonable and agreed upon timeframe to the agreed upon standards
- Explicit expectations. Unmet expectations leave a wake of disappointment. Unfortunately, often what one person thinks should happen is different than what another thinks should happen. Quietly, resentment builds. Make expectations of shared tasks (and what the outcome should be) explicit. This requires involvement, disagreement without defensiveness, and communication.
- Management of expectations. Sometimes, expectations need to be adjusted because of unforeseen circumstances. And sometimes, expectations have to be adjusted because of the realization of what an individual can honestly achieve. People can contribute in different ways. Honestly assessing capability, honoring individuality and recognizing contributions helps to manage expectations.
Trust and transparency are vital for a healthy family and a healthy business. Focusing efforts on the above will help to build strong foundations that future generations can build upon to ensure success in the business and in their families.
Deb Houden is a senior consultant at The Family Business Consulting Group. She will present “Trust and Transparency in a Family Enterprise” at BizTimes Media’s Family & Closely Held Business Summit on Thursday, June 14, at the Italian Community Center in Milwaukee. For more information, visit biztimes.com/family.