Research says that an organization, family-managed or not, is expected to go through several stages of evolution. See the figure below.
Do you think that your firm is at the startup phase?
During this phase, the culture of the organization is indistinguishable from the culture of the founder/owner family. The number of non-family members/employees is less. HR practices are likely to be ad hoc, rudimentary, situational, and not rule-based. At the same time, there is strong family feeling, high energy, and a high sense of purpose among the employees.
At this stage, the seeds of future organizational culture are required to be sown, and the foundation for future rapid growth is built.
Are you experiencing rapid growth?
At this stage, some enlightened family-managed companies start building institutional muscles. Your endeavor to lift heavier weights will require you to develop healthy habits to sustain yourself in the long run. Otherwise, there will be an inevitable breakdown in your upward climb.
At this stage, your financial wellbeing can only be sustained by strong business processes in which your HR systems & processes are crucial. The HR processes must be allowed to mature by inducting HR specialists. This is also the phase of a high rate of hiring. Be careful. HR managers may pay more attention to hiring and less attention to establishing HR processes that are progressive, fair, and equitable.
Gradually your company may experience the dilution of family feelings among the rapidly increasing pool of employees. A strong sense of common purpose may get diluted.
The family business leaders would remain connected to only a small set of old employees with a sense of privilege and would get distant from most of the other employees.
In the absence of importance being given to establishing uniform HR practices by the family business leaders disconnect develops between these 2 sets of employees. See the figure below.
Some business families are known to have applied higher standards of HR practices than other business families and reaped the benefits.
This growth phase is your unique window of opportunity to make the transition towards the professionalization of the organization.
Some miss the bus and suddenly find themselves struggling to grow. These organizations tend to be person-centric rather than people-centric, vitiating the organizational culture.
HR policies are applied selectively and not uniformly. Promotions, designations, compensation & benefits are not applied in a rule-based manner. The leadership remains concentrated in a few hands. Delegation is poor. Innovation suffers.
This damages the employer brand, and it becomes difficult to attract the best talent from the market. Slowly and silently the organizational vibrancy weakens.
Are you at a steady growth phase, after a stage of rapid growth? Are you grabbing this window of opportunity to truly professionalize top to bottom, front to back, left to right without exception?
The enlightened founder/family business leaders work with a sense of self-assurance and self-confidence on people matters. They move away from subjectivity and move towards objectivity and are firm and fair with all employees. If it is done well, it enhances the employer brand and attracts top-notch professionals to join the company. With a superior talent pool, it becomes easier to build a strong organizational culture and continually scale up.
Where do you think, is your organization in its stage of evolution? How would you know? What would you do to improve your organizational health so that you don’t miss the opportunity of sustained growth for the long term?
To have answers to these questions, contact us: https://eumatterconsulting.com/org-design-and-dev/