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Family Business Best Practice

“Best practice is a technique, approach or methodology that, through research, experimentation and experience, has been proven to reliably produce optimal results.  Best practice requires the diligent application of all readily available knowledge, skills and resources, to ensure success”.

Implementing and supporting best practice in a family business should generate sustainable success – whatever that means for a business family and its business.

The key measures of “ordinary” business success have a commercial focus, including: increasing revenues, profits and market share.  Being both financial and objective, they’re easily quantified.

Family business success is usually considered to be a combination of:  sustainable business success (over multiple generations) + family peace and prosperity (also over multiple generations).  This creates a lot of extra complexity and makes success harder to achieve, and even harder to quantify.

The Solutionist Model for Family Business Best Practice (as adopted, taught and supported by FBI), has been developed over more than 20 years through a process of:  practical research + sharing of clever people’s work + visioning + design + experimentation on living, breathing families + performance reviews + extensive peer and survivor de-briefs.

FBI’s Best Practice Process Model establishes and propels a family and its business along deliberately separated pathways towards individual and complementary “professionalisation”.  For the business this means disciplined efficiency and greater profitability;  for the family it means more disciplined behaviours and the perception of fairer procedures and outcomes, for all relevant stakeholders.

Note that the common keyword here is “disciplined”.  All complex organisms, both natural and manufactured (including family and business systems), need a degree of discipline (compliance with natural and/or accepted rules) to survive and thrive in challenging, competitive and sometimes treacherous environments.

Discipline supports adaptation – an organism’s ability to modify its own workings in response to changes in environment and circumstance.  Failure to recognise and respond to a changed reality through adaptation, is the root cause of many family conflicts and business failures.  Looked at more widely, as deduced by Darwin, it can also lead to the extinction of entire species!

Back to Professionalisation:  as a family and its business implement best practice, they get better at doing things well – their skill levels and competencies improve as they professionalise their respective activities.  Doing things in more disciplined and professional ways shouldn’t be confused with corporatising, which usually involves suppressing core values and selling the organisation’s soul, to make more money.

It’s taken awhile to develop an Australian best practice model for family business that works with almost any combination of family and business – no matter how large or small;  whatever their state of disarray;  and wherever they sit in their lifecycle.

Long term, sustainable family business success doesn’t come through luck, although we certainly want some of that in the mix.  It’s the (probable) outcome of disciplined effort, delivered over time through a process that suits the specific needs and circumstances of the family and its business interests.

The process should deliver:  Clarity, Certainty and Commitment + Strategy, Structures, Systems and Skills, for both the family and its business.  These 7 elements are delivered most efficiently through a Best Practice process.

Long experience shows that the full range of required inputs, both human and technical, cannot be provided at a high standard by individual consultancies, which invariably have a “dominant” focus.

Therefore, to produce best possible outcomes for family business clients, serious advisers need to be part of a genuinely trustworthy, collaborative adviser network, where every member understands, and is committed to, a shared best practice process.

To read more, click on this link:   FB Best Practice


Written by Family Business Institute

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