Tuesday, November 14, 2017

Best Practices for Your Business Family

Studying Toyota’s reputation for finding the best ways to do things has been a staple at business schools.  With respect to best practices, though, Toyota explained to one researcher, “we know that, even if we design a perfect process, the environment will change around that process in unknown and unknowable ways.”  Best Practices Don’t Matter. Here’s What Does., The Daily Beat Blog, August 27, 2014.  Toyota could very well have been describing a family business. 

Best practices are not all bad.  A best practice is a method or technique that has been generally accepted as better than alternatives because it has been shown to produce results that are superior to those achieved by other means or because it has become an acceptable way of doing things.  Some families, in search of best practices, are looking for pre-made templates to apply to their organizations.  However, as one leader put it: “…[B]est practices are a misnomer.  Often what we call best practices were at one point good or smart business moves, but we seldom do the work to determine how long they stay the ‘best’ or whether they’re universally applicable.”  The Problem With Best Practices, Fast Company, October 15, 2015.  In other words, sometimes what works as a best practice in one organization is not always applicable to another business family’s needs.  What’s more, needs change over time, and practices must adapt over time.

Best practices are better understood as frameworks for thinking about how other family businesses have been successful.  Instead of something being a “best” practice, it is better be thought of as a smart practice that successfully addressed certain issues in other family business contexts.  As the saying goes (and we have observed to be true): when you’ve seen one family business, you’ve seen one family business.  Family business are unique.  It is not about applying a plug-and-play formula of the same “best practices” to every family business.  The key is learning from how others have found success, crafting solutions that will best suit your family business, and adapting those solutions as the business changes and the family changes. 

A family business advisor can be invaluable to this process.  Not only can an adviser help you understand what practices and frameworks have helped other business families, but a family business advisor can help you build the right solutions to drive your family business towards long term success.

Looking for a simple template of best practices that others have used, and thinking that will be best for your family, is a fool’s errand.  At best, cookie cutter “[b]est practices don’t make you the best.  They make you the average of everyone else who follows them.”  The Problem With Best Practices, Fast Company, October 15, 2015.  At worst, misapplied best practices can foster division and failure.  Learn to know the smart practices other business families are using and, with guidance, implement what will best fit your family and your business.  It’s not about the best practices for someone else’s business; it’s about developing the best solutions for your business family.