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Putting Business First
Jolene Brown knows her way around the kitchen. But these talents extend beyond the family-style dinners she prepares in the kitchen on her West Branch, Iowa, farm. Brown also is at home at hundreds of kitchen tables across the U.S. and in Canada, where she often dishes out truths
to farm families that are hard to swallow.
"No, I haven't heard it all, but I have listened to, studied, and learned a lot about working in a family business," she says. "One thing I have learned is there is a major difference in the relationships and results of a Family-First Business and a Business-First Family."
This difference revolves around how decisions are made. "Basing decisions on emotions or what family members want is what you'll see in a Family-First Business," she says. "Sometimes those decisions work out well for everyone, but that's more a matter of good luck. The majority of times, it leads to problems, first within the family, then in the business."
Brown says the hallmarks of a Business-First Family are making decisions grounded upon a mutual mission, written goals, legal documents, and quality communication.
"A successful Business-First Family doesn't sacrifice family for business, but it honors the family and has the family's best interest at heart. That's why they do the business correctly," she says.
Communication is a major fault line triggering seismic tremors in a family business. In fact, Brown has developed her own top 10 checklist, which she titles, The Top 10 Stupid Things Families Do To Break Up Their Business.
"Many of these mistakes could be avoided with better communication," she says. "Mind reading is not an acceptable form of communication."
Number one on Brown's list is when families assume that genetics is all that's required to create a good working relationship or team. "Just because you were born into the same family doesn't mean that you should be working together as a team," she points out.
In fact, she also tells families that being born into a family isn't enough to guarantee a role in the family business. She recommends a probationary period of at least one year.
"Hire family members carefully, because it's darn hard to fire them," Brown says. "A family business is not a place to rehabilitate a family member."
Written job descriptions and standards of job performance are critical to a family business. "Job descriptions tell you what to do and who is to do it," she says. "Standards of the job tell you how
well something needs to be done. If you don't write these things down, how do you know when the work is done and it is done right?" She lists seven key tools of a successful Business-First Family:
- Business Plan
- Job Descriptions
- Compensation Package
- Code of Conduct
- Buy/Sell Agreement
- Meeting Procedures
"You must have the proper business tools and use them while times are good," she says. "Then you'll already have them in place when times get tough."
Brown has developed a series of questions to ask before bringing in a family member:
- What benefits does the person bring to the business?
- Does the business support these benefits, or will it expand, add value, or cut expenses?
- How will the business provide for a compensation package for this person?
- Is the family member emotionally mature, personally independent, and will he or she act professionally?
Brown, who is an active partner in the farm with her husband, Keith, knows that farmers often prefer to focus on "weeds, seeds, and breeds" than people.
"Farmers are smart business people," she says. "But to be competitive in all areas, they need to understand it's the people side of the business that makes production possible."
In addition to elevating the priorities of human resources and business planning, Brown advocates more attention to leadership training within the family.
"The number one job of a leader is to replace himself or herself," she says. "But who enjoys thinking about that? This leads to procrastination. Leaders need to look at themselves in the mirror and ask, 'What would happen if my succession plans (or lack of them) took effect today?' It's often too late when a sudden health crisis occurs.
"Taking over the family business shouldn't be considered a birthright," she says. "There are conditions that should be met. Choosing the best next leader for your business requires first defining what characteristics and skills are needed and then determining who is best qualified for that job."
Management transition and ownership transition are two separate tasks requiring a great deal of generational give-and-take. "The next generation knows things we need to know but may not want to learn," she says.
Although farm families value traditions and respect the achievements of previous generations, Brown reminds them that change is required to avoid obsolescence.
"Habits, patterns, and traditions make for great family history," Brown says. "But vision, creativity, and commitment make for a long-lasting business.
"In agriculture, if you always do what you've always done, you won't always get what you've always gotten," she says. "You'll be out of business. The pace, people, process, and products for agriculture have changed. You need to change along with it, too."