While family-run businesses have created some of most innovative retailers in the country, the way they're run is often dysfunctional.
That's according to Jay Goltz, who's writing a series for The New York Times exploring the challenges of family-run businesses. Mr. Goltz grew up in a family business and has launched five businesses on this own, including Jayson Home & Garden, the Chicago-based home furnishings store and e-tailer. Asked by the Clinton Foundation, he volunteered to act as an unpaid consultant for Chicago-based Consolidated Printing, one of the pioneers of the "green" printing industry, founded in 1973. While securing a loyal customer base, Consolidated Printing's organization was holding it back from fully capitalizing on its reputation, Mr. Goltz contended.
Of the 12 employees, six are family members: a daughter, a son, a son-in-law, a husband, a granddaughter and a grandson. "In many ways, the family aspect of the business has served them well in that everyone pitches in to get the job done," wrote Mr. Goltz. "This can be a real advantage, but it can also get in the way of building infrastructure."
After an initial meeting, Mr. Goltz said he believed that one issue facing the company was that no clear person was in charge of day-to-day operations. This was a particularl problem since founder Marilyn Jones serves as mother, grandma and wife in other capacities to people within the company, while the other potential leader, her son in law, Shane, serves as brother-in-law, husband, father and uncle to others.
He remarked, "I told Marilyn that she needed to be the boss at work, not Mom or Grandma or Sweetheart."
The second issue concerned standards, specifically who sets them and who monitors them. For instance, Mr. Goltz wondered if Shane's wife tended to side with her mother or her husband.
"At my business, I have learned how to get professional people to act like family (in the positive sense). On the other hand, getting family members to act like professionals can be a different story," he said.
But he also said setting standards helps identify which employees aren't suited for particular tasks.
"I suggested that when you enable relatives, you really aren't doing them any favors," wrote Mr. Goltz. "And when you enable a relative who is also an employee, you are also doing a disservice to the business -- as well as to the other employees."
Finally, Mr. Goltz wrote that, with many employees focused on finishing their specific tasks, no one is exploring the big-picture view. He said with better priorities set, Consolidated Printing can focus more on marketing to new customers.
"The company is stuck in a slow growth mode because the key people are always working on the small picture," said Mr. Goltz. "This is known as working in the business instead of on the business."
Discussion Questions: What are the overall pros and cons of family-run businesses? What are some steps family-run businesses can take to overcome potential organizational issues?