Ownership & Governance

Recipes for Motivating Employees in Family-Owned Business

In a breakout session at the Vistage Think Big Conference, business leaders from family-owned businesses shared strategies for motivating employees. The biggest challenge for family-owned businesses is centered on communication. Communication is a common challenge in all business, but businesses run by families have the additional baggage of family dynamics and non-family employee resentment. Read their success stories, and you’ll get some great ideas for your business.

Jay Lopez, President and CEO of President and CEO at Estill Medical Technologies, Inc. in Dallas, Texas, faced the challenge of family members wanting to extract money from his company. After applying the fundamentals of Brad Hams’ “Ownership Thinking,” he was able to align employees and family members to focus on profitability and share in profit which doubled in one year. Lopez said the most difficult part of the process was sharing detailed financial information with employees. He urged other leaders to develop “clear, understandable language” to communicate complicated financial information with employees.

Ken Stober, President of Mueller Die Cut Solutions, Inc., from Charlotte, North Carolina, found his net profits stagnating at 4 percent because top management and employee actions were not aligned. To solve this problem, he took three steps: creating weekly one-to-one meetings with top management, developing a detailed compensation plan, and holding monthly company meetings focused on key performance indicators and profit sharing. The result of increased communication led to increases in every area, including doubling sales, boosting net sales to 9 percent and larger manager payouts.

Bradley Phillips, Managing Director of The Beck Group, said employees were frustrated with no tools to share innovative ideas. Beck attacked the problem by implementing an Innovations Day where 15 innovative ideas were presented over video conference to every employee in the company (600). Since the innovations were shared company-wide, employees quickly adopted many of the new ideas. Employees also became excited about developing new ideas to share at the Innovation Days, as opposed to shelving them in the past.

Reid Carr, President of Red Door Interactive from San Diego, California, was having difficulty matching just-in time hires to balance profitability with growth.  Carr’s team developed a new process, including: creating of a replicable hiring process, redefining roles to create the right staffing mix, adopting a proactive recruiting program(“Virtual Bench”), and creating a pre-hire orientation program to speed up productivity after hiring. Red Door experienced a hiring success rate which increased from 61 to 90 percent. The “Virtual Bench” grew from 10 to more than 150 people in one year.

Chris Osborn from the Coach Training Alliance in Boulder, Colorado, also shared his thoughts on storytelling as a communication skill for family-owned businesses. Echoing Dan Pink’s “What is your sentence?” message from earlier in the day, Osborn encouraged leaders to think about “What is your story?” He said sharing these stories with your employees will lead to enhanced performance, role clarity, loyalty and engagement. In a family-owned business, management of the core stories can make or break a company.

After reading these success stories, does it make you think about how your business approaches these types of challenges? Are you having the right types of meetings often enough? Are you communicating financials in easy to understand language? Is your hiring process standardized enough to achieve consistent results? Feel free to share your thoughts and examples in the comments below.

Category: Ownership & Governance

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About the Author: Terry Morawski

Terry Morawski has worked as an education executive for more than 10 years. He currently writes a monthly column, Tech Toolbox, for Texas School Business magazine. He has presentedon communications and technology topics at national conferenc…

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