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Family-run businesses are the rule, not the exception, in the language services space. In this brief, we review some of the most important principles for family-owned language service providers (LSPs).
Not All Family Businesses in the Language Services Industry Are Small
Most companies providing translation, localization, and other language services are small – usually with 10 or fewer employees (see “The European Translation Market,” Nov09). However, it’s important not to equate “family-run” with “small” – after all, a litany of major global brands fall into this category – think Carrefour, L’oreal, Mars, Viacom, and Wal-mart, among many others.
Likewise, in the language services business, many of the top-earning companies are owned and operated by members of the same clan. SDL’s Chairman and CEO Mark Lancaster works alongside the Chief Operating Officer, his wife Cristina. Larry Gould, CEO of thebigword, works with his son Joshua as Chief Commercial Officer. So, as in the rest of the business world, family-run language services firms are commonplace – and they can be found at all revenue levels of the industry.
Best Practices for Working Well with Family in the Mix
Language service providers can prevent friction with other workers by observing a few basic principles:
• Family members must deserve the positions they hold. In order for family members to survive and thrive, they need respect – and that respect must be earned. Unless a family member is capable, he or she should not be allowed to work in the business. Otherwise, employees will quickly lose respect for both the individuals in question. If anyone suspects that an individual receives a paycheck just because of a familial relationship, that person will lose confidence in the company’s leadership as a whole. This dynamic puts an extra level of pressure on employees who are also family members to exhibit outstanding job performance.
• Acknowledge that a family member’s presence affects other employees. Even if the family member worker is capable, co-workers are likely to treat him or her differently than they would a non-family member. For example, they may not be as hard on a family member as they would on another peer, because they might fear some sort of repercussion from above. Likewise, they may be fearful of making suggestions to help the company improve, out of concern that this feedback could be taken as a criticism by upper management.
• Special treatment should be avoided. One of the fastest ways to lose credibility and enrage other workers is to give a promotion to a family member while passing up more qualified and higher-performing non-family members. It is better to allow a family member to spend several years gaining experience in another company before joining the family business. Also, allowing family members to do things that other employees do not get to do – such as coming and going at their leisure or taking extra days off – is the fastest way to kill morale.
• Balance the dynamic with non-family leadership. Successful family-run businesses all have one thing in common – they seek out executive team members who are not members of the family. This ensures that there will always be a perspective of someone who doesn’t have a genealogical bias – and gives employees an additional sense of fairness and confidence in the leadership.
Family Members Won’t Stay Around Forever – Nor Should They
As companies evolve, the family’s role usually transforms from workers into beneficiaries. However, family members who do not meet the requirements expected of other employees should stay out of the business from the very start – they can have a role as investors, but should not be involved in running the company.
At some point, every family-run LSP must formulate a succession plan for its management team. Even when there is no apparent danger of any executive leaving, it’s essential to begin grooming others to take over the most critical tasks associated with leading and managing the company. The sooner this happens, the better the firm’s chances of long-term survival.
Now, with all of our words of caution, we do recognize that family members can be the best allies in business. They can be relied on for unquestioned loyalty. They may be able to offer critiques with no sense of hierarchical intimidation. It is not by accident that family businesses are formed in the first place. Our strongest recommendation is to run the family business with the rigor and transparency of an institutionalized business (see “The Owner’s Guide to Maximizing LSP Value,” Apr10).
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