12 Rules for Family Business Failure
[Editor's note: the following excerpt appears in the Private Company Director October 2015 issue.]
Lansing Crane was a keynote speaker at the Private Company Governance Summit 2015 and spoke about governance issues for companies and their boards. Some of his key talking points were using the board as strategic advisors, using the board's advice on personnel decisions, the board's role in culture change and avoiding common mistakes.
During his speech he also took the time to outline some rules for family business failure. They included:
1. Don't share the wealth.
2. Keep shareholders in the dark.
3. Reward activity and seniority, not performance
4. Treat family employees better than others.
5. Don't share company performance information with employees.
6. Use the word "I" instead of "we".
7. Let family trump on all decisions.
8. Believe no one can understand your business better than you.
9. Believe that tactics are really strategy.
10. Avoid candid performance decisions and communication.
11 Engage low-cost advisers and don't tell them everything.
12. Take no risks.