Senior Management in a Family Business

Senior Management in a Family Business

Senior management governs the success and the continuity of family businesses. Family businesses usually start up with informal structure and centralized decision-making. And usually the top managers are exclusively the founders or close relatives. As the business gets bigger and bigger, a more formal structure and decentralized decision making are needed to guarantee the success of a family business for another generation.

Furthermore, appointing the right senior manager is very crucial in this case; professionalism and expertise should be taken into consideration. Senior management selection pool should include family members and non-family members according to their qualifications and value addition to the company. Hence, a clear and formal succession plan would ensure business continuity and survival. Such a plan should start as early as the new CEO is appointed. By creating career development plan system, the nominated managers will go through gradual promotions and training in order to prepare them for CEO positions.

Although the necessity of having succession plan, many families in businesses postpone planning due to complicated implications in a family business environment. The reasons behind this delay are:

  1. Avoid any conflict between the potential CEOs available within the family.
  2. No capable family members for CEO position at current time.
  3. Avoid discussing potential loss of a family member.
  4. Not to admit that company could survive without current CEO.

Good networking, defining roles, establishing boundaries, and fair promotion and reward policy within family members in the business might reduce the conflicts and lead to better environment for success.

In the last five years, my father undertook a project of building a 5000- square-meter factory in a very prestigious industrial area in Northern Bahrain (Bahrain International Investment Park, BIIP). The challenge was to build a huge factory that occupies all operations and management under one roof. And only two weeks ago, all the operations have been shifted to new manufacturing plant. Thanks to god and to my dad’s efforts the factory is fully operational now. My father established this sweets factory in 1983 and with assistance of my mother and two of my uncles. The factory continues to succeed competing in the local and GCC market. And year after year, the business became bigger and number of stuff increased from 3 labors to 150 labors. Later on, two of my sisters and I joined my father’s business few years back. He trained us to lead the business for another successful generation. We are all qualified with knowledge and experience of the industry. The question here who is my father’s successor? Due to seniority and qualifications, my father appointed me as the next senior manager!

My father always says that he has already undertaken so many huge projects, but he believes that developing a leading and knowledgeable generation was the most challenging project in his whole life.