Five lessons from Ella Baché on running a family business

The old saying goes you should never mix family and business yet 70% of small businesses are family owned and they are generating over $4.3 trillion dollars for the economy. 

So what is the secret to this success – values!

Offshoring, downsizing and a belligerent focus on satisfying shareholders has tarnished corporate Australia, but thousands of family owned businesses have the opportunity to reverse this by proving the power of values as a basis for success.

Before I joined the family business nine years ago, Ella Baché had been operating for over 50 years and had established a strong set of values and a charter for doing business.

I was working at the very core of corporate Australia in advertising but after just a few months in the job the contrast was obvious. Management was focused on the dollar and what shareholders were getting and this culture permeated a slight sense of doom as people were never quite sure what would happen if the financial goals weren’t achieved.

It was from this clash of ethos though that I quickly learnt the most valuable asset a company can leverage is its values as they form the basis for everything the company does, from its focus on the range of goals it sets to how it makes a decision as well as how staff are dealt with and treated. 

The saying ‘do unto others as you would have them do unto you’, is so very apt in the business world.  When CEO’s place a strong emphasis on profit over people, there is very little loyalty and respect from both sides, which leads to low company morale and sporadic productivity.

In family business the focus is on empowerment where a common goal forms a core purpose for every person within the organisation thus reducing the potential for individual agendas to develop. 

The other key difference is the level of honesty engendered into a family business. Communication is the key and every member feels involved as management is extremely consultative at all levels. Everyone has their role and all of those combined play an important part in helping the business reach its goals.

And this is where corporate Australia can take its biggest lesson from family businesses – humanise practices, be more consultative and have a higher rate of employee morale and retention. In the end nothing happens without people, so treating them well must be a priority.

Values are at the core of the entrepreneurial spirit within family-owned businesses; they motivate every decision that is made and form a solid foundation for employee and management unity. This focus is strong and generates a core competitive advantage for the business, with people drawn to the authentic culture of the organisation.

‘Employer of choice’ is a real concept and family-owned businesses have this nailed. This is proven by the fact around 40% of the franchise owners in the Ella Baché network are also family-owned teams. Like attracts like and after 60 years we know what works. 

Another key difference that corporates could learn from is how to make business decisions that are more flexible when it comes to supporting the long-term value of a brand, as opposed to merely seeking shorter financial gains. The family business sector is certainly proof this strategy reaps reward.

Granted, corporate Australia has introduced some fundamental strategies like the purpose of solid planning, structure and a clear corporate charter, which are essential in the success of any business, but the authenticity in employee relations is often left out. It could also be argued the service provided by many companies is reflective of the lack of values driving business.

My experience working in a family-owned business has not always been smooth though and being the great grandniece of the founder was not without consequences. I had to work extremely hard to change the perception of my co-workers who otherwise thought I was a ‘spy’ as I was the first family member in 20 years to be working ‘on the front line’.

There was also the need to establish a good way to work with my father that separated our relationship from the job. With all I have learnt and experienced I believe a combination of the rigid structure of corporate businesses and the fluid values of family-owned businesses are the perfect recipe for success.

All businesses can benefit from the following tips based on life in a family business, to deliver better operations and returns.

1. Hold regular communication sessions and retreats – get to know the people you work with. Management should never be faceless and values are best delivered from the top down.

2. See beyond the profit – assign people roles based on their highest skill and the greatest value they can offer the business from a cultural perspective. The right culture goes a long way in delivering top performing employees that work hard and WANT to deliver results not just because they have to.

3. Keep values and culture alive – base expectations on a set of core values that everyone can embrace in order to build a culture that is trusted with no surprises. It will also set expectations for behaviour and performance that cannot be challenged. Value and respect of the individual is paramount as you need to be buying into people not shares.

4. Develop a succession plan – be clear in establishing a road-map to get employees excited about the next stage of their careers at all levels. Education is vital to achieving this and must be budgeted for accordingly to ensure passion is nurtured and cultivated. 

5. Hold regular reviews – communication and cooperation is at the epicentre of success. Let your employees know they are valued by giving them a comfortable platform to communicate with management and talk through their performance or concerns on a regular basis. This will also enable better insight into the personality of each team member, which can then be applied to achieve tailored people management practices.

Pippa Hallas is the chief executive of the Australian operations of international skincare brand and family owned business Ella Baché.