One of the biggest challenges in family businesses is there are so many stakeholders who care about the business – family members, owners, managers, and potentially a host of others (board members, trustees…). All of these stakeholders have a desire, and sometimes a right, to know what is going on in the business. Managing the needs and expectations among all of these people can be fairly complicated. How can this be accomplished without stepping on too many hidden ‘mines?’
To ensure open lines of communication, it is important to communicate equally to all members of a particular stakeholder group. If you rely on informal means of communication (e.g., catching up at a family event, or calling your cousin when you think he needs to know something), you run the risk of leaving someone out. One way to ensure you have appropriate and open lines of communication is to develop a communication grid. This grid provides an inventory of all forms of communication between various stakeholders.
Start by listing all the stakeholder groups in your business. Then think about what information each of these stakeholder groups should be receiving. You can also think about what information they should be providing. For instance, the board chair may send a letter to all the shareholders at the end of each quarter. But, how do shareholders provide input to the board? If independent directors are involved, perhaps shareholders could have dinner with the board a couple times a year. Another example to consider is how the family ensures they understand the needs and desires of the next generation. Perhaps they are not interested in employment in the family business in the same way that the current generation was. How can the communication across generations best occur? If the younger generation members are included as a separate stakeholder group in the communication grid, the opportunity to think about how to communicate with them and receive information from them will be captured as well.
The grid should include forms of communication (e.g., family website, family newsletter, financial statements, etc.), when they should be received and who is responsible for generating them. Once you have completed the grid, circulate it to all stakeholders for their input. If there are places where communication is not sufficient, they should be surfaced. Once there is agreement on what communication should occur, the grid creates accountability for ensuring that communication occurs. The grid can also be used as a long-term planning tool to evaluate how communication may need to change over time as stakeholder groups grow and evolve. Taking the first step of documenting current communication patterns can lead to a host of opportunities for improving lines of communication and building transparency and trust.