Business System

An Effective Business System
Is Critical for Family Businesses

An effective business system is just as important for the family business as for any other business. However, families run the risk of bringing behaviors from their family system into the business and mixing the two. This can happen without any great or dramatic warning but, like carbon monoxide, it can be lethal. So, we keep a careful watch for signs of this happening.

Membership / tenure

People are included in the business system only after it has been determined that there is a legitimate business need for the role and the person has been selected for inclusion. Membership exists only so long as there is a business need for the role and is always contingent upon satisfactory performance.


There is a single entity with final authority (e.g., owner, CEO, board of directors) and all members are ultimately responsible to this person or body.

Decision making

Decision-making authority is clearly defined and consistent.

Reporting relationships

Each person in the business system has a clearly defined reporting relationship to a boss (best if a single boss) and others in the organization. Relationships must be strictly adhered to.

Job definition / roles

There is clearly defined reason for the position to exist (i.e., it exists to support the organization) and a set of tasks to be performed, based on fulfilling the organization's needs. The relationship of each job to other jobs in the business is clearly delineated.


There is a uniform, long-range goal for the organization. All units (e.g., divisions, departments, people) make their plans solely to further this goal, subjugating their own needs if necessary.

Goals / performance evaluation criteria

Formal goals are clearly defined and established at the beginning of each planning cycle with the purpose of supporting the organization. People are held accountable for meeting their goals, and there is a formal evaluation of performance and feedback is given. Rewards and/or punishments are directly related to this evaluation.


An effective business system emphasizes compensation or greater authority/autonomy.


The organization will exist only as long as the business exists, but the goal is to keep the unit together and going indefinitely.

Family Business Help - Afraid to Ask?


Does your family business need a "tune-up"?

In a family business, old habits and routines die hard!

If you want your business to run better and be more profitable, the best first step is to get some advice from outside of your business - finding a management operations expert who can take a fresh look at the potential of the business - and to recommend what changes need to be made to close the gap between "what is" and "what it should be"!

When it comes to making a business run better we recommend:


Do you have questions about your Family Business?
Don't have the answers - don't know who to ask?
It's FREE to

Contact the Family Business Help Desk
Reply within 48 hours.

Chaos Busters - The Management Guide

Identifies 160 Key Business Questions

  • 160 Key Business Questions will stimulate creativity and innovation for your entire management team!

  • 160 Key Business Questions are the keys to unlock the hidden potential of your organization!

  • 160 Key Business Questions will save you time and make your work more effective!

  • 160 Key Business Questions is a Multi-purpose tool with unlimited applications!

How Well Organized is YOUR Organization?

Your Business Will Succeed...


You have The Roadmap for Success

That's What

The Practitioner's Guide for Organizing an Organization
Is All About

  • PGOO shows how to identify the most pressing problems to solve
  • PGOO introduces the ODS-OL (Organizational Diagnostic Survey –Online) - an electronic assessment tool that is highly effective, easy to use, systematic and data-based
  • PGOO explains how to produce a better-organized organization

Family Business Experts Understands
Family Values and Business Systems

Contact us to discuss how any of these affect your business system

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Understanding Family Business e-zine.

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