Owner’s Challenges Transitioning Family Business to Structured Organization
Divya-Nagpal 29th March 2020 223Category: Learning & Development.(0)

The transition from a family-run environment to growing formal structured organization is the most trying, both for the employer and the employee. In the period that the organization is growing, processes have to be structured. The first signs of the transition, is seen in the interactions between the management and employees, which unknowingly start to get structured and reduced, as the management time is now engaged in Strategizing organizations growth. Often missed out, is its impact on the organization’s running emotional bank – the emotions the employees live with.

The interactions move to being formal and work related. Here is when the owner’s non-availability is considered as non-approach ability, more so, by the tenured employees. On the court, some employees are left disheartened.

– As the organization grows, there are mixed employee mind-sets – tenured employees having old ties with the owners and also new young employees. The valued behaviours of the two mind-sets are different.

– Transition is normal, is easy said than done. Not to forget, it is the same management which nurtured behaviours as loyalty and informality in the earlier days, has to now shift its belief patterns. The shift has to be initiated with the top management or the owners of the organization. It is their mind-set that needs a shift.

– A need of structured approach is also now seeping into the employee policies. Here is when the HR policies and processes also need to be reviewed and re-looked at. The organization is going through the cultural shift. The culture can be defined by the formal and informal conversations that happen, the flexibility the people have, the organizations focus etc.

– With which mind-set group should the organization then align the employee processes? It is often difficult for the organization is define those. In a growth trajectory, the organization’s deliverable and the speed of deliverable also keep changing. This has a rippling effect on the expected job and performance expectations from the employees get altered. The organization structuring, KRAs change, and once changed, they need to be re-looked at, in a shorter duration than it has been.

In designing of any employee-related policy, the owners are faced with many questions

– How far do I reward loyalty?

– The expected results and employee behaviours are also different. While the new employees are number oriented and probably faster, the older employees probably value loyalty in comparison to result.

– The most difficult question the management is left with is –

o how far do an HR process should allow flexibility

o The care and love for my old employee is not considered as bias. How far can I now allow biases and make policy exceptions?

o What behaviour should be encouraged and which have become irrelevant.

o How much control to be applied in each employee related policy and process.

o What is the emotional impact of the change on the employees?

o What is the larger message going to the audience. How am I being seen now?

o How much focus should put on the tasks and employee emotion bank.

– The one and only manner to design an effective HR process or a policy is to assess the organization culture and align the HR processes and policies to the THEN EXISTING CULTURE. While cultural alignment should even be for an organizations not going through transition, but more frequent for the transitioning organization.

The one barometer, to keep yourself in check is the values that the organisation carries. Whatever be the changes, if the values are stood by, and lived, by the management, the acceptance of the policy changes is easier and understood. The emotional bank can only be healthier.

So stick to the values of the organization which resonate with your values and evaluate the culture before re-designing the processes.

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