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www.wbjournal.com August 17, 2015 • Worcester Business Journal 17 I n the classic science fiction novel "Dune," a master assassin named Thufir Hawat reminds Paul, the story's hero, "The first step in avoiding a trap is to know of its existence." The same is true of risks to family businesses: The first step in avoiding risk is to acknowledge its existence. This is harder than it seems, and may indeed appear counterintuitive when it's viewed out of context. Family businesses experience risk on several levels, but many failures and shortcomings can be sidestepped by avoiding these five common mistakes. 1. Incomplete documentation. In a family business, procedures often evolve over time as a result of experience, and are adjusted as needed without notation or standardization of those protocols. If your habits, routines or methodology are never in writing, the result is a lot of meaningless time and energy wasted in re-establishing a good working relationship with customers, vendors, employees and family any time business must be carried out by a surrogate. 2. Inconsistent communication. Formal and detailed communications between management and the owners (even when they're one and the same) may seem inconvenient, but it provides any substitute who is stepping into your shoes as manager a clear understanding of your choices, and it will set the expectation of how and when to communicate with your family. By providing reasoning and instruction, you're empowering your family and employees to direct their efforts toward one goal that remains consistent across all channels. 3. Incompatible financial interests. Family connections in a business can cause complications when financial and personal goals are not aligned. Emotional ties can derail plans as interests compete for priority status. A unified vision with all family members striving for compatible financial goals results in consistent progress toward achieving your vision and exceeding expectations without relinquishing control of the company or its assets. 4. "Lone wolf" syndrome. Owners commit to being an active part of their social and business communities, and strong community ties are integral to the prolonged success of a family business. Creating these lasting relationships drives new and repeat customers, but can be deterred through self-imposed isolation or alienation of people important to the business. 5. Lack of an advisory board. An advisory board provides a business leader with consistent recommendations and acts as a repository for institutional knowledge. Should something unexpected happen to the CEO, a qualified advisory board would be able to advise the successor, maintaining the viability of the business and facilitating a seamless transition. A family business can create a legacy that will support future generations or leave a burden of financial and managerial chaos, depending on how they're prepared. Avoiding these pitfalls is the first step toward guaranteeing that your investment never falls victim to unnecessary risk. n Matthew Erskine is owner and operator of The Erskine Co., of Worcester, which specializes in estate, tax, risk and succession planning for family businesses. Contact him at M.Erskine@ErskineCo.com. By Roger Magnus and Heide Martin Roger Magnus is research director for the Worcester Business Journal and holds a master's degree in library and information science from the University of Texas at Austin. Heide Martin is research assistant for the Worcester Business Journal. 10 Things I Know About... Effective research Know risks and mitigate them KNOW HOW 10. Ask a librarian. Not all information is available on the Web. Sometimes, research requires searching an online database, CD-ROM, book or microfilm in a public or academic library. Librarians can guide you in the right direction. 9. List sources. Any time research is presented, it needs to be cited in a bibliography or listing for legitimacy. This will enable others to verify the information and learn additional details about it that could enhance the research. 8. Google has its limits. Different search engines "crawl" the Web differently and pick up different bits of information. There is also the "Deep Web" or "Hidden Web," containing information that search engines can't reach. 7. Define the data. For example, if you're comparing CEO pay in a proxy statement, are you just using salary or other forms of compensation? 6. The 'how' is also important. Make sure you understand how data were collected and what limitations were involved. Most data collected is from a population sample, so margins of error if listed should not be ignored. 5. Apples to apples, but explain the oranges. If you're comparing data, such as among companies or geographies, be consistent and use footnotes for exceptions. 4. Primary research is important. Sometimes data can only be found by calling, emailing or surveying. 3. Learn basic search techniques. Use keywords, operators or limiters (such as document type or time frame) to filter out information. That way, you won't be overwhelmed by the results. 2. Verify, verify, verify! Try to confirm information found and, if possible, locate the original source. 1. Have fun! Research can be tedious, but it's also a process that can take you places you never expected to go. n B eing a manager or supervisor is no easy feat. You're juggling tasks, goals, budgets and clients. Projects seem to overlap one another, or worse. You're the go-between for the company and employees when it comes to communicating goals, providing motivation and offering critique. But don't forget employees' development! Employees need to learn new skills, but you don't have to spend a lot to teach them. Here are three things to keep in mind when looking at the importance of staff development: It increases worker loyalt y, especially when a supervisor has taken the time to understand someone's skills, where the gaps may lay, and has a vested interest in an employee's success. "Loyal employees are more engaged. Engaged employees are more productive," says Victor Lipman in an article at Forbes.com. Meet them where they are. Whether it's finding creative ways to develop remote workers or serving the training needs of five generations now in the workforce, "organizations must restructure the way employees learn and the tools and activities they use" to train staffers, said Keith Ferrazzi at HBR.org. On-the -job development works. At Inc.com, Jerome Ternynck says internal training accounts for up to 75 percent of effective learning. He suggests setting up cross-functional teams for projects to let employees spread their wings in ways they might not otherwise. Start a mentoring or coaching program. Job shadowing is also valuable, he writes, "… a great way for your employees to learn critical elements of other jobs, while further developing in their own. It is also a great way for employees to more formally explore potential career opportunities." n 101: EMPLOYEE DEVELOPMENT >> BY SUSAN SHALHOUB Special to the Worcester Business Journal BY MATTHEW ERSKINE Special to the Worcester Business Journal 5 failures that can cause risk for family businesses