Accountability in family business

Bunso is not pulling his weight,” says Kuya, the second-generation president of the manufacturing business started by their parents.  “As vice president of sales, he is supposed to train his team.  But he leaves early in the afternoon, saying he has to meet clients.  He misses several meetings; his senior manager handles them.”

“But records show that Bunso is generating lots of sales,” I say.  “Isn’t he your top salesperson?”

“Yes,” Kuya says. “But he works on his own.  He does not keep an eye on his team.   One of the sales team came to me complaining that some employees are getting secret commissions, cheating us.  He said Bunso was never around so he had to inform me instead.”

“Did you talk to Bunso about it?”

“I tried to, but he grew defensive,” says Kuya.  “He said I was attacking him, the same way I used to boss him around when we were kids.”

“Does Bunso know his responsibilities as head of sales?”

“He should!” says Kuya.  “He started working in our business right after college, the same way I did.  Our parents trained us.  Sales is the heart of our company, so he knows his job.  He just doesn’t want to do it.”

“Bunso told me that he was bringing in a lot of clients,” I say.  “When he asked you for a bonus, you allegedly got mad and told him to be more accountable.”

“That’s right!” Kuya says.  “He’s so entitled!  How dare he ask for more if he has not fulfilled all deliverables?”

“As a salesperson, I believe he has done a decent job,” I say.  “But as sales head, with the expectations that come with this rank, he appears to be deficient.  The problem lies not so much with Bunso as a salesperson, but on your company system of assigning responsibilities and expectations for certain roles, and training people appropriately for these.”

I help Kuya and Bunso accomplish three tasks:

First, define clearly what the role of sales vice president entails, including financial, management and logistics expectations.

For example, instead of the vague expectation for Bunso to increase sales, he is now expected to “train the team to each increase personal sales by 20 percent in six months.”

Instead of the expectation to “look after clients,” Bunso is now expected to “personally look after the five biggest clients” and endorse the rest to the sales veterans on his team.

Second, refine company systems, including policies and procedures, to ensure that the clearly defined expectations can be met.

Instead of just Bunso receiving personal commissions from clients, he and his team will now be rewarded for good client service.  Calibrated bonuses are given to Bunso for training his people and to his people for executing sales services.

Instead of Bunso rushing out every afternoon to meet clients, he now schedules client calls for the five major ones on just two afternoons (instead of five).  He now has enough time to oversee his people, keep a watchful eye on them and hold them accountable.

“It’s easy to blame individuals as lacking accountability and commitment to their jobs,” say advisers Amy Schuman and Christopher Eckrich of the US-based Family Business Consulting Group in their article “How Can We Have More Accountability in Our Family Business?”

“A closer examination, however, will often show that management systems are not optimized,” they continue.  “Accountability is not merely getting employees to do what you want them to do. It is a process of aligning each employee’s daily behavior with the agreed-upon direction of the firm.”

Third, practice how to communicate as business owner-partners vis-à-vis as siblings.  Kuya is understandably frustrated by what he views as Bunso’s sense of entitlement, in the same way Bunso is hurt by what he sees as Kuya’s bullying behavior.

Kuya and Bunso are now practicing how to be more objective, including how to frame critiques as workplace observations rather than personal attacks.

They are also striving to create a culture of transparency in the firm, to empower employees to deal directly with issues.