Establishing an Open-Door Policy

Other Ways To Actively Listen

As companies grow and the distance between family managers and nonfamily employees widens, more formal processes are needed to solidify the listening process, such as management committees and councils. If you provide a safe place for nonfamily managers to address issues of concern within the company, by extension, you'll give all non-family employees a voice.

Another way to get useful feedback from nonfamily members is to institute a 360-degree performance review. This relies on all the people working with someone to assess how the person is doing in his or her job.

"The key to the success of this evaluation," says Karofsky, "is that it be simple, well explained, and begin at the top of the organization. The family member at the helm has to be able to ask him or herself three questions: 'What am I doing right?' 'What do I need to improve?' and 'What am I going to do about it?' Those questions then have to be asked of peers, siblings and other family members, and then asked once again of direct reports, who are all assured of anonymity."

Karofsky says the family business head has to amass the information gathered from others and see how it matches his or her own perception of performance and the action plan he or she has developed. "If a CEO models this type of evaluation and it has no repercussions for people doing the assessment, others will go along with it too," he says.

Still, under some circumstances, a culture of openness has to be coupled with the ability to actively listen. Otherwise, it's of little value. For example, if you're a family manager and an employee says to you, "You're making it hard on me if your nephew takes the week of Christmas and New Year's off," you have to find out what he means. Is he complaining of unequal practices because he's been refused the time off, but the nephew hasn't been? Or is he saying that he's going to have too much work during that period and he'd like some additional help? You need to ask the person to elaborate on the comment and then check out your interpretation with him before taking any action.

Another example of misusing open communication is if, after encouraging input, you pay no attention to it, never act on suggestions, or allow employees' input to negatively affect their standing in the company. Then you're sabotaging your own efforts. "The business has to be run rationally," Kaplan says. "There can't be a gap between what you say you want and what you really want. People figure that out immediately."

If you really want nonfamily employees to open up and communicate with you, but you can't figure out how to do this, Karofsky suggests calling in a third party. That person needs to be a skilled, impartial interviewer who can speak to nonfamily employees to find out why they're not opening up, and someone who can help you set up structures to facilitate communication between family managers and other non-family employees.

Looking for your own family business consultant? Try the Boston-based Family Firm Institute, a nonprofit organization of family business advisors. Call (617) 789-4200 or visit

Contact Sources

  • Northeastern University Center for Family Business, (781) 320-8015,
  • Thos. Moser Cabinetmakers, (207) 784-3332.
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This article was originally published in the January 2001 print edition of Entrepreneur with the headline: Hearing Aid.

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