Managing Careers In A Family Business

In family businesses, hiring and staffing decisions are based on relationship and obligation as much as on competence and experience. After all, one purpose of family businesses is to provide employment for the family members ! But that doesn’t mean all family members perform effectively,all the time. People may slack off or stop collaborating, and sometimes they get a pass for their mistakes or behaviors. At times, they may even be disruptive to the smooth running of the business.

So what can be done in such circumstances?

Even though there isn’t always the leeway to manage a family member in the same way as an unrelated employee, there are several productive approaches that can be taken to make the best out of an uncomfortable situation while reducing the disruption and risk caused by someone who is no longer effective — or may never have been to begin with…….

Start with an open discussion about accountability. It’s fine to show deference for family membership, but it’s still essential to be candid about business needs. In an initial conversation with the family member, probe and listen deeply to understand how they see themselves, and what they believe they can contribute. Respond with a kind, unambiguous description of the expectations you and the rest of the leadership have for them, and restate those expectations in a follow-up email thanking them for the conversation. After you’ve gone on record, it’s a little easier to refer to those expectations in subsequent conversations about performance.If something about their history or connections, or your relationship with them, makes it risky or uncomfortable to deliver direct feedback to them, consider having a neutral third party convey the feedback to ensure that the message is on point and that they have understood.

Another option is to shift their role or responsibilities. Perhaps they could work as an independent contributor or as a subject matter expert? Be sensitive to their concerns about status and image. They may get to keep their title, for instance. But you can shift them to an area that has no employees, or that doesn’t interact directly with customers ,if that’s not their strength. Or if they are more successful with external audiences and customers than collaborating with teams internally,they could be reassigned as a sales leader. Or based on personal interest and style, a person could be shifted to say a compliance role where they don’t really have to coordinate with others and could be referred to as a technical expert.Some are people persons,others are better with technology,others with abstract ideas,whatever….Struggling with sales,doesn’t mean the person couldn’t be of value in accounts or manufacturing.

A third option is to reassign the family member to a non-family leader. Internal rivalries are common between family members and can arise from painful feelings about ownership and hierarchy just as easily as from performance and accountability issues. You may be able to reassign a family member who had been reporting to another family member to a strong executive who doesn’t have to be concerned about keeping the peace at family events. It’s crucial for the non-family leader to be confident that they have the backing of the senior leadership, including family.

Lastly,construct off-ramps when necessary. At some point you may need to consider alternatives that preserve dignity while clearing the way for more productive staffers. A family member may recognize that they’re no longer in the running for a top job but aren’t ready to retire, or feel stuck because they know they can’t get a comparable job in the open market. Consider designing a sabbatical process for long-standing employees, or experiment with part-time, flex-time or remote assignments. Perhaps an “on call” mentor role  can be created for a family member who serves as the “keeper of the flame” and historian to tell the stories and describe the company’s background and mission in a way that is inspiring without a day-to-day role…….Opportunities to lead community or industry groups can help sidelined family members preserve status and connection in a figurehead role that also serves the business. They might head the family council, host community events, or chair the family foundation, which means less pressure and exposure than in the business but still affording the pleasures of both decision-making and public leadership. If any of these off-ramps do eventually lead to retirement, be sure to celebrate in a way that the family member feels loved and recognized for their loyalty, years of service, and standing in the family.

By using a combination of these four approaches above, you may be able to avoid a forced exit and instead help the family member be a productive participant in the company.However,if all this fails,remember family members who have been turned aside can burn with resentment, and may still maintain some ownership…. So if you must exit a family member suddenly or harshly, make sure a human resources expert or legal counsel checks all the details of your plans and language.