Dad, I need a raise

By Amy C. Cosper

And other awkward family discussions about money

Sometimes it’s easy to forget the business side of your family business — especially when it comes to money, compensation and the uncomfortable topic of wealth. If you are a working member of a family business, at some point, you will need to negotiate something money-related with your family. You’ll need to know your value and get comfortable with it. And it’s hard. It’s hard because loyalty and passion sometimes eclipse reason and data. (And, frankly, sometimes the data doesn’t exist.) And then there’s the family part and the emotion and humility that comes with asking for something. And you’ll have to deal with unspoken fairness rules. What you’re really asking for is not just money. You’re also asking for approval. What’s the opposite of approval? Rejection. Ouch.

The veil of shame attached to money talk in family businesses needs to go away. It’s too secretive to be productive. It’s another one of those unique features (not a bug) in the family business ecosystem. Let’s start with these hard truths: It is not uncouth to discuss money. It is not uncouth to know your value in an organization and ask for it. And wealth, well, let’s get over it by educating our kids at a young age by talking about it.

If you look to other business sectors, asking for a raise is normal. Talking about your value is expected and, well, it’s OK to aspire to wealth. These are normal things that get discussed daily, have benchmarks and keep organizations dynamic and relevant. But for some family businesses, it’s challenging because ... family.

Asking for a raise is uncomfortable for anyone, but more so by a factor of about 1,000 in family businesses. It’s one of those “difficult conversations” that needs to happen.

Important to note here: There are some family members who ask for money but don’t deserve it (or they might deserve it, but the business can’t afford to pay). Those conversations are just as difficult, but just as necessary. In those cases, it’s the business leader, not the other family member, who has to learn to speak frankly.

Meghan Juday, chairman of the board at IDEAL Industries (and a master of having difficult conversations), explains. “For some roles in family business, there are no benchmarks. It’s hard to argue for more money when there’s no data to support the ask. And in family businesses in general, asking for a raise feels, I don’t know, kind of shame-y. I think there’s a bias against family members who work in a family business because the perception is that your value is diminished because you didn’t earn it and you should ‘just be grateful’ in whatever capacity they may be giving back to the family business.”

This is a wrong-headed take, says Juday emphatically. “Look, there are benchmarks for outside CEOs and board members. There are benchmarks for executives. We need benchmarks for all roles — including family members.”

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