As people grow and mature, their interests and values change. Some move up in the family business, others lag behind. Disagreements break out among people who once generally agreed on goals and values.
When this happens, people think about leaving. The decision to leave the family company, though, can cause pain all around. Will it be viewed by other family members as desertion? Will it hurt the person’s standing in the family as well as the business itself? And what are a person’s prospects in the outside world if he or she leaves after being with the family company for 10 or 20 years?
The wise young person entering the family business, or already on board, will anticipate that it may one day become necessary to pull up stakes and move on. No, you should not be looking for the exits the minute you walk in the door; commitment is essential to building a career. But, yes, in today’s world it pays to be realistic: Each of us has a responsibility to become and remain marketable. It’s good for us and for the business. It is a source of personal power and makes us more valuable.
Too many family members become or remain passive dependents of the business or family. Their worth to the firm either doesn’t develop and grow, or it erodes. Gradually they become a burden or an object of scorn. Thinking about leaving is not abnormal—or unhealthy. It’s an element in reviewing where you are in your life and career. Is this the best way for you to spend your waking hours, or would you prefer to be doing something else? What else? Why?
Lever of change
Most of the time when a family member becomes unhappy and thinks about leaving, he or she would, in fact, prefer to remain—if some things could be changed. Dissatisfaction can be a lever for changes in the status quo, which can be good for everyone. The choice is to manage the process or to float along and take your chances that things will get better by themselves.
Patty, a family business executive in her late 40s, was extremely unhappy after her dad selected her brother as president. There had been no discussion and she felt shut out of the decision and demeaned. Her father was astonished at this. After all, it was his decision, wasn’t it? Patty wrote to them both, setting out her dissatisfactions. As owner of 20 percent of the business, she believed she had a right to participate in decision-making.
This storm had been brewing for a long time, and Patty was seriously thinking of leaving and relocating. She had a good relationship with her brother, however, and he was sympathetic. His only worry was that to correct the situation, their father might create a co-presidency, which he opposed. He felt that having two leaders created uncertainty among employees and, to a lesser extent, among customers and suppliers. When there are two leaders, he believed, outsiders play off one against another.
Once Patty made her feelings known, the situation was negotiable. She, too, felt that a co-presidency would not work. So instead her job was enlarged and she was promised more formal briefings on management matters. She is now a member of a newly established management team. She didn’t really want to leave the company and is happy with her new status.
Unlike Patty, people are leaving family businesses all the time. In a 1997 Arthur Andersen/MassMutual survey, more than a third of 3,000 family businesses (34.2 percent) reported that a family member had left the company within the past five years. Nearly a third (29.9 percent) said they had bought out at least one family member during the previous 10 years.
It pays to be prepared should departure from the family firm at mid-career become necessary. But doing a little research before you join can help you calculate the odds that such a break may someday occur. Especially if it has been around for some years, the firm will have a history of the long-term satisfactions of family members with the firm and vice-versa. This story is not in a book on a shelf—it’s oral history. Before entering the business, the young person should look around to see who is satisfied and well regarded, and who is sullen, if not mutinous, and why. If yours is a young firm, do some research on older family firms with which you’re acquainted.
If you do join the family business, it should be with your eyes open, and with a full appreciation that the only permanent thing is change. That requires you to do everything you can to maintain your own market value. Here’s what you can do to help ensure you’ll be welcome elsewhere, or have a power base independent of the family firm...just in case.
1. Stay close to the pulse of the business where the money is earned. Support-staff positions are important, but tend to be career backwaters. A tour of duty in personnel, public relations, finance, or real estate can provide useful experience. But if such jobs aren’t the main purpose of the business, don’t stay there. Instead, get into positions where you have to produce real, measurable results.
2. Maintain a good education and technical credentials. No matter what your age, if you lack qualifications that are important to your job, get them. That means no lame apologies about being a poor speller or writer. There are classes and tutors available for all age groups in reading, speaking, spelling, and writing.
3. Be computer literate. Today, this is a minimum technical competence. Mumbling that you can’t program a VCR, much less operate a computer, may be an endearing observation to your fellow incompetents, but it won’t advance you in today’s workplace.
4. Develop and maintain your network. Know lots of people in your line of business as well as those who sell to or buy from it, and in your community. Playing a lot of golf or tennis or hanging around bars is not necessary, though—or sufficient.
5. Keep a weather eye on the future and continually assess your prospects and the firm’s. If you ever have to work for one of your peers or subordinates (as often happens), will you be able to handle this new relationship? Do you foresee that work conditions and your compensation 10 years down the road will be acceptable? Will the company survive? Is yours among the many consolidating industries? How much risk are you prepared to take?
6. Build your finances. Too many people spend everything they earn, with no thought of the future. They cash in company stock (which grows in value) to finance the purchase of fancy vehicles (which depreciate) or large homes (which need maintenance), and have no plan to build personal capital. Their ÒwealthÓ is in their expectation of an inheritance.
Family businesses are no more or less secure than other types of companies. When the business has operated successfully for a long time, the owners can easily take their success for granted. They believe that the statistics on mortality rates for businesses don’t apply to them; they lose the sense of a need to keep pushing ahead and adapting.
Young people in the middle of this situation can’t be blamed for concluding that they’d better be ready to leave at some point. Or that the business may leave them at some point. There is no point in being taken by surprise.
James E. Barrett heads the family business practice at Cresheim Consultants in Philadelphia.