With liberty and career development for all

A commitment to family continuity requires widening the talent pool—and even trying to save “fallen angels.”

By James E. Barrett

“We want the business to stay in the family. We’d like the kids to run it or to go as far as they can in the company.” With variations, I’ve been hearing this message from business owners for years. They may have two children in the business, or 10, plus spouses. “We’ve got to get them more training,” they continue, “and we need help in planning that.” When I hear this request, I make a mental note: “Broaden their perspective before you get into details.”

What follows are six suggestions for broadening your perspective on career development and for ensuring that the talents of some highly qualified people will not fall through the screen.

1. Plant a stake in the ground. Announce clearly to everyone involved in the company that you are committed to continuing family ownership, that interested younger family members will be prepared for this, and that only those who are competent and committed will hold senior positions. Explain that to continue to develop, the firm must have a strong management and ownership team, and that every employee who is competent and committed—family or nonfamily—will get assistance in personal growth.

Many owners are not ready to do this. They wonder if they’d be better off selling the firm. Or they have doubts about whether the kids will be up to it. They worry, too, about the cost of a good management development effort.

The question of whether or not you will one day want to sell out should be resolved, but it may take years. Meanwhile, time’s awastin’: You better find out now if the kids are up to it. As for the costs of management development, it is not free, to be sure, but it tends to pay for itself over a five-year period.

2. Run a single-class operation. To use an airline analogy, some owners keep blood family members in first class and in-laws in coach. There are also some companies in which males travel in first class and females are still in coach when it comes to job assignments and preparation.

In one firm, three of six family members classified as high-talent five years ago were in-laws. Four have performed well since then and are advancing in the business. The other two, both daughters-in-law in the 27-35 age range, bowed out quietly, citing the need to spend more time with their children.

I followed up with each of them privately. While their concern for their children was sincere, both had also felt the pressure in the company of being in “female second-class”—despite management denials that such a class existed. These wives did not make their feelings known because their husbands were rising in the company and they did not want to “make waves.”

3. Rehabilitate fallen angels. The boss’s kid who has screwed up is widely discussed in family business circles. Every organization I’ve ever been associated with—family, corporate, non-profit, or government—has fallen angels. They were expected to rise to prominence but were sentenced to limbo or to burn in hell.

Often people give different accounts of just what happened: The person who has fallen from grace was used as a scapegoat; or he or she was framed; or had the bad luck to be part of a venture or decision that didn’t work out. When I hear dissonant opinions, I urge management to reopen the case. My most satisfying redemption was a son who was framed and fired by two nonfamily executives intent on reducing their competition for a promotion. As a child, the son had come to view company property as his own. So when he and his bride needed to move to a new apartment they had rented, he went to the company’s storage yard on a Friday night and took a truck. On Monday morning the general manager charged him with theft and offered him a choice of resigning or facing arrest and prosecution. The son resigned.

When I arrived at the company several years later, I checked the facts and asked for board review. The board discovered they had been deceived in the matter and began checking other controversial events. Eventually, this led to the departure of the nonfamily general manager. The family member’s rehabilitation had taken seven years. Since then, he has had five good years with the company.

4. Grant amnesty for prisoners. Often family members who are not doing well in the business become prisoners. They may be there for a number of reasons: The money and the benefits are significantly better than they could command elsewhere. Or they have always been expected to work there and the company automatically employs relatives.

It usually benefits the company and the individuals, for these prisoners to be released. To do that, they have to look into their own souls and examine their life objectives. Is this job, and what it will lead to, going to be their best shot at fulfillment? Realistically, with their present skills, attitudes and performance, do they have future prospects in the organization?

The senior leaders of the company can help them achieve a clearer perspective. The organization should provide true assessments of their capabilities and performance from all sources. When jobs open up, management must objectively assess whether this person will be the best candidate. Supervisors can only do this if they have extensive reports on the family member to compare with data on other candidates.

5. Form a family team. In larger, later-generation firms, family members who are full-time employees tend to be cousins who do not know one another well. This makes it easy for nonfamily managers to play politics and divide them on significant issues.

If the cousins meet regularly, they can become better acquainted, learn how to work better together, and develop a deeper mutual understanding and commitment to each other and to the company. I have coached a number of such teams of cousins, ranging in size from 3 to 18 people. They develop and carry out projects which throw them together regularly.

6. Organize career development planning. There should be a management development program for family members that focuses on large issues. It should supplement, but not replace, regular job performance reviews. The program should encourage family members to do extra work or pursue educational study in order to improve their qualifications. It should help them anticipate tensions between their work and home lives and to learn to achieve a balance between the two. And it should teach them about their responsibilities as owners to employees and shareholders, customers, suppliers, and the community.

While the mentoring of young family members has special requirements, the company’s career development program should not be limited to them. It should be expanded to include all employees. Supervisors should review each employee’s performance and preparation for promotion at least once a year.

These prescriptions will help ensure the proper positioning of a program that depends on the contributions of many people, family and nonfamily. By “planting the stake,” the company makes it clear that this is a long-term endeavor. By running a “single-class operation” and “releasing all prisoners” it confirms a serious commitment to equality and to the legitimacy of a personal life beyond the company. By its openness to rehab of “fallen angels,” it leaves room to correct injustices and allows family members to recover from youthful errors. Finally, by creating a family team and instituting formal career-development planning, the company provides structures for handling the progress of a group of family members.

 

James E. Barrett heads the family business practice of Cresheim Management Consultants in Philadelphia.