It's no secret that in-laws working in the family business
can be a pain. They may stir up trouble if they're dissatisfied
with their working conditions or pay. Or they may become defensive
if they think their spouse or other relatives are being treated
unfairly. Fearing these negative scenarios, many family business
owners are reluctant to hire in-laws.
Statistics show another reason to be wary of letting in-laws in.
According to a recent Arthur Andersen/ MassMutual American Family
Business Survey, 22 percent of family businesses report that at
least one family member has gone through a divorce in the past five
years.
As upsetting as divorce may be personally, it can also threaten
the underpinnings of a family business. An angry ex-in-law might
act as a contentious naysayer to business growth or know enough
about the company to share its secrets. Given the stories family
businesses hear, it's no wonder many recoil when faced with the
prospect of hiring in-laws--even if they haven't experienced
divorce or embittered exes in their own families.
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"Sooner or later, family companies will have to face the
in-law issue," says Bonnie M. Brown, president of Transition
Dynamics Inc., a family business consulting firm in Eugene, Oregon.
This issue, however, can rear its head in a variety of ways: Family
members might fall in love and marry people already working in
their business or marry people who can enrich their family's
business, or the business might have an opening for a position that
a talented in-law could easily fill.
Given the potential for problems, family businesses
shouldn't jump into the in-law pool headfirst--trust must be
firmly established. By fostering solid relationships with in-laws,
you may be able to prevent problems, or at least help prepare
yourself and your staff for the future should problems occur.
Trust was a rewarding part of the relationship Stan Mandel had
with his father-in-law, Ben Solnick. Mandel is now director of the
Center for Entrepreneurship at Wake Forest University in
Winston-Salem, North Carolina. But until 1992, he was the head of a
retail business started by Solnick's family. Before joining the
company, he'd worked for a major consulting firm but had no
retailing experience. What he needed to know, he learned under
Solnick's tutelage.
"For the 10 years Ben and I worked together, he was very
supportive of my doing things differently, and I was supportive of
him taking whatever role he wanted," says Mandel.
"Actually, it developed into a closer relationship than I had
with my own father."
Building this kind of trust with your in-laws is a two-step
process:
Step 1: Sharing Information. In-laws often feel left out
of the tightly knit family units that work so closely together in a
business. And what family business owners frequently don't
recognize is that although in-laws aren't shareholders in the
family business, they definitely have a stakeholder's role that
shouldn't be denied: In-laws are the ones often asked to sign
prenuptial agreements necessitated by the business. They have to
deal with their spouses' or relatives' erratic or long
hours. And they have to listen to endless business discussions
during holiday gatherings.
To help them put up with all this, in-laws need to understand
what's going on and why. "I urge family businesses to have
an annual state-of-the-union address given by the owners to the
rest of the family," says Brown.
It's a tradition Charles S. Childs Jr., a third-generation
co-owner of Chicago funeral homes A.A. Rayner & Sons, adheres
to. "We have quarterly ownership meetings," he says,
"and then discuss what we decided upon with management and
other family members. It's important that everyone know
what's happening so they can be supportive."
Step 2: Getting Involved. The involvement of in-laws
usually grows as the business expands. That's also when its
need for qualified people increases. "When my mother-in-law,
Florence Smith, moved to Chicago from California, she asked if we
had any vacancies in the office she could help with," says
Childs. "We needed someone who could counsel families that
were pre-planning funerals--someone with an insurance
background." So Smith went for training and got her insurance
license. She now fills an important role in the organization.
There comes a point, says Brown, when a family business asks
itself, "What are the risks and what are the benefits of
having an in-law in the business?" Usually the benefits are
obvious: The person can do the job needed and can be trusted to do
it well. But what can you do to minimize risks? Brown suggests
working through as many uncomfortable scenarios as you can think
of. For example, what if the in-law winds up reporting to his or
her spouse? "Raising the specter of what might happen helps
people realize the importance of structure and guidelines,"
Brown says. Guidelines on how disputes will be resolved, who will
report to whom, how performance will be measured and the like tend
to diffuse the tension that can exist regarding bringing an in-law
into the family business.
From there, welcoming an interested and talented in-law into the
business is much easier. Says Brown, "Once these issues are
addressed, family businesses may find there's good reason for
in-laws to participate in the management--and someday even in the
ownership--of the business."
Patricia Schiff Estess writes family business histories and
is the author of two books, Managing Alternative Work
Arrangements (Crisp Publishing) and Money Advice for Your
Successful Remarriage (Betterway Press).
Contact Sources
A.A. Rayner & Sons, 318 E. 71st St.,
Chicago, IL 60619, (773) 846-6133
Center for Entrepreneurship, (336) 758-3689, http://www.mba.wfu.edu/faculty/mandel/
Transition Dynamics Inc.,bbrowntdi@aol.com, http://www.transitiondynamicsinc.com