Theory of Un-Relativity How to keep nonfamily managers happy in order to grow your business.
Opinions expressed by Entrepreneur contributors are their own.
Unless your family has an endless supply of bright,hard-working, well-rounded relatives, you'll have to go outsidethe familial circle to find good managers to help run yourexpanding business. This isn't always easy for familybusinesses, however, because outsiders are often skeptical abouthow much decision-making responsibility they'll have and whatthe job growth potential is in a family-run enterprise. Finding outwhat draws potential employees to a family company and keeps themthere could be an important part of your overall businesssuccess.
Entrepreneur interviewed a number of nonfamily managerswho work for a family business now or have worked for one in thepast. Each one's experience was different, of course, buthere's a compendium of what they said is most important forworkers not attached to the family tree.
"Give us something we can believe in."
Many managers who were baptized in the sea of accounting thatengulfs most public companies are looking for something tocelebrate other than the bottom line. While they understand howimportant profits are, they want to identify with a business thathas been built on strong core values, one with both vision and acommitment to its mission. They also want to work for a companythat openly appreciates its work force.
Part of what drew Brad McKee, director of corporate developmentfor the Batra Group, an Ontario Internet and informationtechnologies developer run by the Batra family, to the company wasthe family's dedication to their mission. "Paul and Susan[whose father, S.C. Batra, is company president ] work harder thananybody else. I've come to realize that it's more thanprofits on the line--it's the reputation and tradition thefamily has established," McKee says. To him, being part of ateam that upholds the same values he has is more important thatbecoming company president.
"Help us overcome our fears that nepotism will alwaysrule."
Talented outsiders recruited to help a family run and grow abusiness need to know the family has company policies that governthe operation. They also need to know the authority and level ofinvolvement of each family member.
David Bassiri recalls a time when he was the sales and marketingdirector for a family-owned printing company. Although he enjoyedworking there, Bassiri left the company because he was offered whathe felt was a better opportunity as general manager for CougarMountain Software in Boise, Idaho. (Today Bassiri is thatcompany's president.) "The two brothers who owned the[printing] business had ironed out a policy on hiring familymembers before I got there: Managers would be asked to interviewfamily members for positions they might be qualified for, but theydidn't have to hire them."
The incident that almost broke the well-established policyoccurred when Bassiri chose not to buy from one of thebrothers' children, who had previously been a supplier for theprinting firm. "The quality, price and service he providedwere not up to par," Bassiri recalls. "The brother whoseson ran the company got angry with me, but I didn't back off.What I did say was that if he wanted me to buy from this childbecause he was family, I would. But if he wanted me to make abusiness decision, I was going to give the business to anothersupplier."
The dispute didn't escalate due to another family businesspolicy: Each brother made final business decisions regarding theother's children. "The uncle agreed with me," saysBassiri, "and worked with the nephew to help him improve hisproduct and service."
"Treat us like distant relatives."
Almost all managers appreciate the warm family values that oftenpermeate family businesses. They also like the access and closepersonal relationship they enjoy with the heads of the business.Still, as important as this part of the business is to them, mostrealize they aren't actually part of the family.
Meryl Ginsberg, now director of communications for theCalifornia School of Professional Psychology, admits she got tooinvolved with a family when she was director of marketing for ahusband-and-wife event-planning business. "It was probably myfault that I began feeling more like family than an employee,Ginsberg admits. "These people were friends before they weremy employers. I was single at the time and hungry for family."Although Ginsberg went skiing and camping with the owners'family and her input was often sought regarding business decisions,Ginsberg's involvement in shaping company policies remainedlimited and she wasn't given a piece of ownership. Although shewas upset by the exclusions at the time, in retrospect, Ginsberg ismore understanding. "If we had clearly definedboundaries," she says, "I might still be there[today]."
"Keep us out of your family disputes."
Every family occasionally has disagreements among its members,and every business has differences of opinion among its leaders.When the two overlap, disputes can not only grow fierce but becomedestructive. Family in-fighting demoralizes nonfamily employees whomay be forced to take sides or face conflicting instructions fromthe different factions.
Rhonda and Glenn Shaw, president and general manager,respectively, of Trinity Valley Erectors, an Emory, Texas, providerof passenger boarding bridges and baggage carriers for airports,shared their operating style with Judy Luckett when she was hiredas the company's bookkeeper. "They warned me thatsometimes when they don't agree it could get loud. I assuredthem that as long as they didn't yell at me or drag me intotheir disagreements, it was okay," Luckett says. "Theynever have."
"Let us show you what we can do, and then rewardus."
Compensation paid to nonfamily managers has to be commensuratewith the going rate for a similar position in a public company. Butfamily firms do have the edge in speedy acknowledgment of a jobwell-done.
One thing Brad McKee asked for in his pre-employment interviewwith Paul Batra was "the opportunity to prove myself within aspecified period of time, and having done so, [for them] to let meknow--both with compensation and with words." In the two yearshe's been with the company, McKee says he always notices andappreciates the owners fast acknowledgments of employees'contributions.
Patricia Schiff Estess writes family business histories andis the author of two books: Managing Alternative WorkArrangements (Crisp Publishing) and Money Advice for YourSuccessful Remarriage (Betterway Press).
Generation Next
When flukes suddenly spawn a family business.
Most people don't start a business because they envision afamily dynasty down the road. In truth, most businesses don'tsurvive into the next generation.
Nevertheless, some entrepreneurs do spawn a family business. Itcan happen by tragic accident: The entrepreneur dies suddenly, andchildren swarm in to save their inheritance. Or by happenstance,when relatives who had previously shunned the firm suddenly decidethey want into the family fold.
How can an entrepreneur prepare for the possibility that a flukemight turn his or her enterprise into a family business?
- Expose your children to what you do for a living. "Even ifyou prefer that your child go in another direction," says IraBryck, director of the Family Business Center at the University ofMassachusetts, Amherst, "it's valuable to understand howthe business is run." Give kids summer jobs; take them withyou to work.
- Balance your complaints about the business by telling childrenabout the positive challenges and benefits of ownership.
- Talk with the family about the business. "You never knowwhen something may intrigue them," says Bryck. You can do thisinformally or under the umbrella of a family meeting. Even if theynever enter the business, knowing about it will be important ifanything happens to you and they need to sell it.
Don't assume you know how your children or other relativesfeel about joining the business just because they express nointerest in it at one stage of their lives. Their final decisionmay be yet to come.
Contact Sources
Cougar Mountain Software, (800) 388-3038, http://www.cougarmtn.com
Trinity Valley Erectors,tve@globeco.net