Opinions expressed by Entrepreneur contributors are their own.
Entrepreneurs running family businesses hire their parents as consultants or employees for a variety of reasons:
- The heir to the family business works out a consulting arrangement with a parent so the child can assume the helm while the parent provides occasional counsel.
- Entrepreneurs looking for reliable assistance tap into the reasonably priced knowledge and dedication of parents who act either as consultants or as trusted employees.
- Parents are facing uncertain financial futures. Pensions, once dependable retirement income sources, have shrunk. People are living longer and are fearful of outliving their money. Healthy, energetic people resist early retirement. And parents who lose their jobs as corporations downsize their work forces may have difficulty finding new positions. Worried adult children who feel responsible for "fixing" the situation may decide to hire their parents to help stabilize the parents' finances.
Does the shift in power, kids playing boss to their parents, work?
"Rarely," contends Fredda Herz Brown, a family business consultant in Leonia, New Jersey.
"It's too easy to fall back into the role of child," agrees Michael O'Malley, a family business consultant in Chicago. "Most children don't feel they have 'permission' to confront their parents. When there is a problem with a parent employee, most children become paralyzed and don't do anything to correct the problem for fear of losing the parent's love or affection." If a parent doesn't do a good job, it's often extraordinarily difficult to criticize, reproach or even steer him or her in the right direction.
Family business advisors point out several other concerns that come with hiring a parent:
- History. "No matter what, a child will not be able to treat a parent as he or she would treat another employee," says O'Malley. "There's too much personal history. Kids don't have experience in measuring their parents' performance, and they're more likely to make excuses for them, such as 'They're doing the best they can' or 'I know it was done in my best interest.' "
- Overstepping bounds. Bringing a parent in for moral support (as someone you can trust to give you kudos in addition to answering phones), can lead to tenuous situations, O'Malley warns. "When the business grows and becomes successful," he says, "the parent often feels his or her presence has been the key factor and assumes a position of power that's not justified."
- Relationships. Parents change the climate of the business and your relationships with others. "Let's say your best salesperson gets into a tangle with your father," O'Malley hypothesizes. "As a son or daughter, how will you react to the situation? How will other people react? An emotional triangle develops."
Patricia Schiff Estess is president of Working Families Inc., a New York City consulting firm that publishes the newsletter Working Families, and author of Kids, Money & Values (Betterway Books).
Best-Case Scenario
Despite experts' skepticism about this arrangement, itsometimes works. In one business Brown works with, the fatherstepped down to let his son take over the firm but stayed on as aconsultant. His responsibilities in this role are specific andlimited. "The father wants his son to have complete authorityin the company. Although he's in the office daily, he moved outof the 'big office' so his son could have it," Brownsays. "It's interesting, though, that the son felt out ofplace in his father's office. At the father's urging, heredesigned the office. Now he feels comfortable as the boss-and ashis father's boss."
Adele Kaplan had an impressive career of her own, which includeddirecting the New Jersey Small Business Development Center atRutgers University in Newark, New Jersey, before she startedworking for her sons. When she "retired" in 1988, Kaplanbegan working as a literacy volunteer teaching adults to read andcoordinating a course in critical issues in world affairs at NewYork University in New York City. But she also had some free time.So she began helping her son David Liederman, founder ofDavid's Cookies, in a number of different ways, includingstanding outside and ushering people into his cookie store in NewYork City. And when her other son, Bill, opened Mickey Mantle'sRestaurant in the same city, Kaplan was there one day a week togreet patrons and answer mail.
Now her two sons have joined forces in a new venture, TelevisionCity, a TV memorabilia shop and soon-to-be restaurant across fromNew York City's Radio City Music Hall, and Kaplan is theretwice a week greeting customers.
What does it feel like being your mom's boss?"We're totally confident that when Mom's in the store,customers will be treated well," says Bill.
"We're good together," agrees David. "Whenall the big issues are going wrong, we can laugh together over thedumbest things, like how we're going to sell six $19 pinkelephants that nobody wants to buy."
Perhaps most helpful to the business relationship is that Kaplandoesn't believe in giving her entrepreneurially gifted sonsadvice. "They're entrepreneurs," she says."I'm not." And besides, they already know her viewson just about everything-"they have since they were3!"
Guidelines For Success
Before embarking on a campaign to put Mom or Dad on the payroll,ask yourself some questions.
- Why do you want to hire your parent? The best reason tohire anyone, parents included, is because the business needs thatperson's services. "The worst reason is because you wantto bail them out of a financial jam," says O'Malley. Ifthat's the case, O'Malley suggests helping a parent find ajob with another company or providing personal financial supportoutside the domain of the business.
- What is the history of your relationship with yourparent? It should be one of mutual respect and easycommunication. The best situation is one in which the parent hasrelinquished the role of mentor/teacher/critic and thinks of you asa peer.
- What do you need to discuss beforehand? You must be ableto discuss the scope of the job the parent will be doing, his orher responsibilities, the salary, reporting arrangements, how youwill handle a situation when you have to tell a parent what to do,and what to do if a parent starts acting more like the boss than anemployee.
- Can you structure the job so it works best for your parentand for you? "Hiring a parent as a consultant who has theexperience and expertise you need has the greatest possibility forsuccess," says Brown. That's because with their limitedduties, like writing a sales manual or trouble-shooting, andlimited time frames, consultants don't turn the powerrelationship between parent and child completely on its head theway employment does.
The consulting option also takes into consideration that aparent may not want to work full time. Part-time and off-site workare other creative options when hiring parents. One writer, forexample, employs her homebound father, a former research scientist,to scour publications for her; he mails her clippings weekly.
- Will you be able to evaluate your parent as an employee and,if necessary, end the business relationship without damaging thepersonal relationship? Before employment begins, agree toevaluate the arrangement within a reasonable time in the nearfuture to see what is working, what isn't, how the businessrelationship can be improved and whether it should be terminated.If the trial period works out, then you can move to a long-termcommitment.
If you can't answer these questions positively, proceed nofurther. As great an idea as hiring your parents may seem, it isdifficult to overcome the psychological hurdles of this topsy-turvyrelationship. And if it's going to jeopardize your personalrelationship, it's not worth doing.
Contact Sources
Fredda Herz Brown, c/o The Metropolitan Group, 230 Ft.Lee Rd., Leonia, NJ 07605, (201) 461-7352;
Michael O'Malley, c/o Family Business Dynamics, 2102N. Clifton, Chicago, IL 60614,(312) 477-0247;
Television City, 64 W. 50th St., New York, NY 10112,(212) 246-4234.
