It’s no hidden secret Pivotal Advisors was founded by two brothers. Read the story here. However, working with family can come with stress and drama. But, it can also come with many good moments and great success. We’ve worked with many family-owned and operated companies and thought we would address some of the most common issues and how to handle them respectfully.
Example: Let’s begin with the original owner. They ran things a specific way; command and control style. When his employees would bring him a problem, he would tell them the solution and send them on their way. But he was to retire. Figured out which one of his kids would run the business, not an easy task, and retired to Florida.
The new leader was thrilled, but they were more of an analytical, detail-oriented kind of person. When an employee brought the new leader a problem, the leader would also ask that they bring the details and a solution or idea of a solution. The goal was to develop a leadership team that could manage most of their problems and pushes decision-making down throughout the organization.
Problem: Many of the people who started with the original owner in charge didn’t like the new team – solution-based approach and how long it took. They wanted decisions right away and felt everything was moving too slowly. However, people who began with the new leader in charge loved this method because they are involved in the solution and felt greater ownership and engagement around what they were doing. They felt as if they contributed to the company.
What to do: The best thing to do with your company is to create well-defined expectations. Review your company values and expectations. Then write down your leadership expectations and benefits so there are no surprises. When there is a new boss and a new way of doing things, you must communicate that with your team and organization. People will typically come around, or they’ll move on. Either way, you’ll get to build the right team for you.
Example: Let’s start with the owner; they’ve been successful and now want to be out of the company. They made their money, built a valuable business, and are now “retired” and ready to live the dream. However, the business is left to the kids to run. The kids are still trying to be successful and create their own careers.
So, when there is conflict among the kids, which happens frequently, the previous owners come in and take back control. They want to keep the peace among the kids. When the owner returns to the company, what they say goes.
Problem: The owner is often out of touch with what’s been happening; they don’t always check in with their leadership team, and, as a result, the employees are getting confused. There have even been cases where the owner gives one set of directions, and the kids (leadership team) give another. The teams don’t know who to listen to.
What to do: The best thing to do is to define roles within your company. Make sure everyone knows it’s about the business and learn not to make it personal. While at work, keep in mind the company comes first. If it gets personal, you may want to bring in an outside nonfamily member to help sort out the controversial topics.
A couple of “guiding principles” we’ve found helpful:
Example: Aunt Karen’s delightful, makes the best cookies, and the CEO still has the sweater she knitted for him on his 16th birthday. Aunt Karen comes to the CEO, asking for work. The CEO wants to help and decides to find her a place in the company.
He puts her on the accounting team where there is an opening. However, numbers start to get messed up, and then suddenly, there’s a whole missing shipment. The CEO goes to sweet aunt Karen to try and help her out. Then, he realizes she’s not as competent as she led him to believe. Because of the family connection, he didn’t do all the screening he would’ve with a typical hire.
Problem: The CEO doesn’t want Sweet aunt Karen to hate him, but she isn’t getting any better with these accounting tasks.
What to do: The best thing you, as the CEO, can do is realize that just because they are family doesn’t mean they are good at the task you assigned them. First, you need to put everyone, family included, through a robust selection process to ensure they’ll be successful in the job. Then, if it still isn’t working out, you need to have the courage to have that tough conversation with them. You need to play to their strengths and see if there is another position within the company that Karen would be better at. Furthermore, having a family member report directly to nonfamily members and then that nonfamily member can report to you makes things a lot easier.
Example: “I’m giving you the business, but I’m still going to hang around just in case you need me.” Sound familiar? The thing is, the new CEO who doesn’t need their dad stilling around “helping.” They’ve been waiting to take over for years, and just as the son had about given up on ever actually getting the top job, the dad finally lets them have it. But instead of sitting on a beach or picking up golf, he’s still hanging around saying, “just in case you need anything.”
Problem: Dad keeps stepping in and taking over. Dad wants to help but is just messing up the flow of things.
What to do: Remember, this is a transition for Dad too. It’s challenging to let go of “your baby,” and they likely have a lot of experience that could still benefit the company and the son. The best thing you can do is to let them help, on a project, at a different location, if possible. Give the former CEO something to do that will consume their time, add value to the business, and not disrupt your regular flow of daily operations.