In my last post, I promised to give you an example or two of family rules or policies that can help to create a healthy separation between family socialism and business capitalism in family businesses. A family employment policy is one of the best tools for protecting a family’s business from inappropriate disruptions by family members who may see it as a piggy bank or birthright.
Here’s an example: Two brothers, Craig and Jim, bought a manufacturing company from their three siblings and their father. The family is large, with five Second Generation and twenty Third Generation members. The brothers knew that eventually one of the members of the 3rd Generation would ask them for a job. In anticipation of this, I worked with them to develop a family employment policy.
The family policy stated the expectation that any member of the family seeking employment would have to meet the following pre-requisites before approaching the owners:
- Graduate from college with a bachelor’s degree in business, economics or science
- Earn and hold a job outside of the family business for at least two years
- Earn a promotion or pay increase during those two years
- Only apply for currently open positions
The brothers then asked their non-owner siblings to sign off on the family employment policy to ensure their support of the requirements if and when any of their children applied for work. All of the siblings saw the wisdom in the policy and agreed to it in writing.
Not many months later, Tom, a 21-year-old nephew, approached Craig, the CEO and controlling owner. Tom told Craig that college “hadn’t really worked out for him”, that his five previous jobs had been “learning experiences” and that he was ready to join the family business. Craig told his nephew that he would be happy to consider him for any open position after he fulfilled the family’s requirements set forth in the family business policy.
He gave Tom a copy of the policy and asked him to take it home, review it and get back to him with any questions before they continued the job search process. Not surprisingly, Tom never called or came back to Craig’s office. Some days later, Craig called me and thanked me for leading them through the development of the family employment policy. He said it had helped the family to steer clear of a potentially upsetting and negative confrontation between siblings about “whose children had the right to family employment”. In his words, “the ounce of prevention had been worth more than a dozen pounds of cure”. He also was grateful for how well the policy had de-personalized the situation and minimized the negative effect on Tom’s sense of self-worth as he struggled to find himself as a young man.
It’s important to note here that, although this example paints Tom in a negative light, he was not ready for work in the family business. Young family members who need help with discipline, self-awareness and career planning need to turn to their family for support and assistance, not the leaders of the family business. Bringing ill-prepared family members into the business sets a flawed precedent of allowing socialistic behaviors into a setting where only meritocracy can provide the long-term growth and success the family hopes for.
Tune in next time for another gripping tale of family policies that help to separate family and business issues in a family business…….