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How to Succeed as a non-CEO family business

Dear Advisor: I am the first non-family CEO of a $45 million sales family business. I've been employed at my company for nearly 30 years and care deeply for the owning family. I'm often asked to become involved with family issues as well as business matters. What advice can you offer me in my new position?


To answer your question, we offer an expert from More Than Family: Non-family Executives in the Family Business. Achieving success as an outsider in a family-owned company can be quite tricky. You may have to suppress your ego from time to time or bite your tongue to keep from agreeing or disagreeing when one family member complains about another. But if you are competent, professional and trustworthy, you most likely will become a valued part of the senior management team, and the rewards will be great. Here are some tips that will help you succeed:

  • Understand that there's no substitute for competence. Competence will get you through tough times and will help you survive a transition to the next generation. It's your competence that will win the respect and loyalty of the company's family leaders. Keep investing in your personal development. (But also keep your personal network of contacts alive; there are no guarantees that any job will last forever.)
  • Make the business your constituency. Be loyal to the business, not to any one member of the family or part of the family. You were hired by the business. Focus on what is best for the business and consistently represent that point of view. In that way, you serve the whole family.
  • Lead the business to the next level of professionalism. While the need for professionalism may not be one that an owner articulates, you have a remarkable opportunity to help a business move from being entrepreneurial to being a company that plans for strategic growth, puts needed policies in place, emphasizes team decision-making, and hires and promotes on a merit basis (family members included!). From this vantage point, you can also promote the idea of putting an independent board in place, if the company doesn't have one. The establishment of such a board will advance the company's professionalism even further.
  • Take your role as a teacher seriously. The more a family relies on you as a valued, non-family executive, the more it will expect you to mentor and help develop the younger family members for management and leadership roles. Consider this responsibility a given, and remember that the owners' children are their most treasured assets.
  • Avoid becoming entangled in family disputes. It's not your job to be the mediator or referee. Avoid triangles--where one family members criticizes another to you or wants you carry messages ("Tell my brother that. . ."). Help get communication going between the two people, but don't become a conduit yourself. Non-family managers often serve as go-betweens because they think they're doing a favor and contributing. But they're not.
  • Don't take personal responsibility for what you can't control. In an effort to be helpful, a non-family manager may try to solve a problem when family members are disagreeing. Unless there is agreement, their positions can change, unpredictably, at any time. In a situation like this, make a recommendation to the owners and let them take the responsibility. Remember that you don't have the final say.
  • Emphasize the notion of "team." Sometimes an executive feels more secure if he or she is the most favored non-family manager. Business owners tend to manage and meet with people one at a time--that way, they can shield themselves from the power of consensus. But this approach encourages individuals to seek the status of "No. 1 Advisor." Almost always, this backfires. We urge non-family managers to promote executive team meetings to share information and alternatives. And always think of yourself as an equal member of the team--not a member more equal than others.
  • Support the succession process, don't block it. Avoid taking sides as to who gets chosen. Be patient -- the process will have many ups and downs and, especially frustrating, backs and forths. Champion and cheer the successor's success. It's likely that the incumbent and the successor will complain about each other. Listen with heart, but don't take sides.
  • Be cautious about being a confidant. You may feel privileged to learn private family information, but it's more prudent to keep the relationship strictly professional.
  • Be wary about asking for an employment contract. Many non-family executives have the perception that family businesses are capricious and that owners may make a decision to fire someone out of their own temperament or emotionalism. When that is their perception, non-family executives often say, "I'll never work for a family business unless they give me an employment contract." Some family business owners have no problem with being asked for an employment contract. But a lot of business owners resist employment contracts. Their attitude is, "That's a self-interested, untrusting way to approach a job." So, if you want to ask for an employment contract, recognize that you might get a negative reaction. Some families will offer an employment contract as a vote of confidence, but in our view, it has to be genuinely offered, not demanded. It's probably safe to ask for an employment contract if such contracts represent standard practice in your industry or if a particular business has operated with employment contracts for many years. In most cases, however, if you feel you need a contract, you probably don't want to work for the company you're considering.
  • Work hard to earn trust. In a family business, this can be difficult--first, because you are the outsider, and, second, because business owners, especially founders, often lack the ability to trust. You begin to build trust by being trustworthy yourself and by offering trust. Think of trust as a two-way street. If it's hard for the owner of the business you work for to be trusting, take the first step. --Don't threaten family control or family unity. Successful, seasoned non-family executives often counsel younger non-family managers to be part of the solution, not part of the problem. For example, if a family member is not yet prepared to take over a company but Dad clearly wants him to, don't jockey for position--take a leadership role in helping the son develop his potential instead.
  • Support the family culture. Most business-owning families take great pride in the family atmosphere they have created in their businesses. They also appreciate the fact that they can promote values they hold dear--integrity, honesty, and community service, for example--through their businesses. One of their greatest fears in hiring outsiders is that the culture of the business will be diluted and that the values it stands for will dissipate. Be sensitive to the family's values and do what you can to help maintain the culture that it has worked hard to build. If you're the head of marketing, for example, welcome key family members to your meetings now and then to talk about family values.

The Advisor

From More than Family: Non Family Executives in the Family Business, Volume 13 in the Family Business Leadership Series. Copyright 2000, Family Enterprise Publishers. www.thefbcg.com

 

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