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Helping Family Businesses
Prosper Across Generations®

Should I Call you Dad? (And Other Perils of Working for Your Family Business...)

By Stephanie Brun de Pontet

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There is a lot at stake when the next generation of working shareholders joins the family business full-time. The presence of motivated and competent family leaders in the business is likely to strengthen the family’s commitment to the business long-term. While we would never advocate that family members should be given a clear path to leadership no matter what, it is in everyone’s best interest that this experience be “successful,” that the new family employee learn skills, earns respect, builds positive connections with employees and develops a greater appreciation for the business—whether they evolve into leadership or not.

However, in a family business, it is not unusual for non-family employees to feel next-generation family members who come to work for the company “have it easy” by virtue of their name. These co-workers will witness the family employee’s easy access to top leadership, special opportunities and what appears to be an “automatic entry” into the organization. What they may not see is that the position comes with a host of challenges as well.

While it is true that other young recruits to the business may not have special opportunities to go to a trade show with the VP of sales or have access to a “custom made” training program, it is also true new family employees face hurdles and frustrations other employees will not experience.

It is important to educate the next generation employees, their supervisors, and other key stakeholders on how to handle the challenging situations that might arise as the next generation of family members come into the business full time. There will be awkward remarks, comments about their family members who work in the business and outside the business, and general pressure associated with the employees “watchful eyes.”

We often work with families and companies to raise awareness of the issues that may come up with the arrival of the next generation of working shareholders. This can involve preparing the management team for the challenge of supervising a young family member, talking through appropriate professional learning opportunities for younger working shareholders, helping the family think through how this affects others in that next generation and if there are any new policies or issues this leads the family to address.

In the course of this work, we also like to spend time with the young adult family member who is joining the business to help make them aware of some of the challenges they may encounter, and help them think through strategies for coping effectively with these. Below are some of the issues that we find worth discussing as part of “on-boarding” a next-generation employee in the business:

  1. Living under the microscope – This is the very essence of where the “family name” cuts both ways. Yes, having the family name can give you a leg up in some circumstances, but it also means you are immediately under a different kind of scrutiny. You cannot as easily “learn from your mistakes” like anyone else because you aren’t anyone else. While many next-generation family members have grown up with warnings from their elders to “behave,” because their behavior would affect the family’s reputation, this pressure is different when it comes to your work reputation. While we don’t want to breed paranoia, people are watching you more closely when you are a family member employee. They are evaluating your performance and capabilities from the get-go, as many may wonder if, down the line, you may be in a leadership role. They are trying to determine what they believe about you: will you be good, fair, smart, quick to act, creative? In addition, as a working shareholder, you cannot make off-handed remarks about the business or a manager because the mere fact that it comes from you gives it a different meaning than if another co-worker had said the same thing.  We have seen some families attempt to overcome this with extreme measures, for example:

    One retail client we know, where the business goes by the last name of the owning family, a next-generation family member who wanted to come into the company was given a false identity in order to be able to work as an assistant manager in a store far away from the corporate headquarters, without his fellow employees realizing who he was. While this allowed him to have a first work experience free of this burden, it was very uncomfortable to be dishonest with those employees, and he eventually had to live through the microscope experience once he moved to head office two years later.
  2. Coping with the legend – In addition to how others may treat you, a lot of young family members struggle with their own ideas of “living up” to expectations and the traditions of accomplishment of their family. Whether you are following the shadow of the founder or are a fifth-generation family member coming into a long-standing legacy, many young people put a lot of pressure on themselves to live up to what prior family members have accomplished. You (and sometimes others) may compare yourself to prior generation family members, what they accomplished, how they lead, etc. One trap many young people fall into is in forgetting that the business has changed a lot since the days their parent was starting out. When young folks are frustrated by their more limited authority in the business and say “dad was already running the plant when he was 32…,” they may forget that the plant back then had 40 employees, and today it is a far more complex operation of 200, for example. While it is wonderful to have family members to whom you look up to and admire for their accomplishments, this admiration should never lead you to seek to emulate your parent or other family member. Each individual needs to find their own voice, role and strengths.
  3. Managing employee relationships – Any new employee anywhere wants to make a good impression on his or her supervisors and colleagues, to be seen as competent, a team player, fun to be with, etc. When you are a working shareholder in your family’s business, you may find managing employee relationships trickier than you expected. First, while you should be yourself and seek to have appropriate social interactions with employees, there are boundaries for family members that are different for other employees. You are “different” by virtue of being in the family and some in the business may treat you differently or make assumptions about you that you will have to work to overcome. For example, some employees may try to develop a relationship with you because they think it will give them better access to the powers that be. This can make you wonder if people are nice or complimentary to you for the right reasons. As was pointed out to one of us by a supervisor when I worked in my family’s business: “Carol, you will never truly know if people like you for you, because your last name is the same as the owner.” Also, whatever the protocols are for inter-company dating at your business, you can assume the restrictions should be even stricter for you. Any romantic entanglement between an employee and a family shareholder is fraught with risk and this is an example of a topic on which it would be helpful for the family to have a policy before the next generation joins the business.

    Some employees might assume you have access to information about business strategy, changes, finances, etc., that you may or may not have, but that are not for sharing in any event; managing confidentiality and those employee/ shareholder boundaries is hard. There may also be times when someone at the company makes an off-handed remark about dividends or wealth that catches you off guard. How can you respond to uncomfortable assumptions or comments of this nature? Until they get to know you and you have proven otherwise, there will be some in the business who will assume you are a spoiled rich kid and only working there because of your family name. While it can be frustrating to have to prove yourself to people who are judging you without knowing you, this is part of the challenge that comes with the territory. Rather than expend energy being angry about these types of interactions, it is important to think ahead about how to optimally respond in a way that enables you to maintain appropriate boundaries but not seem cold and distant.
  4. Relating to family – In addition to navigating complex interactions with non-family employees, there are a few changes to family relationships that you may encounter when you begin to work in the business. The most obvious is how to relate to your family members who also work in the business. From thinking about how to address your parent at the office — “Hey, Dad” might feel awkward in a business meeting or even in the hallways, but do you call him Bob, Mr. Smith, Sir…? — to thinking about the appropriate mentoring or work relationships you can have with other family members, you now have to establish professional relationships with people with whom you have a lifetime of personal history. Less obvious may be the new dynamic created between you and your siblings and/or cousins now that you are a working shareholder. As you transition into the role of insider—a family member working in the business—you may have added responsibilities among your generation for keeping them current on business matters and committed to the family’s shared enterprise. It can be tricky to play this role without appearing arrogant or making the others feel some guilt that they have not chosen a path in the family business.
  5. Managing opportunities – As a working shareholder, we would find it normal that you may be given access to special opportunities to help develop your technical knowledge, leadership skills, or knowledge of the broader industry. In fact, we often encourage an 80/20 model, where 80 percent of the new family employee’s role is a “line responsibility” —that is, a job that needs doing, for which there are performance outcomes on which you can be objectively evaluated; while perhaps 20 percent of your time is allocated to special opportunities or learning that you may be granted by virtue of your dual role as employee and owner. Striking the right balance with this formula is not always easy, as you cannot allow yourself to get behind or not deliver on the core job you are doing, even if one of the special opportunities you have is suddenly ramping up. It will be important that you only take on special projects that you can realistically accomplish, given your other commitments in the business. In addition, the specifics of the opportunities or special projects to which you are assigned need to be given some thought. For example, it would be inappropriate for you to be invited to attend a meeting where the performance of your direct supervisor might be discussed. In addition, while you do not need to keep these opportunities secret from others, you do need to be mindful that your access to these opportunities to learn or interact with key leaders of the company could understandably make some of your work colleagues jealous.

Having the honor and opportunity to work for your family business is a precious one that many will never have. It is important to always be mindful of your role as a family member, to act with integrity, to be loyal to your family and supportive of the business. Never forget that all the rules do apply to you. The other special opportunities you are offered should always be treated with the utmost humility. It is a fact of life, inside and outside of family business, that not everyone will always like you. But to have the majority respect you? That can be accomplished easily by monitoring, managing and governing your own behavior.

While the points raised in this article are by no means an exhaustive list, they do cover a lot of the common pitfalls we see many next-generation family members confronting when they start working at their family’s business full time. Our experience is that next-generation working shareholders who have taken the time to think about these possible pitfalls (and others), are better equipped to handle the awkward moments when they inevitably arise. 




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