Ask Dr. Tom:
Family Members:Can They Be Active
in the Business…But Not Contribute
Question:How would you suggest a family business deal with a member of the family who wants to become active in management, but who does not have the talent to contribute effectively to the business?
Answer:Genus has always maintained the view that all business decisions in family firms should be measured against the following criterion:What is in the best long term interest of the business?Clearly, placing unqualified members in management is not good for the business.But family business success often comes at the price of substantial risks and enormous sacrifices (made willingly and unwillingly) by family members.Because of these sacrifices, families in business ought to feel that they have earned some degree of latitude when addressing the issue of employing an interested family member even though it is unclear how he or she might contribute to the family enterprise.
I believe that such a family member should have the opportunity to participate in a dialogue with the appropriate person in management to determine where the candidate’s current skills and interests lie and whether they match the present or foreseeable needs of the business.If there is reasonable potential, the candidate should be informed that his/her performance on the job will be measured by company standards after six months or a year when both sides will have the opportunity to reevaluate the arrangement.The first year should thus be considered an “experiment,” without obligation to continue by either party if there is unhappiness for any reason.Another option is for the family to offer the candidate a position as soon as s/he develops the talent necessary by going to school or getting experience elsewhere for a pre-determined period.
As a psychologist, I have worked with many family members who have chosen to join their family businesses for a variety of reasons and sometimes the least of these reasons is a result of thoughtful choice of careers.Even the family member who wants to join the family business may not be aware of the true source of his/her own interest in the business.He/she may be feeling “disconnected,” and this drive to work in the family business may be a positive search for meaningful connection.Though I do not recommend that anyone other than a person trained in psychology delve into hidden motivational factors, I do suggest that you be aware that such factors may exist, particularly within the scenario described by this column’s question.