Help! I’m Working For a Non-Family CEO in Our Family Business

“He pushed me beyond my comfort zone, but I liked it”

At first, we were concerned, that hiring an outside CEO would feel like a loss of control. But in a strange way, we almost felt a sense of relief. Relief that the family could tap into a resource that could support us in growing the business through fast growth.

An outside CEO can also help pull the company in the same direction. When family members lead the business they have autonomous power to manage their areas of responsibility. They set their own priorities, strategies, and methods of getting the tasks completed. This independence in the management structure often has family members working in silos with no clear lines of communication and direction. Each family member is setting their own priorities in a vacuum and hoping they align with the overall direction of the business. It usually works well, but there is an opportunity to make it even better when there is a comprehensive plan in place. 

The second generation in our family business was managed by the first generation. Parents have a conflict of interest in managing their children. They can only develop them so far. They are often busy with day-to-day tasks. If everything is going well, there is a tendency to give less feedback. It’s an awkward managing relationship at the least. Bringing in an outside CEO removes the awkward personal relationship of working for a family member.

These are a few takeaways from my experience.

Pedigree- It’s all about who you select

  • It helped that our outside CEO was someone our family was familiar with, not personally, but on a professional basis.
  • Came from our business segment
  • Had a successful track record
  • Was well-respected in the industry
  • Pay special attention to their previous corporate culture
  • Philosophy-customer oriented, financially motivated
  • Why do they want to join your business?

What it’s like to begin working for a non-family CEO?

1. Things get more professional. Fast.

  • Job descriptions are updated
  • Performance goals are set
  • Compensation levels are benchmarked against the industry – I actually received a significant increase. (I think many family business members, contrary to the stereotypes, are often under-compensated)
  • New Performance Bonus Programs established formal sets of goals

2. Leadership style

  • I checked in about once a week on my projects rather than just catching a family member in the hall.
  • Our CEO was more of a top-level leader, didn’t micromanage, established a goal, up to you on how to reach it
  • Feedback – you’d think this might get more formal, but it stayed informal, similar to before. Silence means approval.
  • Held more accountable for my goals.
  • Decision-making-more financial-driven, less relationship oriented

3. Introduced to a new set of suppliers and contacts

  • He came with a big Rolodex-many new connections
  • Connected me with new suppliers, but not forced to use them
  • The balance between choosing suppliers became less based on relationships and more on the financial attributes

4. Culture Change

  • He came from a much bigger company-brought more big company experience
  • But along with that comes the political culture. It got more political fast.
  • There was a tendency to hire other large corporate talents, which can change your corporate culture
  • Decisions become more shared
  • Less agile-more layers of decision-making
  • You might find yourself being second-guessed more
  • Gone are the ad-hoc family meetings to decide on things. Good and bad
  • He actually conformed to more of our smaller business culture and found it refreshing

Been There. Done That.

The single biggest benefit of working with an outside CEO was learning from someone who has led a much larger business. They not only anticipate the speed bumps during growth but come with a vast resource of connections and strategies that a small business can only learn along the way. You quickly realize you don’t have to pioneer everything.

It can be a sense of relief if you enjoy the hands-on entrepreneurial tasks. If you choose, you can move away from administrative/managerial tasks and be more hands-on in your position.

Looking back, my experience was great. I grew so much in my career. He pushed me beyond my comfort zone but I liked it. I wouldn’t have wanted it any other way.