Trusting Others Outside of the Inner Family Circle

As family business owners, we are a trustworthy group. We tend to be easy-going and get along well with others.  Generally we are more sensitive to employees concerns, even treating them as extensions of our own family.

However, this trusting culture, can also leave us vulnerable to outside non-family executives who might take advantage of our unique corporate culture.  If we aren’t careful, we may find our business being taken advantage of by individuals who seek out closely-held businesses where they can gain undue power and influence.

We’ll Never Do That Again, But We Did

Our first experiences bringing in outside non-family executives were horror stories. These hiring mistakes happened to us, embarrassingly, not once, but twice.  The first instance was a long-term VP attempting to bring in a union to gain more influence. The second time was a VP making a power play in an attempt to take control of our company out from under us.


How Does it Occur?

This most often happens as companies grow larger and begin to bring in outside non-family managers for the first time. Many of these individuals have left larger firms where they may have experienced frustration gaining recognition and advancement. Leaving to join a smaller business, they feel they can achieve these job qualities quicker and gain greater influence in a smaller organization.  There is nothing wrong with this, some might even call it ambition.

However, left unchecked, it can quickly spiral out of control and wreak havoc in your company.

Why are family businesses  vulnerable

  • We are too trustworthy of others
  • We have close relationships with our employees who often are considered an extension of our family.
  • We are too naive-many of us have very little outside work experience and haven’t seen the more political and competitive business atmosphere in corporate America.


  1. Carefully vet your non-family senior manager candidates
  2. Find out why they genuinely want to join a smaller, closely-held family business
  3. Ambition is great. But an overly ambitious candidate might mean you have to constantly feed them more responsibility to keep them challenged and motivated. Maybe more responsibility than you are willing to give up.
  4. Consider hiring two non-family executives at the same time to prevent too much dependency on one key executive

Speaking from personal experience, it takes awhile to begin trusting others again after these types of bad hiring decisions. Eventually you have to learn to trust others again.  Bringing in outside talent is one of the most important  actions a family business can do to successfully grow to the next growth stage.

Our third attempt worked well. We eventually brought in a CFO from our auditing firm who was a key executive and helped us grow successfully to the next level.  He gained our trust, the chemistry was right, and he became a trusted member of our senior management.