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 More…

Going Outside – The Runaway Manager

“Before we knew it, we learned that we were having a Grand Opening for our new Manhattan retail store later that week. And we weren’t even a retailer“

To help with the growth our family business, our family hired a key non-family manager for the first time.  Attracting an outside manager into a family business is especially challenging with regards to compensation.  Like many closely-held firms, we weren’t willing to give up equity in the business, so we created a compensation package built around a performance bonus.  We selected an outside executive who came from a larger company, who brought proven expertise to grow our company rapidly. Coupled with their high ambition, it seemed like a good idea to tie their compensation into sales growth. More…