“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…
The Risks and Rewards of Non-Family CEOs
Family Business Quarterly
The person at the top of the organization chart at many family businesses these days may not have the same last name as the business, as more and more companies are turning to non-family CEOs.
Dr. Bonnie Brown, the president of Dallas-based Transition Dynamics, addressed the good, bad, and–yes, sometimes–the ugly of going outside the family for top managers during a recent Half-Day forum on “The Non-Family CEO: Rewards and Risks of Non-Family Key Managers.”
“I think we’re going to see non-family CEOs used more and more over time,” said Brown, who regularly consults to family businesses.”There are a lot of good reasons to do so, such as a gap in the leadership skills between generations.”
Brown provided the scenario of a company whose CEO is ready to retire, but the family member who is the chosen successor is simply not ready to take over.Rather than rush the successor or have the CEO hang on longer than desired,