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…

Dangers of Poor Employee Communication in a Family Business

“We turned her down, and later found out she had approached the union, to stage the union drive, in order to win her job back.”

As family business entrepreneurs, we often tend to manage by hunch, figuring things out as we go along, especially in the earlier startup years. Many of the issues we face as our businesses grow; we plod through, without much advice from outside advisors. Surprisingly, most of the time it works out well. For our family business, this time it didn’t.

We had been in business for about 15 years, and our compensation plan was pretty basic; salary plus a holiday bonus. The bonus was pretty much automatic. One year we decided to revise the bonus portion, realizing that as longer-term employees’ compounded wages increased, it was increasing the bonus portion disproportionately. We decided to cap the bonus for the highest paid managers.

One of our long-term managers became upset with the new bonus program and decided to leave the company.

About six months later we had a group of employees, petition for a union organizing More…