Suggestions for nonfamily managers - Family Business - Column

Nation's Business, August, 1993 by John L. Ward, Craig E. Aronoff

"My friends think I'm nuts to take this job as vice president at a family business," says a corporate executive looking for a new challenge. "They keep reminding me that blood is more persuasive than competence."

Like that executive, more and more expatriates of large firms are seeking opportunities with family-owned businesses. They sense a greater security and perhaps a more pleasing quality of work life. Many of these same folks scorned such opportunities not long ago.

Life in big businesses has certainly changed over the past few years. Downsizing and stepped-up competition are only two of the many factors that have increased the pressures and lack of security of corporate life. But the climate in family-owned businesses has remained relatively stable and inviting. We offer the following counsel to managers seeking employment in family firms:

Beware of requesting a contract. Many family-business owners are affronted by contract requests that may seem normal or wise to others. They feel their loyalty and integrity are being questioned before the candidate has proven his or her worth. We do recommend, though, discussing a job description thoroughly. Clear expectations are always useful.

Don't expect equity. Periodically, business owners flirt with the idea of sharing equity--and, ill advisedly, hint at it. Sometimes they think it will tie managers more closely to the business and to the business's performance. Sometimes business owners consider sharing equity just because it seems to feel right. But almost always, regardless of what they say or hint, they usually choose against sharing real stock.

Don't get too close. Many who seek to work in family firms would prefer, for their own needs, to get emotionally very close to the owning family. They think that it's part of the family-business culture. But a business-owning family will usually be inconsistent in that regard, and that can disappoint expectations.

We recommend that nonfamily managers presume the relationship to be friendly, yes, but above all, professional

Avoid secrets. Sometimes one family member having a difference with another will look for sympathy or support from a nonfamily manager. While this confidence can make the nonfamily manager feel more important, we think it's almost always bad practice.

Nonfamily managers would be wiser to make sure that they encourage family members to talk to one another directly and that they avoid being caught in the middle.

Don't take personal responsibility for what you can't control. In an effort to be helpful, a manager may attempt to solve a problem when family members are disagreeing--or where the business owner isn't yet in concurrence. Unless there is agreement, their positions can change, unpredictably, at any moment. That's very frustrating. We suggest the manager in these situations make a recommendation to the owners and let them then take the responsibility.

Move for fast impact. We find business owners to be very optimistic about their new key hires. Sometimes there is almost a sense of awe that one so professionally qualified would work for them.

The beginning of your tenure is the perfect time to make your feelings clear, make an impact, or precipitate a change. We urge you to overcome the manager's natural first impulse to be compliant and reserved.

Stress "team." Sometimes an executive feels more secure if he or she is the most favored nonfamily manager. Business owners tend to manage and meet with people one at a time, shielding themselves from the power of consensus. This approach fosters individuals seeking the status of "No. 1 adviser." Almost always, this will backfire. We encourage nonfamily managers to promote executive team meetings to share information and alternatives.

Help the successor grow. Business owners are often too critical of their heirs, their famliy-businees successors. To reinforce their concerns, they will seek such confirmation from older, key managers. Next, the business owner may "quote" the nonfamily manager to make a point to the successor.

Nonfamily managers serve the company best when they are optimistic and positive about a successor's ability to develop and when they aid in that development. If there are doubts, encourage testing of the successor by an organizational psychologist to identify needs and programs for improvement.

The addition of excellent nonfamily managers to the family business is a pivotal step. Depending on nonfamily managers is essential to long-term growth. It's also vital to the company's culture and creativity.

But when business owners begin to recruit and incorporate new outsiders in key positions in the business, it can be an understandably clumsy and frightening experience for them. They feel vulnerable and unsure of themselves. They feel they are taking a step that lessens their personal control. We encourage nonfamily managers to be patient and understanding during this stressful transition.

New nonfamily managers face a critical decision. They can work themselves into the family culture seeking to be close to the family and falling into the patterns of past practice. Or they can, by their conduct, help lead the business to the next level of professionalism.