What Children Should Know Before Joining Family Firms
5th May 2016 Denise Federer
Good insight into the practicalities of succession planning with regards the next generation and on how to guide children into a family business.
A recent article on the FamilyEducation website, excerpted from The Complete Idiot’s Guide to Dealing with In-Laws, lauds children who weigh the pros and cons of joining a family business before making a commitment to do so, noting that working with family can be a double-edged sword. That comes as no surprise to Federer Performance Management Group, a performance management team, which offers the same advice as well as some additional specifics to consider.
“Having the opportunity to join a family business can be a dream come true or quite the absolute opposite, a horrible nightmare,” said Denise Federer, Ph.D., FPMG founder. “What I find is true for many children involved in family businesses is that they wished they’d done more ‘due diligence’ before they came on board.”
Federer notes that children often feel lured by their parents to join the family business, and perhaps shortchanged because they were never able to realize their own dreams. Many children blossom under a parent’s tutelage, she adds, while others wither. Family dynamics can be significantly affected as well; some families grow closer as a result of working side-by-side, and others get torn apart.
FPMG’s tips are meant primarily for children who aren’t yet working at a family business, but they can also provide some food for thought for those who’ve already made that leap.
Before joining a family business, answer these important questions:
Why are you doing it?
Your motivation is important, whether it’s for sentimental reasons, you want to own the business someday or you’re passionate about what is being sold. Minus the proper motivation, i.e., fulfilling someone else’s dream, you may be in for an unhappy work life.
What’s expected of you?
'Trust me' is not an appropriate response to a query about job specifics. Like any other employee, you need to have your pay, benefits, responsibilities and title spelled out in writing.
What’s the 'end game'?
Will you have the chance to buy the business at some point, or will it be gifted to you? To ensure no misunderstandings occur, define ownership opportunities from the get-go.
What’s your value proposition?
Do you have the appropriate education and business acumen? It’s best to gain industry experience by working for at least two years at another company, and it’s also invaluable to learn entrepreneurial skills.
Will your ideas be heard?
If you already have a hard time communicating with your parents, what makes you think things will be different in a business environment? You don’t want to feel ignored or misunderstood at work.
If after some soul-searching, the decision is made to join the family business, Federer suggests ensuring that transparency is maintained at all times. Boundaries also need to be created, for instance, calling parents by their first names rather than mom or dad.
“Since your non-family colleagues will likely think you have an ‘in’ with management, you have to work hard to show them you have to adhere to the same requirements they do,” Federer says. “If you are named the heir apparent, it’s even more important to gain respect, ideally by starting at the bottom and working your way up via your accomplishments—not your name.”