June 18, 2014

Joining the Family Business


The decision whether to join the family business is a difficult one for any family member. Harry Levinson, a prominent researcher/consultant in the field of family business has this advice: "Don't go to work for your family business if you can possibly avoid it." Although I do not agree completely with Mr. Levinson, his advice should serve as a warning that joining the family business should not be done without a good understanding of the problems that can arise and a plan to address those problems.

Initially you should analyze joining the family firm as any other career decision.

Ask yourself how working in the family business will meet your personal and professional goals. Does it provide the work experience that you are looking for? Joining the family business because the pay is good or because that is what is "expected" will probably not lead to a satisfying career.

You should also review your qualifications for working in the business. Do you have skills that are needed in the business? If not, how will you develop them? You cannot rely on having the correct last name to succeed. In this regard, always, always work for someone else first. Having a track record outside the family business will give you confidence and credibility in the eyes of other family members. It will also teach you greater respect for the achievements of the current management team.

Talk with key non-family employees. Non-family employees can help you look at the business objectively, as an outsider. An honest conversation with existing employees is a great way to learn what its like to work in the business.

Secondly you should analyze the impact of your joining the business on the family. Can you work with your father or mother? Is your father overly controlling and unable to delegate and does that drive you crazy? Does your brother, sister or cousin work in the firm and can a business relationship with them co-exist with the familial relationship? Will sibling rivalry prevent you from working as a team?

You should also discuss your expectations about promotion, leadership succession and ownership with the senior generation and other family members. Are your expectations realistic and are they shared by other family members?

In doing your "due diligence;" don't rely on assumptions about what people think or how they will act. Get first-hand information from all members of the family who have input into the business (which, usually means everyone). It may be difficult to discuss these issues — especially issues of ownership and management succession — however, it is much better to learn that your father never intends to retire and you will never be president before you join the business, rather than when you are in your 60's.

If, after your "due diligence" investigation you are willing to join the firm and the senior generation is willing to offer you a position, make sure that you get a clear understanding of your role in the company, and a clear understanding of the senior generations expectations of your performance. A job description is a must. Develop objective criteria for evaluation of your job performance and salary adjustments and, if appropriate, future ownership.

Notwithstanding the difficulties of mixing family and business, working in the family business can be very gratifying. Advance investigation and planning will help you to structure your role (and adjust your expectations) so that your career in the business will be a rewarding experience for you and the family and profitable for the business.

For more information on this topic, please contact marketing@jordanramis.com or call (888) 598-7070.


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