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Talent Placement: The Right Family Member for the Right Job

Posted on in Growth Strategies

Do you work within a family-owned business? Our new series, HME Modern Family, is just for you! This is the second in a series of articles that will cover topics on how VGM members can navigate through and overcome the complexities of operating a family-owned HME business.

 

My first job out of college was working for a family-owned transportation company. The owner had convinced me to come on board to learn the business because his children had no interest in doing so. His concern was that the legacy he was building would cease to exist if he became unable to manage day–to-day operations. Over the years his children married, and their spouses got involved in the family business until the business was sold.

There are many stories that follow a pattern in family-owned businesses: A new family member enters the business or a key leader is replaced by a family member’s spouse. In many situations, these leadership changes happen because of the family bond rather than skill or ability. Conflicts can arise when individuals are hired based on emotions and familial ties versus rational thought.

How should those involved in family businesses navigate the complexities of talent placement? With thoughtful planning before hiring, when placing family talent and in leadership.

Before You Hire: Succession Planning

In a previous article, I discussed the importance of succession planning and creating shared vision and goals among leaders. Is the purpose of the business to create jobs for family members, establish a legacy for the founding family members or provide for future generations? A detailed succession plan can satisfy each of these scenarios.

A well-thought succession plan also lays the foundation for your family businesses hiring process. This plan should detail how involved current and future generations will be in the business and the various roles they may assume.

Hiring Time: What Will Family Contribute?

If you’re a family-business owner, you’ve undoubtedly been told, “But, you should hire them, they’re family.” Think twice before you decide to do so. Your well-intentioned hire may cause conflict in the long run.

SCORE has a great rule of thumb when it comes to making a family hire: Don’t put family members on the payroll if they’re not working for or making some contribution to the company.

In family businesses where second- and third- generation family members are coming of age to begin working, leadership must have an honest discussion to evaluate each young family member’s potential. What skills might they bring to the company that can have a positive impact? Do they have long-term goals for the business? Do they have a genuine interest in being a part of the family business far into the future? Which have the potential to assume significant leadership positions? Answering these questions before you hire a family member for a particular role can help to ensure the best roles for each.

After Hiring: Defining Roles

When multiple family members share ownership, the first and most crucial decision is what role each owner will play. Have a candid, transparent and honest discussion about the specific roles and the decision-making matrix. This is not a time to hold back or to worry about feelings: The sustainability of the business can hinge on the outcome of the discussion. To avoid confusion, the decisions must be written down and communicated to all leaders of the business.

These rules also apply when bringing other relatives on board to ensure the skills and talents of each are utilized best within the company. It is crucial to have specific and direct communication with every family and non-family member about the role and duties of each.

SCORE has put together other ideas for family-business owners to consider:   

  • Do not create two classes of employees: family members versus non-family members.
  • Establish healthy boundaries between family and business.
  • Do not abuse the family relationship.
  • Do not confuse family decisions and business decisions.
  • Use family councils to address family matters.

Mentoring the Next Generation

The most successful family-managed and owned businesses are those with a structured development plan for future generations to assume significant roles in the business. Family members should be exposed to a formal development plan to learn all aspects of the business. Younger family members should have mentors, some related and some not, who understand the importance of providing direction and training for these future leaders. Non-family managers and leadership must understand the role they play in developing younger family members.

Egos and personal agendas must be set aside to forge a path for current and future family business success. Business experts from outside of the family can help to keep planning discussions from becoming too personal.

My first job experience taught me a valuable lesson about asking the right questions. I would have discovered early that the owner did not have the answers. It has been said that the direction we take, not our intention, will determine our destination. Proper planning and communication can help define that destination before the trip begins. And, remember to do more than talk to each your family business partners – communicate clearly. You will be glad you did.

About the Author

Richard Davis is a human resources consultant with HirePowerHR, which he founded in 1992 to focus on talent management and human resource consulting and management training and development. He has more than 30 years of health care experience in executive management and consulting.

 

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