Link This |
Email this |
Blog This |
Comments (0)
Moving From Birthright to Earned Right
August 2, 2007
For a variety of reasons, family members sometimes believe they are owed an executive position in the business. They expect a job to be created for them; they expect above market compensation and benefits; and they expect to be exempt from the policies and procedures non-family members are required to follow. They want to start high and move higher, even if only on the basis of their blood line.
You may already have experienced those conditions. You may be facing them right now. Your biggest business challenge today might be “How do I keep what is an ‘earned right of succession’ among non-family member employees from becoming a ‘birthright’ for family member employees?”
You are not the first family to struggle with this question. Successfully threading this needle requires you to keep two fundamental principles in mind.
You Can’t Run Your Family Like a Business
And…
You Can’t Run Your Business Like a Family
I know Marcus Buckingham wrote a bestselling business book titled “First Break All the Rules.” He wasn’t talking about these two. Break these, and you will shipwreck.
Families are based on subjective and unconditional acceptance between parent and child. In most families, that means blood line gets away with things the hired help shouldn’t even think about. Putting children on the family business payroll too early in their career is often (usually?) a blueprint for disaster. The opportunity to learn what it means to be an employee is lost; and that means performance accountability to others is out the window.
A well run business is based upon objective conditional acceptance. There is a quid pro quo that says you get what you earn. To make sure that opportunities are earned and deserved, follow these guidelines:
- Require immediate family members to hold outside employment for 3 – 5 years before joining the family business.
- Place family members in real jobs with clearly defined roles and responsibilities.
- Create performance expectations that can be measured and clearly contribute to the bottom line.
- Compensate family members at market rates.
- Hold everyone accountable for performance and behavior.
- Remember that blood line is chance and behavior is choice.
- Make sure that choices have consequences and rewards.
- Provide immediate family members (siblings, children, first cousins) with an external business coach.
- Use family, management, and organizational covenants to drive a performance oriented culture based on personal accountability and responsibility.
Posted by Dan Schneider on August 2, 2007 | Comments (0)
