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The benefits of working with family include mutual trust, a shared long-term outlook, and quick decision making. However, your inner family business relationships can also cause chaos for the company and family.
What can you do?
Join us as we explore chaos proofing your family business so you can build a great company with a strong family around it.
21clear.com
Adam Hatcher: Hey there.
Welcome to the 21 Clear Podcast where
we talk about anything to help you
chaos, proof your family business
so you can build a great company.
With a strong family around it.
I'm your host Adam Hatcher, drawing
on 13 years as an executive, scaling
my own family's company and a lifetime
of experiences around the business
and a chance to learn from a lot
of other family companies as well.
And today we're gonna go to part two of.
An episode that we started last time.
And so in episode four of the podcast, I
laid out the family business framework,
a strategic or a practical way of
looking at doing work on your inner
family business, how you and your family
members interact with each other, how
you work together, hire how you exit the
business, how you run ownership meetings.
We looked at the
framework in episode four.
In episode five, we took one of
those ideas how to chaos proof hiring
family members or not hiring them.
We took one of those ideas and we
spent more time on it, and I did that
by sharing the first part of a webinar
that I was hosted at by Kennesaw State
University's Family Enterprise Center.
This episode, we're gonna share
the second half of that webinar.
When you go back and listen to
episode five, you'll hear us
talk about the importance of
creating family hiring criteria.
Those are those things that any
family member who wants to join
the company needs to do before
they're even considered for a job.
It has nothing to do with
a position in the company.
It is, do you have to graduate
from college, from graduate school?
Do you need to work somewhere else?
Can you have an arrest record?
Are there certain parts of the company's
core values you have to agree with?
Those are specific criteria for
family members before they join.
That's part one of the chaos
proof hiring of family.
Okay.
This episode we're gonna get
into the last three elements.
It's gonna be matching
family members to real jobs.
Then it's going to be, if you followed
the whole process to this point.
Not doing it, not joining
the family company.
And you'll hear me
explain that a bit more.
And then lastly, family members do
not know how to work in the company
just 'cause they grew up together.
They do not learn it by osmosis.
What does it look like to vigorously
onboard family members into their
actual job so that they can be
successful in the company and not
put pressure on the family business?
That's what we're gonna do in this
episode, and I hope you enjoy exploring a
bit more how to chaos proof hiring family.
Now let's go to step two of
chaos proofing family hiring
or hiring family members well.
And that is once they pass the
family hiring criteria, you need
to match them to an actual job.
And let me just go ahead and say
upfront that Director of This Economy
is Scary, is not an actual job.
Director of I Don't Want To Go Find
Something Else, is not an actual job.
And while those are funny examples,
I can also tell you about a family
business that hired their son and
hired their son into a sales role.
But they brought in outside
investment and had limited
ability to affect the compensation
plan in their own organization.
But they wanted their son to make
significantly more than other employees.
And so what they did in the sales
role was they made him where everyone
else had a territory he did not, where
everyone else had a restriction on
how they sold, particularly not taking
clients from others, he did not.
And his position allowed him to
take business from other salespeople
to be able to make more money.
It's sometimes it's Director of
This Economy is Scary, is funny.
It is dangerous, in fact, to
the organization to let family
members join the company when
they do not have an actual job.
And you know your job is real if
the job has a name that I could
look up in a salary software.
I spent seven years as the head
of human resources in our company.
And like there are jobs that
are in salary softwares, and
there are jobs that are not.
So the first thing, your family
member needs a job that's in there.
Second, they need to actually have
results that they are responsible for.
I worked with a phenomenal marketing team
in our family's company, but I don't know
why so many family businesses like to
hire family members into part or full-time
marketing roles with no descript job
other than to make fun and snark other
people and pay them $80,000 a year.
I don't know why it's marketing.
I don't know why that's the number,
but if it's a real job, you can name
the job and the job has actual results.
And then lastly, you know it's real
if you can imagine telling the family
member why they're gonna be good
at the role, selling them on it.
I saw a great example
of this a few years ago.
A second generation CEO in
a manufacturing company.
His son was about to graduate
from Clemson University.
So my apology to our Georgia Tech
and Georgia graduates on this, but
it was a good story outta Clemson.
Second generation, he had bought
his parents out and his son was
about to graduate from Clemson.
They were growing the company and
their competitive difference was the
quality of their product and they
had to increase first pass yield
as they were scaling the company.
So what the CEO wanted to do, the
second generation CEO, he wanted to
hire entry-level engineers to put around
his more senior engineers that had
particular focus on quality and could
run particularly quality improvement
projects to increase first pass yield.
That's what he wanted to
do as part of selling it.
And his son had both been successful at
Clemson, had worked an internship in a
quality department during his college
years, and when he applied to the family
company, they were able to hire him
into an entry-level engineering role
with a quality focus and give him his
part of this target of increasing the
first pass yield and the quality of the
company, and thus making it successful.
It was a job so tailored to what he was
good at, that his father could tell him
exactly why he was gonna be successful.
And that's a very normal practice
in human resources to have
a tight job and a tight fit.
And just for some reason in family
companies, there's this temptation
where we can just let someone drift in.
But when you do this, when you have
clear family criteria and you match
people only to actual jobs, so
clear, you could sell them on why you
think they'll be successful in it.
You have set the family members
and the company up for success.
Otherwise you have left
them to blow in the wind.
And maybe it'll work, it won't.
And when it doesn't work for a family
member, that is that unnecessary
chaos we're trying to avoid.
So steps one and two,
family criteria, actual job.
If both of those are true for a family
employee that you're considering
hiring, or if you're a family member,
considering joining the family business,
the next thing I would tell you to
do is to say no to the opportunity.
Why would I say that?
There was a good article in the
Wall Street Journal, a couple of,
let's see, this was back in April.
Rachel Wolf's a writer for them.
She has an interest in family companies,
and she wrote an article, you can
see it here, about people coming out
in a scary economy and wanting to
go work for their parents instead.
And so I have a podcast and a newsletter
and somebody that was a subscriber to one
of 'em ask me, if you got to talk to one
of these folks, what would you tell them?
What is the first piece of advice
you would give a young family member
considering joining their family company?
And I said, it would be simple.
If they had family hiring criteria that
they had met and there was an actual
job, I would tell them, don't do it.
Do not work together,
go work somewhere else.
Now that doesn't mean it's not
a good idea, but it's the exact
opposite of drifting into the company
because everything else is scary.
So why not?
Why would I tell you, why would
I tell your family members
to not join the company?
First there's a risk.
I remember my father telling me as
we reflected back on years together.
He said, I knew when I hired
you the risk I was taking.
Because as we talked about earlier in the
webinar, every family member you hire,
you're adding more unconditional family
into a conditional environment, creating
more and changing tension that's going
to move and evolve with you over time in
the life cycle of the family business.
So you are constantly taking a risk.
And the other thing you're doing when
you hire family or when when you let
them work for you, or you go work, is
you're asking your family or giving
them permission to form a fully
integrated view of your character.
They might know you as the funny uncle.
They might know you as the ballerina.
They might know you as the kind
grandfather, but when you invite them
to work with you or you go work with
them, you're opening yourself up to a
complete evaluation of your character.
And that is a risk that you're taking
that you actually don't know when
you go work with family or they work
with you, what you're going to see.
You don't know until you work together
if you're aunt support decision maker.
You don't know if you have family
members as wonderful, as generous of
gift givers as they may be at Christmas.
When you work with them, do they
actually put their interests above the
families or do they put the family above
the customers and the company versus
always putting customers and company
first and then family and themselves?
You don't know that
till you work together.
I had one view of my grandfather
when he and I worked together and
when I worked in the family company,
I realized he had a very different
and a tough management style.
I would've never known that unless we
worked together and he likely learned
a couple of things about me in the
few years that we worked together too.
Anywhere else you could work in the
world other than your own family's
company, you don't take these risks of
inviting your family to create a fully
integrated view of your character.
And so because of that risk and
because of that tension, when you
work in a family company, you create
this family business or you make it
bigger by being another family member
that joins, there is a requirement
of you to work and run the family
business in addition to the company.
I had about 15 different jobs for
free payer credit before I came to
work in our own family's company.
And they were complex, they were
challenging, but none of them
required me every day to run two
different organizations, a family
business and an outer company.
But when you join the family business,
that's what you're signing up for.
So I would tell someone, even if you
meet the criteria and have an actual
job, the next thing is don't do it.
Don't drift into this because there are
big risks and unknowns you're taking
on and requirements you're accepting.
But if eyes wide open, you see
that, you know that, and you're
willing to take it on the last
step in chaos proofing your family.
Hiring is to vigorously
onboard new family members.
Let's juxtapose that word vigorous.
There is a temptation when you onboard
to believe that family members,
they were around you growing up.
They probably picked it up by osmosis.
I talked to a second generation family
executive, and the next generation
was with them, sons, nieces, nephews,
and they used that word with me.
They said, well, I mean, Adam, they
just, they understand by osmosis.
I'm like just because they came to
Thanksgiving, it doesn't mean you know how
to handle particular client relationships,
and just because you remember to text
everybody on their birthday doesn't mean
you know how to do a performance review.
It's lunchtime, so I'm allowed to
do this just because, you know the
family lasagna recipe doesn't mean
someone knows how to complete a budget
shell or that they can recite a core
value and nor are they expect it to
just because they know the recipe.
But once you are hired, that's the
responsibility that you take on.
And so what are components,
when we say vigorous onboarding?
I think of that with three components.
First, it's a written plan.
Second, if you are able to, you
provide them a broader view of the
organization through job rotation.
And third, you introduce them to
the family employees uniquely.
So first to a written plan.
When I joined the company, very different,
purposeful onboarding is not done walking
down the hallway in passing conversations.
In our company, we had a multi-page,
multi-month onboarding for staff.
And a similar multi-page,
multi-month onboarding for leaders.
Two separate onboarding checklist.
I joined as a general counsel,
as an individual contributor.
So can you guess what written
plan my father gave me?
Yeah.
Some of you I know know it.
He gave me both.
I was gonna do everything up front and
whatever your list is if you are about
to hire a family member, if you're about
to join, write down the onboarding plan.
Work with human resources,
work with a consultant.
Talk with me afterwards.
I'm happy to tell you how we broke down.
'Cause I had to go through
different departments and functions.
We were staffing and recruiting company.
I had to do 10 drug screens and sit
for a half day with the receptionist
and then go work on a client and
a prospect proposal with finance.
You want them to go through a written list
to introduce them to the organization.
Assume they hadn't worked there.
I had actually worked there
in high school, in entry-level
receptionist functions.
None of that prepared me for
joining as a leader in a high
pressure role, like general counsel.
So write down the plan.
Second, if you can, and this is not
something I did, but something some
of the best, and we did this with my
brother, and something some of the best
family businesses I've seen as best
you can provide them a job rotation.
If you can put them through, if
your organization is of a size
to put them through operations,
finance, sales, human resources.
I mean, that's just an
example over a year.
Great.
I saw a very large family organization
who one of their now family executives
started in a franchise and then they
went into franchise selection and then
they went into one corporate function and
then they moved into another corporate
function and they had the luxury of a
larger organization where they could move.
But even if you can give someone the
time to shadow roles for weeks or
months at a time to get their hands
in and learn before they have their
own job responsibilities, it will
help them understand the organization.
It also gives them the
message family to family.
I didn't expect you to know all this.
I remember one of the hard things
joining your family company, I
spent about six months trying to
pretend like I knew everything.
I felt like I was working in a fishbowl
and I wanted everybody to understand,
think that I understood it all.
And finally, someone so kindly
pull me aside and said, Adam,
it's okay to ask questions.
We know you don't know anything.
And so when you create an onboarding
plan and job rotation, and part of
it you're taking care of if you've
joined your family company or if you're
about to, there is an anxiousness.
This helps to take care of that.
And then lastly, introduce them
to the other family employees.
When I joined my grandfather, my
father and my cousin were there.
And eventually my brother would join.
And when we onboarded new leaders
to teams, we could have taken that
idea and done it just for the family.
And that would look like a morning
where we sat down and each of us
went around the table and talked
about, well, what is Adam's job?
What's Bill's job?
What's Randy's job?
We would go around and
talk about our jobs.
We used work personality profiles.
You might use the Myers-Briggs,
Working Genius, Strength
Builders, whatever it may be.
You would go through that and say, this is
my personality, this is their personality.
When we interact with each other at work,
how do our personalities mesh or not?
Actually, a couple years into working
together, my father and I realized
that our, we use the Predictive Index,
there was a part of our personalities
that was inherently at conflict.
And we didn't know that for a couple
of years, but when we finally looked
at it and we'd worked together a
while, we realized it, and then it
was something that I could be aware
of in our working relationship.
So onboard to the jobs, the
personality profiles, you can even
get vulnerable and share what you're
strong and what you're weak at.
The new family member, what
are their goals going to be?
How do they interact?
How might they interact
with other family members?
Again, it's not long.
It's just probably a morning, but you
sit down and what you're acknowledging
is that we have an inner family business,
those of us who have chosen to work
here, so we're gonna introduce each
other to ourselves as family employees.
It also may be the first time that you
call each other by your first names.
In onboarding a family
employee or being onboarded
I would encourage you if you've
always called your grandfather
Poppy, like I called mine, or
your dad, daddy, or your sister,
whatever your family nicknames are.
As you are onboarded to
the company, let it go.
I called my father Randy.
I called my brother Baker whenever
we were doing family things.
And it's just a small way to help you
realize that you're not at Thanksgiving,
you're not watching SEC football together.
You are in a family business inside
a company that's relying on you.
And then thankfully, when you are watching
football together, you can flip right
back to dad or buddy or whatever you use.
So onboarding to family
employees also lets you start to
professionalize your relationship.
And that is our framework for hiring well.
Having family hiring criteria, matching
to actual jobs, not drifting into it.
Saying no.
And then even if we get over
that, being vigorously onboarded.
You may have sat through this
though and want to put this off.
Okay.
Maybe your, your in-laws,
your cousins, your nieces,
whatever, they're, they're young.
But remember in my experience,
you can never start soon enough
on purposefully hiring family.
The need for this kind of clarity
will be on you before you know it.
My sister was in high school when she got
the letter from my dad and kindergartners.
You may have had this experience.
Kindergartners can create awkward moments
by saying things like, well, mommy, will
I ever be able to work with grandpa too?
Having those answers earlier we'll help
you chaos proof your family business.
And so I have found when you
work on these, you may say,
where do you work on them?
And so as we close together, I'll
tell you, we used family meetings.
We may call them ad hoc, and
we sometimes did 'em annual,
did 'em quarterly.
It depends on the rhythm of the family.
Sometimes things were emailed, sometimes
there were other resources there.
We use family business meetings
to work out a lot of these things.
I hope this episode particularly
listened to with episodes four
and five have been helpful to you.
21 Clear exists to end chaos
in family businesses, and we
do that two ways by offering
dedicated family business consult.
So not looking at wealth management or
strategic tax planning, but focusing
on that inner family business.
So with consulting services, but then also
resources and this podcast is one of them.
One thing I learned in my own family's
company, I led corporate strategy
for about a decade as we quadrupled
and went coast to coast, and I
learned how hard it is to focus.
On the business versus
working in the business.
We all know that phrase, it's
even harder to focus and make time
for your inner family business.
So my hope in this podcast is that you
have gotten 20, 25 minutes just to think
about how your family works together.
Inside the company and every time
you touch a resource of 21 Clear
'cause we provide consulting and then
resources for however long you touch the
newsletter, a LinkedIn post, however,
however long you touch the book that
we're gonna be publishing in quarter
two of next year, or this podcast
that you just get to take a breath.
Think about your inner family business.
My hope is that has been helpful to you.
I look forward to joining
you again next time.
Until then, thank you
so much for listening.
As my grandfather would've said,
thank you so very, very much.