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.