Common Causes of Family Business Conflict & What to Do About Them.
Family Business Mediator Video No 27: Employing Family Members.
By Jon Kenfield. Solutionist.
• Family business = private business, legal & practical ability to do whatever.
• Prime reason for many family businesses’ existence is to provide employment for family members, (especially those with sub-par employment prospects, in the eyes of their parents).
• More complicated in 2nd and subsequent generations, because there are more stakeholders, coming from multiple households exponentially more complex family dynamics.
• If family members fit in = OK, provided they aren’t resented by staff (loss of expectation of career path etc).
• If family member doesn’t fit in – work ethic, personality, attitude towards staff etc, major issues. Good staff leave; loyal and bad staff stay. Loyalty is usually personal to the leader, not to the family.
• Junior roles are usually OK. Senior roles need to be on merit, or everybody’s future is at risk, and staff push back is almost inevitable.
• Solution: establish objective employment criteria in the business (HR policy task).
• Create formal performance management system, with:
o Detailed job descriptions.
o KPIs.
o Objective competency requirements.
• Make objective employment criteria a family requirement in an agreed Family Policy or Family Constitution document. Then it isn’t personal, when the issue arises, and business and family procedures support each other.
