Monthly Archives: April 2018

04/20/18

Employment Policies In Family Business

In all social structures, policies provide a process for aligning an organization’s values with its actions. In family enterprises, where there is an overlap of family, business management, and ownership, a family-employment policy is one of more important policies a family can develop.

It can be difficult for family business owners to be objective about hiring—and firing—family members. The family-employment policy helps by providing an established process and procedure for hiring family members. It outlines the factors necessary for employment, and when applied consistently, helps family members understand their relationship to the business.

“The policy is intended to avoid conflict, and should focus on what is best for the company and should stay consistent for family and non-family members[1].” It sends a message that employment with the company is not a birthright–it must be earned.

For instance, the policy may specify that a family member must have gained experience and earned a promotion in an outside firm; achieved a certain educational level; be a good fit within the company, and have skills commensurate with the current market salary for a legitimate job opening.

The policy may also include a statement of philosophy such as: “We are a family committed to our members and descendants being responsible, productive, well-educated citizens who practice the work ethic and make constructive contributions in the local community and the world at large”[2], thereby reinforcing family values.

While all families are different, it’s clear that development of a family employment policy is dependent upon good communication among family members and between generations.

[1] Family Business Wiki. http://www.familybusinesswiki.org/Family+business+Policies

[2] Bork, David. 1991. https://www.aspenfamilybusiness.com/PDF/Sample_docs/Employment_Policy_Form.pdf

04/7/18

Developing Future Leaders

For family businesses to thrive through succeeding generations, the development of future leaders must not be left to chance. It’s the responsibility of the current head of the family business to recognize and nurture leadership qualities in members of the rising generations. Here are seven strategies for accomplishing this critical task: 

  1. Be a model of leadership yourself.
  2. Demonstrate honor and respect for family members who are leaders.
  3. Recognize that there are as many different leadership styles as there are leaders. Consider the differing yet effective leadership styles of Martin Luther King, Mahatma Gandhi, Eleanor Roosevelt, Malala Yousafzai, Oprah Winfrey, Stephen Hawking, Winston Churchill, General Patton, and Steve Jobs. Encourage the development of individual and innate leadership styles within your own family.
  4. Provide younger family members with opportunities to lead.
  5. Help them learn to identify leadership opportunities within and outside the family business.
  6. Encourage their involvement in leadership activities in a variety of life areas such as in school, in professional associations, in your community as well as in your family business.
  7. Encourage them to think in terms of what they want to accomplish for the family and the business.

Of course, it’s important for the head of the family and current leadership to monitor the path of potential next-generation leaders; to see where they succeed; where they struggle; to guide, correct and mentor them. The future of the family and the business will be in their hands.