Hiring a Non-Family Executive into a Family Business

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Originally Posted On: https://centennialinc.com/centennial-blog/hiring-a-non-family-executive-into-a-family-business/

Here is the situation: you run a successful business and you love the camaraderie you share with the other top executive.  That executive also happens to be your brother.  It is a great set up because you and your brother complement each other well and you are experiencing incredible growth in your family business. In fact, you’ve seen so much growth that it is time for a dedicated executive to handle the sales division. Problem is, no one in the family has that expertise.  It’s clear an “outside” hire will need to be made.

Hiring a new, non-family, executive sounds easy enough, but the reality is far from easy.  Family businesses are amazing and contribute significantly to the American economy, but family dynamics can make things extra complex inside an organization.  We dedicated a whole article to the sensitivity that comes along with a family business. Being aware of the extra care required is a great first step.

In this article, I will touch on the areas you must be keenly aware of when hiring a non-family member into a family business.  As I mentioned above, it won’t be easy to find just the right person, but it can be a great opportunity for a top executive if handled properly.

In every search, Centennial always focuses on character, chemistry, culture and competency, but when hiring into a family business, culture and chemistry are especially crucial.  The family has to be really comfortable with the new hire, almost like an addition to their family.  There has to be a strong connection and likability on both sides of the table.

The family executives must have complete trust in the new hire.  This is someone they will dream with, strategize with and do business with on a daily basis. It makes the job of finding just the right candidate an exciting challenge.

If you are the candidate that is hoping to secure a top position in a family business, it is best if you have experience working in one in the past.  This helps you accept the family dynamics which are unlike the dynamics of a non-family business.  Many business challenges are the same no matter the type of organization, but the solution to those challenges may look different in a family business.

If you have worked in a family business previously, you can better accept the fact that a problem’s solution may appear clear, but when it negatively affects a family member, the clear solution may not be the final decision. For example, if a family member is the head of a department that is under-performing, the solution to that problem is probably not going to be to fire him or her. Employment of a family member is typically protected.  This is normal in family businesses but could be frustrating to a non-family member.

There are often “sacred cows” in family businesses and you need to be aware of these early in your tenure. Make sure you do your due diligence before you start to implement change. Knowing the pace of the organization is imperative.

Evaluate what you need in order to round out your leadership team.  Don’t hire someone just like yourself.  Consider your strengths and weakness and hire someone who will compliment those areas.

Also evaluate your culture and be sure you hire someone who will be comfortable in your culture.  Jean vs. suits.  Collaborative vs. independent.  Structured vs. laid-back.

Before the right person can be found, there needs to be an understanding of the end goal.  This long-term thinking is one of many areas that sets Centennial apart.  We don’t simply want to find a fix for your current need, we want to set you up for future success.  To that end, we ask a lot of questions to be sure we have a solid understanding of your organization’s strategic needs. There is no point in addressing today’s needs if they won’t help you achieve tomorrow’s goals.

Identify your long-term goals before bringing in a non-family executive.  Be clear on what you expect from him or her.  These questions are a good starting point:

• Are you planning to keep the business in the family?
• Do you want to grow your company to a certain dollar amount and then sell?
• Do you want to groom a successor to take over?
• Are you hoping to maintain the current size of the company?
• Do you want to grow the company and then pass it to the next generation?
• Do you have the proper on-boarding or assimilation for the new leader in place?

The task of finding the right executive to join a family business is challenging but very attainable.  Centennial is a family business that has worked with a lot of family businesses during its 40+ years.  I personally know the rewards of finding just the right person to seamlessly fit into a family business. It’s extremely gratifying to see someone graft into a family-based leadership team and help grow the organization as a unified team.

It takes experience to know what questions to ask of the client and the candidate. Digging into the character, culture, chemistry and competencies are always necessary, but a solid confirmation on culture and chemistry will see the family business win.  It’s a challenge I’m always up for, so contact me if you need just the right executive to join your team. 513-366-3768.