Family businesses reach out to professionals outside the family circle to add value to the business and to ensure the growth and endurance of the business in competitive market spaces. This may also occur by necessity such as circumstances when the family members do not possess the required business skills and expertise, there are only a limited number of family members willing and able to help manage the business, the next generation is not yet prepared to run the family business, or there may be no heirs to the business.
Problems occur in those families which do not have a deep respect for the skill of managing- Roberta Fenech
In a few instances, integrating someone with different DNA may trigger the immune system of some family business leaders, resulting only too often in the rejection of non-family executives. Some family business leaders still prefer family members to hold executive positions. They maintain that executives who are not owners will not watch over the affairs of a business as diligently as owners managing the business themselves.
This tends to occur mostly in founder-managed small family businesses as fast growing, future-looking businesses encourage the involvement of non-family executives.
Non-family executives are ‘invited’ into something dear to the family and are trusted with a key part of its activities, but remain guests. The best non-family executives are likely to have the personalities and social skills to be successful in such settings, apart from the noticeable business skills. Cultural competence is also an important requirement.
The ability to understand and be sensitive to the family-influenced cultural and social processes is the core of cultural competence. Cultural competence may be acquired by understanding the specific values and norms of the family business and what goals and meanings key family members give to the business.
The various competencies of non-family executives are dynamic and need to be nourished through interactions and communication between individuals. This does not mean that all family business cultures are averse to change and that non-family executives are marionettes steered by the cultural frame of the family business. Family business cultures can be open and encourage new ideas.
There exists a large variation in the way families interact with non-family executives. This interaction is very much dependent on the orientation of the family members towards the business and each other.
Families improve the likelihood of non-family executives’ success if they have an outlet for voicing their opinions, wants and needs that does not directly involve the non-family executive. Such family meetings and councils act as an insulator between the potentially messy processes that families engage in to distil individual preferences into coherent sets of common and communicable objectives, and the non-family executive.
Non-family executive performance improves when the family speaks with a unified voice. Family meetings and councils help such a purpose.
Successful non-family executives are capable of working with and navigating the interpersonal aspects of the family environment that helps define the family business. They know the issues that are important to family members and how best to deliver on their objectives. They know what is expected of them and the underlying influences on what is important to the owners.
Successful non-family executives develop a heartfelt affinity for the family for which they work and have the personality that fits the family business. In many cases, the emotional bond between non-family employees and the families with and for which they work become so tight they feel like part of the family.
Non-family executives may play a critical role in succession as they are often asked to help develop the next generation. Successful non-family executives in this role will require a very clear sense of their place in the family business’ history and willingness to be subservient in some ways, to the longer-term processes of which they are a part.
Problems occur in those families that do not have a deep respect for the skill of managing. Such family businesses tend to be too casual about family members taking positions in the company and being promoted.
When a family does not set high enough standards for family members entering the business and being promoted, the management strength is diluted because the non-family executives become discouraged and leave, or they simply are not attracted to the business in the first place.
Successful family businesses attract and retain valuable non-family executives by emphasising merit, giving opportunities to accumulate personal wealth and assuring career opportunities for the best among them. They structure their business and design their employment policies to ensure accommodation of both family and non-family executives.
Successful family businesses find that bringing in seasoned non-family executives or grooming them from within is an excellent way for an organisation to gain wisdom and outside perspective.
fenechrob@gmail.com
Roberta Fenech is an associate consultant of EMCS Consulting Group and lecturer at St Martin’s Institute of Information Technology.