Family Businesses can be rewarding but complicated

The Opportunity

Doing business with family members has NEVER been a neutral topic. Family businesses are a time-honored tradition.

In contrast, many companies have formal policies against doing business with people you have outside ties with, just because of the (MANY) possible complications.

What follows is a discussion of how to make the most of the rewards of family businesses while avoiding some of the pitfalls.

The Solution

It has been a tradition since time immemorial for families to work together. Young people become apprentices to their older relatives and learn the inner workings of business. After “earning their stripes” and completing their education, these young people are often groomed for high positions in the companies. The connections, the early introduction to the key players and concepts, and the reputation they carry in their families’ names provide their customers with the security of dealing with a “known entity,” in what is now a very volatile marketplace.

There are many family dynasties that have spent many generations building reputations, building markets, and gaining experience that become their competitive advantage. The Gallo family in winemaking, the Eccles family in banking, and the Shane company in jewelry are examples of families that have (or had) several generations in building their businesses into vast empires.

There are even current tax breaks for employing your children. Some very smart families have their children work in the family business, and a portion of their salary goes into their education fund. This allows for additional tax advantages.

Working in a family business (as a non-family member) can present a unique set of benefits and problems. I worked for a small family-owned florist shop in college. It was extremely unwise to have a disagreement with a member of the “ruling family” because the rest of the family would hear about it almost instantly and your future with the company would be suspect. There was also much gossip among non-family members about the pointlessness of trying to be successful in a family business because no matter how hard you work, “you’d never have the right genes.”

On the other hand, I worked at another family-owned publishing company whose approach was to treat all of their employees like family. We had a barbecue on the premises every other Friday, communication was extremely open, and it was a wonderfully warm and nurturing environment. My boss treated everyone like a son or daughter. They were happy to help out an employee whose home was damaged in a storm, (we were given half a day off on the condition we showed up at Dave’s house in overalls with tools in hand) or to cover for a secretary who needed time off to care for a sick child. It was a surprisingly nurturing environment, unheard of in the modern, cold corporate culture.

Modern Corporate Culture- Keeping Things Simple

This is all very well and good if your family owns the company, but for the rest of us, working with family has some definite drawbacks, and even some formal obstacles. And for good reason!

Avoiding conflicts of interest, or the appearance of conflicts of interest, is central to the human resources policies of many companies. Most forbid direct reporting relationships between family members or even dating couples. There is the possiblity that other employees will see a relationship as a factor in a raise or a promotion, or on the contrary, in a disciplinary action. A breakup, divorce or intergenerational family fight can make it very hard to maintain complete fairness and objectivity in the workplace. The HR department’s job is to avoid any such turbulent possibilities by keeping things simple.

There is also the issue of confidentiality. Many people confide in their spouses and families about issues at work, which provides a much-needed outlet and is not likely to cause any harm if the spouse or family member’s work is not related. But with interconnected projects and departments, there is always the possiblity (or perception) that families that work together may have the advantage of inside or shared information that their co-workers don’t have.

In his book Office Romance, Dennis M. Powers details what he calls Office Wolves, Office Hyenas, and Office Black Widows- people that can make life much more turbulent in an office where spouses or dating couples working together. His “Wolves” are people who are so intent on dating a person in the office that they make life difficult for the object of their affection that doesn’t reciprocate their feelings. “Hyenas” are people who enjoy being in the middle of whatever gossip they can dig up, and “Black Widows” are the injured parties from extracurricular office romances. All this can lead to a lot of, well, complexity, to say the least.

On the other hand, we spend at least forty hours a week at work, and pour out creative energy and inspiration and get to know people we work with. It’s a fact of life that some of those people are likely to develop relationships. Powers reports that one third of all romances begin at work. Many people leave companies or start their own simply to spend more time with their families.

Many of the best qualities in the people we work with are also the best foundations for relationships- or the best qualities in the people we love and respect in our personal lives are the best reasons to work with them. Trust, understanding, shared values and mutual goals are all great reasons to work together.

With many companies merging, relocating, or becoming international, some companies are relaxing their policies about spouses and family members working together, especially at remote locations. An executive sent to Lisbon to open a new office agreed to go if his wife could also find employment there. The Human Resources department found an opening that fit his wife’s qualifications, and made an exception to the HR policy since they would be working in the same department.

Love and Money- Working with Families

Here are some suggestions we’ve heard for maintaining familial bliss as well as sound business. Some of these guidelines also apply to doing business with friends, an equally tricky topic.

1. It is as important to be as courteous to your family as it is to strangers. We sometimes become too relaxed with family members just because
   we see them every day. We take for granted that they’ll put up with our moods in ways other people wouldn’t understand. This can lead to problems with family members, or with other employees who feel awkward seeing these interactions.
2. Establish boundaries. Make sure you spend enough non-working time with your family members that you see them as individual people that you have a healthy relationship with outside of the company. Have separate family outings, holidays or weekend activities where you DON’T talk business.
3. Be professional in public or at work. Expressions of affection could make other employees feel uncomfortable.
4. If you want to be alone together or have a private conversation, go away from the company property for an intimate lunch or cup of coffee. But don’t abuse the privilege and allow either person’s duties to be neglected.
5. If you are the employer, have very specific policies about reporting relationships and expectations of behavior to avoid conflicts of interest, sexual harassment, or the potential appearance of either. Working in separate departments, for example, might be an ideal solution where a couple can work at the same facility but avoid any potential problems.
6. If you own a family business, be sure the lines of communication to non-family employees are good. Make sure that no one feels disadvantaged
   for being left out of conversations and decisions that take place around the supper table. Keep the appropriate people (based on their role in the company) involved in all decisions.
7. Don’t talk about your family members personal life with other members of your staff, except in terms that are absolutely non-controversial. (Don’t tell your co-workers that you don’t approve of who your daughter is dating, for example, if your daughter works in the next office!)
8. Make sure each member of the corporate structure has the option to leave the company without impacting the company more than necessary. Don’t assume that a person is a “lifer” just because he or she is a family member. Whether or not they take the “exit clause,” just having one makes people feel less trapped and ensures that they are there by choice.
9. Respect each others’ decisions and authority. This may be particularly difficult for parents. Just because you’re the Mom that doesn’t mean you can tell your son how to run his department. Keep your comments appropriate for your role in the company, rather than your role in the family.
10. Appreciate the good things about each other. It becomes easy to focus on the negative when you spend a lot of personal AND professional time together. Remember (and point out) what you admire and love about one another.

Doing business with family and friends can be very rewarding. It can also be very complicated and difficult. It always involves an even more stringent standard of etiquette than usual, but if appropriate measures and safeguards are taken, it can make life, work and relationships a rich, rewarding tapestry that brings the best of both worlds.