Our EventsSee archive »
14 December 2018Regulatory compliance for cryptocurrency businesses
Should you join the family business?
Richard (not his real name) graduated from college on a Friday. Three days later he would start his first day on the job in his family business. The choice was not one that he gave much thought to. He’d grown up in the family wine business, which his grandfather had founded, and his father had wooed him to join. This was the family’s legacy, his father had said, and someday Richard would be CEO. Or at least that’s what Richard heard.
Twenty years later, things have gone horribly wrong. Though they work side by side, the men are barely speaking after a boardroom blow-up. In his darkest moments, Richard is even contemplating whether to sue his father for breach of fiduciary duty. By all accounts, catapulting Richard into the business straight out of college was a mistake. Richard and his father both had high hopes for a generational transition — and both sides share in the blame for what has gone wrong — but after two decades of devoting himself to the family business, Richard worries that he’s wasted the best years of his career. And his relationship with his father feels like it has deteriorated beyond repair.
Some people thrive after choosing a career in their family business. But others wither, bitterly regretting their choices. ‘’I’m going to lose my business — and my father,’’ Richard recently lamented to us. His situation happens too frequently — and it’s the worst-case scenario about what can go wrong when you jump wholeheartedly into your family business too early in your career.
The decision to accept any full-time job offer can be stressful. But with family businesses, the choices can be far more complicated: It’s as much an unspoken social contract as an employment one — and the consequences can last far longer. In our experience, even the most high-potential family members have a hard time navigating the complex emotional mix of expectation, obligation, uncertainty, and the desire for professional success when faced with the decision.
Often, people considering joining the family business are afraid to appear either ungrateful or entitled, so they don’t ask important questions. They just assume and hope that their parent’s desire to have them join the company will mean they have a fulfilling career ahead of them, potentially one that leads to ownership and the CEO spot. But that, as Richard learned the hard way, is not always how things play out.
Growing up surrounded by a family business should provide younger generations with unparalleled insights into its strengths and weaknesses, its potential, and a sense of how it might be possible to grow their careers there. But often the younger generation is given only a glimpse into the organization, the part that the senior generation wants them to see.
There are some red flags that joining your family business might not be a good decision, no matter what the circumstances. If, for example, your relationship with your father or mother (or whichever relative owns and runs the business) is not in a good place, joining the business is not likely to make things better — and, in fact, it could make things much worse.
Instead, we recommend getting a job outside of the family business and earning a promotion before opting to join your family business. By establishing yourself first outside of the family business, you will have demonstrated to your family, to your future colleagues, and, most important, to yourself, that you have something real to offer your family’s business. As one client told us, “We like our next generation to ‘get their butt kicked’ outside the family business prior to joining. Then when we ask them to work hard, they know it’s what anyone would ask.”
When you do join the family business, it should be in a real job in the company, not one that your parent has manufactured for you. We know of one family, for example, in which each of five sons was welcomed in at a staggering $400,000 salary. Some of the five worked hard; others spent more time on the golf course. The simmering tensions over the inequity inevitably boiled over.
But at whatever moment you’re considering joining the family firm, you need to ask yourself two sets of fundamental questions to guide your decision. The first three questions should be directed at yourself; the second three should be asked directly of your family business leader (presumably the controlling owner of the business).
Follow the link to continue reading. Source: Judy Lin Walsh & Rob Lachenauer; Harvard Business Review.
Follow the links to find scholarly insight on family ownership.