Are you employing family members?

We’re often called upon to work with family-run hospitality businesses. They can be very difficult to deal with. Having the involvement of immediate family and relations is a double-edged sword and a potential nightmare for a management consultant or other outsider engaged to work with the business.

Those of you who have never been involved with family businesses probably look at them with some envy. The notion of having a tight knit ‘tribe’ all pulling together for the good of the group is an attractive proposition, and one that a fair number of people aspire to. I’ve had thoughts like this myself. The reality is often quite different.

Husband and wife teams

Take the most common family business — a husband and wife team. How would you like to work and live with someone — all the time? How long do you think your marriage (or business partnership) would last? How do you get time out? Imagine, if every time you wanted to take a holiday or a break you had to take your business partner with you? Also, marriage (or defacto) partners are seldom evenly matched or ideal for the roles they play within a business.

Husband and wife teams can be quite problematic

Husband and wife teams can be quite problematic

It’s common for us to find one or other partner is the dominant, driving force, while the other partner is swept along by events and struggles to fulfil a role they are ill prepared and unsuited for. It’s great when we do find a balanced, happy team — they do exist, but so do a lot of unbalanced couples with one unhappy person who is trapped in a role they struggle with or, worse still, despise.

It gets very scary for us. Where does a management consultant’s role finish and a marriage guidance counsellor’s begin? A couples’ basic problems with each other or their domestic relationship can often be at the root of serious business problems. We often see tired partners who hardly communicate with each other presiding over ailing businesses.

Other relatives

Cousin Vince

Cousin Vince

When other family members are introduced to the business, it can get quite bizarre. Cousin Vince may be an amusing asset at a family barbecue, but he hates humanity, is dyslexic, slow witted, prone to uncontrollable flatulence and is a totally incompetent marketing manager. His wife Beryl is very astute and should be the Operations Manager, but because she’s a recent ‘in-law’ and not part of the immediate family, she’s relegated to waiting duties, which she hates with a passion.

Meanwhile George, the long-serving head cashier and not part of the family, has finished his PhD in Marketing but because there’s no chance of a marketing job, is

looking for a job elsewhere. Uncle Henry, who was an art teacher and wants to be a social worker, is the maintenance man, and his wife Penelope is the head waiter, despite her speech impediment, drinking problem and hair-trigger temper. Get the picture?

Sure, I’m being a bit flippant to make a point, but we’ve seen much weirder than this. I’ve sat in meetings of key personnel of family companies in absolute fascination watching them jostling for position in the family hierarchy, subtly pushing their hidden agendas and rarely dealing straight with each other.

Communication can be a problem

Machiavelli must have done his apprenticeship in a dysfunctional family company. It’s interesting how normal (and necessary) business communications become tempered to avoid family feuds in such businesses. Paid third parties (usually the long suffering family accountant or luckless management consultant), often get used as sacrificial pawns to deliver politically sensitive communications while family members with strong vested interests feign non involvement and detachment.

They might look like a happy family unit, but do they communicate accurately?

They might look like a happy family unit, but do they communicate accurately?

When the whole thing progresses into the second generation and some of the family’s children become involved, it gets even more difficult. Some children get drawn into the business with little or no choice in the matter:

‘Your grandfather started this business and it will all be passed on to you one day. . .’

I have come across miserable adult children who are working within a family businesses because it is expected of them and because they’re paid better than they would get in the outside world. It’s common to find them in relatively junior positions for their age because there is no room to move up until ‘dad’ or ‘uncle’ retires.

Who is the next leader?

If there are two or three kids involved, the mathematic probability of upward promotion becomes even more remote — they can’t all have the top job. A wise leader would probably turf some, or all of them out of the nest, but only a small percentage of family business leaders have the foresight or objectivity to do this. I’ve also seen a few cases where kids have wanted to leave but the family has stood in their way.

How are you going to ensure succession within the family?

How are you going to ensure succession within the family?

It seems that we also have a human tendency if we become the leader to hang around too long. Orderly succession planning is often absent in family businesses and it can take a full blown coup détat among the younger members to remove an ageing dictator who has inadvertently allowed the business to stagnate or decline. The older we get the more set in our ways we become, and the more we fear and reject change.

So family businesses are a mixed bag. They can be incredibly durable, stimulating environments that provide a good living for the whole tribe, or they can be life sentences that stifle captive family members.

One way or another, they’re always an interesting challenge for a consultant. When they function the way they should, they’re a joy to be involved with. When they don’t, they can be a hotbed of political intrigue, distorted communication and square pegs who have been driven into round holes.