Monday, June 6, 2011

Lesson #42: Is Working With Family Members a Good Idea?

My immediate reaction to this question is no, working with family members is not a good idea, for the many potential issues I will detail below.  But, if structured correctly, a family-related team can work.

The biggest reason I think the answer is no, is the normal work-life balance can get completely thrown out of alignment.  Normally, you have your work life and relationships, you go home after work, and enter your personal life and relationships.  A nice balance of ying and yang.  When you work with the same people in your family, there is a risk that balance is not acheived.  You never get a break from eachother.  And, frankly, it becomes too easy to bring work home with you, and you never get a break from it.  And, vice versa, too easy to bring personal life back to work with you.  So, for a family working relationship to work, there has to be a clear understanding:  work issues stay at work, and personal issues stay at home.

In addition, when working with family members, and no different than with any employee relationships, it is critical there is a clear definition of roles, responsibilities and reporting.  If you are going to be equal peers at the same executive level, then there has to be a clear definition of what decisions and tasks are in each person's control (e.g., marketing decisions by wife, operating decisions by husband).  If one of the family members is going to be reporting into the other (e.g., father CEO and son VP-technology), then: (i) the managing family member needs to manage with "kid's gloves", no pun intended, to not ruffle long term family feathers; and (ii) the managed family member needs to understand that ultimate control and decisions rest with their boss, in this case, their dad.

The last consideration relates to succession planning.  With parent-child working relationships, there needs to be a clear long term succession plan put in place from the beginning, and both parties must live up to their promises in that plan.  For this, I will use an example from one of my clients.  The father CEO hired the daughter COO with the message she would learn the business, and she would take over for him in five years, when he would retire at age 65.  But, ten years later, the father was still CEO at age 70, micromanaging the daughter and driving her crazy to the point she wanted to quit.  But, since the father had no other person to transition the business to, the daughter played the "retire or I quit" card.  The strategy worked and they hired a consultant to help facilitate and enforce that transition.  But, it should have never got to that point, as it created a ton of stress for that daughter, dealing with an extra five years of uncertainty and management by her father.

These are just a few things to think about before starting a working relationship with your family members.  If you can, I would avoid it.  God knows, my wife would kill me if she had to work with me, as my "work personality and expectations as CEO" are very different than my "home personality and expectations as husband".  And, I would never want to worry about walking on eggshells in driving a successful startup business, which is stressful enough as it is.

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