Non-family executives can have it rough when working within family firms, nepotism, favouritism and family disputes can wreak havoc on their work environments. Josh Baron and Rob Lachenauer from the Harvard Business Review have researched and written an excellent report on best practice for non-family members to work and thrive in family firms. David Harland – Managing Director of FINH
We see all kinds of office politics – the good, the bad, and the ugly – in family-owned businesses. Families can be intensely political organizations, and non-family executives must know how to play politics both in the business itself and in the dangerous borderland between the business and the family.
After reviewing the work that our firm has done with more than 200 business families around the world, we’ve identified some winning political moves that non-family executives can make:
Play in your “room” only.
We like to explain to client family and non-family members that family businesses are like a home: Different discussions should be held in different rooms. Non-family executives who survive and thrive are those who either know intuitively or learn through experience how to separate the business into the management room, the owners’ room, the family room, and the room for the board of directors. Successful non-family leaders stick to the “management room.” They understand that when it comes to the “family room,” the family has all the power; it’s never going to be a fair fight. Blood is usually thicker than water. Yet family squabbles do spill over into the management room, and non-family executives must be able to isolate the business from the family when family members can’t see past their own internal squabbling.
Ironically, it often turns out to be harder for the manager to stay out of the family room than one might think. That’s because many business families either deliberately or quite naively try to involve the non-family executive in family affairs. We worked with a client family whose patriarch was continuously trying to engage the very talented non-family CEO in a bitter family fight with his son. This was a losing proposition for the CEO who, to his credit, refused to take sides in family disputes. He was empathetic, but he firmly pushed back against being used as a pawn in a game that he could never win. He repeatedly told the patriarch, “That is a family room issue; please take it there.” So far at least, this non-family executive is turning out to be very successful.
Be highly discreet and competent.
Restricting your influence to the management room does not mean that you are powerless as a non-family executive. Far from it. Given your position in the company, you typically have access to an enormous amount of privileged information, and information is power. As we noted above, the problem for many non-family executives is not that family members try to keep vital information from you, but rather that you are deluged by potentially explosive information. Woe to the manager who cannot keep confidences! Lose the trust of family members and your career will tank no matter how good you may otherwise be at playing the game of office politics.
This is not to say that family members always keep non-family executives informed of important business decisions that are in the offing. They don’t. But the best way to avoid being left out of critical conversations is to demonstrate your competence. We’ve seen this type of situation with another client family where major business decisions get made outside the office when the family gets together on Sunday afternoons. The non-family executives can’t force the family to involve them in these extra-office discussions, but in this case at least, one financial analyst is so good that the family invites her to all of these meetings. She has demonstrated her talent, her dedication, her discretion, and her commitment. She works extremely hard and has been careful not to align herself with any one family member or branch. She knows how to be professional in a family environment, and the entire family has come to respect her.
Avoid proxy wars.
Alignment with one family member or branch is dangerous because families can act out their rivalries by “taking out” a relative’s favorite non-family executive. While proxy wars are hardly limited to family businesses, they can often be more intense in families due to volatile group dynamics. For example, we’re currently working with a client family member who is very vocal about his intent to break up the team of employees that is fiercely devoted to his sister, with whom he has a particularly contentious relationship. Our advice to non-family executives faced with this dilemma: Never hitch your wagon to just one star. Aligning yourself with a particular sibling or branch is always risky.
Give credit and invoke the family’s higher angels.
In our experience, the non-family executives who survive the longest are those who know instinctively how to deflect credit from themselves to the family. While this is important for career success in all office environments, in family environments this tactic takes on far greater significance. Make a son look important in front of his father – a battle that child may have been waging all his life – and you will win the loyalty of that adult family member for life.
What’s more, most family owners are intensely proud of their companies. When negative family politics break out, you can nudge the family members to remember their family’s greatness. Do this with genuine respect for the family’s legacy, and you can go a long way toward helping them bridge their immediate political differences.
Make use of impartial outsiders.
Giving feedback to executives about their performance can be tricky in a family business, where the sibling or cousin that you are evaluating may someday be the boss. Your instinct may be to step back and tell the truth, but to tell it “slant.” And, indeed, caution is the appropriate response. The fact is that you must deal with the reality of the power dynamics at play. Look for opportunities to make your feedback truly independent of you, and truly confidential. Encourage your business to conduct 360 reviews using an outside provider. Or find an honest broker – for example, a trusted, external board member – who can give constructive criticism without risking his or her career.
One of the most difficult political situations arises when a non-family employee has a genuine grievance against a family member who receives de facto protection because of the lack of any formal (or informal) channels for redressing the situation. Imagine for a moment what happens when a non-family employee with a complaint turns to the head of the business, who just happens to be head of the family and the father of the son who committed some egregious offense. This occurred at one client family where the son was making inappropriate sexual comments to several female employees. In this case, the power of the non-family executive to put an end to the situation was very limited; it took an outside advisor to step in, expose, and stop the harassment.
Know your genetic limits.
Finally, to be successful in a family business, you must have a realistic sense of the destinations on your career path. Even the most masterful player of office politics is not going to get the top job if there is a family member in the leadership pipeline who is destined to assume the mantle of CEO. Don’t take it personally; it’s not about you. You are biologically disadvantaged and have to be savvy enough to recognize this fact. Always be thinking about the family tree and family dynamics when considering your own path up the career ladder.
In a family business, playing office politics successfully means having the humility — and the political shrewdness — to put the family first.
Want to learn more about working within a family business? Contact FINH on 07 3229 7333