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Chaos Proof Your Family Hiring - Part 1 · The Twenty One Clear Podcast

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Adam Hatcher: Hey there.
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Welcome to the 21 Clear Podcast, where we talk about anything to help
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you chaos, proof your family business so you can build a great company
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with a strong family around it.
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I'm your host, Adam Hatcher, the founder of 21 Clear, and today we're
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gonna follow up on our last episode.
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In that episode I laid out.
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The family business framework, a framework for running your family business meetings
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and putting important elements in place with trust building in the center.
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To let you chaos proof your family business.
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And recently Sarah Davis, who was our guest in episode three
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and is the director of Kennesaw State's Family Enterprise Center.
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Sarah invited me to give a webinar on a part of the framework.
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We covered chaos proof hiring with 13 years as a leader and executive in our
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family staffing and recruiting company is something I was quite familiar with.
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And so, this episode and the next episode, we're gonna take that
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webinar and break it into two parts.
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Today we are gonna explore the first part of chaos proof hiring.
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So there are four elements to it.
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Gonna lay out a case for intentional family business hiring, and then lay out
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the first element with an example, and then in the next podcast we'll take the.
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The end of that webinar and we'll lay out the last three steps for you.
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So if you didn't hear the last episode on the framework and you want a bigger
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picture, just walk back to episode four and episode five is gonna be the beginning
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of chaos, proof hiring, and then part two of Chaos Proof Hiring will be episode six.
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So let's jump right into the webinar and I hope you enjoy.
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Today we're gonna touch this idea of how you hire well, or we would say, how
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do you chaos proof your family hiring?
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Because the only way you have a family business is if you've hired one.
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After the founder,
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once you have a family business, you hire.
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My grandfather hired my grandmother on the first day that our
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family's company was started.
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There wasn't really a process, and I'll spare you the story for today,
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but that employment lasted one day and there are lessons in both hiring,
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leaving, running the family business, working well and building trust in
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their single day of working together.
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But what is interesting to me about hiring well and doing it
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intentionally, it is the opposite.
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The opposite of drifting into your mom and dad's company.
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I live here in Augusta and I was on the driving range one day.
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And there's a guy, we will call him Victor, here on the webinar.
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But Victor was hitting next to me.
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We hadn't met, and I asked Victor what he did and he said, you mean what did I do?
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Well, well, tell me about it.
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He said, well, my brother Mo and I took 20 years to build a company together.
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I said, oh, well, and how's the company going?
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He said, well, I don't work there anymore.
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So I asked him what happened.
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He said, well, my nephew, my brother Mo's son, he wanted to join the company.
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And I told him that kid didn't know a thing.
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I told him he didn't work hard.
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He'd always been lazy and I wasn't gonna have him.
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I was interested now, and he said, well, we got in an argument.
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And after a couple of weeks, my brother Mo finally said to me, you know what, Victor,
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if we don't see my son the same way, then we don't see business the same way either.
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And that was the end.
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They didn't have a way to establish whether or not a family member was
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qualified to work for the company.
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And also to working together well, they didn't have a way to resolve conflict
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with each other outside of the business.
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And I tell you all that story, because the end of it actually broke my heart.
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So the brother Victor ends up leaving.
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Mo hire's his son.
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About a year later, Mo tried to get Victor to come back after firing the son.
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Victor had moved on with his career.
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He came back and helped with one customer that was key to him, but never returned.
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And then Mo the brother died.
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Leaving his widow with a company that was not well run with a family
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that was strained and a son who was estranged away from them.
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When I say it's not a problem, it's chaos.
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When they say that chaos can get into a family company and
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rip up a company and a family.
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That's the stakes when we work together that we're playing with.
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And that's why focusing on hiring is so important.
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'Cause every one of us that has a family company has to do this.
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So lemme give you, in this family business framework, four steps, and we promised
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at the top you were actually going to be able to get better at hiring family today.
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So my encouragement to you, I believe Kathy Milton, who's on here, is
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around a bunch of other people.
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Kathy, you may not wanna do this on a sheet of paper in front of other
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people, but if you have a sheet of scratch paper, put it out to the side.
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'Cause there's gonna be a couple opportunities for you to draft,
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ways that you can think about chaos proofing your hiring, right?
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So you have four things to chaos proof family hiring.
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The first one is family hiring criteria.
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Then it's a commitment to match family members to actual jobs.
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If you have family criteria and you have a family member who is qualified for an
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actual job in the company, then I'm going to tell you the next step is to say no.
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Meet the family criteria, pair up with an actual job, but then say no.
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And if you get over that third point, that third objection, then it is
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not just drifting into day one, it is actually vigorously onboarding
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family members in a way that is dissimilar to how you onboard family.
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Alright, so family hiring criteria.
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I want to tell you all a personal story.
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I was at my maternal grandfather's funeral.
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My paternal grandfather started our family's company, so different one.
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I was at my maternal grandfather's funeral.
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We were at the reception after my grandfather's funeral, and one of his
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friends who'd been in a civic group with him who was older, talked to me
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in the line and I asked him what he did and he had spent about 35 or 40
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years scaling a business with his son.
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And so I asked him, what's going to happen for your family company next?
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He told me that he was so proud of his son, said he went to Georgia
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Tech and he got an engineering degree, and they were an engineering
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firm, and said Georgia Tech,
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and he's worked with me for 25 years and he's learned all the different
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functions and my clients love him, the employees love him, and he's really
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let me become chairman and I am just, I look forward to turning it over.
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We hadn't quite worked out the ownership yet, but my son can take
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over and I was, again, remember I'm at my grandfather's funeral just
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getting appetizers off of a buffet and I said, wow, you are so fortunate.
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That is not the story for so many people.
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That was a mistake to say, because then he said, oh, well yeah, it's not all
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that good because my son wants to hire my grandson, and that kid's an idiot.
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He said, he doesn't know anything.
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My son's gonna hire him one day and that boy is gonna tear down everything that
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we have spent three decades building.
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And I took a breath and thought about this idea of family hiring criteria
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and I said, well, let me ask you, have you and your son ever sat down and
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made a list together of if any family member ever wants to join the company?
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What they would have to do before they were even considered.
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He said, no.
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I said, well, lemme tell you this.
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I said, in my experience with family businesses and family owners, I can tell
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you this, family owners don't like making lists and they absolutely don't like
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being governed by the lists they make.
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But it's way better to argue about bullet points on a criteria list than it is to
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talk about the intelligence of a grandson.
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So what I encouraged him to do is first what is family hiring criteria?
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It is a written list
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that is for family members, before they can be considered for the job, any job.
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So note this is not I was hired into our family's company as the general counsel.
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This never asked the question, is Adam qualified as an attorney to be
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the general counsel of the company?
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It's a prerequisite list and whatever you put on the list, the two most important
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things in creating it is that first you actually do it, and then you're
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as specific as you possibly can be.
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So I want to pull back our curtain and show you the list
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that our family company had.
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I wanna tell you before I do though, my father wrote this list
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when the company was at about $50 million top line and was regional.
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It was increasing and it was an increasingly complex organization.
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I joined in 2010, so when he created this, we had not gone through 2008
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yet, or we're just in the middle.
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I'm sorry, we're in the middle of the 2008, 2009 crisis.
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So he's writing the list in that.
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But he knows that the company's gonna bounce back and he knows that the demands
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of the company, the customers that it sells to, were global and publicly traded
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clients, meaning the sophistication and the demands were gonna keep going up.
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And so if the grandfather I had been talking to at my grandfather's
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funeral made a list, his list and our list weren't gonna be the same.
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So I'm gonna show you ours, just as an example.
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So I am in law school.
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My brother is in college, my sister was in high school, and we all got
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the same letter from our father.
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And it said, I don't know if the Lord will ever call you back or you'll ever
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feel a call to join the family company.
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But if so, five things have to be true.
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First, you have to graduate from college.
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Second, you have to have a degree from graduate school, not a
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specific type of graduate school.
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My brother got an MBA, I went to law school, but you have
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to have a graduate degree.
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You have to go work somewhere else.
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That is not unique in family companies requiring working somewhere else.
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However he added to that, you must get promoted somewhere else.
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And then lastly, he said, your life needs to be reflective of Christian values.
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Now I want you to read into that real quick.
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What he was doing, the company is a for-profit, privately held company that
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holds itself out as being faith-based.
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He wanted to make sure that any family member that joined could work
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in a company that held itself out as having particular faith principles.
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And so that list isn't gonna be your list.
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You have a different family, you have a different company,
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you have different customers.
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But there are three things.
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If I broke his list down, it really had three things in it.
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First, it had education requirements.
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Second, it had experience requirements.
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And third, it worked to have an alignment with the culture of the organization.
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And I wanna touch experience and education real quick.
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And here's something I love about what he did.
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He told me once, Adam, I graduated from Georgia on a Friday.
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I went to work at the family company on a Monday.
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The only person who ever gave me a job was either my father by promotion or
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the day I bought the company from him.
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I want you to always know that you have value outside of this organization and
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outside of my eyes when you come to work here, I also need you to go get experience
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that we could never get without people who have worked outside and brought it in.
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And so what he was doing with this list for any family member who
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joined in an increasingly complex organization, he wanted them to be part
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of the future of the company with our particular clients, but also always
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have their own independent identity.
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'Cause if you've ever worked with family, you know how difficult that can be.
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So that's our list and that's the concept.
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If you have your side sheet of paper, I want you to try this real quick.
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Okay.
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So just a grid, we're gonna work over to you.
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So there's those five criteria.
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I said he put in a letter, let's assume your family business is
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X, Y, Z manufacturing company.
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Let's just give a different example.
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So let's say they sent a similar letter.
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It might say that before any family member comes to work for X, Y, Z, they
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need to have an engineering degree.
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And again, I'm gonna encourage you to get specific with your criteria, not
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just go to college or go to school, okay?
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An engineering degree from a US news, top 100 university.
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And then for experience.
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You've got to work outside the company for three years and have become
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a manager of at least one person.
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See, that's different than the way my father phrased it for our company.
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And then lastly, the cultural alignment.
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When we do a reference check on you, your references need
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to talk about your humility.
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Let's assume humility is a big part of the culture of that company, and we
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don't want you to have an arrest record.
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You can write this in your family hiring criteria.
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Okay?
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So you can see what these criteria do is it communicates to the family,
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their education experience, and cultural prerequisites, and none
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of these have anything to do with actual skills and fit to a job.
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So take just a second.
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And think about your own company.
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If you have someone in your family who is, maybe you have family who are about to
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graduate from college or in high school.
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Maybe you have nieces or nephews who may be in kindergarten, but your cousin,
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your sister-in-law, your aunt, someone has asked you, Hey, might they ever
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have an opportunity to work with you?
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These questions come up earlier than any of us think.
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So think if you had your way, what education would you wanna make sure
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any family member who joined had?
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And then what experiences outside the organization would you want them to have?
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And then think through your core values.
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Pick one, pick two, or just the cultural behaviors your company
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and its leaders are known for.
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What's one of those?
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What's two of those?
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You wanna make sure every family member is aligned to.
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Education, experience, cultural alignment.
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That's family hiring criteria.
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That's the first step in chaos proofing family hiring.
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And now I want to celebrate you.
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Okay?
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If you took a minute, Kathy Milton, no matter where you are.
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Yeah, Kathy logged in first, so I just picked on her a couple times.
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If you just did this, I wanna celebrate you because here's what's so hard
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about a family business, right?
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So I know running an organization day in and day out is hard.
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It's hard to do strategic planning.
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It's hard to make the time.
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It's hard to have the discipline.
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If it's hard enough to argue with customers,
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it's certainly hard to argue with each other about value propositions.
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But this is even harder.
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This is doing inner family business work.
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And the family business has no revenue.
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It has no customers, but it sits right in the heart of the organization.
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And if it's healthy, it can help the organization reach
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full value with a strong family.
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And if it's not, all of it can go away spectacularly.
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And so what you just did maybe for the first time?
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Well, not really, 'cause this is the Kennesaw State Family Enterprise Center.
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But maybe for today, maybe the first time today you've thought
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about that inner family business and taken a step at making it
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healthy.
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So congratulations to you.
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Alright, that's step one.
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Now let's go to step two.
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That is the end of the first part of the Kennesaw State
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Family Enterprise Center webinar.
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In the next episode, we're gonna finish that and go through the last
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three elements of chaos, proof hiring.
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I hope this has helped you think about your inner family business a bit.
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This is the kind of topic when you have family meetings that you both create,
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debate, and communicate, and so I hope this was a helpful podcast for you.
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Look forward to sharing the rest of it with you in episode six.
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I appreciate you subscribing and following.
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We do have a monthly newsletter and post content on LinkedIn as
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well that I hope is helpful to you.
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I appreciate you joining, as my grandfather would've said.
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Thank you so very, very much for listening.