Latest / The Twenty One Clear Podcast / Chaos Proof Your Family Hiring - Part 2

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Chaos Proof Your Family Hiring - Part 2 · The Twenty One Clear Podcast

0:06
Adam Hatcher: Hey there.
0:06
Welcome to the 21 Clear Podcast where we talk about anything to help you
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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, drawing on 13 years as an executive, scaling
0:23
my own family's company and a lifetime of experiences around the business
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and a chance to learn from a lot of other family companies as well.
0:31
And today we're gonna go to part two of.
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An episode that we started last time.
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And so in episode four of the podcast, I laid out the family business framework,
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a strategic or a practical way of looking at doing work on your inner
0:52
family business, how you and your family members interact with each other, how
0:56
you work together, hire how you exit the business, how you run ownership meetings.
1:01
We looked at the framework in episode four.
1:03
In episode five, we took one of those ideas how to chaos proof hiring
1:09
family members or not hiring them.
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We took one of those ideas and we spent more time on it, and I did that
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by sharing the first part of a webinar that I was hosted at by Kennesaw State
1:23
University's Family Enterprise Center.
1:27
This episode, we're gonna share the second half of that webinar.
1:32
When you go back and listen to episode five, you'll hear us
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talk about the importance of creating family hiring criteria.
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Those are those things that any family member who wants to join
1:43
the company needs to do before they're even considered for a job.
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It has nothing to do with a position in the company.
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It is, do you have to graduate from college, from graduate school?
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Do you need to work somewhere else?
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Can you have an arrest record?
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Are there certain parts of the company's core values you have to agree with?
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Those are specific criteria for family members before they join.
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That's part one of the chaos proof hiring of family.
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Okay.
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This episode we're gonna get into the last three elements.
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It's gonna be matching family members to real jobs.
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Then it's going to be, if you followed the whole process to this point.
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Not doing it, not joining the family company.
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And you'll hear me explain that a bit more.
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And then lastly, family members do not know how to work in the company
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just 'cause they grew up together.
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They do not learn it by osmosis.
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What does it look like to vigorously onboard family members into their
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actual job so that they can be successful in the company and not
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put pressure on the family business?
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That's what we're gonna do in this episode, and I hope you enjoy exploring a
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bit more how to chaos proof hiring family.
3:03
Now let's go to step two of chaos proofing family hiring
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or hiring family members well.
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And that is once they pass the family hiring criteria, you need
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to match them to an actual job.
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And let me just go ahead and say upfront that Director of This Economy
3:23
is Scary, is not an actual job.
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Director of I Don't Want To Go Find Something Else, is not an actual job.
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And while those are funny examples, I can also tell you about a family
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business that hired their son and hired their son into a sales role.
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But they brought in outside investment and had limited
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ability to affect the compensation plan in their own organization.
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But they wanted their son to make significantly more than other employees.
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And so what they did in the sales role was they made him where everyone
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else had a territory he did not, where everyone else had a restriction on
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how they sold, particularly not taking clients from others, he did not.
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And his position allowed him to take business from other salespeople
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to be able to make more money.
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It's sometimes it's Director of This Economy is Scary, is funny.
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It is dangerous, in fact, to the organization to let family
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members join the company when they do not have an actual job.
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And you know your job is real if the job has a name that I could
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look up in a salary software.
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I spent seven years as the head of human resources in our company.
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And like there are jobs that are in salary softwares, and
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there are jobs that are not.
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So the first thing, your family member needs a job that's in there.
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Second, they need to actually have results that they are responsible for.
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I worked with a phenomenal marketing team in our family's company, but I don't know
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why so many family businesses like to hire family members into part or full-time
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marketing roles with no descript job other than to make fun and snark other
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people and pay them $80,000 a year.
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I don't know why it's marketing.
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I don't know why that's the number, but if it's a real job, you can name
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the job and the job has actual results.
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And then lastly, you know it's real if you can imagine telling the family
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member why they're gonna be good at the role, selling them on it.
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I saw a great example of this a few years ago.
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A second generation CEO in a manufacturing company.
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His son was about to graduate from Clemson University.
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So my apology to our Georgia Tech and Georgia graduates on this, but
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it was a good story outta Clemson.
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Second generation, he had bought his parents out and his son was
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about to graduate from Clemson.
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They were growing the company and their competitive difference was the
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quality of their product and they had to increase first pass yield
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as they were scaling the company.
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So what the CEO wanted to do, the second generation CEO, he wanted to
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hire entry-level engineers to put around his more senior engineers that had
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particular focus on quality and could run particularly quality improvement
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projects to increase first pass yield.
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That's what he wanted to do as part of selling it.
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And his son had both been successful at Clemson, had worked an internship in a
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quality department during his college years, and when he applied to the family
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company, they were able to hire him into an entry-level engineering role
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with a quality focus and give him his part of this target of increasing the
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first pass yield and the quality of the company, and thus making it successful.
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It was a job so tailored to what he was good at, that his father could tell him
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exactly why he was gonna be successful.
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And that's a very normal practice in human resources to have
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a tight job and a tight fit.
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And just for some reason in family companies, there's this temptation
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where we can just let someone drift in.
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But when you do this, when you have clear family criteria and you match
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people only to actual jobs, so clear, you could sell them on why you
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think they'll be successful in it.
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You have set the family members and the company up for success.
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Otherwise you have left them to blow in the wind.
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And maybe it'll work, it won't.
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And when it doesn't work for a family member, that is that unnecessary
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chaos we're trying to avoid.
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So steps one and two, family criteria, actual job.
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If both of those are true for a family employee that you're considering
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hiring, or if you're a family member, considering joining the family business,
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the next thing I would tell you to do is to say no to the opportunity.
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Why would I say that?
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There was a good article in the Wall Street Journal, a couple of,
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let's see, this was back in April.
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Rachel Wolf's a writer for them.
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She has an interest in family companies, and she wrote an article, you can
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see it here, about people coming out in a scary economy and wanting to
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go work for their parents instead.
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And so I have a podcast and a newsletter and somebody that was a subscriber to one
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of 'em ask me, if you got to talk to one of these folks, what would you tell them?
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What is the first piece of advice you would give a young family member
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considering joining their family company?
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And I said, it would be simple.
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If they had family hiring criteria that they had met and there was an actual
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job, I would tell them, don't do it.
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Do not work together, go work somewhere else.
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Now that doesn't mean it's not a good idea, but it's the exact
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opposite of drifting into the company because everything else is scary.
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So why not?
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Why would I tell you, why would I tell your family members
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to not join the company?
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First there's a risk.
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I remember my father telling me as we reflected back on years together.
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He said, I knew when I hired you the risk I was taking.
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Because as we talked about earlier in the webinar, every family member you hire,
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you're adding more unconditional family into a conditional environment, creating
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more and changing tension that's going to move and evolve with you over time in
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the life cycle of the family business.
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So you are constantly taking a risk.
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And the other thing you're doing when you hire family or when when you let
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them work for you, or you go work, is you're asking your family or giving
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them permission to form a fully integrated view of your character.
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They might know you as the funny uncle.
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They might know you as the ballerina.
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They might know you as the kind grandfather, but when you invite them
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to work with you or you go work with them, you're opening yourself up to a
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complete evaluation of your character.
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And that is a risk that you're taking that you actually don't know when
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you go work with family or they work with you, what you're going to see.
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You don't know until you work together if you're aunt support decision maker.
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You don't know if you have family members as wonderful, as generous of
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gift givers as they may be at Christmas.
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When you work with them, do they actually put their interests above the
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families or do they put the family above the customers and the company versus
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always putting customers and company first and then family and themselves?
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You don't know that till you work together.
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I had one view of my grandfather when he and I worked together and
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when I worked in the family company, I realized he had a very different
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and a tough management style.
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I would've never known that unless we worked together and he likely learned
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a couple of things about me in the few years that we worked together too.
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Anywhere else you could work in the world other than your own family's
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company, you don't take these risks of inviting your family to create a fully
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integrated view of your character.
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And so because of that risk and because of that tension, when you
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work in a family company, you create this family business or you make it
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bigger by being another family member that joins, there is a requirement
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of you to work and run the family business in addition to the company.
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I had about 15 different jobs for free payer credit before I came to
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work in our own family's company.
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And they were complex, they were challenging, but none of them
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required me every day to run two different organizations, a family
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business and an outer company.
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But when you join the family business, that's what you're signing up for.
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So I would tell someone, even if you meet the criteria and have an actual
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job, the next thing is don't do it.
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Don't drift into this because there are big risks and unknowns you're taking
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on and requirements you're accepting.
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But if eyes wide open, you see that, you know that, and you're
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willing to take it on the last step in chaos proofing your family.
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Hiring is to vigorously onboard new family members.
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Let's juxtapose that word vigorous.
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There is a temptation when you onboard to believe that family members,
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they were around you growing up.
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They probably picked it up by osmosis.
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I talked to a second generation family executive, and the next generation
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was with them, sons, nieces, nephews, and they used that word with me.
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They said, well, I mean, Adam, they just, they understand by osmosis.
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I'm like just because they came to Thanksgiving, it doesn't mean you know how
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to handle particular client relationships, and just because you remember to text
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everybody on their birthday doesn't mean you know how to do a performance review.
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It's lunchtime, so I'm allowed to do this just because, you know the
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family lasagna recipe doesn't mean someone knows how to complete a budget
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shell or that they can recite a core value and nor are they expect it to
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just because they know the recipe.
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But once you are hired, that's the responsibility that you take on.
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And so what are components, when we say vigorous onboarding?
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I think of that with three components.
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First, it's a written plan.
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Second, if you are able to, you provide them a broader view of the
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organization through job rotation.
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And third, you introduce them to the family employees uniquely.
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So first to a written plan.
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When I joined the company, very different, purposeful onboarding is not done walking
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down the hallway in passing conversations.
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In our company, we had a multi-page, multi-month onboarding for staff.
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And a similar multi-page, multi-month onboarding for leaders.
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Two separate onboarding checklist.
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I joined as a general counsel, as an individual contributor.
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So can you guess what written plan my father gave me?
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Yeah.
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Some of you I know know it.
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He gave me both.
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I was gonna do everything up front and whatever your list is if you are about
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to hire a family member, if you're about to join, write down the onboarding plan.
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Work with human resources, work with a consultant.
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Talk with me afterwards.
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I'm happy to tell you how we broke down.
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'Cause I had to go through different departments and functions.
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We were staffing and recruiting company.
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I had to do 10 drug screens and sit for a half day with the receptionist
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and then go work on a client and a prospect proposal with finance.
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You want them to go through a written list to introduce them to the organization.
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Assume they hadn't worked there.
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I had actually worked there in high school, in entry-level
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receptionist functions.
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None of that prepared me for joining as a leader in a high
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pressure role, like general counsel.
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So write down the plan.
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Second, if you can, and this is not something I did, but something some
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of the best, and we did this with my brother, and something some of the best
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family businesses I've seen as best you can provide them a job rotation.
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If you can put them through, if your organization is of a size
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to put them through operations, finance, sales, human resources.
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I mean, that's just an example over a year.
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Great.
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I saw a very large family organization who one of their now family executives
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started in a franchise and then they went into franchise selection and then
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they went into one corporate function and then they moved into another corporate
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function and they had the luxury of a larger organization where they could move.
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But even if you can give someone the time to shadow roles for weeks or
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months at a time to get their hands in and learn before they have their
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own job responsibilities, it will help them understand the organization.
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It also gives them the message family to family.
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I didn't expect you to know all this.
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I remember one of the hard things joining your family company, I
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spent about six months trying to pretend like I knew everything.
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I felt like I was working in a fishbowl and I wanted everybody to understand,
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think that I understood it all.
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And finally, someone so kindly pull me aside and said, Adam,
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it's okay to ask questions.
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We know you don't know anything.
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And so when you create an onboarding plan and job rotation, and part of
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it you're taking care of if you've joined your family company or if you're
16:46
about to, there is an anxiousness.
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This helps to take care of that.
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And then lastly, introduce them to the other family employees.
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When I joined my grandfather, my father and my cousin were there.
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And eventually my brother would join.
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And when we onboarded new leaders to teams, we could have taken that
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idea and done it just for the family.
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And that would look like a morning where we sat down and each of us
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went around the table and talked about, well, what is Adam's job?
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What's Bill's job?
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What's Randy's job?
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We would go around and talk about our jobs.
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We used work personality profiles.
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You might use the Myers-Briggs, Working Genius, Strength
17:29
Builders, whatever it may be.
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You would go through that and say, this is my personality, this is their personality.
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When we interact with each other at work, how do our personalities mesh or not?
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Actually, a couple years into working together, my father and I realized
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that our, we use the Predictive Index, there was a part of our personalities
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that was inherently at conflict.
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And we didn't know that for a couple of years, but when we finally looked
17:52
at it and we'd worked together a while, we realized it, and then it
17:54
was something that I could be aware of in our working relationship.
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So onboard to the jobs, the personality profiles, you can even
18:02
get vulnerable and share what you're strong and what you're weak at.
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The new family member, what are their goals going to be?
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How do they interact?
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How might they interact with other family members?
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Again, it's not long.
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It's just probably a morning, but you sit down and what you're acknowledging
18:18
is that we have an inner family business, those of us who have chosen to work
18:23
here, so we're gonna introduce each other to ourselves as family employees.
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It also may be the first time that you call each other by your first names.
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In onboarding a family employee or being onboarded
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I would encourage you if you've always called your grandfather
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Poppy, like I called mine, or your dad, daddy, or your sister,
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whatever your family nicknames are.
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As you are onboarded to the company, let it go.
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I called my father Randy.
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I called my brother Baker whenever we were doing family things.
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And it's just a small way to help you realize that you're not at Thanksgiving,
19:03
you're not watching SEC football together.
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You are in a family business inside a company that's relying on you.
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And then thankfully, when you are watching football together, you can flip right
19:13
back to dad or buddy or whatever you use.
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So onboarding to family employees also lets you start to
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professionalize your relationship.
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And that is our framework for hiring well.
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Having family hiring criteria, matching to actual jobs, not drifting into it.
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Saying no.
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And then even if we get over that, being vigorously onboarded.
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You may have sat through this though and want to put this off.
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Okay.
19:44
Maybe your, your in-laws, your cousins, your nieces,
19:48
whatever, they're, they're young.
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But remember in my experience, you can never start soon enough
19:56
on purposefully hiring family.
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The need for this kind of clarity will be on you before you know it.
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My sister was in high school when she got the letter from my dad and kindergartners.
20:08
You may have had this experience.
20:10
Kindergartners can create awkward moments by saying things like, well, mommy, will
20:14
I ever be able to work with grandpa too?
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Having those answers earlier we'll help you chaos proof your family business.
20:23
And so I have found when you work on these, you may say,
20:26
where do you work on them?
20:27
And so as we close together, I'll tell you, we used family meetings.
20:31
We may call them ad hoc, and we sometimes did 'em annual,
20:34
did 'em quarterly.
20:34
It depends on the rhythm of the family.
20:36
Sometimes things were emailed, sometimes there were other resources there.
20:42
We use family business meetings to work out a lot of these things.
20:48
I hope this episode particularly listened to with episodes four
20:52
and five have been helpful to you.
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21 Clear exists to end chaos in family businesses, and we
21:00
do that two ways by offering dedicated family business consult.
21:05
So not looking at wealth management or strategic tax planning, but focusing
21:11
on that inner family business.
21:13
So with consulting services, but then also resources and this podcast is one of them.
21:18
One thing I learned in my own family's company, I led corporate strategy
21:21
for about a decade as we quadrupled and went coast to coast, and I
21:26
learned how hard it is to focus.
21:28
On the business versus working in the business.
21:31
We all know that phrase, it's even harder to focus and make time
21:36
for your inner family business.
21:38
So my hope in this podcast is that you have gotten 20, 25 minutes just to think
21:46
about how your family works together.
21:49
Inside the company and every time you touch a resource of 21 Clear
21:53
'cause we provide consulting and then resources for however long you touch the
21:57
newsletter, a LinkedIn post, however, however long you touch the book that
22:02
we're gonna be publishing in quarter two of next year, or this podcast
22:05
that you just get to take a breath.
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Think about your inner family business.
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My hope is that has been helpful to you.
22:12
I look forward to joining you again next time.
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Until then, thank you so much for listening.
22:18
As my grandfather would've said, thank you so very, very much.