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Blood & Non-Blood Family Members In Business

By Family GovernanceJune, 2021March 18th, 20243 min read
Family Business - Blood non-Blood

Unless your family business is a “mom & pop corner store” (which is more akin to owning a job than owning a business anyway), you will need to have a mix of ‘blood’ and ‘non-blood’ people working in it.

As any business matures and grows, there becomes a need for professionalisation and systemisation. While owners may put a high value on the people in the business (especially family), the true value created in any business is through systems. A business that cannot function as well without family members is not worth very much to a potential buyer.

Family or non-family CEO? That is a huge question for many family businesses, especially as the founder generation seeks to retire. Even if there is a family member who is willing and able, is that what is best for the business itself?

For a non-family CEO to succeed in a family firm, they must understand the values of the family. The family also needs to be able to articulate those values to the CEO, and monitor their adherence in some way (which is by no means simple).

The challenge for any incoming CEO of a family business is to maintain and respect the ingrained culture, and at the same time drive the business forward. It is important to create an atmosphere of inclusion and purpose, and ensure people outside of the family are also seen and heard.

In larger business with many family members involved, possibly from multiple branches of the family and multiple generations, the kinship tensions are multiplied to a great degree.

When family differences get in the way, it doesn’t necessarily make you a bad employee, or a bad child, sibling, or cousin. It’s important for family members to retain their own identity and not become overly subsumed within the family enterprise and its mission.

Having people outside the family circle who can provide objective feedback – whether as advisors to the board or mentors to family employees – can be very helpful.

Consider This: Does your family business have policies around how family members qualify for a position and their performance measured? Do you have a board with externals and/or mentors available so family members can have a forum to discuss issues of concern?

Further reading: 

Here is more on reading on family business governance.

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