Key Rules for Running a Family Business
The Rules, Part II
It's All Relative
DuPont, controlled and managed by family members from its founding in 1802 until professional management took over in the mid-seventies, grew into the world's largest chemical company. It prospered as a family business in part because it faced up to the in-law quality issue. All male duPonts were entitled to an entry-level job in the company, but their performance was carefully reviewed by senior family members. If this review concluded that the young family member was not likely to be top management material 10 years later, he was eased out.
The first five rules cover the basics: Hiring practices and fairness. Now, let's kick it up a notch by setting forth some guidelines for employment qualifications, staffing key positions, hiring non-family members, and communication. Here are five more rules that cover these issues.
In-laws working in the business must be at least as able and hard-working as any unrelated employee. This is a toughie, kids, nepotism being what it is, but starting with qualified people goes a long way to prevent problems down the line.
Family-managed businesses, except perhaps for the smallest ones, increasingly need to staff key positions with non-family professionals. The demands for knowledge and expertise -- whether in manufacturing, marketing, finance, research, or human resource management -- can rarely be satisfied by family members alone.
No matter how many family members are in the company's management and how effective they are, one top job must be filled by a non-relative. Typically, this is either the financial executive or the head of research-the two positions in which technical qualifications are most important.
Be sure to make time away from the business. Everyone needs a break from the grind -- especially in-laws who work, live, and socialize together.
Try for open communications. Tricky for kinfolk, but key for business success.
More on: Family Finances
Excerpted from The Complete Idiot's Guide to Dealing with In-Laws © 1998 by Laurie E. Rozakis, Ph.D. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.
To order this book visit Amazon's web site or call 1-800-253-6476.