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The day I had to take my own advice about family business

For nearly 15 years, I’ve consulted family-owned businesses and helped them navigate the many complexities they face.

Parents charged with running the family business all have challenges, desires and concerns. Yet, on a regular basis, they make decisions that could be right for the business but sometimes painful or divisive for the family.

Commonly, they face choices such as whether to give a prime assignment to a deserving family member or a less-deserving, nonfamily employee to avoid the appearance of favoritism. Another common choice: whether to keep or terminate an underperforming child who needs the job but is holding the company back.

It’s usually easy for me to offer well-reasoned, objective advice. But recently, I came face to face with a similar dilemma within my own family.

In a phone call with a close friend who happens to be the managing partner of another firm, I learned that one of my children, Aaron, 27, was interviewing with his firm.

I was surprised. I didn’t know he was looking to leave his job, where he was a senior accountant. To top it off, he didn’t even ask me what I thought he should do, or if I had room for him at our firm, JW Advisors.

After hearing this news, I spent hours rehashing the pros and cons of having my son work for me. For starters, my son is smart, talented and successful. But I wondered, could I be fair and objective if I had to supervise him?

I have clients who have family members working in their businesses who manage quite well. In many cases, I helped them put the policies in place that have helped them make it work. Chief among these policies are the rules and requirements for promoting family and nonfamily members. Family-business owners must decide if company policy covers them equally or if there are other considerations for family members.

I discussed this news about my son with my wife, my other children, my business partner and employees in our firm who know my son, and even with my friend who had already offered him a job. Eventually, the time was right for me to discuss it with my son.

“Dad,” he said, “when you were my basketball and baseball coach, I had to be better than the other kids to get the same playing time. I don’t want to be held back even though I deserve to advance simply because I’m your son.”

He went straight to the heart of the matter. The sad part about this comment was that it was true. When he was a kid, I did play less talented teammates over him to keep the parents’ perception of favoritism at bay. So, how would I handle his career success, which might come faster or slower than others in the firm?

I concluded that there would always be some with a different perception of what’s “fair.”

As our discussions continued, we explored other concerns. He was seeking a job where he would flourish but would also achieve a greater work-life balance.

My son and I discussed conversations I had with clients where I was an objective adviser. These clients had policies, guidelines and expectations in place for when a family member might join the business.

So, here’s my fatherly advice for such situations: Have those conversations sooner rather than later. Codify the results of these conversations into a written policy and have everyone involved sign it to make sure they agree, even if the children aren’t part of the company yet.

The policy will be different from company to company and family to family. For instance, I’ve had clients whose children joining the family business went straight into management. Others chose to have them come in at the bottom and mentored them along the way until they were ready for senior management. As I advised and helped them through stormy waters, I watched the younger generation grow into successful and capable leaders.

What did my son do? He went to work for my friend, in part because he wants to make it on his own — just like I did.

— Chris Wilcox is the taxation and transition partner and co-founder of JW Advisors, a Las Vegas-based consulting firm specializing in business financial consulting, litigation support and forensic accounting, assurance and tax services. Reach him at 702-304-0405.

 

 

 

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