Far too often, businesses become “family” businesses without much prior thought: “A small business needs new employees to expand, so why not hire the kids?” “We have a new role to fill, and our cousin seems good at that, so it just makes sense.” “My business is my life, so of course I’ll make it a part of the family; why wouldn’t I?” Decisions like this are often the default position, and it’s easy to see why. We know our families. We (generally) understand trust them, and even if they aren’t perfect, we’re used to dealing with their faults. Hiring outsiders can be a long, stressful, imperfect process and as the old adage goes, “a bird in the hand is worth two in the bush.”
But a smart family business will be one built intentionally rather than one without much thought. If you’re asking yourself “should I hire a family member?” you’re off to a good start—many people don’t even think to ask that question before making the decision. If you’ve even entertained the notion of hiring a family member, you owe it to yourself and your family to sit down and create a framework for how this will look and work. We call this the Family Participation Plan™ and it functions like the ground rules of a ballgame—when everyone knows the rules before they start playing, chances for conflict are minimized.
What does a Family Participation Plan™ look like?
A Family Participation Plan™ should, in essence, anticipate any assumptions, confusion, or ambiguity in the process of hiring a family member that could cause conflict down the road. In The Soul of the Family Business, Tom Hubler lays out an expansive (but certainly not comprehensive) list of topics that a Family Participation Plan™ could likely cover:
As you can see, these topics can cover a range of potentialities, from accountability (will mistakes made by a family member be punished appropriately?) to future planning (should a child expect a future in which they inherit or run the business?) to competency optics (does a family member need to have the same work/education qualifications as a non-family member in order to be hired?). Of course, it’s important to note that every Family Participation Plan™ will be different, as every family business is different, with unique needs, expectations, and values. While no plan is perfect, sitting down with your family and working out a Family Participation Plan™ that gels with your Common Family Vision™ can help ensure that unnecessary conflict and confusion are kept to a minimum.
Creating a Family Participation Plan™ is only one step in the difficult but rewarding process of successfully hiring and working with family members, many more of which are covered in The Soul of the Family Business. Through personal anecdotes, real-world case studies, useful tools and frameworks, and more, Hubler offers a wealth of lessons on succession planning and other common stressors within family businesses. For all of this, pick up The Soul of the Family Business, available in hardcover form on Amazon.com or at a bookstore near you. And of course, you can always contact Hubler for Business Families today to set up a free orientation meeting with Thomas Hubler, the expert on family business planning.
What does a Family Participation Plan™ look like?
A Family Participation Plan™ should, in essence, anticipate any assumptions, confusion, or ambiguity in the process of hiring a family member that could cause conflict down the road. In The Soul of the Family Business, Tom Hubler lays out an expansive (but certainly not comprehensive) list of topics that a Family Participation Plan™ could likely cover:
- The criteria for coming into the business
- What kind of education will be required (or encouraged)
- Expectations on whether you need to have outside work experience before joining the family business
- Other eligibilities for joining the business
- The training program expectations
- What happens if mistakes or failures occur
- Compensation plan
- Issues related to career planning
As you can see, these topics can cover a range of potentialities, from accountability (will mistakes made by a family member be punished appropriately?) to future planning (should a child expect a future in which they inherit or run the business?) to competency optics (does a family member need to have the same work/education qualifications as a non-family member in order to be hired?). Of course, it’s important to note that every Family Participation Plan™ will be different, as every family business is different, with unique needs, expectations, and values. While no plan is perfect, sitting down with your family and working out a Family Participation Plan™ that gels with your Common Family Vision™ can help ensure that unnecessary conflict and confusion are kept to a minimum.
Creating a Family Participation Plan™ is only one step in the difficult but rewarding process of successfully hiring and working with family members, many more of which are covered in The Soul of the Family Business. Through personal anecdotes, real-world case studies, useful tools and frameworks, and more, Hubler offers a wealth of lessons on succession planning and other common stressors within family businesses. For all of this, pick up The Soul of the Family Business, available in hardcover form on Amazon.com or at a bookstore near you. And of course, you can always contact Hubler for Business Families today to set up a free orientation meeting with Thomas Hubler, the expert on family business planning.
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