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Family Business – Developing the next generation

by | May 31, 2021 | C4: Culture, Employee Engagement, Other stuff

It is not easy running a business today and neither is raising a family. So what happens when you are trying to do both in the family business?
Many Ridgeline HR clients are family businesses and many of them hope that their businesses will prosper through successive generations of the family.
But the reality is that that isn’t easy to achieve – the competing pressures of business and family responsibilities often prove too much and can be damaging not only to the business but also to family relationships.

Some of the more common scenarios that we have come across are:

  • A family member enters the business for the wrong reasons – because they think that is expected of them or because mum and dad feel that they will not be able to succeed outside the business, so they need to provide a job and a livelihood;
  • Senior family members want to retire but don’t think that their successors are ready to take the next step and manage the business in their absence;
  • Junior family members who want to take that next step are frustrated by senior managers’ reluctance to “hand over the reins”;
  • Senior family members are reluctant to scale down their active business involvement or retire because work plays such an important part in their lives;
  • A family member’s work performance or behaviour is not up to scratch but is not addressed properly creating perceptions of nepotism and resultant disengagement and performance deterioration of other staff.

While each of these situations represents a real and often painful dilemma for the family business and family members, they can be prevented or resolved with proper planning, a degree of objectivity, a strong set of values and a bit of help.

So what do you need to do?

When you have a family member entering the business:

  1. Ensure that the new entrant understands that, while they will be supported and have every chance to succeed, they are subject to the same performance and development processes and expectations as all employees;
  2. Make it clear that there is no obligation to work in the business and you are happy to support them in another career direction if that is what they want to do;
  3. Find and appoint a non-family mentor for them – someone to whom they can go to confidentially discuss and get guidance on any questions, concerns or ideas that they have;
  4. Be clear on their strengths – both technical strengths (what I can do) and character strengths (how I best operate);
  5. Develop a Personal Plan which provides the opportunity for the new entrant to explore different work opportunities in the business and, at the same time, learn how the business works;
  6. Actively support the new entrant as they learn and continuously coach them, monitor their wellbeing and provide feedback to them – in this process, you should be discussing and sorting out which areas of the business/roles, the family member is showing capability in and which might not be a fit for them.

When you have been through all of that, you and the new family entrant should have a pretty good idea on whether working in the business is right for them and for you and be able to develop a career plan accordingly – whether that is in the business or elsewhere.

It may be that the family member has shown a talent that offers great career potential in a different industry setting or that warrants investment in studies of some sort. Perhaps getting a bit of experience in another business or role before returning to the business would have benefits.

Of course, sometimes there is just not a fit and that can be a challenging conversation. If you are unable to reach agreement or there is a dispute of some sort or you need help with one of those conversations, be prepared to get some independent help – someone who can sit down with the parties and facilitate discussions to an agreed resolution.

If you need help

Go and find people who are a good cultural fit with your business and can provide services that can help you in the following areas:

  • Facilitating planning discussions and developing program plans which address, roles, relationships, values and behaviour, strengths and wellbeing.
  • Coaching for business owners in the coaching of junior family members in the business
  • Assisting with resolution of any performance issues or disagreements that might arise
  • Ensuring that the business has appropriate policies and procedures to support management of family members in the business.

We do all of that stuff so we’re happy to have the conversation about how we can help.


Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094

6 Ellesmere Ave, Croydon Victoria 3136

1300 108 488