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Industry outlook: Bringing in new champions

Daphne Engelke on employing non-family executives

How will I ensure that I am treated fairly? Will I be able to make a difference? How do I avoid getting drawn into family conflicts? These are some of the questions that I get asked time and time again by talented individuals, who are considering joining family businesses as a non-family executive.

Let us also consider the concerns of the business owner. I recently met the owner of a successful IT company in the Middle East. Even though he is only in his early 50s, his health has deteriorated quickly and he realised that his original plan of handing over his business in the next 10-15 years to his children (currently all in their early 20s) simply will not work.

He is still determined that ownership of the company should stay in the family—whether or not his children grow into management roles in the future—but needs a non-family member to take over the chief executive role in the meantime.

Daphne EngelkeHis main concerns regarding the transition to a non-family executive are threefold. Firstly, how to motivate a non-family executive to be as driven and committed as a family member would be.

Secondly, what the potential effect will be on the career path of his children. And last but not least, how to ensure that the company culture and values do not get lost.

Thriving family companies were created by champions. Even though a healthy dose of apprehension will always exist on both sides, the incorporation of non-family executives into family companies may not always be needs-driven like in the case above but can also deliver significant value. It is all about finding and successfully integrating new non-family champions to complement the champions within the family.

Our advice is firstly to clarify expectations of both sides before the hire is made, for example, what are the career development opportunities? What is the long-term succession plan and what is the employment and compensation policy? In addition, common understanding needs to be reached on how communication takes place and when and which information gets shared by whom.

Secondly, for the non-family executives, we believe the key is that they continuously demonstrate loyalty and dedication to the family company, instead of to a particular family member or branch.

And lastly, our advice to the family business owners is to widen their focus during the hiring process of the non-family executive. This should incorporate not only the candidate’s skill-set, but also ensure that they share the family’s common values, and consider whether they could also act as a mentor for the next generation. Most importantly, it is essential that the family business owner ensures that the non-family executive is treated fairly and impartially by setting a good example in the family and in the business.

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