You know it and, even worse, your staff knew it first. One of your family members is just not making the grade in your company. Other relatives had touted your brother-in-law's daughter as the ideal candidate for an opening in the firm. And she had always seemed like a bright and capable young woman.
Relatives can work out well in key positions when they're placed in roles that suit their skills. But when a family member is not cutting it, senior management may have to make a sensitive decision.
Where did this go wrong?
The hiring process is a key factor in whether a relative will thrive in a family company. As with any candidate, three things must be considered: qualifications, experience and fit for the role.
Unfortunately, when assessing relatives, family business leaders often ignore hiring guidelines; they may feel compelled to give a family member special consideration. Many have an unspoken two-org-chart structure: one chart for family, another for the rest of the workforce. For family members, desirable roles are assumed, promotions expected and job security assured. That rarely sits well with the rest of the staff, whose ascension is usually merit-based.
To avoid having to dismiss an underperforming relative, establish a hiring process of equals, no exceptions. A one-size-fits-all policy eliminates assumptions that the right last name guarantees a plum job. That means enforcing hiring systems that everyone must adhere to. If there's a spot to fill, résumés should be submitted, credentials evaluated and requirements fulfilled. And should a family member then be hired on the basis of merit, have a plan in place to measure success. Offer training and mentoring, making it clear that there are consequences for non-compliance.
Determining the right placement
The neophyte niece in the marketing director's spot is doomed from the start. More effective—and fair—is adherence to a requirement that family members have experience and education that are relevant to the position.
A technique that we have found works well is to assign new family hires multiple “quick hit” projects with measurable metrics before considering them for high-profile positions. These smaller assignments allow them to learn and gain confidence, while establishing their credibility. After some time has passed, you may ask them to spearhead the rollout of a new policy or procedure to assess their interpersonal skills.
Finally, consider projects that make relatives a part of the crowd so that they can build their network and gain support inside the company.
Can this hire be redeemed?
When a relative underperforms, often the issue is not the role itself; it's that the family member was brought in at a level above his or her capabilities. A good way to save the situation is to restructure the position and create a development plan to build skills and foster growth.
So that the reassignment is not perceived as a demotion, always focus on the business need, and not the person. Explain to the family member, “The business is growing rapidly, so I'm appointing a senior director for this department.” Make certain, of course, that whoever is named to oversee your relative is a capable manager and has real authority.
Sometimes the family member is a better fit for a different role. If so, begin a transition process that includes coaching and mentoring, allowing the person to move into a new opportunity with support. And, as you would with any other employee, revisit the move in 90 days to evaluate progress.
If the problem is the result of a bad attitude, and you believe the relative is incapable of change, don't prolong the pain. Let the person go as soon as possible. There's never a “best time” to pull the plug, but there are ways to minimize the agony afterward.
Handling a difficult task
Let's be honest. There is no comfortable way to fire a relative. There are, however, steps you can take to make it easier on the person you're letting go, and to ensure you're handling the situation properly.
• Gain early buy-in from other family members. As early as possible, begin discussing your impressions with other family members. Give substantive reasons why you feel that dismissal is the only option. You may learn that others share your point of view. Your goal is to gain buy-in and support for your decision, even if you're alone in your impressions. Expect that some will not share your opinion, particularly if different branches of the family are involved. Explain that company must operate like a business, and that everyone who works there must add value and contribute. Clarify why what's in the company's best interests serves everyone.
You might also establish a “Chief Relationship Officer,” a family member who is responsible for providing business-focused information to relatives. Establish a policy of frequent communication with family members.
• Communicate clearly with the person in question. As soon as you sense that you may have to let a family member go, begin a dialogue. Outline the poor performance in detail. Often family members' behavior improves when they realize that having relatives in high places does not mean lifelong job security. If the situation is beyond repair, reiterate why dismissal is needed.
It may be best to give the person the opportunity to resign. If so, suggest that he be the one to inform the family, and present the resignation as his decision. Later, you could tell your staff that “Jim has elected to leave the company to purse other opportunities.”
• Include the person's supervisor. From the beginning and throughout the process, include the family member's immediate supervisor, who likely will offer you valuable support and added ammunition. But don't be surprised if the failing relative plays “the family card.” We've found it beneficial to have a senior family member and the person's immediate supervisor join forces to pre-sent the business case for dismissal. In that instance, make sure the manager is a credible, respected employee, whose observations will be valued. Obviously, managers must have the power to make decisions, and other family members should respect that.
• Stand your ground. It takes a cool head to make the right decision when reversing a family hire. And it takes a thick skin to back up your decision in the face of requests that you reconsider. The key is to stick to your message. Reiterate the points you established in your early communications with the other family members and the person's superior. Don't waiver or equivocate. Hold firm to what you know is right for the business.
Even if a family fight ensues, emphasize that this was a business decision, and that you are responsible to people outside the family as well. No one, family member or not, benefits from prolonging a bad situation. Share concrete examples of what happened. “Bill mismanaged a few situations on the same account, and as a result, we lost a client. We can't afford to let that happen again.” Let your family know you tried repeatedly, but there just was not a good fit.
Family life after a firing
Family gatherings can be strained after a relative leaves the family enterprise. But as much as possible, it's best to put a wall between “church and state.” Leave this situation at the office, and encourage everyone else to do the same. Chances are that your relatives are feeling uncomfortable, too. It's best to normalize family relations as soon as possible by demonstrating that you would like to maintain all your relationships as they were. Continue going to family functions, and model with your behavior that life outside of the office should proceed as it always has.
Don't expect healing or understanding on the first go-round. Try at least three times to connect with a family member who may be angered by the firing. Just remember, it's more about ego and emotion at this point. Expect to listen and console at first, before you start explaining. Show that you are sincere in your concern and convictions, and make it clear you believe you did the right thing.
Tish Squillaro is managing partner and CEO of Candor Consulting (www.candor-consulting.com).
Copyright 2012 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permssion from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.