The family’s third-generation young adults, now mostly in their 30s, were raised by their parents to live well, work hard and exercise discerning tastes—and they do. With above-average personal assets, they can hire designers and decorators as they buy, build or renovate their homes.
Here’s the problem: The family firm itself makes kitchen cabinets, counters, decorative tops and moldings.
When one young husband casually enthused about the beautiful Indian granite countertops his wife had just had installed, he was amazed at the intense negative reaction. “You didn’t use the gorgeous new Corian tops we produce? Where is your loyalty?”
The husband explained that his wife had set her heart on Indian granite after admiring it in a friend’s home. As Henry Ford Sr. once remarked, “He took it like a man and blamed it on his wife.”
The husband’s father officially forgave the error, but nobody forgot about it—or stopped the needling.
Most families expect all members to be loyal to the company. But what does that mean? Who decides? How important is it? What’s the cost of disloyalty?
• “Look,” the handsome, single 32-year-old son patiently explained to his outraged car-dealer father, “I’m a car guy. My friends are racing fans. I bought a used Porsche 911 at a good price for cash. I drive it on weekends and never bring it to our dealership. Why are you so upset?”
“You’re sales manager of an American brand dealership,” Dad responded. “If you’d bought a Corvette or T-Bird or Viper there wouldn’t be a problem. I’m tired of being carped at by customers who see you around town in that car. You leave yourself open to backbiting by employees and sniping from our factory reps. Setting a good example of product loyalty is one of the prices of leadership.”
• At a family-owned gourmet retail food chain, non-family executives blew the whistle on younger family members who had been shopping at low-price, warehouse-type chain competitors. “No good reason for us to lose that volume,” they said.
The family CEO kept his cool while carefully checking the facts. His investigation showed that his relatives who shopped with competitors had younger families with limited budgets. Even with the company’s employee discounts, they could save money by food shopping at the competition.
Each of these cases raises similar questions.
• If I work for my family’s firm, should my spouse, who is not an employee, feel bound to use only our products?
• If I want to drive a type of car that we don’t sell, should I repress that desire and buy one acceptable to the family?
• If we’re trying to live within our means, should we do all our food shopping at our store, accepting the extra cost as the price of loyalty?
Steadfast allegiance would require that all three answers should be “yes.” But a rigid “loyalty policy” flies in the face of common sense. It’s only human for family members—like employees—to resist control by their family or company.
Obtaining the behavior we want is a classic carrot-and-stick exercise. The incentives we offer for loyalty by employees and family members can and should include carefully crafted strings that lead to desired behavior.
If your family (or your spouse’s) has its name on local buildings, billboards or trucks, you belong to an elite. Some folks can’t handle that. But most enjoy the extra recognition a leading family receives. The community expects certain minimums of behavior in return.
If a business family is to enjoy its time together, cutting everyone else as much slack as possible is a good idea. Younger folks—especially those marrying into the family—need to learn how their behavior can affect the business.
One snarly son-in-law told me: “If it’s not in my prenuptial agreement, it doesn’t apply.” As you can imagine, he’s frequently in trouble. I prefer the approach of his fellow brother-in-law, who keeps his radar tuned for sensitive matters. He raises these for discussion. He’s nobody’s lap dog or wimp; just a perceptive guy and a decent human who understands that being part of a family business, even at the outer fringes, involves some responsibilities along with the goodies.
James E. Barrett (jebcmc99@aol.com) heads the family business practice of Cresheim Inc. in Philadelphia.