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Know when to let go of a poorly performing family member

By Henry Hutcheson
Henry Hutcheson
Henry Hutcheson is a nationally recognized family business speaker, author and consultant in Raleigh. He can be reached at Familybusinesscarolina.com.

One of the most difficult family business issues to deal with is the poor performance of a family member. The causes can be many, solutions are few, and failure to address it can create not only an underperforming organization, but potentially fracture the family.

Entitlement and enablement are the typical culprits. Kids in family businesses grow up seeing their parent leading a group of employees, enjoying some perks in life, and with the ability to take off from work when they want. This environment seduces the next generation into thinking they are also entitled to similar privileges.

Parents, in their zeal to bring their children into the business, or by not being honest with themselves, can overlook their children taking too many liberties. Worse, perhaps they are fully aware of the poor performance but believe the family business is the only way they can make a living. Employees can also be enablers, casting a blind eye fearing intervention too risky.

Hardworking siblings also suffer. They want to maintain a good relationship with their underperforming sibling and potential future co-owner. They may bring the issue to the parent, but they will be torn in trying to treat their children equally.

One family business I worked with had kids who arrived late, left early, and surfed the Internet and slept while at work. The father made excuses for them, and they assumed the business would be theirs one day anyhow. Ultimately they were unprepared to lead the business or handle the workload as owners.

Family businesses are notorious for retaining loyal but underperforming employees. However, they are let go when times get tough, and the phrase “we should have done that a long time ago” invariably will come out.

Employees who are family members should be treated no differently, but for many owners, relatives are more delicate to handle.

Here’s how to do it:

Address the issue quickly

The sooner the situation is addressed, the better. The longer you wait, the more ingrained the family member’s belief that poor performance is acceptable, the harder it is to change, and the more likely their feelings will be hurt.

Prepare a list

Given that the family member may not be fully aware that their performance is lacking, it is important to come prepared: Have a list of instances you are aware of, add in those that other employees may have reported, and if necessary, conduct an anonymous employee survey. Be prepared for excuses and defensiveness.

Help identify the root of the problem

The next step is to identify the root cause of the issue. It can only come from three places:

• Lack of skill or knack for the particular job.

• Other priorities interfering with performance.

• Lack of interest in the job, and perhaps work all together.

Perhaps they are being asked to perform a role they are not very good at. This can be resolved with more training or trying another job. If this has no effect, probe if they have competing priorities. (Typically, you already know). The solution is similar to when there is no motivation – they need to be pushed and measured to find a way to meet the minimum performance level, or else they need their responsibilities lowered until they can perform.

Take final steps

The dramatic next-to-last step is to have them take a week off unpaid to give them time to consider whether this job, work and company is for them. Sometimes they come in Monday and decide it’s not. Sometimes they return with resolve. But if they come back and are still unable to perform, they need to be let go.

But don’t worry, most times they find what they were really looking for, or come back years later with the required vigor, maturity and focus.

Henry Hutcheson is a speaker and author and president of the consulting firm Family Business Carolina. Email your questions about family business to Henry@familybusinesscarolina.com
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