St. Louis Business Journal
Be cautious about accepting job with family business

By Anna Navarro

June 2003 - When Gary (not his real name) accepted the job offer, it looked like a winner. The responsibilities were interesting, the pay was a step up, and the family business seemed to share his value system, a welcome relief from his last employer who had been very insensitive to his family needs.

But soon after starting, Gary began to realize that working for this family business had serious downsides.

Many decisions in the family owned company were based on personal ties, not on solid business reasoning. Most recently, the job of vice president of sales and marketing had been given to the son of the founder, a young man who had spent only 2 years working in the sales department and had nearly flunked out of his undergraduate business program. His sole qualification seemed to be his relationship to the CEO.

Gary endured the negative consequences of mixing up family and business issues almost daily. It wasn't just appointing an unqualified person to the job for which he aspired. It was also things like the spoiled young man's rules about expense accounts and vacation schedules.

Whenever dual relationships exist in a company setting (that is, there are both business and other types of relationships between individuals) the possibilities for trouble abound. Favoritism is only one version of them.

Gary had persuaded his boss that they needed a new information system. But the vice president of sales and marketing was denied the request by his father. Why? Because the CEO was miffed at his son for the recent purchase of a luxury vacation home. The father wanted to teach the young man a lesson about frugality. But both Gary and the company suffered as a result.

Not all family companies are as irrational as the one that hired Gary. Some family businesses can be great places to work. Many of them value loyalty and stability and are the last to lay employees off in a downturn. But even in well run family businesses, family members will usually have the upper hand over outsiders.

How do you determine whether a family owned business will work for you?

You can get some clues from looking at how many of the top-level managers are family members. If many of them are, that suggests, at a minimum, that opportunities for advancement may be limited.

You can also network among your contacts to see if you can find anyone who has left the company. If you are lucky enough to find someone, promise them confidentiality and ask them how often family ties interfered with good business decision making.

If you can't find answers that way, then assess your situation, because my next suggestions for ways to get information on this issue involve some risk of turning off the prospective employer. If you are out of work and need any port in the storm, you might end your investigation here and decide that you can endure the potential downsides of dual family / business relationships as long as you have a steady paycheck. But if you can afford to be selective, read on.

When the interviewing gets serious, ask to talk to employees. Then ask them how decisions are made in your department and the company. Be alert to answers that indicate family relationships override good business decision making. Also, inquire about who has been promoted or let go in the last two years, and whether family issues placed a disproportional role in those outcomes.

If the company has a board of directors, ask how many members are outsiders, how many are family. If the balance tips heavily to family, it may mean the company fails to value the input of outsiders.

In the final stages of interviewing, ask the prospective employer himself (or herself) how family and business relationships intersect. Cloak your real focus somewhat by asking other important questions like where the company ranks in the market, what the strengths and weaknesses of it's competitors are, etc. If they get defensive, or give you answers at odds with those given by employees, or former employees, that's a bad sign.

Accepting an offer from a family owned business could be a good choice if no family members appear to stand between you and your path of advancement. Or if the evidence suggests that outsiders are valued and treated fairly. But if the reverse is true, going to work for a family business could well bring you more than your normal share of headaches.

Anna Navarro is the founder of Work Transitions, a nationwide career consulting firm that trains independent career strategists and consults with individual clients.

This column was originally published by the St. Louis Business Journal. The actual title of the column and date in which it appeared in the Business Journal may be slightly different from what appears on WorkTransitions.com.