Although it’s difficult to to deal with a situation where you have to let family members go, there may be no other option.
Family business owners dedicate their lives to creating equity in the family name and derive pride from having their children build on their life’s work.
That’s why they urge offspring to follow in their footsteps. But sometimes children who have joined the family enterprise do more harm than good and deserve to be laid off. This creates a sticky situation that many family business owners are loathe to discuss.
Not B.C. Bearing Corp.’s active chair Wendy McDonald, however. She openly admits that she fired one of her children when she felt that his work habits weren’t up to her standards.
That puts her in a league with family business patriarchs, such as Magna International founder Frank Stronach, American media mogul Ted Turner and former Toronto Maple Leafs owner Harold Ballard, who have all fired offspring during their business careers.
“It was quite dicey at the time,” recalled the 83-year-old McDonald, who was recently honoured with a BIV Influential Women in Business Lifetime Achievement Award.
“But as it ended up, he had friends in our same type of business in the States and he started working there.”
Within a year of McDonald’s early 1980s decision to axe her son, she bought the American company that had hired him and brought him back into the family fold.
“Sometimes they get a little cocky and they think they know everything,” McDonald said of her kids.
She didn’t want to name the child that she fired but she stands by her tough love approach because she said it made her son a better man.
David Bentall, who is chair of the UBC Sauder School of Business’ Business Families Centre, said family business leaders can do three things to guard against the problem of poorly performing family employees.
First, he urges them to require offspring to work for at least five years at an outside company in the same sector as the family business.
"That proves to the future employees, who they’re going to be working with, that they’re competent. It shows the rest of the family that they’re competent. And, it allows them to look in the mirror in the morning and realize that they’re competent,” he said.
Second, up-and-coming family members should also get regular performance appraisals from non-family members so the younger family member can get objective coaching and guidance.
Without that appraisal, offspring could be allowed to drift and wrongly believe that they’re doing well. Problems could mount until the situation becomes untenable and by then there would be no opportunity to develop young progeny with constructive feedback and guidance, he said.
Finally, Bentall tells family business heads to encourage their offspring to follow their own passions.
“If they’re passionate about music, they should be doing something in the music business. If they’re passionate about construction, they should be doing something in the construction business,” Bentall said.
Bentall states that last point with the conviction of personal experience at his family’s former business, Dominion Construction.
“I had no passion for construction. So, to be president and CEO of a construction company when you have no passion for the business didn’t make a lot of sense,” he said.
Bentall now heads a coaching practice called Next Step Advisers that has a niche advising family businesses
Reprinted with permission. "Fire Away" by Glen Korstrom. Business in Vancouver. April 11–17, 2006.
