Tips for planning family employee career paths

Otherwise smart business leaders often fall short in thoughtfully planning career paths for family members. They think the family employee can wing it once the person has joined. Ironically, family members are often given less guidance or support than are other employees.

The most common mistake in family businesses, however, is bringing a family member into a level that is far beyond the person’s competency. Parachuting someone right into, say, head of marketing because they’re good at social media or appointing them director of technology because they “always loved computers” when they otherwise have no real-world experience—these moves can set that family member up to fail right from the start.

How will your company nurture and groom the career paths of family members? These five common career-path models are followed by many family businesses:

• Undefined: You can join the business, but there is no stated career path for you. “We’ll figure it out. Maybe.”
• Branch silo: Family members will be hired into the division that their parent (or their branch of the family) controls, and they remain there. If Dad runs manufacturing, for example, that is where they will find opportunities. They will never move out of their family silo, and promotions will depend entirely on Dad’s seeing fit to grant them.
• Company’s career path: Family members will be treated like any other new hire, brought into appropriate positions, and promoted according to the same guidelines applied to all other employees. There are no guarantees they’ll be offered anything outside the standard company path.
• Custom family path: Family members will be given every opportunity to succeed, but there is no guarantee of success. If all goes well, they can then expect to be promoted to the highest level their abilities and drive will take them. Some call this pathway “finding their highest and best use.”
• Executive escalator: If a family member joins, they can expect an easy glide to the top executive ranks. They’ll be promoted quickly and treated as a special case. They can “fail” their way to the top, with few, if any, consequences.

It usually makes sense to find a way to offer family members a clear career path, with support, but one in which they know they have to earn their promotions over time. Bringing a family member swiftly up to the executive suite without merit rarely pays off for either the employee or the company. Doing so can be a recipe for resentment, the loss of loyal non-family employees, and, ultimately, failure.

Design feedback and development for family employees

Family members, reporting directly to a parent, are never given any constructive feedback or, worse, are not held accountable for their failures and poor decisions. When a family member is ignored or coddled in spite of poor performance, and when nonfamily employees are afraid to speak up, irreparable damage can be done to both the business and the family. Therefore, the business must deliberately incorporate feedback into a family member’s career pathway with the company. Family members are special, in good and bad ways. The question is, how to make sure that the family employee has genuine, constructive feedback throughout their employment?

Most families treat feedback and development in one of five ways:

• Ignore: The family member will receive no formal feedback and little informal feedback or other attention.
• Treat the family member according to the company’s regular policy: The family member will be given feedback in the same way that all other employees receive it.
• Supplement the company’s policy: Family members receive additional feedback and training beyond what is typically provided. The process is often led by independent board directors, an outside firm, or a coach that can provide cover to those providing feedback.
• Prove yourself: Family employees will be given a series of very difficult business challenges that they are expected to overcome to demonstrate their worthiness. The only feedback they get is another herculean challenge.
• Coddle: With little explicit feedback given the family member, failure is tolerated even as the person is promoted.

The most successful families create some version of a supplemental evaluation approach such as an anonymous 360-degree feedback system in which the family member’s boss, peers, and direct reports evaluate their performance. Otherwise, the family members don’t get real feedback on their performance.

*Adapted from the Harvard Business Review Family Business Handbook by Josh Baron and Rob Lachenauer. Pages 187-189 and 192