Banyan Global

Is It Time to Leave the Family Business?

The Duke and Duchess of Sussex made headlines when they announced their decision to “step back” from their royal duties in favor of greater independence. While their desire to step away from the pressure of the royal spotlight is understandable, even commendable, the announcement reveals how fraught separation can be. The suddenness of the declaration left the public wondering what happened and what this means for the future of the monarchy. The Queen swiftly responded that the conversation is in “early” stages. And the media was filled with stories of the royal family being “blindsided” by the news and people picking sides. Though the British monarchy may be more famous than most family “businesses,” the issues that arise when a family member decides to leave the business are not unique.

For most people, deciding to make a mid-career job switch is not a big deal. But for family members in a family business, the decision becomes far more complex. A critical misstep in communicating your choice can lead to a permanent break in family relations, but paralysis can result in personal bitterness and regret over the career you could have had if you’d chosen a different path.

You may face this question because your initial entry into the business was not well thought through — perhaps you entered on vague promises (“One day this will all be yours!”) without clear responsibilities or even a real job title. We know of one family business member who never even got a business card during the four years he worked in his family’s industrial supplies company because no one could agree on his title. Once you’re in the job day-to-day, you may realize that the benefits of being part of a family business aren’t worth it if you’re not contributing in a meaningful way.

Others come to the crossroad later in their career when they reach the sinking realization that they’re not destined to be the next leader of the family business, or worse, that their passion has worn off. We worked with one deeply unhappy daughter of a family business leader who aspired to become an entrepreneur, but felt obliged to join her dad’s company instead. Lacking passion for the family business, her career there never took off and she now bitterly regrets the road not taken. For many, the process of generational transition is painfully slow and emotionally consuming. We know family business leaders who insist they’re still in their “prime” well into their 80s and refuse to discuss handing over the reins to the younger generation working in the company, who grow frustrated waiting in the wings for their turn to lead. Sound familiar?

If you’re on the brink of a monumental decision, take a breath and consider your position carefully before making any sudden moves. The worst thing you can do is to storm off on a Friday, have regrets over the weekend, and then slink back the next week as if nothing ever happened (we’ve seen that, too).

Such impetuousness will destroy your credibility within the firm and within the family.

Before making any big moves, evaluate where you are in your own career development, why it’s not what you might have hoped for, and what you can (and can’t) do about it. It may not be too late to get your career back on course. We suggest working through a six-step approach to evaluate your options:

Compare your vision to your family’s vision: A critical factor in deciding whether a company (your family business or any other business) is right for you is whether you believe in its long-term vision. In a family business, the shareholders formulate this vision jointly. It can be tough to get a myriad of perspectives in perfect alignment, but it’s essential to get the broad strokes right because the board and management will develop the company’s strategy based on it.

Evaluate whether you share the same vision for the business as the other shareholders. If you’re aligned, you can hold up tough decisions against your shared vision to see if they’re directionally sound. If you’re not, staying at the family business will always be an uphill battle and you may be better off elsewhere.

Clarify your aspirations: It’s not essential that you want to end up running the company someday. We’ve seen many satisfied family members employed in positions in the family business that align with their skills and interests — so don’t set a false binary choice (“I am the future leader of this business or nothing”) for yourself as the only path to happiness. One of the most fulfilled family employees we know chose to leave her high-powered job in international sales to become the archivist at her family’s consumer goods business. She discovered her real passion was capturing the family’s history, including their successes and failures, and passing the lessons learned on to the next generation.

Be as clear about your aspirations as possible: What do you seek to accomplish in the family business? How and when will you develop the skills necessary for the role you aspire to? How does that fit with the senior generation’s aspirations for their own career paths? Where can you put your skills to their highest and best use?

Identify your deal-breakers: It’s natural to have differences of opinion in business. In family businesses, these opinions are heightened by emotions and family dynamics. To have a successful, long-term career in a family business, you will need to learn how to share control with the rest of your family members engaged in the business. Get the decisions most important to you right, and let the others ride.

Examine what’s triggering your instincts to leave and then separate the reasons into what you can influence/change vs. what you have to live with (or not). For example, if you have a different opinion on how the business should be run, consider whether it’s truly a deal-breaker. More often than not, individual operational decisions come into focus over time and lose their immediate fight-or-flight response, but a major strategic shift or a constant pattern of having your opinion overruled is worth fighting for diplomatically.

Find and leverage mentors to guide you: An essential resource when you’re in a family business is an experienced mentor who can provide a neutral perspective and help guide your career without the biases of a family member or the challenges that an in-house HR department would face in evaluating the next family leader. A good mentor can be an independent board director, a senior executive who is capable of being neutral, or even someone that is not directly connected to the family business but knows enough to be of help.

Ask your mentor for an honest assessment of where you are developmentally and what you’ll need to do to achieve your goals. Talk to your mentor regularly (at least twice a year plus a more substantial check-in every three years) and ask for their help to keep you on track with your goals. A good mentor may also help you redefine what success looks like so that you’re not solely focused on becoming the next company CEO.

Finally, make the decision that’s right for you — but be careful how you communicate it: If, after careful consideration, you choose to leave your day-to-day role in the business to pursue another venture, contemplate how to leave with dignity and retain familial relationships. Make sure you have a clear exit story to communicate internally and externally (such as pursuing an MBA to gain skills to become a more effective contributor to the organization later) so you’re not perceived as leaving in a huff. Have a plan for what you want to do next and socialize it with your family members before it ends up in the company newsletter. After all, you may no longer be an employee, but you are likely to still be a shareholder (or future shareholder) in the business. Reflect on how your departure may affect your role holistically. Can you still be an effective owner and work with the other family owners to govern the company, when you’ve moved outside of daily operations?

Ask for merit-based evaluations and a development plan: Don’t be afraid to ask for constructive feedback if you truly want to perform to the best of your abilities. Many family businesses fall into the trap of thinking that family members don’t need to have the same HR processes as non-family members. The truth is, it’s even more important for family employees to receive honest feedback if the company is to be successful, because someone who’s been coddled to the top could make a decision that jeopardizes the future of the company. Avoid being that person by asking for honest, 360° feedback from those around you. Work with your mentor to assess how to learn from the feedback you receive and incorporate it into your leadership style.

If you do choose to stay, be clear on why you are staying and what you hope to accomplish by staying in the family business. If you don’t address the problems that led you to this point of frustration, they aren’t likely to go away. Think about an approach to resolving your major concerns. Are you in the right role? Do you have sufficient support and direction? What changes are needed to make staying a sustainable and enjoyable prospect? Review your progress regularly. Keep track of how you are doing relative to achieving major milestones and your ultimate career goals.

As Harry and Meghan will discover as they carve out their progressive new roles in the British monarchy, there is more than one right way to have an impact on the family business, stay close to your family, and still have a fulfilling career.

Consider Lord Jacob Rothschild, one of the heirs to Europe’s long-lasting banking dynasty. After a disagreement over the direction the family firm was taking, he left the flagship N. M. Rothschild bank and set up RIT Capital Partners. At the time, his decision seemed risky, but years later, RIT is one of the biggest investment trusts in the UK, and Jacob has had an esteemed career. A billionaire in his own right, he’s even found a way back into the family fold, recently forming a joint venture with Edmond de Rothschild Group and RIT Capital. His journey shows that there are many possible paths to navigate your role in the family business.

We’ve seen many leaders for whom being an engaged shareholder is a better fit than a day-to-day manager, and vice versa. Whatever your decision may be, show your family that you respect and honor the family legacy and that you seek personal fulfillment. Ask for their support along your life’s journey, whether that’s inside or outside the family business.

 

First Published: 24 January 2020 on HBR.org