Should You Join the Family Business?

Richard (not his real name) graduated from college on a Friday. Three days later he would start his first day on the job in his family business. The choice was not one that he gave much thought to. He’d grown up in the family wine business, which his grandfather had founded, and his father had wooed him to join. This was the family’s legacy, his father had said, and someday Richard would be CEO. Or at least that’s what Richard heard.

Twenty years later, things have gone horribly wrong. Though they work side by side, the men are barely speaking after a boardroom blow-up. In his darkest moments, Richard is even contemplating whether to sue his father for breach of fiduciary duty. By all accounts, catapulting Richard into the business straight out of college was a mistake. Richard and his father both had high hopes for a generational transition — and both sides share in the blame for what has gone wrong — but after two decades of devoting himself to the family business, Richard worries that he’s wasted the best years of his career. And his relationship with his father feels like it has deteriorated beyond repair.

Some people thrive after choosing a career in their family business. But others wither, bitterly regretting their choices. ‘’I’m going to lose my business — and my father,’’ Richard recently lamented to us. His situation happens too frequently — and it’s the worst-case scenario about what can go wrong when you jump wholeheartedly into your family business too early in your career.

The decision to accept any full-time job offer can be stressful. But with family businesses, the choices can be far more complicated: It’s as much an unspoken social contract as an employment one — and the consequences can last far longer. In our experience, even the most high-potential family members have a hard time navigating the complex emotional mix of expectation, obligation, uncertainty, and the desire for professional success when faced with the decision.

Often, people considering joining the family business are afraid to appear either ungrateful or entitled, so they don’t ask important questions. They just assume and hope that their parent’s desire to have them join the company will mean they have a fulfilling career ahead of them, potentially one that leads to ownership and the CEO spot. But that, as Richard learned the hard way, is not always how things play out.

Growing up surrounded by a family business should provide younger generations with unparalleled insights into its strengths and weaknesses, its potential, and a sense of how it might be possible to grow their careers there. But often the younger generation is given only a glimpse into the organization, the part that the senior generation wants them to see.

There are some red flags that joining your family business might not be a good decision, no matter what the circumstances. If, for example, your relationship with your father or mother (or whichever relative owns and runs the business) is not in a good place, joining the business is not likely to make things better — and, in fact, it could make things much worse.

Instead, we recommend getting a job outside of the family business and earning a promotion before opting to join your family business. By establishing yourself first outside of the family business, you will have demonstrated to your family, to your future colleagues, and, most important, to yourself, that you have something real to offer your family’s business. As one client told us, “We like our next generation to ‘get their butt kicked’ outside the family business prior to joining. Then when we ask them to work hard, they know it’s what anyone would ask.”

When you do join the family business, it should be in a real job in the company, not one that your parent has manufactured for you. We know of one family, for example, in which each of five sons was welcomed in at a staggering $400,000 salary. Some of the five worked hard; others spent more time on the golf course. The simmering tensions over the inequity inevitably boiled over.

But at whatever moment you’re considering joining the family firm, you need to ask yourself two sets of fundamental questions to guide your decision. The first three questions should be directed at yourself; the second three should be asked directly of your family business leader (presumably the controlling owner of the business).

Questions to ask yourself:

  • What is motivating you to join? These could range from “Dad expects me to’’ to “It’s my best shot at the top.’’ There is no one right motivation (and sometimes a few are in play), but what’s important is that you articulate your reasons — and make sure they are good enough to provide a foundation for your decision-making process. Is the source of your motivation coming from your passion for the business, or are you caving into external pressure?
  • Are the personal relationships among the family leaders healthy enough? Family owners don’t need to always love each other, but they do need to make good decisions together. Do you see evidence that they can make good decisions together about the future of the company? Is there evidence that they will be transparent and constructive with you? Do you think the range of important people (parents, siblings, and cousins) will support you during the inevitable crises that befall every business and career? And in the future, do you think your own relationships in the family can withstand the pressures of working together?
  • Am I OK being constantly in the spotlight? Nonfamily employees tend to watch family members closely. How you behave will reflect, for better or worse, on the full family. You will be “special” and will never be treated as you would be in an outside corporation. That’s not always an easy thing. And the spotlight doesn’t shut down when you leave the business at night. The standard barriers between your work and your personal life will be blurred, and the scrutiny on how well you are doing will be strong from both sides. Can you live with this?

Questions to ask your family business leader:

  • How do you see my career path? You need to understand how your career will develop in the family business. Ask: What thought have you given to how I will grow and develop in the family business? Who will develop and evaluate me? Once I join the family business, is it a “life sentence”? What happens if I don’t work out well in this particular job? And what are your thoughts on how a transition of leadership will work down the line? How will I know I’m succeeding?
  • Is there a path to ownership? You need to ask, not just assume, where you fit into the business’s current and future ownership structure. Ask: Who owns this business now? What are the plans, if any, to pass ownership to the next generation? How do you imagine you will formally hand off ownership control at some point? Are you considering adding any nonfamily owners? Do I have to work in the business to become a future owner — or benefit from ownership — and will the same rules apply to any other relatives who are considering the same decision I am now? Is there a shareholder’s agreement I can read to understand the rules of ownership?
  • What is your vision for the company? It’s essential that you understand, and ideally share, the current leadership’s plans for the business. Ask: What do you envision the business will look like in 20 years? Do you want to grow it, milk it for cash, or something in between? What is the company doing now to reinvent itself and stay relevant over the long term? What can I do to help support the company’s future and contribute to its continued success? How do we ensure that our personal relationship stays healthy, no matter how this works out?

There are no magic answers to these questions, but together they can provide the foundation for a healthy discussion with the business’s current leadership. You can — and should — have a productive conversation about your prospective career track in the family business. You shouldn’t join, for example, if you will just be coddled to the top.

If you don’t feel comfortable asking these basic questions of the current leadership, you can have a “dry run’’ by feeling out either one of your parent’s trusted advisers — or the parent who doesn’t work in the business. Ask them directly: “Would you join this business if you were me?” Often, their answers can provide telling clues, about both the health of the business and your career prospects under the current leadership. But eventually, it’s essential to go directly to your parent with your questions and explain why you’re grappling with the decision. If you can’t do that, how are you ever going to navigate the far more tricky issues that will inevitably be important down the line?

You are entitled to know the structure, rules, and processes that will enable you to be successful in the family business — before you join. Or, you should at least have an open and honest conversation about how to build the right ones. If you come into the conversation having had outside experience in another company, you’ll be interacting with your parent (the business’s leader) on a more even basis, rather than parent to child. One high-potential family member we know, for example, was able to leverage her successful career at a Silicon Valley company to ensure that her parent valued her talents and contribution appropriately.

Such conversations may be difficult when you haven’t had that kind of interaction with your parent in the past. But as Richard learned the hard way, leaving the answers to some fundamental questions — and the dozens more you are entitled to ask as you make one of the most important decisions of your life — to fate may not turn out well in the long run. Better ask now; you are never in a better position.


Some of the identifying details in this article have been changed to protect confidentiality


First Published: 4 Jun, 2018. Harvard Business Review