22 June 2014
The outsider: non family directors in family businesses
Question: "What can you suggest to get family businesses to effectively use non-family executives?"
Steve Clowes, a non-family FD for several family businesses including Savekers Ltd discusses his thoughts.
The answer to this one lies very much in the personality of the family member. I am assuming this is advice from a non-family member.
By their nature, family business owners tend to be very strong characters and are running a business which either they have built or have inherited. They may feel in a very lonely place and that they have brought the business to the point it’s at by being strong, following the way they have worked through and reacting to what happens in the business on a day to day basis. Others will prefer to use the support of those around them.
For the non-family member, it can take a long time to build trust and this is by openness and honesty. Explain the issues even at the risk of hitting a brick wall. Be logical but see the problems of the family members. Get to understand more than the issues. The family member is a person with all the same emotions and worries, home issues and need to succeed. On top of that family business pressures when they could also be carrying financial burdens way beyond employees.
If there is a key issue it can be very difficult and confrontational at times.
My experience is to work alongside and be the person to be trusted, be honest and reliable. Give information in a very concise form. Be prepared to discuss and put your point across proactively and with confidence. Also be prepared to accept that they may be right if they don’t agree. At the end of the day, if they have listened and rejected your advice, work with it but monitor it and flag up problems.
None of this is easy and at times it can get uncomfortable and confrontational. I have always been the personality to back off when the argument starts to get polarised and come back another time, maybe with more information or a better argument if things are still going wrong. We can all be difficult to reason with sometimes whether family or not. We can all be wrong.
When I started to answer this question it did occur to me that the question should also be asked the other way round. ‘How do family members create the forum for others who want to help?’.
The family is a strong party and to ease the flow of communication is a great step forward.
Dani Saveker, FIB founder and CEO, comments:
The role of a non family executive can be one of the greatest strengths however, if you get it wrong it can also be devastating. I had the pleasure of working with Steve but I have also experienced destructive non-family directors personally and within other family businesses.
Assuming that you have someone that has earned their position and gained the trust and respect of the board and family, as Steve did in our case, they are pivotal. At their best, they become a trusted guide and confidante.
Steve was 100% on the side of the business and we knew and appreciated that. He also understood that we were the owners and faced very challenging personal situations which he supported us with and we will forever be indebted to him for. His role was tough though and we knew it. Steve was neither a family member or ordinary employee. He knew everything but at times his hands were tied.
From the outset you must be honest with each other. My advice from personal experience and also that of working with many family businesses and their executives is to use a facilitator to help ease the process and also support the role of the non-family director. Having someone to turn to for them is just as important as for family members.
Being a non-family director can be immensely lonely and frustrating – you won’t be there at Sunday lunch when the family decide things and you may get caught up between family members. You may never get the opportunity of receiving shares or moving up the career ladder. The best non-family directors give everything as if they do own the business and will care for it as much as you do - never forget this.
It’s a tricky path littered with landmines and you have to go into this with an open mind and solid support to keep you being what is such a critical role for successful family businesses. Empathy and understand is needed on both sides along with trusted communication. They can also be one of your greatest assets when putting succession and transition plans in place and to help bridge any gaps.
FIB will be shortly running a series of workshops specifically designed for non-family directors. If you'd like more information please drop the team a line