Hiring In-Laws: The Kiss of Death
Many successful small businesses have been ruined by bringing in-laws in to the family business. As these in-laws struggle to establish a voice in the company, meaning well, they often wind up destroying them. As the owner of the family business, it is your job to avoid situations that could hurt or hinder your business. In this case you should assume a few often overlooked points:
When approaching your business, never think of it in terms of one happy family.
Never assume that in-laws will be grateful to benefit from the opportunities the business offers. Rather, they often feel guilty and incompetent thinking they would have never gotten the job if they weren’t family.
Even in-laws with terrific ideas for the company will disrupt the business, the family, or both.
In-laws will struggle from day one to try to prove themselves to you. Even at family outings they will often engage in business talk to promote their worthiness and creativity.
The O’Shea Family Business
To further illustrate the risks of hiring in-laws into a business we will use a real life example, the O’Shea family. The O’Shea family business was fairly simple. They owned a clothing manufacturing company that made camouflage apparel. They were contracted suppliers of clothing to the military since the business opened its doors during World War II. Daniel O’Shea, the company president, was earning a “comfortable living” in 1970 when began making plans to select his successor. His two daughters had no interest in the day-to-day operations of the company. As a result his decision to choose his son, a levelheaded recent M.B.A., was easy. His name was Sean. Sean knew the business very well, and the company grew from his good business sense. He was young and energetic, helping the company to increase profits almost 50% in his first 2 years while at the helm. This meant bigger monthly checks for the family members, and no one argued against that. The business began to grow and so did the need for personnel.
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Sean made a big mistake only 5 years into his career. With the insistence of one of his sisters, he hired an in-law. It was against his better judgement, but he figured he could place him in a job were the family ties would not cause any problems. He hired him into the accounting department that was in desperate need of manpower at the time. His name was Rich, a fittingly ironic name, as you will later see. Rich was full of ideas to expand the business. He wanted to develop markets geared toward retail fashion stores. At a family dinner, he commented on how lucrative the Levi’s blue-jeans business was becoming. He noted that blue jeans, along with olive-drab jackets and camouflage clothing like the kind the O’Sheas made for the military were selling as fast as they were stocked. He suggested that Sean begin pursuing these markets. Sean politely rejected his proposal, but Rich kept insisting it was a “gold mine idea”. Sean explained that the business had already cornered “a low risk, highly consistent market,” and that pursuing the new retail markets was a risky venture, one that he was not willing to expose the business to. The business was the family’s livelihood, and putting them at risk just wasn’t feasible.
This made perfect sense since profits were at an all time high and there had been relatively little change to the company’s tactics since its founding. However, Rich saw things differently. In his opinion, “if there’s a promising opportunity that could greatly increase sales, it should be pursued.” Neither would budge after numerous “meetings”, more aptly named confrontations by the family members. Family get-togethers were beginning to turn into heated business debates, with family members split on both sides of the issue. At work, the arguments were beginning to affect Sean’s ability to manage the business. Rich would come in to his office almost everyday to urge him to reconsider pursuing retail markets, and every time Sean would refuse. So, in only 6 months after being hired, Rich was fired. Rich was outraged, and simply could not understand why he was fired for trying to make the company stronger and more profitable. In Sean’s eyes he was keeping him from conducting business as usual. Rich wanted revenge. Jean, his wife, was upset as well. She couldn’t believe that Sean viewed the business as being more important than family. Of course, she didn’t mind receiving her ever-growing monthly check from the business, which Sean was largely responsible for. Apparently that was no longer enough though. Now Rich and Jean wanted total control of the business, so Rich and Jean (sister) rallied the support of Marie (the other sister) to take control of the business. The three filed a lawsuit against Sean for abusing his power as the president of the family business. The lawsuit was thrown out in time, but not before it weakened the business so much it was unable to purchase supplies to keep producing. A little over a year and a half later, Sean was forced to sell the once highly profitable family business to avoid bankruptcy. What was once a strong and growing family business for over 30 years was ruined in only 2 years.
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Conclusions
In-laws will constantly struggle to “earn their keep”. They feel they have to prove they are assets to the company beyond the realm of what a typical employee would do. Since you did them a favor by hiring them, they feel they must repay you by awing you with their knowledge and ability. Take Rich for example. He was hired into the accounting department, not into the marketing department, or the advertising department. Yet, he pushed his marketing ideas on Sean all the time. Even though these ideas had little to do with the department Rich was in, he still felt like it was his job to do everything.
Later on the in-laws will likely desire to have a say in major decisions. They begin to feel like they are part of upper management simply because they are in the family. For some odd reason, they feel this alone qualifies them to have some control over what goes on within the business.
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They’ll also be the first people to seek revenge when things don’t work out, and they’ll often drag the family and the business down with them. It’s the competitive nature of people. Rich and Sean were good friends before Sean hired him. They used to enjoy golfing and fishing together. Rich also got along well with the rest of the O’Shea family as well. But when he became a player in the family business all that changed. His urge to become highly involved in the business got in the way of his ability to just enjoy being around the family. Then, when he was removed from the business, he felt rejected by some of the family members and sought revenge. That revenge ultimately destroyed the family business, and split a once close and loving family.
The spouses of the in-laws will take everything personally. When Sean turned down Rich’s proposals she began questioning Sean’s ability to manage the business around other family members. She felt that her husband was an intelligent and resourceful man and shouldn’t be treated in such a way. Honestly, Jean knew absolutely nothing about business. She had never gone to college, in fact, she had never held a job for more than a year! She was comfortable living off of the income the business supplied her with. As soon as her husband became involved in the business, she became involved in a business she knew absolutely nothing about.
Final Thoughts
Remember that it typically isn’t the in-law’s desire to destroy a family business. The problem lies in their overwhelming desire to “make a difference”. This urge is what ends up killing the business. The in-laws are probably good people and would make excellent employees, so let them work somewhere else where they don’t have to deal with family politics when they are struggling to get that next promotion or big raise. It is best for everyone.
