Nurturing Talent in Family Business

Nurturing Talent in Family
Business

Welcome
Mr Bryan Bourke
William Fry

Dr Eric Clinton
DCU CFB
Welcome

Guest Facilitator
Ms Amy Schuman
FBCG, USA

www.thefbcg.com
Copyright © All rights reserved.
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Nurturing Talent
in the
Family Business
DCU Centre for
Family Business
Amy Schuman
The Family Business
Consulting Group
September 27, 2016

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Family Business
Utmost Challenge – Tremendous Opportunity

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I think old man McGuffy went a little too far trying to be fair to
his boys.
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Why Me? Series, John L. Ward et. al.©

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Research Shows
Family Businesses Out-Perform
• Return on Assets
• Return on Investment
• Profitability
• Best Places to Work
• And….

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Sources of FB Success
•Purpose
•Strategy
•Culture
•Paradox
Mastery

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US Best Places to Work – Fortune, 2014
1. Google Public
2. SAS Private
3. Boston Consulting Group Private
4. Edward Jones Private
5. Quicken Loans Private
6. Genentech Private
7. Salesforce.com Public
8. Intuit Public
9. Robert W. Baird & Co. Private
10. DPR Construction Private
11. Camden Property Trust Private
12. Wegmans Food Markets Private
13. David Weekley Homes Private
14. Burns & McDonnell Private
15. Hilcorp Private
16. CHG Healthcare Services Private
17. USA Private
18. Southern Ohio Medical Center Non-profit
19. Baptist Health South Florida Non-profit
20. Ultimate Software Public
21. Kimpton Hotels/Restaurants Private
22. W.L. Gore & Associates Private
23. Plante Moran Private
24. Scripps Health Non-profit
25. Atlantic Health System Non-profit
(17 Private, 4 Non-Profit, 4 Public)

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HR and your Business Today?
• No dedicated HR Dept.
• Small HR Dept. focused on salary,
benefits, hiring, compliance, etc.
• HR as one important staff function along
with Finance, Legal, IT, etc.
• HR as strategic partner functioning at
highest level of the organization.

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HR and your Family Today?
• No contact between HR and owning family.
• Rarely, HR provides support/input to family.
• Frequently, HR helps the family with matters
related to their careers and to family
relationships.
• HR is an essential participant in discussions
and problem resolution regarding the family.

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Stages of Growth for HR
S
T
A
G
E
S
O
F
G
R
O
W
T
H
F
O
R
H
R
1 1000+
 Founders/Managers take
care of HR function
 HR administrator
 Focused on Transactional HR tasks
 Some recruiting support
 Small HR Group
 Focused on transactional
HR functions
 Basic organizational
development functions
 HR Strategic Partner
 HR Department
 Focus shifted to
Organizational Development
 Strong HR infrastructure
Number of Employees

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Size & Complexity of Family
Business
HR Development Path Drivers
Small, uncomplicated family
business
Large, complex multi-location,
multi-generational family
enterprise
 HR done by Management
 No HR group per se
 May have HR admin clerk
 Entrepreneurial stage – start-up and early
growth
 Single location
 Single HR professional
 Focus on Transactional HR tasks
 Some recruiting support
 Strong growth over short period of time
 Location expansion
 Small HR Department
 Growing need for standard HR systems and
structures
 Focus on transactional HR functions
 Basic organizational development functions
 Multiple locations
 Geographic expansion
 Acquisitions
 At least 2 generations involved in business
 Initial focus on building culture
 HR Strategic Partner
 Large HR Department
 Strong HR infrastructure
 Strong focus on organizational
development
 Regional, national, and global presence
 Multiple locations
 Multiple business units
 Global expansion
 Multiple shareholders and across multiple
generations
Source: Ransburg, Sage-Hayward and
Schuman (2015) HR in Family Business:
Harnessing the Power of Your People.

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Your Goals for the Conference
• What are your greatest HR-related strengths?
• What are your greatest HR-related
improvement opportunities?
• What are the strengths and vulnerabilities of
your family and business culture?
• How do you recognize and manage the HR
paradoxes of your family business?

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Human Resources in the
Family Business: Our Model

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Are Family Businesses Different?
•Are HR functions different in a family
business? How?
•What are common challenges, and
how to address?
•How can HR help with sticky issues
and be a strategic partner?

Ms Catherine O’Flynn
William Fry
Guest Adviser

DCU Centre for Family Business Workshop
Catherine O’Flynn - Employment Partner
27 September 2016

Overview
Introduction
Policies
Procedural Pitfalls
Case Study
Employment updates 2016

Essential Policies
Essential
Policies
1.
Grievance
2.
Disciplinary
3.
Anti-Bullying
4.
Harassment
5.
Equality

Grievance and Disciplinary
Refer to relevant policies and procedure
Ensure compliance with LRC Code of Practice on
Grievance and Disciplinary Procedures

Recommended Policies
IT Social Media Data Protection

Procedural Pitfalls
 Follow fair procedures
 Inadequate investigation is a frequent cause of legal challenge
 The majority of successful UD claims tend to involve
procedural flaws

Unfair Dismissal Close Relative Exception
 Protection does not extend to:
“a person who is employed by his spouse, civil partner, father, mother,
grandfather, grandmother, step-father, step-mother, son, daughter,
grandson, granddaughter, step-son, step-daughter, brother, sister, half-
brother or half-sister, is a member of his employer’s household and
whose place of employment is a private dwelling-house or a farm in or
on which both the employee and the employer reside”

Case Study
 Conducting an investigation in a family business
 Difficulties – “nepotism” accusations
 Independent investigator

Employment Law Updates
Retirement Age Adoptive Leave
Paternity Leave

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Case Example: Kwik Trip

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Case Example: CrisisCO
• Recruitment woes threaten new plant opening
• Confused roles & reporting relationships
• Traditions weakening – culture shifting
• Family members advocating for their children
• Turnover rising
• HR not seen as making a positive contribution

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Human Resources in the
Family Business: Our Model

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Stakeholder Vision/Values
“Yes, of course we have heard of shareholder value. But that does not change
the fact that we put customers first, then workers, then business partners,
suppliers and dealers, and then shareholders.”
Wendelin Wiedeking,
CEO Porsche
FT 10/8/05
“Our purpose and goal is to create maximum wealth possible. Anything else
would be socially unacceptable and unfair to our owners.”
French Second Generation Firm
“To crush my enemy. To see him driven before me and to hear the lamentations
of his clan.”
Conan the Barbarian

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Recruiting:
A Reverse Funnel Approach
Success Factors in Family
Hiring
• Clarity on whether family
employees are wanted or
not
• Guidelines for family
employment
• Boundaries regarding
contact and interaction
• Access to information for
all
• Transparency – being
open and honest about
decisions
• Balance between
formality-informality in
recruiting process
Success Factors in Non-
Family Hiring
• Experience working
in a family business
or appreciation of values
• A self-confident team
player focused on
development of others
• A genuine caring for the
family
• Superb
communication skills
• An ability to visualize
and share what they
want as their own legacy

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Selection Processes
Pitfalls
• Letting fear drive selection
• Putting candidates on a
pedestal
• Over relying on your gut
• Blurring the boundaries
• Forgetting to communicate
selection decisions to the
wider family

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Onboarding Process

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Performance
Evaluation &
Gap Analysis
Coaching
and
Feedback
Learning
Development
Planning
Job
Description
Continuous Cycle of
Development and Learning
Key Principles:
• Mutually Beneficial
• Intentional and
purposeful approach
• Focused on capability and
culture
• Understanding and
appreciation for family
business challenges

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Exits as a Transition not an Event

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Innovation
Empowerment
Performance
Teamwork
Change
Leadership
Efficiency
Profitability
Quality
Communication
Creativity
Learning
Continuous Improvement
Entrepreneurship
Excellence
Customer Service
Courage
Dignity
Reputation
Fairness
Open-mindedness
Authenticity
Hard Work
Stewardship
Dependability
Empathy
Curiosity
Humility
Discipline
Prudence
Sincerity
Do The Right Thing
Family Business Values are Different

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Family
Business
Culture
What we
do
What we
say
What we
believe
What we
value
What we
measure
How we
are
organized
Conscious Culture
Concept of a conscious
culture:
• where your culture comes
from
• what you would like your
culture to be
• how to build the culture that’s
right for your family firm
• when and where to monitor it
to ensure it stays on track

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FB
Culture
Family
Characteristics:
-Generation
-Religion
-Ethnicity
Ownership
Goals and
Objectives
INTERNAL INFLUENCES EXTERNAL INFLUENCES
Firm Size and /or
Business Direction,
Structure, Processes,
Systems, Procedures
Family Values,
Vision, &
Mission
Industry
Geography
• Country
•Regional
•Political climate
Market
Opportunity
Customer
Demographics
Factors Shaping a FB’s Culture

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Where does culture come from?

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Family employee recruitment
• Establish clear guidelines re: employee qualifications
• Create boundaries between business and family
decision-making processes
• Inform family members about the business on an
ongoing basis (e.g., internships, rotational programs,
dinner table conversations, etc.)
• Remember that family members can play important
nonemployee roles (e.g., philanthropy, family council,
etc.)
• Successful recruitment requires that employment
makes sense for the company and the (potential) family
employee

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Family employee selection
• Establish clear job terms (e.g., job description,
qualifications, reporting relationships, compensation,
and performance assessment approach)
• Assess the fit between candidate and company in terms
of job requirements and company culture
• Consider both inclusion and merit when hiring family
members
• Create company-wide policies with guidelines for
employment terms (e.g., compensation, benefits,
professional development, etc.)
• Communicate hiring decisions with the candidate first,
followed by the Board, other candidates, the broader
organization, and the family (in that order)

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Family employee onboarding
• Provide new family employees with the same
onboarding experience as nonfamily employees –
don’t assume they already know their way around
the company
• Ensure that new family employees have broad
exposure to other employees early on – family
employees often have a tendency to interact only
with other family employees
• Clarify any additional onboarding plans (e.g.,
family employment guidelines, assignment of
family mentor, etc.)

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Family employee development
• Provide family employees with the same
evaluation and development as nonfamily
employees as a starting point
• Recognizing that family employees may
eventually become owners, allow them the
opportunity to develop their ownership skills
(e.g., observe board meetings, attend family
business conferences, etc.)
• Family employees should report to nonfamily
managers whenever possible

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Family employee exit
• Take care to ensure that a family employee’s
exit from the company does not also result in
an exit from the family (e.g., keep in touch with
family employees after they leave the business)
• Establish a policy re: the number of times a
family employee can depart and then re-enter
the business
• Treat family employees the same as nonfamily
employees when it comes to the logistics of an
exit (e.g., severance, outplacement, etc.)

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Remember…
• Every company is unique; your HR function
will have to fit your situation.
• Liberate HR from the shackles of policing and
monitoring; deploy HR as a strategic partner.
• Face family employment challenges honestly;
manage family employees actively and fairly.
• Recognize your greatest HR-related
paradoxes; embrace the ‘both/and’ mindset.

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Maharana Shriji Arvind
Singh Mewar
76th Generation Trustee
of the House of Mewar
“Change rarely invalidates the
past and it does not
necessarily imply a rejection
of the old. I believe in the past,
but my feet are firmly rooted
in the present and I’m
constantly thinking about the
future. A great deal can and
should be preserved from the
past. In particular we should
treasure the ancient and
selfless values that have
stood the test of time.”

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Thank You!
Amy Schuman
Principal, Family Business Consulting Group
schuman@efamilybusiness.com

Stay Connected
www.dcu.ie/centreforfamilybusiness
familybusiness@dcu.ie
+353 1 700 6921
@DCUCFB

Nurturing Talent in Family Business

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