How Challenging Is Recruiting Executives for Family Owned Businesses

by Kevin Logterman July 27, 2016
July 27, 2016

What comes to mind when you think of brands like S.C. Johnson or Welch’s? We’re confident that one of the first things you think of is the slogan of each of these companies. S.C. Johnson’s slogan, “A Family Company,” and Welch’s “Family Farmer Owned” are two excellent examples of marketing campaigns that differentiate organizations as family businesses.


In our view, it’s probably not a coincidence that more brands are reminding the marketplace that they’re family owned. Considering the economic conditions of the past few years, there’s a generous premium on businesses that can prove their continuity, reliability and stability. These are companies that can survive and flourish even in troubled times, and it’s definitely a selling point, no matter what industry sector the company occupies.


However, behind the scenes of the smoke and whistles of marketing, the truth is that business strategy is seriously impacted by an organization when they want to sustain their commitment to being a family company. The strategies for CEO succession and recruiting executives for family-owned businesses are challenged by emotional ties, governance issues and established business processes. What are the best practices?


Recruiting Executives for Family Owned Businesses


Every organization wants to ensure a strong executive team to steward complex business strategies, but succession plans can all too often represent a risk of upheaval and a threat to business continuity. However, in the family-owned business scenario, there are even more factors to face; including the family dynamics, core values, company history, and workforce expectations.


With this in mind, recruiting executives for family-owned businesses starts with sourcing candidates who fully comprehend and connect with the company’s primary mission. This is critical. Cultural fit is non-negotiable. Miss this point, and the candidate’s talent, qualifications and experience become irrelevant.


Furthermore, a candidate should be given a clear view of exactly how a family owned business differs from previous organizations they’ve worked with. It’s common for candidates to come forward with the belief that private family-owned businesses are less aggressive than a publicly held company; but this isn’t always true. There’s a reason the US Bureau of Census reports that around 90% of American private companies are family-owned; it’s because they know how to evolve, adapt and maintain a competitive edge in the marketplace. Often, this takes aggressive business strategies. Candidates should be aware of this dynamic from the get-go.


Additionally, there needs to be an understanding of how a candidate’s skills translate from a non-family business. For example, someone who has led a team within the public sphere is typically highly process-oriented and values accountability. These are traits that could be highly valuable to a family owned business.


When working with an executive recruitment firm, organizations need to be transparent in what their goals and expectations are. Unfiltered communication enables a clearer view of the company history, growth trajectory and overall business strategy. This perspective is key to sourcing the right candidates who will help the company achieve long-term success.


Ultimately, thorough planning is key. Board members, shareholders and consultative advisors can provide insight as necessary, but recruiting executives for family-owned businesses takes a high level of comprehension and relevant experience. The organization needs to make clear cut decisions about what level of control and involvement they wish to maintain over the business, especially with regard to how many generations are – and will be – involved as the business grows.

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