Any company with a development strategy needs qualified managers to maintain and increase its competitive edge. This is a need which gives rise to several kinds of problems: how to attract and keep these managers, how to develop their individual abilities, and how to motivate them to get the most from their commitment.
In the case of family businesses, this problem has a number of facets that do not apply in non-family businesses as a result of the special relationships between owners, managers and members of the family. Because of these differences, this article outlines the most important abilities for a non-family manager to possess in a family business.
LoyaltyThe problems of managers who are not members of the family are often expressed from a negative viewpoint. It is more useful to view this issue from a positive perspective, in accordance with the fact that most managers in any particular country work in a family business, develop their careers, and stay there.
When trying to identify possible areas of difference between managers working in non-family businesses and those working in family businesses, loyalty is one of the most significant values sought by a family firm. Loyalty is defined as a value and as a quality of the will by which a person holds firmly and consistently to his convictions or duties, and to the people or institutions who have put their faith in him, in spite of the difficulties that he might encounter.
Because the family business usually passes through certain stages in its life-cycle and because in such companies two different systems are superimposed one on top of the other, the non-family manager’s loyalty may have certain qualities that are not found in non-family businesses, for example: Loyalty to the founder of the business, to the family, or to certain members of the family.
Given that from a dynamic perspective the “loyalty-trust” relationship is an ongoing, self-sustaining process, these qualities will manifest themselves in certain types of behaviour in the family business, as trust lies at the root of the non-family manager’s loyalty and this loyalty in turn generates greater trust in the non family manager.
Non-Family Manager’s AttributesThe most important abilities for a non-family manager to possess are as follows:
- Adjustment to change. Changes occurring in the family business due to changes in the owning family and in the family’s ownership and power relationships with the family business.
- Mediation in conflicts. Ability to mediate problems between family members as a result of the manager’s knowledge of the family business and the family’s interests and the moral authority that the parties concerned have vested in the manager.
- Patience. Ability to accept situations in which the non-family manager’s career development clearly moves at a slower pace in comparison with other members of the family.
- Support to the founder. Act as a stand-in for the founder while the company is still in its first generation, taking care of those functions that are most neglected by the founder.
- Help in the incorporation of the second generation. Act as a mentor for younger family members, taking part in their training and smoothing over any obstacles that might arise in the organization.
- Work with second generation. Act as a hinge keeping the two active generations together and helping the founder in the retirement process.
- Help in ensuring the businesses’ continuity. Maintaining the family businesses’ culture as it moves towards the third generation, developing the new types of relationships that come into being as the number of owners increases and the families become spread over wider geographical areas.
Thus, the influence that the non-family manager gains among the family and in the family business allows him or her to act, negotiate, and advise decisively and to implement the best decisions in the company’s interests.
This article has been partly extracted and modified from Gallo, M.A. (1991). Managers Who Are Not Family Members. Proceedings of the 1991 Family Firm Institute Conference, October 16-19, Beaver Creek, Colorado, USA.