Nurturing Talent in Family Business

Nurturing Talent in Family Business

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Welcome

Mr Bryan BourkeWilliam Fry

Dr Eric ClintonDCU CFB

Welcome

Guest Facilitator

Ms Amy SchumanFBCG, USA

www.thefbcg.comCopyright © All rights reserved.

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Nurturing Talent in the Family BusinessDCU Centre for Family Business Amy SchumanThe Family Business Consulting GroupSeptember 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.

9Why 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 Public2. SAS Private3. Boston Consulting Group Private4. Edward Jones Private5. Quicken Loans Private6. Genentech Private7. Salesforce.com Public8. Intuit Public9. Robert W. Baird & Co. Private10. DPR Construction Private11. Camden Property Trust Private12. Wegmans Food Markets Private13. David Weekley Homes Private

14. Burns & McDonnell Private15. Hilcorp Private16. CHG Healthcare Services Private17. USA Private18. Southern Ohio Medical Center Non-profit19. Baptist Health South Florida Non-profit20. Ultimate Software

Public21. Kimpton Hotels/Restaurants Private22. W.L. Gore & Associates Private23. Plante Moran Private24. Scripps Health Non-profit25. 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

STAGES

OF

G R O W T H

FOR

HR

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’FlynnWilliam 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 PorscheFT 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



37Source: Ransburg, Sage-Hayward and Schuman (2015) HR in Family Business: Harnessing the Power of Your People.

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

Involuntary ExitsVoluntary Exits



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InnovationEmpowermentPerformance

TeamworkChange

LeadershipEfficiency

ProfitabilityQuality

CommunicationCreativityLearning

Continuous ImprovementEntrepreneurship

ExcellenceCustomer Service

CourageDignity

ReputationFairness

Open-mindednessAuthenticityHard Work

StewardshipDependability

EmpathyCuriosityHumility

DisciplinePrudenceSincerity

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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FBCultur

e

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 SchumanPrincipal, Family Business Consulting Group

[email protected]

mailto:[email protected]

Q&A




Thank you!!!




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