Bringing Outsiders Into a Family-Owned Business: Will It Work?

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Question: If you run a family-owned business, should you bring in outsiders for leadership positions? Why or why not?

Bringing in an Outsider Reduces Key-Man Risk

“By using outsiders within your business, you are more likely to reduce key-man risks by making the position more replaceable. It is hard to replace a family member. It isn’t as hard to replace an outsider. Using outsiders early on will give your business more scalability and more flexibility as it grows.”

Bringing in an Outsider Gives You a Different Perspective

“I am the President and CEO of my family-owned business, but my COO is not a family member. He always manages to bring a perspective to the table that we may not have in the family dynamic (I work with my brother and two sisters as well). I also feel that he can be that voice of reason between us family members on any and all situations. It’s been working out great.”

Bringing in an Outsider is Good for the Dynamic

“I definitely think there needs to be outside influence in a family dominated organization. No matter how much family members think they can keep their business and personal lives separate, there is always bound to be an issue. Having an outsider’s perspective always helps manage conflict and, in a lot of cases, prevents it. With that said, I love working with my family!”

Bringing in an Outsider Can Help the Company

“It’s a nice idea to keep a business in the family, but keep in mind that just because someone is related to you does not mean he or she has the right combination of skills and experiences to do a certain job effectively. Outside leaders may be better equipped to supplement your strengths, and they are also more likely to be objective because they are not as emotionally invested in the situation.”

Bringing in Outsiders Can Give You Perspective

“Family companies are great for the loyalty, but that loyalty can also mean everyone refusing to admit when someone isn’t a fit for the position. It’s great to work with family, but assess whether it might be clouding how you see your employees and their performance, and whether that might be causing problems. Outsiders can give you perspective.”

Bringing in an Outsider to Amplify Your Leadership

“Yes, I strongly recommend you bring in an outsider for leadership. However, you have to firmly state his or her position as the leader so everyone understands this person is a vehicle for carrying your own leadership further and making it better. That way, your leadership gets amplified, and you establish an exemplary role model for others to follow.”

Bring in an Outsider to Ease Potential Conflict

“I grew up amidst a family business. I’ve allowed partners to hire their family. Never have I seen this not create toxic elements in the company culture and place undue strain on those families.

But if you have to do it, yes, you need to hire outside leadership. If nobody with a different last name can do the job better, which I already don’t believe, do it to demonstrate fairness.”

It Depends

“If your family-owned business has been and is still a good business and you are sure the family members involved — and the ones that will be involved in the future — know how to manage it, it isn’t necessary to bring anyone else on board. But if you notice the family is starting to harm it, then you should. “