Learning the family key for outside executives in family business

Q: I'm applying for an executive position in a family business. Besides being a good fit for the work, what should I be aware of if I become a nonfamily manager in a family business?

A: A nonfamily manager in a family business can be more effective when he or she understands the owning family. Unlike public corporations, owners of family businesses seek a variety of outcomes in addition to business profits. For example, they often promote community development, take a personal interest in employee welfare and like to use the business to develop family members' capabilities. Business values and norms may align with the family's preferences and patterns. Employees may feel as if they are a part of the family.

When families start businesses, they often rely on the family to get things done. Family values and norms guide the business. This approach provides some efficiencies and makes sense to the owning family. However, it takes time for nonfamily members to understand these business "norms." Family firms often have an insular sense and can seem clannish.

To navigate the family business landscape, nonfamily managers need to get to know the family and discuss norms with others who have worked in the business for some time. In addition to norms and values, it helps to know the family history, family objectives and how owners make decisions.

Depending on their relationship with the family, nonfamily executives may be asked to help prepare the next generation to manage the business. To facilitate transition of leadership, they may be called on to temporarily run the business or to mediate between the generations in resolving differences.

If the business you are applying to work at is preparing for transition to the next generation, hopefully the owners have added a governance structure, like a board of directors or advisers, or even a family council, to add stability. These forms of governance can make it easier for nonfamily executives to interact with the family, as they are set up to provide a set of operating norms for the family and employees to follow.

Ritch Sorenson is the Opus Chair in Family Business and the academic director of the Family Business Center in the Schulze School of Entrepreneurship at the University of St. Thomas.