A Tried-and-True Approach To Hiring a Non-Family Executive in a Family Business
Change is inevitable. People can’t stay in roles forever. Times shift, people age, and there’s not always a clear next-in-line to hand the reins to.
You want someone with experience and vision. Someone with a passion for the business your family has been operating and growing.
Sometimes, that person is best brought in from outside.
Luckily, there are tried and true ways to decide whether hiring a non-family executive is the best decision for your family business and to ensure a smooth succession once stakeholders are on board with the plan. These 11 tips and Jen Traeger Coaching can help guide your planning.
Should You Hire a Non-Family Executive in a Family Business?
You can, and in some cases, there are definite benefits to doing so!
Times when it might be wise to hire a non-family CEO for the family business include when:
Succession is not agreed upon by business stakeholders
You want a fresh perspective
The business needs professional management you can’t get from within the family
You need an objective decision-maker
The business needs long-term stability
Any transfer of leadership in a business should be carefully executed to ensure a smooth transition and avoid conflicts down the line. This applies whether the succession is happening within the family or to an outside person.
Take, for instance, Gera Developments, an Indian real estate company discussed in detail in this Harvard Business Review article. A months-long planning and training process resulted in a successful succession from the outgoing family member to an incoming non-family CEO.
There are a variety of considerations unique to family-owned businesses when planning for the succession of executive leadership. It can be helpful to have someone guide the family and the business who understands the complexities of navigating succession within a family business, such as Jen Traeger Coaching. Jen brings her extensive experience with family businesses to her coaching practice, providing guidance for navigating many tricky and unique circumstances.
11 Tips for Hiring a Non-Family Executive in a Family Business
#1: Ensure All Stakeholders Are in Agreement
It is important that stakeholders agree, not only with the decision to hire a non-family executive, but also with who it is and the hiring process. Preferably, this is a unanimous decision to help minimize/avoid conflict. Once a decision is made, it’s critical that everyone supports it.
#2: Create a Clear Mandate
Clearly define the responsibilities and role of the non-family executive from the beginning to avoid conflict.
Consider the following:
What decisions can they make alone?
When do discussions need to happen?
What do they need to accomplish and by when?
This should all be clear before they accept the job, so they know what to expect. Clarity on as many details of the expectations and role as possible will help with relationship and trust building with the new executive.
#3: Develop a Transition Plan
Create a transition plan that includes the following:
Timeline
Strategies
Communication
A clear plan allows stakeholders and the non-family executive to be on the same page and facilitates a smooth transition in bringing them on board.
Other questions to consider as you lay out a transition plan include:
When does the old executive officially turn over their position?
What does onboarding look like?
What relationships are important to develop?
Who should they be introduced to?
#4: Create Space for Building Relationships
It's important to allow space for the new executive to develop their own relationships and figure out who does what, what motivates them, and how things get done in the business.
Some things must be spelled out and planned ahead, while others need the space to happen organically.
#5: Choose a Point of Contact
Choosing one person to be the contact point for the executive is easier and more efficient than touching base with a handful of people who might have different ideas and priorities.
One person to manage discussions and plans is most effective, and that person can bring things to others when needed.
#6: Encourage Open Communication
Honest and open communication across the organization is the best method for success. Ensure the incoming executive and team know how to handle conflicts, miscommunications, and differences of opinion.
#7: Focus on the Future of the Business
Ensure the executive knows what their role could look like in the future and ask what their vision is. You’re bringing someone from the outside in for their experience, expertise, and leadership. They may have ideas or a vision for future growth that can take the business to new heights.
Remember, the overall goal is ensuring the long-term success of the business and its effective management. Allow a coach like Jen Traeger to help your family plan for this transition, with an emphasis on the future you want to see come to pass.
#8: Don’t Hire Someone Just Like You
Your business probably doesn’t need someone with the same skill set as you or another family member. Instead, evaluate the strengths and weaknesses that exist across the business and look to hire a non-family executive who complements those and rounds out your team.
#9: Evaluate the Culture and Needs of the Business
Hire someone who will be comfortable with your business's current culture and isn’t looking to change it (if that’s not what you want). Ensure there is a shared understanding about where the family is seeking change and where continuity is important.
#10: Layout Any Incentives
A candidate for executive will likely ask how they’ll benefit from their efforts in their position. Discuss this with stakeholders ahead of time and offer attractive incentives to the incoming executive.
Jen Traeger Coaching can offer suggestions for incentivizing that will be mutually beneficial to the business and the new executive.
#11: Let the Executive Be the Executive
It’s vital that the exiting executive gives the new executive space so they know this is now their job and they’re in charge.
You want your new executive to feel empowered to be the leader you hired them to be. Clarity around all the previous points discussed will help your newly hired executive dive right into their new role.
Jen Traeger Coaching Can Help Ensure Your Family Business’s Long-Term Success
Jen Traeger understands how family businesses operate and what best practices lead to long-term success and growth. She is now applying her knowledge to her coaching business and is ready to support your family as you plan for your business’s future success.
It can be hard and messy to navigate transitions in executive leadership, but Jen Traeger Coaching offers a clear, streamlined process that can open pathways for unprecedented growth and possibilities.
Schedule your complimentary discovery call with Jen to discover how her services can meet your company’s needs. You’ll be glad you did.
