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Lessons from the pirates: Employment criteria

Setting sail for clear standards

To be hired in the family business, family members should have the appropriate skill level to successfully handle the job they are applying for.

Phillips’ code of conduct states:

“That man that shall not keep his arms clean, fit for an engagement, or neglect his business, shall be cut off from his share, and suffer such other punishment as the Captain and the company shall think fit.”

As we can see from the code, what was expected from each pirate while aboard the ship was clear. Further, the consequences for inadequate performance were also made clear.

In many family businesses, family members are hired with little regard for whether they have a skill set that will benefit the business—and once they are hired, it is often unclear what is expected of them. Given the dynamics of this type of business, it is not uncommon for there to be no consequences for failure to perform. If allowed to continue, this can result in unacceptable behaviour not only being tolerated, but also becoming the norm or expectation among family members. Typically, everyone just adapts around those family members who aren’t performing as desired.

Consider the following example. Henry and Fred are two brothers who are co-owners of a family business and both have children working in the business. It is apparent Henry’s son, Peter, is not performing, and it is also apparent Henry is picking up the slack created by his son so his brother will not say anything about Peter’s non-performance. This happens far too often within family enterprises and results in the situation being ignored until the next generation ascends into leadership and ownership positions and inherits the mess. All of a sudden, Peter is confronted with the need to pull his weight, but unfortunately doesn’t have the skills to get the job done as expected.

This means Peter’s siblings or cousins are now going to be saddled with a very difficult situation that could have easily been prevented had the business developed rules of employment before employing any family members. Instead of focusing all their time on the effective running of the business, the new leadership group will now have no choice but to spend time and money on remedying a very sensitive, painful, and stressful situation.

It’s important to make clear what the expectations are for any given role, as well as what the consequences are if the family member fails to perform.

We can provide our families and family businesses with a real benefit by implementing rules of employment before the next generation enters the business. Rules surrounding employment will make the process of hiring a family member more structured, rational, and skill-based, rather than based on bloodlines. With employment criteria in effect, perhaps Peter never would have been hired in the first place—or he would have been hired, but his ascension into management and leadership would have been stalled or halted until his performance met the job expectations.

As with the pirates, when there are consequences for non-performance and they are clearly communicated to all, expectations are reinforced and remain clear. Of course, the type of punishment would likely differ from that of the pirates.

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