Family Employment Policies: Scarcity and Abundance

Family Employment Policies: Scarcity and Abundance

by | 'Nov 26, 2017' | How-To | 0 comments

The mindset with which we approach a given topic colors how we think about it.

One of my clients, a non-family CEO of a substantial family business, sometimes describes his own mindset toward business decisions in terms of scarcity and abundance. When he’s in scarcity mode, he finds himself thinking of a particular issue or transaction as a zero-sum game. He begins to hoard opportunities, to be defensive and paranoid about others’ motives. Recognizing his mindset, he has learned to stop himself and think instead in terms of abundance. By envisioning multiple mutually-positive potential outcomes—opportunities for win-win solutions—he finds he is more creative and more open to possibility.

I’m writing this a week before Thanksgiving, which seems to me a good time to reflect on scarcity and abundance in the context of family employment policies. As I go about my work with business-owning families—an opportunity for which I am deeply grateful—I have been thinking about how family businesses approach job opportunities for family members. It seems to me that well-intentioned efforts to beef up family employment policies with more rigorous requirements may be creating mindsets of scarcity when an emphasis on abundance might be more successful.

During the course of my professional career, I’ve witnessed a shift in the way business-owning families think about employment opportunities. While leadership succession at one time was often based on entitlement (if you had the right last name, you were pretty much guaranteed a high-level job in your family’s business), over the past 20-30 years we have seen entitlement-based systems replaced by more meritocratic systems. Many business-owning families have implemented firm policies regarding the educational and vocational attainments that family members must demonstrate before they will be considered candidates for management positions: for example, candidates must have bachelors’ and graduate degrees and 3-5 years of relevant work experience before they will be considered for management positions in the business.

Employment policies such as these, well-meaning and principled as they are, can create a mindset of scarcity, and that mindset can create unanticipated consequences. For instance, such a policy can convey that the barriers to entry are high, that few will be good enough to surmount them, and that many family members should just plan to look elsewhere. Even well-prepared candidates may be turned off by the tone of the policy, and be more inclined to accept positions with firms that are welcoming and encouraging. Family managers begin to worry there won’t be room for their children, and fear that their siblings’ children might “get there first,” heightening the sense that succession is a zero-sum game of duck, duck, goose—but with lifelong consequences.

The point is, if the policy is too strict and rigid, it can become a deterrent to family members who may otherwise be interested in participating in the business.  If the policy is inviting, even while maintaining rigorous standards, and, if it suggests varying opportunities and on-ramps throughout a family member’s career, then it is much more likely to foster participation and productivity, and create new opportunities for the family and business.

An employment policy built around a mindset of scarcity is like a wall: it is designed to keep most family members out.

An employment policy built around a mindset of abundance, in contrast, is more like an invitation: it promotes the opportunities that a career in the family business can provide. It encourages the business to create meaningful summer jobs, college internships, and mid-career opportunities for family members to learn more about the business and try out jobs in different areas. It encourages education and skill building, and promotes regular communication with family members about what’s going on in the business and what skills are needed. It may even offer scholarships or other benefits for family members who have gone through a summer job or internship, as a way to promote the opportunities offered by the family business and increase the odds that family members will choose to bring their talents home.

Recognizing that the family’s human capital may include pools of talent beyond those needed in the existing business, the abundance-oriented employment policy might even create a new focus on investing in talent and opportunity, creating new divisions, or developing an incubator to invest in family members’ ideas and skills.

When a family communicates a mindset of abundance through its family employment policy, even as it maintains rigorous criteria and promotes meritocratic principles, it is much more likely to grow and retain its human capital, in all its forms.