Four considerations that all family businesses should make when recruiting external leadership

Executive search expert and founder of talent solutions company Jordan-McQueen, Victoria McQueen, offers her experience to family businesses that have leadership recruitment needs.

One of the biggest questions facing family businesses is whether you should bring in an external person to run the business – and if so, when?  

Reaching the decision to appoint external leadership in a family firm may come from a need to introduce new thinking, to form a part of your company succession plan or perhaps to add value and experience within certain areas of the company in order to help fulfil your growth strategy?  

However the situation has arisen, the realisation and acknowledgment of identifying the requirement can be both a relief and a daunting prospect at the same time.  It often opens up many more questions about the pros and cons of appointing from outside of the organisation, what kind of person would ‘fit in’, how the family will feel about the decision and when is the ‘right time’?

One - When is the ‘right time’ to bring in external leadership?

Once you have identified a requirement and made the decision to look for external leadership, the next decision to be made is ‘when’?

This comes down to the individual needs of the business, if there are any deadlines to be met and what parameters affect the search.  For example, if the appointment relates to the retirement of a board member, the timing may be more obvious than when it relates to a succession or next generation issue.

Another factor influencing the timing of an appointment relates to whether the current environment and company organisational structure will firstly attract the right candidates and secondly, support the new chosen leader and their remit? Are there steps needed to change the company before the appointment takes place? Are there internal politics to be dealt with beforehand?

Two - Do you have a clear understanding of the ‘culture’ of your business and how a ‘non-family member’ may fit into it?

Understanding your business culture is key to finding the right person.  Family businesses often have a strong set of core values and are eager to respect the legacy of the generations before.  Every business also has a unique organisational culture relating to the social environment and the way in which colleagues interact with each other and clients. Having an awareness of your business culture will help to identity potential candidates whose personality and leadership style would offer a good fit.

Considering your business culture combined with the business needs, strengths and barriers to success will shape the search for an external leader who has exactly the right mix of attributes.

A good fit should be an individual who will respect the values and strengths of the company whilst having the necessary skills, experience and confidence to influence change and progression in line with its strategy.

Three – Is the external leadership role clear with well-defined expectations?

The remit will vary depending on the type of role being filled i.e. Non-Executive/ Board Advisory versus Executive Management, but in any case, it is important to have clear expectations for both parties defined from the beginning in order to have the best chance of success.  

 It is particularly important for family businesses to be clear and transparent in their proposition to any potential external leaders about career development, earning potential, empowerment and succession plans. Performance related bonuses and the opportunity to own a share in the business often help to get buy-in. 

Be honest about what you are looking to achieve with the appointment and allow that to shape the remit. For example, you may be looking for someone who can add value in terms of ‘been there and done it’ experience, perhaps having been part of growing a similar business into a more sizeable entity or restructured a company.  Alternatively, you may be looking for someone who can challenge the business in some way, perhaps through offering different perspectives from the family viewpoint or challenging decisions.

Do not allow the existing structure within the company to define what you are looking for this time. In order for businesses to grow and adapt, you must be open to diversity, if that is what the business requires.

Lastly, enlist the help of an experienced recruitment and talent expert who can work with you to draw out an accurate picture of what skills and experience are required to complement and add value to your existing board or senior management before commencing a search.

Four - Have you considered how a new external leader will be received by the existing family members within the business?

Appointing external senior leadership can be an emotional process that produces mixed reactions amongst family members.  In anticipation of this, it is often helpful to engage in honest and open communication about the reasons behind the decision and the pros and cons of making the hire. 

Do not put off potentially difficult or awkward conversations.  Talking to family members before any decisions are made, gives those involved time to raise any concerns or questions and become a part of the process.  It can also be helpful to bring in neutral parties or experts to help family members think outside of the box and to challenge their thinking.

Recruiting externally for family businesses is far from easy, but the process can be made much easier by appointing the right company to help you.  

Victoria McQueen not only has an outstanding track record of making senior appointments on behalf of her clients but also has first-hand experience of the challenges that face family businesses, saying “I’m aware of the intricacies of family businesses; my father was an entrepreneur in the automotive industry in the North West and my husband is part of his family’s national dairy business. I appreciate and understand how challenging it is to attract and retain the right people.”

If you would like some professional help or advice on matters regarding recruitment for family businesses or appointing external leadership, contact info@jordan-mcqueen.com to arrange an appointment.