How to grow a family business when the CEO is struggling?
Many family businesses are confronted with this dilemma all the time. The person that’s running the company is also the Dad or Son or Daughter or Mother and firing them would cause even bigger problems.
What do you do?
Let’s suppose the founder elevated his son to the ranks of CEO and entered a long-awaited, and well-deserved retirement.
Shortly thereafter, it became apparent that the son was not prepared for the responsibility.
- Sales began to slide
- Long-term employees left
- Culture migrated from family-oriented to threatening and accusative
- Family members are calling the CEO daily to fix the problem
What do you do?
Stepping back in should be the last resort. There’s no coming back from that.
Let’s also assume that firing the son is off the table (for the time being).
Here’s some steps you can take to transform the situation toward success and growth:
- Identify the root problems with the company
I would advise bringing in a consultant or firm to do a rapid analysis of the financials, culture, employee sentiment, and leadership team interviews. Have the final presentation made to the shareholders (Dad/Mom, siblings, son). Ensure the results include details and recommendations.
- Establish or revamp an Advisory Board with expertise
Many family-owned businesses have Boards that are rubber stamps for the Owner/CEO. In this case, the son is struggling and needs guidance. He’s reluctant to ask for it from family members but should leverage expertise from Advisory Board members. Ensure you have a well-rounded Board with legal, technology, sales & marketing, finance, and industry expertise.
- Establish performance expectations with the CEO
This is a tough one. The CEO must know that he will be graded on his performance just like any other employee. Otherwise, there’s no incentive to improve rapidly if there’s no consequences. Include timelines and checkpoints for updates.
- Hire a Business Coach for the CEO
The CEO has some personal areas of growth that needs to be worked on. A good Coach can help identify those areas and provide guidance for the CEO in a positive and constructive manner. The coach can also determine the CEO’s willingness to commit to improvement.
Focus on leadership traits and training for the CEO. A family member that was promoted due to DNA rather than skills and experience will probably have some gaps. A relationship with a Coach should be confidential and therefore non-threatening for the CEO.
Path to Success
As you can see, the goal here is to provide the son with the tools, skills, and resources to be successful. Everyone wants to feel appreciated but that can rapidly go away if things turn for the worse.
As the Owner, elevate yourself above the personal dynamics of family to help the son grow into the leader the company needs.
If you need further assistance, please feel free to contact us at Rich Hall Group.