Dear Desperate:
Your dilemma is common in family-held businesses. Successful entrepreneurs are tenacious, single-minded and willing to make great personal sacrifices for the sake of their companies. Unfortunately, those same qualities often pose obstacles to taking the company to the next stage of growth. Founders frequently identify so closely with their businesses that their personal lives are inseparable. This certainly sounds like the case at your company, where a 95-year-old is still at the helm and handling day-to-day issues.
I suggest you tie the case for better human resources management to corporate growth. Your founder may continue to ignore these issues unless he realizes the impact they have on the business now–or may have in the future. Linking morale with business results enables you to build a better case for change.
Start with internal indicators. While you state that sales in 2004 were roughly $100 million, you do not indicate whether this is greater than, less than or flat relative to previous years. If sales are flat or declining over the years, try to link that to concrete actions that were taken (or not taken) relative to your employees.
For example, does employee turnover correspond to revenue trends? Have sales decreased in the years that holiday bonuses were not given? Has the generational power play led to missed business opportunities? Perhaps there are additional industry benchmarks upon which to base your argument–for example, customer service statistics, market share data, your company’s growth versus that of competitors, etc.
Once you have outlined a fact-based case–where the cause and effect of workforce-management practices are clearly delineated–you will need to strategize as to who is best positioned to present this case to your founder. It may be best to enlist other key stakeholders, whether in key positions (such as the head of sales) or key people from the other generations of owners, whose own future livelihood depends on the success of the company.
Given your description of events, however, I am not certain that this will play well in your organization. Your founder sounds as though he has fairly rigid ideas about how to run his business and what’s been successful over the years. It may be difficult to persuade him to change his ways. It also sounds as though the next generation of leaders lacks the ability to step up to the plate.
If that’s the case, and you do not see a chance that things will change as the next-in-line family members take charge, you and others may be better served looking for new jobs elsewhere. Any company–whether privately held, family-run or public–that does not pay attention to people issues will ultimately fail.
SOURCE: Keith Swenson, managing director, Capital H Group, Chicago, Illinois, Jan. 19, 2005.
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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.