That may be easier said than done, says Sue Ouellette, a nurse practitioner turned business consultant near Baltimore. A family enterprise may be a business, but the inherent dynamics in the family structure, dysfunctional as they may have been, don't simply go away.
"The business is a microcosm of what the family was like," she says.
Ouellette says when she would fly from her home in Seattle to her parent's house in Boston for holidays, she'd have to sit in her car in the driveway for ten minutes before going in because she knew once she walked through the door she'd revert back into an 8-year-old in the presence of her parents. She wanted just a few more minutes of being a rational adult before that happened.
"All that stuff is only amplified in a family business," she says. "If I was an outsider coming in, I wouldn't just want to talk to the CEO. I'd want to talk to other people who work there. I'd want to know a lot before I went there."
But even if the outsider wants to come in, non-family members don't have a fighting chance unless family members accept them. And for that to happen, communication is vital, Ouellette says. If the son is a foreman in a construction business, and the father brings in a consultant that has nothing to do with the son's role, so long as the father communicates what he is doing and why, it shouldn't be a problem, Ouellette says. But if, say, the daughter is the father's right-hand man, and he decides to bring in someone as CFO, she might feel threatened. She might even throw a temper tantrum. In any business, someone might feel betrayed. But when it's a parent/child relationship, the betrayal can cut even deeper.
"For the consultant coming into something that wasn't agreed upon by everyone, that can be a nightmare. They will never fit in," Ouellette says. "That person will probably be sabotaged."
The reality is, more times than not, bringing in an outsider will not work, she says. That's because in most family businesses, communication-whether it's a discussion about bringing in an outsider or about issues that have arisen out of the natural family dynamic-is often poor, she says.
"I would say it doesn't work out more than it does," Ouellette says, though it depends on your definition of "working out." If you call a company that is growing and is somewhat profitable, but family members are barely talking to each other because one brother is making more than the other and they can barely be in the same room as each other, then perhaps there are companies that have hired an outsider and prevailed, she says.
"There are a lot of companies out there making a decent profit, but if all the family members were on the same team, working synergistically and were able to talk to each other about issues as they came up, would it be more profitable? I'd say so," she says.
Indeed, only about 33% of family businesses make it to the second generation. Just 12% make it to the third, and only 3% make it to the fourth, according to the Family Firm Institute.