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The Pros & Cons of Hiring Non-family to Manage Your Family Enterprise

Many new hires leave quickly if there’s a misalignment in expectations for their role

Family cliques and power struggles add complications, says Arthur Salzer, chief executive officer and chief investment officer of Northland Wealth Management, a family office based in Oakville, Ontario and Calgary, Alberta.

Making sure that family members understand that “impartial parties are coming in to help – not to pick sides but to have a discussion and pull off the Band-Aid every so often to get wounds to heal – can go a long way to improving family dynamics, but they have to want to do it. That’s really the challenge,” he says.

Reporting to the board

When you bring in an external CEO to run the company, that person still has to report to the board and there needs to be a good working relationship that way, Salzer further explains. But you’re really bringing in a professional to help guide the direction of the company as opposed to merely being a sounding board.

“You need an agreement from the get-go – a meeting of the minds – about how much influence you’re going to have and how much do you really want them to have,” says Salzer.

“Is it okay if they step on your toes? If it makes things better for you in the long run, we can take some of that pain, that loss of power.”

Increased communication makes the transition easier, as does consistent review of how the newcomer is working out with the family and the board.

“There’s a saying – what gets measured is what gets done,” says Salzer.

“If you’re hiring a person for a certain role, then what are the metrics to measure that person, how often are they measured, and for how long can they be outside of guidelines before there’s a serious issue and they need to be replaced?

“Sometimes bringing in the experts doesn’t necessarily mean your family business is going to be run any better. Again, there needs to be some meeting of the minds so that they understand what the goal is and you know you’re hiring the right person.

“You may have some musical chairs for a while before you reach that right comfort level, that relationship where there’s mutual respect, back and forth.”

The orignal Canadian Family Offices article may be found here.


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