Professional Management
The decision to hire a professional manager is likely one of the most important and difficult
hiring decisions that a family business owner will have to make. The typical definition of
professional managers equates them with external, nonfamily, nonowner managers, thus
declaring professional management and family management as mutually exclusive. [14] “A typical
argument…is that professional nonfamily managers should be brought in to provide ‘objectivity’
and ‘rationality’ to the family firm.” [15]
There are several problems with this way of thinking. First, it perpetuates the outdated notion
that family members are not professional, that the smartest thing for a family business to do is
to bring in professional management—as quickly as possible. [16]
Second, professional managers are not always prepared to deal with the special nature of family-
owned businesses. “The influence of families on businesses they own and manage is often
invisible to management theorists and business schools. The core topics of management
education—organizational behavior, strategy, finance, marketing, production, and accounting—
are taught without differentiating between family and nonfamily businesses.” [17] This does an
injustice to the unique workings of a family-owned business.
Third, a professional manager from the outside is not always prepared, perhaps not even most of
the time, to deal with the special nature of family companies. The dominant view on professional
management downplays the importance of the social and the cultural context. “This is a problem
in family firms where family relations, norms, and values are crucial to the workings and
development of the business.” [18] It is argued that the meaning business families attach to their
businesses is guided by family values and expectations—so much so that “anything or anyone
that interrupts this fragility could send the business into chaos.” [19]
The hiring of an outside manager, therefore, should include an assessment of
both formal competence and cultural competence. Formal competence refers to formal
education, training, and experience outside the family business. Although it is certainly helpful
and appropriate, formal competence is not sufficient for managerial effectiveness. It needs to be
supplemented with cultural competence, an understanding of the culture of a specific firm.
Interestingly, most family businesses look only to formal competence when selecting a CEO. [20] Culture and Nonfamily CEOs
It is extremely important to understand the culture of the family firm. It means that
as a leader you have to be sensitive to the organization’s reactions on the things you
say and do. I have a long-term employee on my management team, and she is my
guide in these issues. She can tell me how the organization will react and how things
are likely to be received. We have to build on the past even though we have to do a
lot of things in new and different ways. But because of the culture, this might be very
sensitive. (The words of a nonfamily CEO in a family business.)
As a nonfamily CEO, you have to have in-depth respect for the invisible forces
among the employees in the family firm. You cannot escape the fact that there will
always be special bonds between the family firm and the owner. Always. (The words
of a nonfamily CEO in a family business.) [21]