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Ask Dave

Reducing Family Business Drama

Joe works for a family business and has no ownership. What's the best way to handle the interpersonal relationships between family members who come and go within the company?

QUESTION: Joe in Pittsburgh works for a family business and has no ownership. What’s the best way to handle the interpersonal relationships between family members who come and go within the company?

ANSWER: I would recommend you and your brother-in-law do some reading on family business. Just type “family business” in Google, and there are some good little books out there. I’ve got four or five of them, and they’re all thin, quick-read books. There’s not much to it. There’s Family Business Magazine. You can literally get a degree in family business from Kennesaw University.

As I started studying family business, I was glad to find that there were a lot of best practices already out there. The thing is most families never bother to study the unique science of family business. It is a science. It’s art and science, but it is a science.

Now my kids are grown and married. I’ve got a son-in-law and a daughter who work here and a daughter who runs our family foundation. Three of them are employed directly or indirectly by me and this company. As we started entering that, everyone knows who’s been walking around that it’s fraught with potential drama and problems, so I started studying it and interviewing families that were successful at functionally operating, minimizing the drama. You can’t minimize the drama completely, because people are involved. There’s drama with non-family employees. I’ve got drama around here with the other 300+ people. That’s part of the deal, but it adds a special layer.

Draw three circles on a piece of paper that interlock to where there’s one spot in the three circles where all three touch. It’s a Venn diagram. Otherwise, they all touch at least once. There are three possible positions a person in your world or family can hold. They could be a member of the family—that’s one circle. They can be an owner of the business—that’s another circle. They can be an employee—that’s another circle. Your brother-in-law is the only one who’s all three. You are an employee and a family member. You have to wear different hats. Your brother-in-law is not wearing the hat of family member when he hires his kid or your kid. He is wearing the hat—and he’s not wearing the hat of the owner—of the CEO of the company. He’s the chief operating officer—the president of the company. He is functioning in that role. He’s not functioning in the role of dad. He’s not functioning in the role of brother-in-law. And everyone needs to talk about that fact.

When I sit down with my daughter on a business-related thing—my daughter Rachel Cruze who does our youth speaking—I’m saying, “Rachel, I am dealing with you on this issue as one of the brands of this company, and I’m your CEO. I’m not talking to you as your dad.” There’s a difference. We say that out loud a lot. We remind each other. What is the nature of this meeting? Is it daddy/daughter or is it president/brand? I’m expecting her, when she’s in this office, to conduct herself in a professional manner. When she’s out there on the road speaking on behalf of this organization, she does not get a pass. She has to bring it. It’s game on. If her evaluations come back on a speaking gig low, somebody in this place is talking to her about it. We’re pretty hardcore, dude. We talked about that before we brought them on board.

Here’s the problem. If I bring her in here or I bring her husband in here and they’re half-butts, everyone in the place not only loses respect for them, they lose respect for me. It demoralizes the excellence level of the whole place. It’s called nepotism in this case. We have to talk about it, and so my kids—even when they were 12 years old working the book table at a Live Event—were told they had to work twice as hard to be respected as a Ramsey because everyone thinks they’re going to be a screw-up. Everybody assumes your kid is a screw-up when they come to work for you because they couldn’t get a job anywhere else. So they’ve got to bring it. To get respected, they’ve got to bring it. That’s part of the hiring process of a family member, and if they don’t bring it, you’ve got to put on that president’s hat and fire your kid, but you’re not firing your kid. You’re firing an incompetent employee. Reprimanding them is the same way. Expecting their sales calls to be up is the same way. Expecting them to be on time with their shirt tail tucked in is the same way. All of that falls under the same heading.