What should a founder do when a family member’s performance at work is poor?

Founders of family businesses often agonize about how to handle a family member who is visibly underperforming on his job. Such underperforming family members in senior roles impact not only the business but also the morale of employees because they see different standards being applied to professionals and family members.

So the founder’s dilemma is how to preserve the relationship and support an underperforming family member while at the same time ensuring that the business does not suffer irreparable damage. What should he do?

Here are 6 things founders need to do:

  1. Open communication: The founder should have an honest and transparent conversation with the underperforming family member. It is crucial to address the issue directly and constructively, emphasizing the impact of their underperformance on the business and the morale of other employees. Focus on the facts and specific examples rather than personal attacks.

  1. Provide support and resources: Offer support to the underperforming family member by providing necessary training, mentorship, or coaching. This shows a commitment to their development and success.

3. Consider alternative roles or responsibilities: If the family member is struggling in their current role, explore the possibility of reassigning them to a different position within the company that better aligns with their strengths and skills. This can help maintain their involvement in the business while mitigating the negative impact of underperformance.

4. Seek external expertise: If the founder finds it challenging to address the issue effectively, they may consider seeking advice from external consultants or industry experts who specialize in family business dynamics. These professionals can provide objective insights.

5. Maintain fairness and consistency: It is crucial to maintain fairness and consistency in the treatment of all employees, regardless of their familial relationships. This ensures that other employees perceive that the same standards and expectations apply to everyone within the organization.

6. Evaluate long-term sustainability: If all attempts to improve the family member’s performance prove unsuccessful, the founder may need to consider more difficult decisions, such as reducing their responsibilities, transitioning them out of the company, or exploring other options. 

Ultimately, each situation is unique, and the founder must make decisions that align with the specific dynamics and goals of their family business. 

Harsh Chopra

Family Business Advisor