When’s the best time to write a pre-nup? Hint; it’s not the day before the wedding – much less the day after. Defined entry criteria for family members – what we call the rules of engagement – are the business equivalent of pre-nups, and should be spelled out and in place well in advance of need. Failure to establish these rules ahead of time is an invitation to disaster, particularly in a family business where post facto standard setting can easily be construed as a personal attack. But if members of the younger generation coming aboard understands what’s required of them and can perform up to the expectations of senior management, of other family members and of the rest of the company, then things run smoothly.

 

What should your rules of engagement be?  Broadly speaking, they might include:

 

•    Work experience outside the family business, which gives the next gen members a real-world view of employment, and ensures they’ll be supervised by someone outside of the family.

 

•    A defined level of education appropriate to their position

 

•    Competency in the area for which they’re being hired, and a skill set that matches their duties

 

•    Personal attributes and style compatible with the values and culture of the organization

 

There is no one-size-fits all when it comes to the rules of engagement; the right answer is what works for your family. Some family businesses have very strict and specific entry criteria; others are comfortable with less stringent requirements. And these guidelines aren’t written in cement; times change, and standards with them, and even those families with the most rigid criteria will reevaluate them as each new generation comes in. A fourth-generation family business will likely have very different rules of engagement than it did a few generations before.

 

Be sure to check out the reasons why next gen family members want to come aboard. Is out of a passion for the business? Is it because they can’t find any other job? Whatever’s driving their choice, having an open family discussion about that is absolutely necessary.

 

Bottom line, it’s important to recognize that entrance to the family business is neither a given nor an entitlement. Make sure that whatever your entry standards are, they’re communicated clearly and understood by everyone involved. Managing expectations on both sides from the start will avert damaging conflict down the line.