Working with Your In-Laws Isn’t Always a Terrible Idea

When Walmart’s Rob Walton, board chairman of the family-controlled company, appointed Greg Penner to vice chairman last week, he was going to bat for his son-in-law, underscoring the important role that in-laws can play in the game of family business.

It isn’t always that way. In-laws in many business families often find themselves at a disadvantage. As nearly every married (or formerly married) person recognizes, tensions with in-laws are common, whether you work together or not. When working in the family’s business, in-laws (who sometimes call themselves “out-laws”) have two strikes against them. They have to live up to the standards and expectations set down for non-family employees; at the same time, they are viewed by non-family employees as having all the perks that come along with being part of the family. Essentially they have the worst of both worlds.

And yet some in-laws can and do avoid a third strike; some even manage to hit a home run.

What does it take for an in-law to survive and thrive, as Walmart’s Greg Penner has?  We decided to find out. We called up a number of in-laws (and their spouses) to ask: “What are the keys to success for being an in-law who makes it in a family business?”

We quickly learned that there is no single in-law experience. Successful involvement in the business depends on a number of factors, including each in-law’s competence, personality, expectations, and opportunities in the business, as well as a family’s philosophy about whether or not to allow in-laws in the company. We found that different in-laws can even have positive or negative experiences within the same family business. And yet after talking with our client families, we found that the successful in-laws often play by the following rules:

Play for another team first. Work experience outside the family is often a prerequisite for being – and feeling — successful in a family business, and for maintaining a sense of personal identity. This experience is critical not only for developing competence and skill, but also for building a reputation, self-confidence, and credibility both with the family and with non-family employees. As one CEO put it: “I came in as an accountant, and I felt pretty good about that because I didn’t feel like they were having to train me to try to find a place for me.” The importance of this work experience was emphasized time and again — even by in-laws who had made it to the top of the heap but who had not worked outside the family business.

Negotiate like an agent. Given the infamously porous boundaries between the family and the business in a family-controlled enterprise, successful in-laws draw an invisible but firm line between their personal and work lives. As one top executive put it: “When you negotiate for compensation, clarify compensation, clarify benefits, clarify your role, clarify your career plan, clarify your goals, and be honest and candid about it. Don’t treat it as a family decision to buy a summer home. Act just as if you were negotiating with Oracle.” The more transparency, professionalism, and clarity that you achieve, the better placed you will be to shape your career in the family business.

Be clear about structure and policies. Several in-law executives attributed their success to the fact that they did not report to a family member. If you must do so, then be sure that the family has a strong employment policy and that it is supported by the board. The policy needs to address to whom you are responsible, what your responsibilities are, and what recourse you have if there is a family member in charge of the company who is undermining your efforts in the business. Remember: Structure is your friend!

Be smart about geography. It’s a truism that familiarity breeds contempt, but it also happens to be the source of good advice. A number of in-laws we spoke to, and their spouses, attributed their success to the fact that the in-law worked physically far away from the family center. Distance not only makes the heart grow fonder, but it allows for personal and professional growth and maturity in a way that is not always possible when one is at HQ, under the magnifying glass of the patriarch or matriarch.

Be patient. Take a hard look the make-up of the family whose business you are thinking of entering. If there is already a favorite son or daughter, there may be no room for a male or female in-law executive. “If there are other ‘real’ family members working in the business, you may get sidelined,” warned one in-law. “At least you won’t be deeply involved in the succession process.” And yet it doesn’t always turn out that the heir apparent is either good enough or smart enough or interested enough to wait around to take over the business. “I tell every employee, including in-laws, to be patient and to do the job better than anyone else could do it,” said one CEO. “You will be paid handsomely, and if this doesn’t work out, you’ll be in a position and will have the confidence to go work somewhere else.”

Find a confidante outside the family. When you work for a family business, you just can’t bring the job home with you – it’s often too sensitive for a spouse to be forced to take sides between you and his or her family of origin. “Maybe it’s because your partner has grown up thinking that her father knows everything and is the smartest guy in the world, but when you run up against that, you’re in trouble,” said one in-law CEO. “You really need a good friend that you can talk to if you hope to make it in a family business.”

If all else fails, you can always follow the practice of an in-law of one client family: Keep a signed copy of your resignation letter sitting in your desk. “Whenever it’s clear to anyone that I’m not the right guy for the job, I’ll just walk into the patriarch’s office and hand over my letter,” this executive said. Having an exit option is important, whether it is your own money, an outside business, or employable skills. The additional security gives in-laws – and their spouses — the distance they need to be able to walk away from an unhealthy situation.

The in-laws we talked to were successful and have made it to the top. They took pride in working for a family business. Once you realize that you have a lot of room as an in-law to influence the future of your career in the business, you’ll feel much better, and likely be much more effective. From that point on, it’s a whole new ballgame – both for you, and for the business.

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