How to Fire a Family Member in a Family Business

How to fire a family member in a family business

Doesn’t this sound like an absolute nightmare?

The Integrator of a second-generation family business called me because she was dealing with two major people issues.

Not only were they people issues — they were people issues with her cousins, the only other family members in the business. She was worried about her business, her customers, and her family.

Here’s what’s going on:

Her well-intentioned cousin is struggling to run operations. He has industry experience, is a core values fit, and wants the role. Sadly, he just doesn’t get the role of leading people who have more experience than he has and doesn’t have the personality or emotional capacity to truly lead people. When it comes to GWC™ (get it, want it, have the capacity for it), he doesn’t get it, wants the role, and doesn’t have the capacity.

Her other cousin is serving as the sales and marketing leader. He gets the role, wants the role, and has the capacity to do it. He has increased sales by 35% and now operations aren’t keeping up. This is causing issues with customers and extreme frustration for the brother who GWCs his role.

The Integrator didn’t want to fire her cousin because one of the biggest goals their grandfather had was to continue to have a strong family and a great business. Her grandfather often talked about having a business where the next generation works together. She is afraid that if she lets her cousin go who doesn’t get his role, it will hurt the family.

What a Mess!

She felt like no matter what she did someone would be hurt and mad at her. If she let her cousin stay in his role customers would be frustrated and might leave. If she let her cousin stay, she feared she would lose his brother who was doing amazing work. If she fired her cousin, she knew her grandfather and uncle would be really mad at her. In the 70 years of running the business, a family member had never been fired. If she let her cousin stay, she feared he and his brother would lose their close relationship. This felt like a no-win situation and an issue that could not be solved.

Impossible. Scary. Frustrating… But Not Uncommon

The scenario she laid out is very common in family businesses. When you ignore performance issues, no one feels good. The business suffers and unnecessary conflict grows. This hurts the business and the family. While it might feel easier to let people who are the wrong people in the wrong seat stay, it’s destructive, makes it hard to accomplish your vision, makes traction nearly impossible, and hurts the health of your team.

Alternatively, when you address performance issues, it is uncomfortable for a short time. But the business moves forward, issues are addressed, and conflict is dealt with. You stick to your vision, you gain Traction®, and you maintain your health as a team and family.

Here is what she decided to do…

Despite the fear of anger from her family, she used the 3 Strike Rule with her cousin who did not GWC his role:

Strike 1: She had a performance conversation with the family member using the People Analyzer™. She made it clear that she was speaking as the Integrator, not as a cousin. She pointed out that the family member is all pluses on the core values, but is a minus on “get it,” a plus on “want it,” and a minus on “capacity.” She had three examples prepared regarding their performance for the conversation and gave them 30 days to turn it around. She consistently put missed Scorecard numbers and unfinished to-dos on the Issues List.

Strike 2: Thirty days later, when his performance hadn’t improved, she met with her cousin again. She came prepared with three examples of what hadn’t changed. At that conversation, the family member shared that he didn’t think he was going to be able to improve, but was afraid to let the family down and leave the job. They had an open and honest conversation and decided to create a clear message for the team and a plan for him to step down to a role he would get and have the capacity to do.

This family business was lucky because they didn’t have to get to the third strike where he would have likely been fired.

While it might not always go that easily for every family business, I have seen it go like this many times.

Open and honest performance conversations are key to maintaining a great business and great family relationships. Then can be almost unbearably hard to do and they are worth it.

Follow the 3 Strike Rule with all of your employees, including family members, and you’ll have a stronger business and family.

The 3 Strike Process

Here are the steps to follow for the 3 Strike Rule:

  1. Discuss the issues and your expectations (with three examples for each) and give them 30 days to correct the problem
  2. Meet again in 30 days. If they haven’t improved, discuss their performance (with three examples) and give them another 30 days to improve.
  3. Meet again in 30 days. If they still haven’t improved, they are not going to and must go.

No one, especially family members, wants to perform badly and have no one talk about it. It is like having something in your teeth for hours at a party only to find out that no one told you. It is embarrassing and kills trust. Getting these conversations out in the open is hard, but also kind and productive. Invest in your family business by following this process with all employees, especially family members.




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