Family Ties

Matt Horne and Kevin Costello are both in business in the Chicago area with their families. Along with his wife of 34 years, Kitty, Horne makes a zesty, gluten-free cocktail mix called Longbranch Bloody Mary Zinger. Costello is a vice president for the frozen foods division of Home Run Inn pizza, founded by his grandfather.

Horne enjoys working with his wife. “The two of us together are like Burns and Allen. We have a very good time,” he said.

But unlike Home Run Inn, which opens its arms to family members as employees, Horne would bar other family members were they to ask to join his business. “I have the utmost respect for the abilities of my children, but I would not put them on the payroll,” he said.

That’s because he and all seven of his brothers used to work at their father’s business, and though they manufactured ice cream flavorings, the experience left a bad taste in his mouth.

“Family and business is like oil and water,” said Horne, who left his dad’s company after five years and says there’s still bad blood between some of the brothers. “You read in the paper about how well families work together, but you’re not getting the full picture.”

Costello says that while there are challenges, they can be counterbalanced by positives – not the least of which is job security.

“You’re probably not going to fire your brother or vice versa,” he said. “You’re usually given the benefit of the doubt.”

In addition, “You usually have a financial stake or part ownership, so you’re extra driven to help the place succeed,” he said.

Thinking of going into business with family? Best to ask yourself some questions first. It could mean the difference between success and estrangement.

Are you entering the business (or bringing a relative in) out of a sense of obligation? Not pursuing your own dreams or developing your own talents leads to unhappiness and underperformance. In Horne’s case, it led to regret. “Knowing the family business was a fallback sapped my initiative” to take advantage of post-military educational opportunities, he said.

Don’t invite a family member in for “imprudent reasons,” like an inability to hold down another job, says Evanston, Ill.-based psychologist Kenneth Kaye, author of “The Dynamics of Family Business: Building Trust and Resolving Conflict.” (iUniverse Inc., 2005). “You may think you’re helping them, but it leads to conflict.”

Do you have a genuine interest in the business’s product or service? And can you stand behind its mission? “Analyze the company and how it is run based on your personal values,” Costello advised. “What would you change if you were in charge? Find out if you and your prospective new boss are in agreement.”

Are you accomplished in your own right? “It might be best to go out and do your own thing for a while. Give yourself your own career before you become absorbed in the family business,” said Costello, who earned an advanced degree in aerospace engineering before joining Home Run Inn. Otherwise, you might have trouble forging your own identity. Besides, “It’s good to get outside experience so you gain a realistic idea of what corporate life is like. It’s easier to separate family emotions from the business if you’ve had that other experience,” he said.

Can you see past family stereotypes? “When you work with family, you all have predisposed ideas from childhood,” Costello said. “You formulate opinions based on Christmas parties and Easter dinners, and these spill over into the business.” The youngest might always be seen as the “baby,” and spoiled, and the parent might be seen as a provider instead of a boss with bottom-line concerns.

What preexisting dynamics might affect the business? Sibling rivalries and other problems will tend to intensify. How will you feel if a sibling or cousin advances faster and further than you? “There are never enough leadership roles to go around,” Kaye said.

Are you suitably educated and qualified? If not, employees who are not family members will assume you got your job through nepotism. Indeed, be prepared for that perception no matter how qualified you are.

Will accountability be a problem? “I could see where there might be a tendency to be too lenient with family members,” Costello said. But on the flip side, elders might be harder on family members than other employees to stave off accusations of favoritism.

What will you do for an emotional outlet? “People who are not in a family business have a great way to let off steam – they go home and they vent about all the stuff that goes on,” Costello said. “You can’t do that in a family business. You can’t go home and vent without consequences. There’s a feedback loop.”

Can your relationships handle a failed venture? Ideally, “You still have to deal with these people if the business fails,” Kitty Horne said. The blame game can tear a family apart.

Can your relationships handle success? Kaye counseled a family whose ownership-succession and inheritance plans led to bitter litigation. For the sake of fairness, “Parents should create liquidity in the family’s assets to provide for business opportunities for sons and daughters outside of the business so they don’t have to wait to inherit,” he said.