Legacy and Loyalty : Recruitment to Ensure Family Business Sustainability. Legacy is what is passed on from predecessors to the next generation. In the context of a family business, what stands out from a legacy are the values, culture, vision, and mission that are passed down from one generation to another. It is this legacy that distinguishes one family business from another, even though both produce similar products. So legacies are not only in the form of physical assets such as factories, offices, machines, money, inventory, and so on.
For example, there is a family business that produces high-quality local food. Thanks to the dedication and hard work of the family and employees, the company has successfully built its reputation. The task of the next generation is to ensure that the value of locality and quality is maintained. Business strategies may change. However, these values must not stop.
Legacy and Loyalty : Recruitment to Ensure Family Business Sustainability
A more tangible example is Miele. Miele is a German family business. It is a manufacturer of high-end domestic appliances and commercial equipment, headquartered in Gütersloh, Ostwestfalen-Lippe. The company was founded in 1899 by Carl Miele and Reinhard Zinkann, and has always been a family-owned and family-run company. The Miele family holds 51.1% and the Zinkann family owns 48.9% of the company. The company is loyal to its core business. In addition, the company maintains two of its core values: loyalty to society and a refusal to sacrifice its ethos for short-term profits or following trends.
What about loyalty? Back in the family business context, loyalty is loyalty to both the company and the family. This kind of loyalty makes the emotional bond within the family business stronger.
To maintain legacy and loyalty, the right recruitment is needed. Focusing solely on standard technical and nontechnical skills is not enough. There is a family factor there. What does proper recruitment look like?
Recruitment should always be based on family values. For example, if creativity and collaboration are prominent values, one needs to look for people with a track record of fulfilling both values. Another obvious example is the Tata Group. This Indian conglomerate takes social responsibility and ethical behavior very seriously as part of its legacy. Many employees have worked for Tata for decades. They are inspired by Tata’s values. For recruitment, Tata places loyalty as a key assessment, with many positions filled by referrals and individuals who demonstrate a deep commitment to the company’s mission and legacy.
Next, engaging the younger generation. There are two reasons for this. First, they are the ones who will carry on the family business. It is in their interest for the family business to survive and prosper. Second, they usually have a broader and fresher view of current and future business trends. They can help to find candidates that fit the needs of the future.
Given the diverse skills required in the future, family businesses should not make too much of a distinction between family and non-family candidates. If recruiting family members, the competencies should be relevant. If recruiting non-family professionals, they must be able to adapt to the family’s values and culture.
An example is Cargill. Cargill is an American conglomerate. Currently, the company, headquartered in Minnetonka, Minnesota, is led by the fifth generation. Some of Cargill’s main businesses are the trading, buying and distribution of wheat and other agricultural commodities, such as palm oil; energy, steel and transportation trading; livestock raising and feed production; and the production of food ingredients such as starch and glucose syrup, vegetable oils and fats for applications in ultra-processed foods and industrial uses. Cargill also has a large financial services arm, which manages financial risks in commodity markets for the company.
Cargill values family legacies and hires family members only if they meet certain educational and professional standards. Family members must have external experience before joining the company to bring fresh ideas while preserving legacy of excellence. Family members are groomed for leadership roles but have to compete with external candidates for top positions. Thus, the company applies the principles of meritocracy while ensuring loyalty to the family’s long-term vision.
New employees must understand and respect the family legacy. For this, effective onboarding is key. New employees must recognize and understand the family history, company history, family business values and culture, and where the family business is headed.
Commitment to legacy and loyalty should be part of the performance evaluation of family business employees. In addition, performance evaluations should be conducted fairly, regardless of whether someone is a family member or not.
However, recruiting successfully in a family business is not without its challenges. For example, intergenerational differences. Many senior generations prefer to maintain the status quo. Meanwhile, the younger generation advocates for change. If not anticipated, this can lead to disputes.
There are family businesses that prioritize family members in hiring. But do they always have the skills needed? The answer is clearly no. Faced with this condition, family businesses certainly need to recruit external people.
Ideally, family businesses can balance the desire to maintain tradition with innovation. However, this is sometimes not as easy as one might think. Focusing too much on tradition can keep a family business from moving forward. However, a family business can lose its identity if tradition is abandoned completely. In fact, there are many good traditions that should be preserved.
Legacy and Loyalty : Recruitment to Ensure Family Business Sustainability
Category: Family Business
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