Our guest blog post comes from Steve Brilling, Executive Director of the Entrepreneurship Center and Family Business Roundtable at Seattle University’s Albers School of Business and Economics. 

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It all comes down to communication—clear, concise, honest communication, with a dash of compassion thrown in. Whether it is in a legal document or simply a written memo, it is a business imperative that every family member knows the ground rules beforehand. It will save you much heartache in the future. While a verbal understanding is better than nothing, it opens the door to bad memory and misinterpretation.

I’ve personally lived through it. I allowed my daughter to be hired into our company with some trepidation but established the ground rules with both her and her boss – if Anne didn’t perform, that was between her and her supervisor and she should be treated like any other employee. Fortunately for all of us, it worked out but she did leave about a year later, after falling in love with one of our top salespeople—that’s another story for another blog.

I tell the above story to remind ourselves that establishing ground rules is important for not only the family member but also the non-family employees. They often feel very conflicted about their role in the family drama. Do they really have full authority to treat the family member as “just another employee?” Be honest with yourself—how do you really feel when your son or daughter is criticized by a non-family member? I think I have pretty good emotional intelligence but this type of situation can test your resolve.