Volume XXIII, Number 43 (Issue 1152) October 27, 2025
To Nepo or Not to Nepo? – Part I
That is the question – and then some. As we have observed in the case of royal families, nepotism comes with the territory (aka title, primogeniture, throne, etc.). Sometimes the heir is worthy, sometimes not. The same is true in the business world. Twenty years ago, I had a business partner who specialized in working with family-owned and operated businesses. One of his favorite characterizations of family-owned businesses is they have all of the normal business problems with any family dysfunctionality added to the mix. My experience says that is true.
My first encounter with the challenge of employing a relative or close friend was when I was in college. To help pay the bills I worked – sometimes full-time, sometimes part-time. One of those stops was at a combination service station and garage. It was an owner-operated business and one of the mechanics and the assistant manager was the owner’s son-in-law. Whether that decision was meant to provide his daughter and her husband with a reliable income or there was a longer-term vision where the son-in-law would take over the business one day was never made clear to me, nor was it my business. What I do know is when the daughter and son-in-law split up, the son-in-law found himself out of a job while I received a battlefield promotion to assistant manager.
The next encounter was early in my banking career where the scions of two prominent shareholders were hired. One was brought in as the assistant to the Chairman and CEO; the other joined the planning group where I worked. Both stayed with the organization for about three years before moving on, and I should add that their respective departures were of their choice. It also seems worth noting that during their time with the bank both were teased by their colleagues about being either Chairman of the Board or CEO in training. Fortunately, both were hardworking and good natured, so they took the jokes made at their expense in stride. Turns out both were incredibly successful with one being elected governor of a large state and the other going on to run his family’s oil and timber empire.
Another time I found myself on a consulting assignment with a remarkably successful oilfield service company. The company’s founder and owner started the business in his garage but eventually turned it into a highly profitable organization thanks in no small part to his hard work and inventiveness. In fact, his ability to solve complex problems resulted in multiple patents including at least two that readily translated into non-oilfield-related applications. Eventually, the founder’s daughter joined the business in an upper-level position that she was neither technically nor professionally qualified to handle. Making matters worse, she seemed to have forgotten how hard her dad worked to build the business. By the time she made her presence felt the firm had two hundred plus employees and her dad, having paid his dues, had shifted into managing from afar. That is to say, he was either at the ranch or traveling as he followed his Alma Mater’s sports teams all over the country. Sadly, when the daughter joined the business, she chose to mimic her dad’s current model. Because she spent more time away from the business than working in it and on it, staff morale plummeted. Thus, lacking a viable family member to take the reins and lead the business forward, the company business was soon sold to a larger organization.
To be continued…
Soli Deo Gloria
“I am reminded of your sincere faith, which first lived in your grandmother Lois and in your mother Eunice and, I am persuaded, now lives in you also.” 2 Timothy 1:5
J. Keith Hughey
Mobile: (210) 260-0955
E-mail: keith@jkeithhughey.com
Website: www.jkeithhughey.com
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