Volume XXIII, Number 44 (Issue 1153) November 3, 2025
To Nepo or Not to Nepo? – Part II
Picking up where we left off…
Due to the length and nature of my career I have been blessed to advise countless family-owned and operated businesses. For that matter, I too have hired family and friends. Sometimes it has worked well. Really well. Sometimes it has proven to be a challenge. These days, my son, Jake, is managing partner of JKHCo so I work for him rather than the other way around. And, since succession planning is one of the mainstays of our
practice, it only makes sense that Jake became my succession plan.
Through all of this what I have learned is that hiring family and friends works best when the family/friend has an aptitude for the work/role, is a self-starter with a solid work ethic, has an interest in, dare I say passion for the mission, they understand they will be held to the highest possible standards of performance (everyone is watching them and how they are being managed), and they know their continued employment is not guaranteed. The last items in this list are crucial since if family and friends are seen as exempt from the rules, non-family member employees will grow to resent anything that looks like abuse of position and favoritism. What goes hand-in-hand with that is the non-family staff also lose respect for leadership/ownership when family runs amuck.
In short, employing relatives and friends does not work well when the individual is a poor fit for the job, they are not held accountable for performance, they expect to be promoted without doing the work, and the
owner(s)/management lack the courage to discipline or terminate them when their performance does not measure up. I understand, even empathize with the desire to take care of family by putting them to work. However, the patriarch/matriarch who coddles family and friends, who ignores behavior and performance that would never be tolerated in a non-related employee is failing all involved.
A few other things I have learned about the possible perils of nepotism are:
- The elder family member must remember that even a dedicated, well-qualified next generation family member/friend will not make decisions or do things in the same way as those in the preceding generation. Factor in even a small sense of entitlement and is it any wonder fewer than two in ten family owned businesses last beyond the third generation?
- Family members who are not employed in the business can resent their siblings for being on the payroll as well as their parents for what they perceive as favoring some siblings at the expense of others. In more than one instance we have encountered family members who are not employees of the business expecting to be compensated as if they were.
- A family-dominated board of directors can be fraught with dysfunction.
- Nepotism tends to put undue pressure on any non-family member who is tasked with training and managing that family friend/relative. The problem gets magnified if that individual is also expected to discipline, let alone terminate the problem child who is a poor fit.
- Some who accept a job in the family business do so out of a sense of obligation. Should their gifts, dreams and passions pull them in a different direction, any sense of sacrifice they feel can result in a string of “what ifs,” resentment, and regrets.
I could cite other examples and other insights from the world of workplace nepotism, but to respect your time I will stop here other than to say employing family and friends can carry numerous risks capable of overshadowing the pluses. In the same way I could list multiple success stories from the same realm. If it happens you have an example, good or bad, you would care to share, I am listenin
PS. My thanks to friend and long-time reader, Bob J., for suggesting this topic.
Soli Deo Gloria
“Children are a heritage from the Lord, offspring a reward from him.” Psalm 127:3
J. Keith Hughey
Mobile: (210)260-0955
E-mail: keith@jkeithhughey.com
Website: www.jkeithhughey.com
Transforming Potential into Unmatched Performance
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