How to avoid culture clash
Landing right staff is family firms’ biggest challenge
In its ongoing effort to find the right employees, Empire Communities hired someone from a public U.S. company as a manager at its busy, family-run residential building enterprise.
He was highly qualified, but there were problems. “You’re hiring someone who fits the culture of the business,” said Andrew Guizzetti, co-founder and chief financial officer of the Vaughan, Ont.based residential builder.
“If the culture of the business is one of execution and one of candour and if someone comes from, in our case a large U.S. public company, and is used to less candour and more bureaucracy, that’s where cultures clash,” he said.
The manager didn’t last. But Empire Communities, founded in 1993 by a group of family friends, continues to grow from a few people to 200 employees now. The company is structured, Mr. Guizzetti said, but it’s more familial.
Many family businesses say that landing the right talent is their biggest challenge. In Price water house Cooper’s Global Family Business Sur- vey, 69% cited staff recruitment as their top challenge, up from 56% in 2010.
Their concerns included: attracting the right talent (58%) and retaining key staff (46%).
“Talent is a concern across all industries and sectors, but it becomes a bigger challenge for family businesses because everyone is competing for the same talent. Typically, family businesses are not able or willing to compete with corporate players when it comes to compensation,” Sharon Duguid, director of the Centre for Entrepreneurs and Family Enterprise at PwC, said in the report.
“As well, their conservative growth strategies, while practical, may not hold as much appeal for younger talent who want the opportunity to move up the ranks and add value quickly.”
She said businesses should sell their advantages, such as their loyalty to their staff.
“There’s a family atmosphere and I think people are attracted to that,” Mr. Guizzetti said about Empire Communities. “I can’t speak for all of [our 200 associates], but for most of them, they feel a real sense of loyalty and connection. Many of them have been with us for the past 20 years. They wear the com- pany on their sleeves; there’s a real sense of pride and camaraderie.”
Mr. Guizzetti’s late uncle and Paul Golini started a land development venture in 1986. Six years later, Mr. Guizzetti, his brother, Daniel, and Paul Golini Jr. decided they wanted to develop land and construct buildings for homeowners. Empire Communities has built 5,100 homes and 3,200 condo units.
“The first three employees were Dan, myself and Paul. Now we’re 200. Part of it has been a learning curve for us in terms of adapting and sometimes letting go,” he said. “Letting go is the biggest challenge, but it needs to happen for a company to grow,” he adds.
Almost all Canadian family businesses i n the PwC survey (99%) have family members employed as senior executives. “This is all part of the psychology of entrepreneurs that defines family businesses. Often, the owner/ manager and the team at the top are accustomed to having all the control. It’s difficult for them to relinquish any part of it,” Ms. Duguid said.
“This may work for a time, but then they find themselves suddenly too big, without the right corporate structure, systems or people in place to manage effectively and steward the company to further growth.”
As Baby Boomers prepare to leave the workforce, the need for leaders to replace them is growing. Fifty-one per cent of family businesses in Canada plan to pass the business down to the next generation and 14% will pass down the ownership by employing non-family professional management, the report revealed.
“It’s our role to identify who are leaders and who to mentor. Part of talent development is mentoring,” Mr. Guizzetti said.
Dan Curry joined Toronto’s Dominion Bond Rating Service in 2008 during the hysteria surrounding the economic collapse. Now president of DBRS, he was then eager for the challenge and wanted to work with Walter Schroeder, who founded the company in 1976. “I just thought it was an interesting opportunity to work with somebody like Walter. You don’t really get many opportunities to work with someone who started a business from nothing and built it into something that was this significant,” he said.