Observations
Old Retainers are a common cause of conflict in family business. Typically, Mum or Dad has worked with “old Phyllis / Sam” since the early days and over the years has (allegedly) promised: “we’ll always look after you”, in return for their unconditional loyalty.
Conflicts arise when new business leaders are pressured to honour promises that:
- Are not supported by any credible form of evidence.
- Go against their principles of good business management (ie: there is no appropriate role for the employee in the modern business).
- Risk leaving a former leader’s spy safely embedded in the organisation and,
- Provides a continuing reminder of the past when they’re trying to focus the business on the future.
Some Old Retainers become very close friends of the old proprietors as card, travel, drinking, tennis, golf, or fishing buddies. Their relationships range from entirely genuine, to cynically self-serving, and all points between. If worthy of note at all, it will almost certainly be a strong relationship with one or more senior family members.
Problems:
- Special arrangements being requested by the Old Retainers, or by former leaders of the business, didn’t form any part of the succession planning process and,
- The Old Retainer in question doesn’t add much value to business operations anymore (if they ever did) and,
- They’re suspected of spying for Mum or Dad on their successors and,
- They will probably undermine critical business modernisation efforts with frequent gratuitous comments like: “that’s not the way your father/mother would have done it”.
Solution
Facts. Work out what, if any, promises were actually made.
Obligation. If there was a promise, does it constitute an obligation that has any right to expect to be honoured and, if so, how should it be honoured, without causing unacceptable collateral damage?
Commitment. How strong is the former leader’s commitment to deal with the situation, and how do they want to deal with it? Consider the broader context of current business circumstances, as well as personal sense of obligation.
Value to Business. Compare the current HR needs of the business with the Old Retainer’s competencies, ability, and willingness to contribute.
Consider Options: Is there a practical way to reconcile the Old Retainer’s needs, with the former leader’s wishes, and current business (real) needs? Or … is it easier to accommodate the Old Retainer in a role where they can’t do any harm, to avoid conflict?
Share the load (business). Engage the executive management team in discussions, findings, options, and making provisional decisions.
Share the load (family). Discuss executive team findings, options, and provisional decisions with relevant family members, if they weren’t included in the business discussions. Note that decisions on this subject can have effects on family relations way outside business environs.
Broader implications. What messages about leadership and culture will whatever decision is made send to other staff?
Negotiate acceptance of outcome:
- Negotiate a new employment arrangement with the Old Retainer to eliminate their old (protected) status and convert them into a regular staff member, subject to standard HR policies or,
- (Within reason) negotiate an acceptable exit plan that reconciles standard HR procedures with appropriate moral recognition of whatever promises were found to have been made by the former business leader.
- Ensure approval of the final solution by Dad or Mum by referring to business needs and ground rules. Avoid negotiating on emotional terms that are at odds with your, and/or the business, values and policies.