Infosys has hired a new CEO. Salil Parekh will take over the role formally at the start of the new year. No one classifies Infosys as a family owned business. In fact, the promoters themselves talk of the company as a professional one. However, the events of the last few months which saw a game of change-the -CEO- because- the- founder promoter-wants- to has put in quite a few dents in the image of the company. There was speculation within the industry about whether a senior professional would be ready to wade into the muddy waters of Infosys as the CEO, given what had happened to the previous one.
The events at Infosys got me thinking deeper about what do professionals really look for when they join a family business. McKinsey had conducted a study a few years ago in which it had surveyed thousands of employees to find out what were the top three things they looked for before they joined a family business. Family business owners would benefit by going through the report as it puts quite a few points in perspective.
For example, contrary to common belief, money is not the key motivator for a professional to join a family business. It is one of the top five factors but certainly not the number one. I find that many of my family business owner clients are surprised when I point this out to them. After their initial surprise the next question, invariably, is "So, what do they want?" While surveys and reports by consulting firms and family business institutes around the world have thrown up a motley list of 'wants', I am listing down the ones that I believe are important. These are in no particular order.
A clear and compelling vision of the patriarch: The long-term vision of the family business is important to the senior professionals. They understand that family businesses are about creating a legacy. Thus, if the vision is one that resonates with them it makes it easier for them to align themselves with the business. Family business owners would benefit by discussing their vision for the business in detail with potential hires. They need to realise that it is this vision that makes them special as they stand right in the center spot of the business. Harvard Business Review calls them the sun in the solar system! The patriarchs need to be aware of the fact that outsiders see them as the personification of the corporate identity and values. They also need to realise that senior professionals join their business because of them!
Clarity of roles and responsibilities: Professionals are used to working in an environment where the roles are well defined. In non-family organisations it is this role-definition that defines hierarchy and the position of the professional within the corporate structure. In a family business the position of a professional is sometimes defined by their proximity to the Family. To retain senior talent, and to optimize productivity, family business owners need to define clear roles for their employees. They need to be aware that without clarity about their roles, the senior employees will be likely to waste time and energy in negotiating roles for themselves. This would eat into the time that could be spent in productive work. I find family business owners often telling their senior management team to get the work done any which way. This is about the worst role descriptions! Professionals need to know what they are expected to do (not how to do!) and they also need to know what will they be accountable for at the end of the appraisal period. In the absence of this professionals are likely to get into politicking and protecting their own perceived-turf.
Open and transparent culture: Transparency is less about having glass cabins or an open office structure; it is more about doing business with open cards on the table. In any organisation information is shared on a 'need-to-know' basis. In a family business the need-to-know gets confused with know-the-family. People who are family loyalists or close to any member of the family sometimes have access to more information than senior professionals. Family business owners need to be aware of the repercussions of using information as a power-tool. Professionals work best when there is open communication and honesty in the work place.
You may wonder why money has not figured in the top three. Money is important, of course. No one will work without money! Money is required to send the children to school, to pay the EMIs for houses, cars and others, for maintaining a lifestyle. Thus, every professional needs money that can take care of all this and then leave some for saving for the future. Let me put it this way - it is too little money which is a problem. But studies by well-known HR Firms have shown again and again that once each individual's personal threshold is crossed, money ceases to be the reason for employee satisfaction. Thus, if a professional wants to join your business only for the salary, my advice is look for another one.
Coming back to Infosys. The industry is waiting eagerly to see if Salil Parekh uses the Corporate Jet for his work-related travel or flies economy in commercial airlines! This was one of the reasons quoted by the promoters to justify the sacking of their previous CEO.