Your Company is Not a Family

Reid, Chris, and I wrote a post on HBR.org about the myth of company as family, and explained why in The Alliance we liken companies to pro sports teams. Here’s how it starts:

When CEOs describe their company as being “like family,” we think they mean well. They’re searching for a model that represents the kind of relationships they want to have with their employees—a lifetime relationship with a sense of belonging. But using the term family makes it easy for misunderstandings to arise.

In a real family, parents can’t fire their children. Try to imagine disowning your child for poor performance: “We’re sorry Susie, but your mom and I have decided you’re just not a good fit. Your table-setting effort has been deteriorating for the past 6 months, and your obsession with ponies just isn’t adding any value. We’re going to have to let you go. But don’t take it the wrong way; it’s just family.”

Unthinkable, right? But that’s essentially what happens when a CEO describes the company as a family, then institutes layoffs. Regardless of what the law says about at-will employment, those employees will feel hurt and betrayed—with real justification.

Read the rest at HBR.org.

4 Responses to Your Company is Not a Family

  1. nigel says:

    totally agree, having built an earlier enterprise based on the “family atmosphere” it was doomed for failure; not because its a bad product or service, but because people are people and their job is to suit themselves. this is not a vindictive action, this is just like children do; they aren’t being selfish, they are being totally normal. they know you’ll flex to assist; to accommodate, and they know, although perhaps not in a conscious way, that you are emotionally attached to the “family” and will do anything to maintain the status quo.
    Believe in the family too much and your risk is huge, and very difficult to see.
    The things, the truths, we learn about ourselves in business is amazing

  2. z6 says:

    Interesting. I would agree that focusing on growth vs cost control during the early stages of a business is ideal, however, there will be a point when that shifts

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