Nasir and Matt welcome author Meg Hirshberg to discuss her recent article about firing your spouse. They address, "I run a business that hinges on customer service. My son is home from college and can't find a job. Is it worth me taking the risk of hiring him knowing he probably won't be good for the business?"
NASIR: Welcome to Legally Sound Smart Business.
This is Nasir Pasha.
MATT: And this is Matt Staub.
NASIR: And this is where we cover business in the news and also put on our legal twist and also answer some of your business legal questions that you, the listener, sends in to firstname.lastname@example.org. Very good.
MATT: Good intro, too.
NASIR: I’m talking about myself – my intro.
MATT: Yeah, good intro today. Good job.
We are going to cover a nice little topic about families and businesses and spouses. I was thinking about this. I probably have at least I can think of four or five different clients that literally it’s a husband and wife operation as far as ownership goes. I always wondered how the dynamics filled that line.
Today, we have a guest, her name is Meg Cadoux Hirshberg. She is the author of For Better or For Work and we found her. She actually got an article picked up on Inc.com which I thought was great. It’s called “I Love You but You’re Fired.” I thought it was a funny title. Well, of course, the link is on our show notes.
Meg, how are you doing?
MEG: Fine, thanks for having me today!
Matt, I’ve been thinking about this, we talk about how partnerships are like a marriage but what happens when the actual partnership is a husband and wife? That can really change the dynamics.
MATT: You’re exactly right. A partnership, you have to view it as a marriage. If your partner in business is also your partner in your personal life, I could see lots of issues of where do you draw the line if you spend all day together at work. Do you go home and talk about work all day? There’s just a lot of things that go into that. So, I do really enjoy this article. It has a couple of stories and, from what I understand, Meg, you once worked with your spouse as well, correct?
MEG: Yes, I did. My husband, Gary, founded Stonyfield Yogurt almost thirty years ago. When I met him and we moved up, we decided to get married and I moved up to the farm, we were actually on a farm in New Hampshire at that time – no longer – but when I moved up to the farm, I started working in the business right away and we worked together for a couple of years at which point we decided this was not the best thing for our relationship. So, I backed away from the business and haven’t worked for it since.
NASIR: Very good. I think one of the biggest issues – despite whether it’s a marriage or not – finding who the decision-maker is in a business is sometimes difficult. We have a lot of people that come up with their partners, 50-50 partners, but I always tell them, “Look, even though you make decisions together, there has to be one person that breaks the tie, so to speak.” It reminds me, of course, we have to bring in the show The Office, when Jim and Michael were co-managers of the office and just how that just did not work and it doesn’t work in any other business. There’s always at least one person making those decisions. Would you find the same, Meg?
MEG: Right. Well, that brings up one of the key issues that kind of rise when couples work together which is that it’s hard to transition from a situation at work in which usually one person is in-charge, i.e. the entrepreneur, often the spouse. Most businesses that are run by couples are not started by the couple together. Most are started by one person, the entrepreneur, who has a dream, has a vision, and then, “I want to help out.” That’s usually the way couples wind up working together. The relationship in the business setting is not equal. Usually, there is one person in-charge. Transitioning from that back home to a relationship in which theoretically is an equal partnership can be very difficult so that does bring up one of the challenges.
Another challenge, of course, is compartmentalizing which is something that I was unable to do, actually, which is how you leave the work stuff at work and I don’t only mean work conversations which can trail you home, for sure. Making those barriers as you alluded to can be very difficult but also conflicts within the workplace. Disagreements within the workplace, how do you leave them there and not have them contaminate your home life, your personal life?
Even with all these caveats though, I’d say that I have interviewed because I’ve interviewed hundreds of entrepreneurs and spouses for my book and for my writing for Inc Magazine and I’ve interviewed many couples who work together because they wouldn’t have it any other way. They couldn’t imagine building their life dream with anyone but their partner so it can work beautifully in many circumstances.
But, when it crashes and burns, you have tobe prepared that that’s going to happen, too – that it’s just not going to work out. But to not let that – the fact that you can’t work together – make you feel like, “Well, gee, maybe this isn’t the right person for me. Maybe there’s something wrong with the relationship.” These are really two different kinds of relationship – a work relationship and an intimate one.
MATT: That’s one of the things I thought would be really difficult. It doesn’t seem like there would really be a time to evaluate how the other spouses. You know, maybe if one spouse who is kind of the decision-maker and the other one needs to evaluate how the other spouse is doing it. If you’re spending all your time together and you also go home to a family every day, it just seems like that’d be really difficult to do.
My question to you, Meg, what would be your number one tip for spouses that want to go into business together – assuming that your step number one would be you think that they could still do it?
MEG: Well, it would be, first of all, to sit down together frequently – maybe every six months – I mean, not let it go longer than that – for the couple to sit down together and check in personally, how is this going for us as a couple? Is this working? Really checking in about that and not just kind of letting it slide. I think that’s very important to establish those regular check-ins.
Within the work environment, ideally, the spouse should not report directly to their mate. That can set up all kinds of tensions. But, even if that is the case, the spouse should have a really defined role at work and be considered a co-equal partner, even if he or she is stocking shelves while the entrepreneur is running the shop.
Nevertheless, even though they technically have very great differences in terms of hierarchy, in terms of the community and how they present themselves to friends and family, it should be, “This is our business” – not “this is my husband’s business and I’m helping out” because that, again, establishes a not healthy dynamic.
NASIR: Yeah, I think that’s some great advice. The things that you’re saying reminds me of some tidbits that I think any partnership in business can take. The six-month rechecks and making sure that there’s some respect as far as who’s reporting to who and the boundaries are drawn, even when you have a 50-50 ownership partnership.
I think this is my last question here. A lot of times, in this case, we would often put in writing. Even though you guys are co-owners – whether there’s two, three, or four – we of course put the roles in writing. Maybe one is a president, one is a secretary, or vice-president, and what those capacities are. Do you think it’s helpful or maybe it’s even more of a barrier to actually put this kind of stuff in writing even on a legal enforceable basis or should it be a little bit more informal than that?
MEG: I don’t know if needs to be legal enforceable but, you know, what does it say on people’s business cards? What are their roles? Because, a lot of the time, most of the time, what happens typically is that, as I mentioned, the entrepreneur will start the business, the spouse will kind of slide in because they want to help out which is what happened in our case. I was not particularly interested in the work I was doing in the company or was I trained for it nor was I well-suited for it, but I was available, I was capable, and I was cheap which is often why spouses wind up helping out. They want to help out the family enterprise and you really have to specify, “What am I doing here? What is my role here? Am I suited for it? Is this a good job for me? Should this be something that I’m filling in temporarily until you can hire someone who’s better trained or more interested in doing this job?” That starts with specifying what the spouse’s role is.
That’s step number one and it’s not just Girl Friday or whatever it is that they’re just kind of filling in. But what is my job here? And then, figuring out, “Is that good? Do I want to be doing this over the long term? Because maybe I don’t. Maybe this isn’t a good fit for me.” I’d say that would be more the path that I would take rather than necessarily writing everything down. I think it could be a discussion but it should be an honest discussion.
MATT: We’ve got a question that we do every episode as well so we’re hoping to keep you on for this. It’s actually another family-related question so we’ll get your input on this as well but here it is.
“I wrote a business that hinges on customer service. My son is home from college and can’t find a job. Is it worth me taking the risk of hiring him knowing he probably won’t be good for the business?” and this is coming from someone in New York City.
MEG: This is the toughest challenge, especially these days with a very difficult job market. A lot of people are faced with this who own businesses – what to do with their adult children who can’t find work.
You know, this is a case-specific scenario. For example, if the parent hires a young man thinking in advance, “This is not going to work out,” then you know it’s not going to work out and it’s just going to introduce personal tensions into the relationship and exacerbate problems that are probably already there. You don’t want to get into that – neither the parent nor the child.
That said, if it’s possible that the child may grow into it, may learn to prove themselves, if there is an openness, this could work out. My inclination would be to give the child the benefit of the doubt because, if they want to work in the company, if there’s possibility that it couldn’t work out, give them a shot, even if only for a limited period where I’m going to hire you for the next six months and let’s see how it goes. Let’s see if the job is suitable for you, if we think you’re doing a job. Set a time when you’re going to evaluate it so it doesn’t kind of drag on and on as tension gets exacerbated.
I would try to give the benefit of the doubt to the kid unless it’s clear, unless everyone is going into this saying, “This probably isn’t going to work,” because, when you go into it that way, it’s almost certainly not going to work.
NASIR: Yeah, I think that’s a good point. I think the person’s question in itself kind of gives away their attitude on the subject.
NASIR: It reminds me, too, how I think in the past, it was much more common, this is a classic scenario, the family-run business where the parents are trying to get their children involved and so forth. Maybe we’ve gone away from that a little bit but I think we’re coming back to that in a certain sense because there’s a lot of college students that have graduated. The millennial generation that we hear moving back home. If their parents and their family have family businesses, they’re probably going to be there to help out and all these dynamics are now coming back into play and makes it interesting.
From my perspective, I’m not even sure how to deal with this legally because, on our legal minds, yeah, we’ll create a contract with your son, but those terms aren’t going to govern those little hidden things of how you deal with each other to make it work. That’s impossible for us to deal with.
MEG: You know, family business is just about the most dicey thing out there because it is so easy to let the family try to clog the business. I mean, all these old issues and resentments and things can really surface and make life difficult for everyone.
When family businesses fail, they fail spectacularly. On the other hand, when they succeed, it’s a fantastic thing because they’ve created this thing and what better than to pass that legacy on to your child? Those are the two things you care about most – your family and your business – what you’ve created, your other baby.
Certainly, if anyone out there is involved in a family business, it’s really important to have a team of advisors and how do you relate not just to your child who’s working for you in terms of inheritance and things like that? There’s so many issues that come up in that situation. I would strongly recommend that.
MATT: Well, thanks so much, Meg, for coming on the show today and giving all of your insight. You’ve said a bunch of great things and I think our audience will really appreciate that.
NASIR: Tell us a little bit about your book, For Better or for Work, as we close out here.
MEG: Yeah, I’ve been writing for Inc Magazine for six years now about the impact of businesses on families and vice versa, actually – talking about the family business here. And so, I eventually realized that, after getting a lot of requests, “You should really write a book,” I realized that a book would be very useful for people as a guide to issues that will almost inevitably arise if you’re in business for any duration.
I wrote my book, For Better or for Work: A Survival Guide for Entrepreneurs and their Families. Hopefully, the book will help couple the families understand and cope with some of these issues that are just so classic to entrepreneurial families.
NASIR: Very good. Well, thanks again, Meg! Thank you for joining us and also to our audience, thank you for joining us today. I hope you enjoyed the episode.
MEG: Thanks for having me.
MATT: Keep it sound and keep it smart.