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For a small startup, recruiting talent is difficult. Given the company's current conditions, without a sturdy parasol tree, how can you attract a golden phoenix? Moreover, at this stage, management is not standardized, rules and regulations are incomplete, and there are many loopholes. For the boss, employee loyalty may be more important than ability. Is there a type of employee who doesn't care about salary and benefits, works tirelessly, and is loyal and reliable? After much thought, it seems only one's own parents, wife, aunt, or uncle fit the bill. Thus, many small companies are family-run, and it's common to have relatives and friends working in them. For a fledgling company, this is inevitable.
Managing relatives is not something just anyone can do well. On this issue, I have only lessons, not experience. Fortunately, my wife's job has always been good—she works for a Fortune 500 company—and she has no interest in my small business. When the company was first established, based on various situations I had observed, I decided to avoid hiring relatives and friends as much as possible. Later, when the company reached a certain scale, an elder from out of town called, saying that her son (my cousin) had graduated a year ago and was working as a salesperson at a small company in our industry locally, with a modest income. She hoped he could come to Beijing for development. My relative's family is relatively poor, and one of the children cannot work due to special circumstances. I had met this cousin before; he was about eighteen or nineteen, quite smart. At the time, I thought the company was short-staffed, and since we needed people anyway, how could a relative or two affect the company's development? So I readily agreed.
When my cousin first arrived in Beijing, he lived and ate at my parents' house. The lifestyle differences between young and old caused my parents to complain to me frequently. After a while, the company rented a dormitory for employees who lived far away, and I arranged for my cousin to move there, which solved the problem. My cousin was very clever and good at socializing. Within a few months, he fully adapted to the company environment and performed well in his department, often ranking among the top in bonuses and commissions. Later, I noticed that he often boasted about his relationship with the boss, ordered colleagues around, and frequently clashed with department managers and supervisors. Other employees were very dissatisfied, but no one dared to intervene due to his special status. I talked to him several times, and he always promised to change, but with little effect. A year passed, and my cousin had become adept in the industry. Then he approached me, saying he had several classmates back home who were smart and reliable, and he wanted to bring them to develop together in the company. I thought it was a good idea, so I agreed to take them all in. That's when the trouble began.
My cousin and his friends lived and ate together, speaking only their hometown dialect, which no one else in the company could understand. Although they were in different departments, department heads noticed that they were colluding to earn illicit money. My cousin was very clever; he often spread rumors that there were conflicts among management, and that he belonged to my faction (since I was the boss), warning his direct supervisor not to pick the wrong side, or there would be endless trouble. Many employees were intimidated by him, and it took a long time for the issue to reach me. The company's policy on such matters was: first offense, a fine and warning; second offense, dismissal. I had a serious talk with my cousin, and he swore he would never do it again. But within a month, another department head reported that my cousin's clique was engaging in shady activities, and they were not only unashamed but even encouraged others to join. I was really in a dilemma. If I didn't act, I would be raising a tiger that would eventually harm me. If all employees acted like my cousin, the company would soon be on the verge of closure. I still hoped to grow the company and ensure that the shareholders who started it with me could buy houses and cars and have security in old age. Better to endure short-term pain than long-term pain. So, gritting my teeth, I gradually let my cousin and his clique go. The company's business was in turmoil for half a year as a result. My cousin's parents also called to scold me, saying I valued money too much—my cousin had just earned a bit on the side, and since we were relatives, why be so particular? I was left speechless.
I once heard a company president talk about how he dealt with relatives after his company grew big: his five or six relatives had contributed money and effort without regard for personal gain during the startup phase, but after the company expanded, they couldn't keep up with its development pace, and most held high positions that were hard to manage. At that point, he chose to sacrifice money to preserve family ties: for the older ones, he gave them a sum of money to help them start their own businesses and become bosses; for the younger ones, he funded their education abroad, covering all expenses, and after they graduated, he helped them find jobs at other large companies. This method smoothly resolved the thorny issue. Brilliant!
Indeed, if you don't have superb management skills, it's better not to hire relatives or friends, or you might end up losing both the business and the relationship.
This article is excerpted from the book "Learning to Be a Boss by Doing" published by Boris Books.