Creating A Family Office: 5 Golden Rules Of Successful Single Family Office Hiring
From the recruitment perspective, creating a family office isn’t too different from building any other type of business arrangement. However, in reality, the initial dry data from candidate selection is just a small fraction of establishing a prosperous, forward-looking FO. Because every family is different, with their unique values and visions, there are several very specific guidelines to consider when gathering a truly bespoke and devoted team. In other words, below are five golden rules of successful single-family office hiring.
Set up a foundation
Whether you are creating a family office from scratch or restructuring an old FO to fit the new leader’s vision, it is crucial to begin with outlining a general direction for the upcoming hiring process. What are the family’s priorities? Have they changed since the founder’s time and do they need to adjust to the tendencies of the future?
In many cases, a family will exhibit a diversity of generations, and, therefore a versatile range of plans and perspectives. Taking a multi-gen approach and considering the outlooks of different family members is imperative to seek out capable, future-oriented executives. Additionally, this process will very likely touch on such topics as power succession and role distribution within the family, making the hiring more straightforward and guided. But what will the foundation setting be like, exactly? Think of the typical corporate vision/mission organisation, but replace the company’s interest with the particular family’s interest. The questions to answer will primarily concentrate on profiling both short and long strategies, highlighting the family values and culture, figuring out all potential development paths, and so on. While constructing a solid foundation is definitely challenging, effective and regular communication with the family will significantly help out. Imagine this process as defining and positioning the main pillars which will hold the entire structure together. And the rest of the job will be to pour the concrete of hired executives to support the initial principles. Go for people over skills
Finding an experienced executive to run a single-family office or any of its branches is, without a doubt, important. However, as practice shows, the families will most probably go for individuals who display a better culture fit. In action, such compatibility will manifest in the ability to process information and make decisions in a similar manner to the family’s leader. Simply said, the successful FO employee is the one who shares the family’s beliefs. Depending on how long a certain person will work for the same family, their skills arsenal and the expertise diversity will expand and shift. Considering that many single-family offices are rather compact, it is common for former corporate investment managers to learn how to select promising collectable items or dive into the technicalities of innovative fields. Such adjustments can only happen smoothly when the FO executive and the family are on the same page.
For the same reason, evaluating each potential candidate’s emotional intelligence skills is key to creating a family office with exemplary communication. Of course, reading a person with precise accuracy is often complicated, but employing popular tactics such as behavioural interviews, open-ended questions, assessment forms and case studies will certainly help.
Create a unique criteria framework
At this point, you understand what a family needs and looks for in the perspective hire. Next step is to get specific and outline not only the exact positions you want to fill but also the culture-fit criteria described above. To do this effectively, you might want to imagine the front end of each candidate’s performance. What kind of situations will they be dealing with? How far will they need to travel, if at all? Which languages do they need to speak? And so on.
Having the exact search criteria while creating a family office serves two main purposes: evaluating the candidates independently as well as comparing them with each other. Plus, the specific requirements can also work as a handy tool when selecting among family and internal non-family individuals. This should minimise the level of conflict when a young heir, for example, is aiming to fill a position but doesn’t technically qualify for it.
The foremost outtake for creating the unique criteria framework is to introduce a healthy combination of hard, job-related skills and interpersonal style, which was earlier described as the culture-fit. Not following the criteria religiously might easily result in a close family friend failing due to lack of expertise, or a former corporate executive with a foreign background not meeting the cultural preferences of the family. Negotiate, hire and onboard wisely
After the candidate selection, comes the stage of winning them over by offering competitive conditions for the future position. It goes without saying, that people coming from top-tier corporate roles will expect a similar level of income, benefits, and privileges. Of course, due to the minimalist structure of most single FO’s the exact match might not be possible. For example, the family might need assistance on a day-off or outside the office hours. Accounting for such scenarios and being as upfront as possible during the negotiation process is imperative to creating a family office position that will work out.
In a lot of cases, unlike in multi-family offices, the newly hired expert will be required on the on-call basis, and therefore, might remain engaged at their current position. This is often a solution for employing a lawyer or an art evaluator, for instance. When this arrangement occurs, the family has to remember that their associate’s employment status in that other company should never be threatened or compromised. Another make-or-break component of signing up a new employee, especially in leadership positions, is an onboarding plan. Some of the goals to achieve during onboarding is to assist the new hire with establishing smooth communication with the rest of the team and the family, set the ground for several small initial wins, for instance, finalising a contract with a service provider, and ensuring the environment for successful performance.
The significance of keeping the new hire engaged and on-board should never be underestimated. After all the challenges of seeking and integrating the executive in question, it would be wasteful and disappointing to lose them over inadequate retention planning. Creating a family office is always a forward-looking process, so it makes sense to count on each member for the long run.
On the strictly-business side of retention, most family office leaders often highlight the importance of having clear instructions as well as the authority to follow them. While competitive compensation and bonus system certainly go a long way, the sufficient resources to perform successfully and an efficient governance organization will always tilt the employee’s decision-making scale towards staying.
And last but not least, every team member, disregarding of their role, has to clearly see the room for growing and developing. The key to achieving this from the family’s perspective is through understanding the drivers behind each employee and meeting them as much as possible. Based on the motivation of that person, a solution can be providing opportunities to gain more knowledge or to partake in philanthropic activities on behalf of the family.
Creating a family office for decades to last
By considering all the above, creating a family office can get if not easy, then well-organised, and driven. And the right way to follow the five rules of successful single FO hiring is by committing fully and avoid any type of shortcuts. This way, each member of the team will become an invaluable addition to the family’s success and prosperity.