Bringing in “senior” non-family members into non-family companies

To some the title of this article might seem like a grammatical error.

However, given our long history of working with both family and non-family companies, we would observe that in both types of business a similar question arises:

“How do we successfully bring in much needed “new blood” without destabilising the existing team?”

Interestingly, whilst this question is obviously and openly asked in family businesses, it is something rarely articulated this plainly in non-family businesses.

Yet, in our experience, non-family businesses would also serve themselves well to consider this question as part of any recruitment for a senior position.

This will be particularly apt in two areas.

Firstly, when it comes to issuing equity (or not) to the new hire, many existing shareholders can be nervous about the implications of “sharing their success with newcomers”.  Thankfully, there are several structures that can be put in place which allow for the protection of existing shareholders, whilst still allowing for new joiners to be incentivised in the long term.

Secondly, there are times, particularly in younger organisations where a new person coming in will mean that the role of another senior member of the team will need to flex.  This can particularly be seen in start-up businesses when one of the founders has reached their “ceiling” within a role or wishes to wind-down and now needs to be deployed differently.

These and other questions need to be fully considered and, ideally, managed from the outset to obtain best advantage and traction from the new hire.  Bringing on board experienced advisers can help with these matters and make a significant difference. MM&K is experienced in advising on all matters of succession planning – be it the orderly transfer of value from exiting shareholders to a new generation of management talent or helping realign the senior management team.

If the above matters resonate and you would like to discuss how MM&K could assist you with developing your approach to incentive structures – please contact Stuart James (stuart.james@mm-k.com) in the first instance.

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