Managing Grandchildren in Family Businesses

Running a family business is already tough, but throw in managing your grandchildren, and you’re in for a wild ride. Fortunately, Loyd Rawls, one of the leading experts in family business succession planning, is here to help you dodge the disaster zone. With over 50 years of experience—and a quirky alter ego called “Dr. Merlot” to lighten the mood—Loyd has seen it all when it comes to the challenges of managing family dynamics in business. Yes, you might catch him with his hat on backward and a glass of wine in hand, reading from his book Family Business Heartburn Relief, but don’t be fooled by his casual demeanor—this guy knows his stuff!

In this video, Loyd, with his trademark blend of humor and no-nonsense advice, tackles one of the trickiest aspects of family business: managing grandchildren. He dives deep into the emotional and technical challenges that come with integrating the next generation into the family fold, offering wisdom and insights you won’t find just by reading the book. Whether you’re dealing with hiring in-laws, managing grandchildren, or balancing family relationships in a high-stakes business environment, Loyd’s advice is designed to keep you out of the disaster zone and firmly in control.

Here are 10 surprising truths Loyd shares that will completely change how you think about managing the next generation in your family business!

Respect is NOT Automatic in Family Businesses

You’d think family members naturally respect one another, right? Wrong. Rawls reminds us that “familiarity breeds contempt,” meaning that treating your grandkids with respect in the business takes conscious effort—don’t assume it’ll just happen. In many family businesses, relationships that seem close-knit outside of work get tested under the pressure of business demands. Without clear expectations, family ties can strain. Rawls emphasizes that the key to fostering respect is clear communication and holding family members, including grandchildren, to the same standard of accountability as everyone else.

Most Problems Are Really Hiring Issues

If your grandchild is driving you nuts, it’s probably not a “management” problem. According to Rawls, 90% of so-called grandchild issues stem from poor hiring decisions. Bottom line: spend time hiring the right way! Skipping the due diligence of evaluating whether your grandchild is the right fit for the business—both in terms of skills and mindset—can lead to long-term problems. Treat family hires with the same scrutiny and process you would any other employee, ensuring they’re capable of adding value, not just filling a seat due to their last name. The right hire is a solid investment, while the wrong one can be a disaster waiting to happen.

No One Escapes the “Bad Hire” Nightmare

Think hiring a family member guarantees smooth sailing? Think again! There’s no easy way out of a bad hire—especially when it’s your grandkid. Many family businesses implode because they couldn’t reconcile bad hiring choices. It’s harder to fire a family member than a regular employee, and the emotional baggage can affect the entire family dynamic. Rawls warns that if you hire your grandchild without fully considering their skills and potential, you may face the dilemma of navigating the difficult decision of whether to keep or let go of someone tied closely to both your business and your personal life. Plan ahead to avoid these sticky situations.

Apply the “Platinum Rule”

Treat your grandchildren how they want to be treated, within the framework of your business’s values and priorities. This golden piece of advice could make all the difference in creating a thriving business environment. While the Golden Rule teaches us to treat others as we want to be treated, the Platinum Rule takes it a step further: treat others in ways that resonate with them. This can be particularly important in multigenerational businesses where different generations may have varying communication styles, work ethics, and priorities. Finding common ground while respecting each individual’s perspective will not only foster better relationships but also boost productivity and harmony in the workplace.

Supervising Your Grandchild? Don’t Even Think About It

One of Rawls’ strongest pieces of advice: Do NOT directly supervise your grandchild. Let their actual supervisors handle them, and avoid micromanaging their every move. Trust the process. Direct supervision can easily become a breeding ground for family drama. Grandparents may struggle to be objective, leading to either overindulgence or excessive criticism. Letting an independent manager oversee your grandchild not only maintains professionalism but also provides a level playing field for all employees. This way, your grandchild can learn the ropes and prove themselves without the weight of family politics hanging over them. Trust your management team to provide fair feedback and guidance.

Avoid the “Preaching Pitfall”

Ever been tempted to give unsolicited advice? Rawls warns against “preaching”—a.k.a. answering questions that weren’t even asked. Instead, focus on truth, compassion, and staying approachable without becoming the family “know-it-all.” Grandparents often have a wealth of wisdom to share, but timing is everything. Offering advice at the wrong moment can create frustration or make your grandchild feel criticized rather than supported. Before offering your thoughts, check to see if your grandchild is genuinely seeking guidance or simply venting. Approaching conversations with compassion and patience will make you a trusted advisor rather than a constant lecturer.

Expect Your Kids to Ask “Why Didn’t You Treat Me Like That?!”

Here’s the kicker! Rawls says your kids will ask why you treated their children (your grandkids) differently than you treated them. His witty response? “You were my child, not my grandchild.” Ouch! But true. This difference in treatment is natural—grandparents often feel a unique bond with their grandchildren and may have different expectations or leniency toward them compared to their own children. While it may create some tension, Rawls advises accepting this as part of the generational shift in family dynamics. Be prepared to have open and honest conversations with your children about why things might feel different for their kids in the business environment.

Grandchild Respect? It’s All About Values

Don’t lose sight of what matters most—your business values. Whether it’s work ethic, responsibility, or respect, ensure your grandkids understand that respect in the workplace revolves around these core principles. Instilling strong business values in the next generation is critical to long-term success. It’s not just about keeping family ties intact—it’s about building a sustainable business legacy. Reinforce the importance of aligning with the company’s mission and core values, and remind your grandkids that their respect for those values is what will ultimately secure their role in the future of the business.

Grandparents, Acknowledge What They’re Doing RIGHT

As a grandparent, resist the urge to critique and micromanage. Instead, acknowledge the good they’re doing and let their supervisors handle the negative feedback. Your job? Encouragement. Rawls highlights that positive reinforcement from a grandparent can carry extra weight. Your role is to support and uplift them, not get caught up in their day-to-day challenges. A well-timed word of encouragement can motivate your grandchild to push through tough times, especially when they’re struggling under the pressures of working in a family business. Let the professional managers handle performance issues while you focus on being the voice of support.

The Future of Your Business Depends on Grandchildren Management

Mismanaging your grandkids could be the start of your business downfall. Rawls says, “You wouldn’t be the first family business to collapse because of dysfunctional grandkids in the company.” Yikes! Consider this your wake-up call. Family businesses thrive when each generation respects the legacy, contributes meaningfully, and works in harmony with others. When grandchildren are brought into the business without proper management, it can create tension, resentment, and inefficiency that ripple across the entire organization. To safeguard the future, take a proactive approach—set clear expectations, invest in training, and ensure that your grandchildren are prepared to uphold and build upon the family business legacy.

Ready to take the reins and manage your grandkids like a pro? Implement these 10 shocking truths and watch your family business thrive across generations. You won’t regret it!

How We Help You

Are you struggling with navigating industry volatility? Are you concerned about managing complex family dynamics within your business? Do you know how to effectively integrate and manage the next generation, particularly grandchildren, into your company?

In just 30 minutes, our experts can offer actionable insights and practical tools designed to protect and grow your family business. We’ll help you develop a comprehensive succession plan and implement innovative growth strategies to ensure smooth business transitions in this volatile market.

Managing grandchildren in a family business presents unique challenges and opportunities. Our approach addresses both the emotional and technical aspects of integrating younger generations into your business fold. We provide guidance on avoiding common pitfalls such as hiring mistakes and ensure that younger family members are treated according to your business’s values and priorities. Our approach includes establishing clear communication, applying the “Platinum Rule” to accommodate individual needs while upholding business standards, and navigating the generational shifts that impact family roles and expectations.

Don’t let the complexities of succession planning or the challenges of managing family dynamics hinder your potential. Embrace the opportunity to secure your future and manage your grandchildren effectively, ensuring the long-term success of your business across generations. Reach out to us today to start a conversation about how we can help you maintain harmony and keep your business thriving for years to come.

Mastering Family Dynamics & Governance for Growth & Seamless Succession

Family and Business alignment is hard to find when business issues liven up family dynamics.

However; with proper process, governance policies, and mutual respect built over time, a Family Business can thrive through multiple generations. Click the following links for more drill-down resources on Family Dynamics and Family Governance.