You are interviewing for your dream job. You’ve made it to the end of the final round of interviews and you get the chance to ask your interviewee some questions to get a true feel for the company. You ask: “what defines your culture as a company?” He replies: “We are a family here at _____________.” A few days after your final round interview, you get the long awaited call from the HR department: “Welcome to the ___________ family”
Whether a business owner or employee, your company’s culture is important to you. As the CEO, you take pride in the workplace environment that you have created, and as an employee it might be the reason you decided to take the job. As a business owner, you have good intentions and think that branding your company as a family will create a camaraderie among your employees and therefore make your company a desirable place to work. However, in reality it can be damaging to your business and culture.
So why is your company not a family?
A company is not a family because it serves a completely different purpose then a family. Unlike a family, a company’s purpose is simply to achieve a vision and maximize profits for shareholders. On the other hand, The purpose of family is to provide a safe and stable environment for a group of people who choose to live and grow with one another.
While some CEO’s are proud to call their company a family and want their company to be a “safe and stable environment,” others have very strong opinions why doing so can be dangerous.
For instance, Tobi Lütke, the CEO of Shopify wrote a letter to his managers about company culture in August of 2020. In the first line of the letter he states: “Shopify, like any other for-profit company, is not a family. The very idea is preposterous. You are born into a family. You never choose it, and they can’t un-family you.”
As Lütke points out in the opening line of his letter, when the CEO refers to his company as a family, a dangerous precedent is set. In a family, the mother and father bring children into the world – the children have no say in who their parents or siblings are, and they are stuck with them for life. In contrast, companies are institutions where the CEO and employee have the choice to be a part of the business. Employees are hired and or fired based on their skill set, work ethic, and ultimately their performance. By characterizing your company’s culture as a family, your employees may get the sense that they will not be fired. After all, you can’t fire your children, or your parents, right?
As Lütke’s letter goes on, he admits that while “it should be massively obvious that Shopify is not a family but [he] see[s] people, even leaders, casually use terms like “Shopifam” which cause[s] the members of our teams (especially junior ones that have never worked anywhere else) to get the wrong impression.”
When business owners brand their companies as a family, they think that they are creating an environment where employees feel like they belong and have shared values, but they do not really literally mean that they are a family. What they really mean is that the company’s culture is one where everyone works together in pursuit of a common goal; there is mutual respect among employees and where everyone’s opinion is valued. But by referring to your company as a family, you are likely blurring boundaries that can be detrimental to the success of your company.
In order to have a strong company culture, you must maintain the expectation that the best talent will be rewarded and average performers will be let go. When you brand yourself as a family, you might make your employees feel that they have more leeway for subpar performances and slacking. Similarly, when you refer to your company as a family, it becomes harder for coworkers to maintain professional relationships. The relationship between a CEO or manager and the rest of the employees should be strong, but boundaries must be in place to ensure that a sense of respect is maintained. When you state that “we are a family”, the line of respect becomes ambiguous. Do you ever remember a time when you were mad at a parent or sibling and said some unkind words to them? It was something that you might not say to a teacher or coach, but because they are your family, it seemed okay? The same applies when a company refers to itself as a family. Boundaries are blurred, and an employee might feel more comfortable using choice words with his/her boss.
An alternative to branding your company as a family is to refer to yourself as a high performing team. Professional sports teams are not a perfect analog for your company, but there are many applicable similarities. Each year, professional sports teams and organizations put together a team that they believe has the best chance at winning games and ultimately winning the championship. The composition of the team changes from year to year. Sometimes, the general managers will decide to cut team members and will make trades to acquire new players from different teams. Other times, a new draft pick will join the team. However, professional sports teams maintain a cutthroat culture; each player knows that they are not guaranteed lifetime employment. Their employment is contingent upon their performance and what they bring to the team.
So do yourself a favor and don’t brand your company as a family. As a CEO, you can still have a positive company culture where your employees enjoy coming to work each day without referring to yourself as a family and blurring critical boundaries. Instead, use the team analogy: a group of different individuals working together for a common goal with a sense of camaraderie, but at the same time understanding that their job is always on the line.