Do You Need a Search Firm If You Have Internal Candidates In Your Family Business? The Answer is Yes. Here's Why.

"If you have internal candidates for a position, why should you work with a recruitment or executive search firm?"

This question arises in almost every initial conversation with family business leaders facing executive transitions. It reveals a basic misunderstanding about what professional executive search truly offers, and why the risks are too high to depend solely on internal relationships.

The assumption behind this question is that executive search is about finding candidates. It's not. Executive search is about process, objectivity, and ensuring you make the best possible decision for your organization's future.

Understanding the Process vs. Resume Distinction

When you work with a search firm, despite having internal candidates, you're not paying for candidates. You're investing in process.

The importance lies in ensuring that people already in your system meet the same standards and are evaluated as rigorously as any external candidate would be. There's also a deeper layer to consider, particularly for family companies with internal candidates: addressing questions about bias.

If the internal candidate is a family member, are you truly evaluating them based on their qualifications? Or are you viewing them through a sentimental and emotional lens, perhaps because they deserve something that was promised to them, because they were born into the family?

The Family Business Risk Factor

Families face significant risk by promoting unqualified people because they're connected to the family. When you run a process that forces candidates into consideration based on their qualifications rather than their family ties, and when that process is conducted by an unbiased third party, you ensure that you're making qualified decisions rather than decisions based on bias, whether direct or unconscious.

This objective evaluation becomes crucial for several reasons:

Merit-Based Assessment: Internal candidates undergo the same rigorous evaluation as external candidates, ensuring promotions are based on capability rather than relationships or promises.

Market Benchmarking: Understanding how your internal candidates compare to what's available in the broader talent market provides an essential perspective on whether you're promoting the best available person overall, not just the best available internally.

Stakeholder Confidence: When internal candidates advance through a structured, third-party process, the entire organization understands that the promotion was earned rather than given based on family connections or internal politics.

The Bias Challenge in Family Businesses

Family businesses face particularly complex dynamics when evaluating internal candidates for leadership positions. The emotional and relational components of family relationships make objective assessment nearly impossible without an outside perspective.

Consider the family member who has worked in the business for years and naturally expects advancement to a senior leadership position. The complexity of objectively evaluating family members creates dynamics that many families struggle to navigate effectively on their own.

Similarly, long-tenured non-family employees often develop relationships and expectations that can cloud objective judgment about their readiness for expanded responsibilities.

The Search Process for Internal Candidates

When families engage professional search firms despite having internal candidates, the process typically follows this structure:

Position Definition: Before evaluating any candidates, the search firm collaborates with the family to clearly define the role's requirements. What are the specific competencies needed? What leadership challenges will this person need to address?

Equal Evaluation: Internal candidates participate in the same assessment process as external ones, including structured interviews, competency evaluations, and reference checks with former colleagues.

Objective Comparison: The search firm provides a market perspective by identifying what external candidates are available, offering clear comparison points for evaluating internal candidates' readiness.

Merit-Based Recommendation: Based on qualifications and fit for the role, the search firm provides recommendations that protect both the organization and the internal candidates themselves.

When Internal Candidates Succeed

In many cases, internal candidates do prove to be the best choice for senior roles. When this happens through a structured process, several important benefits result:

Earned Credibility: The promoted individual and the entire organization recognize that the advancement was based on merit, not on relationships or politics.

Development Insights: The assessment process often reveals specific areas for growth, allowing for targeted development as part of the transition.

Confident Decision-Making: The family gains confidence in their choice, knowing it was based on a thorough evaluation rather than assumptions or emotional attachments.

The Cost of Getting Internal Promotions Wrong

The risks of promoting the wrong internal candidate often exceed those of a failed external hire. External executives who don't work out can be managed relatively cleanly. Internal candidates who struggle in promoted roles create more complex challenges:

Relationship Complications: Issues with family members or long-tenured employees affect relationships that extend far beyond the workplace.

Cultural Impact: Failed internal promotions can create organizational cynicism about whether good performance actually leads to appropriate advancement opportunities.

Limited Correction Options: It's much more difficult to address performance issues with internal candidates, particularly family members.

Protecting Internal Candidates

Engaging professional search support when you have internal candidates ensures that your most important leadership decisions are based on what's best for both the organization and the individuals involved.

The process protects internal candidates by ensuring they're promoted into roles they're prepared to handle successfully, rather than being set up for failure based on assumptions about their readiness.

The Strategic Perspective

Your internal candidates may indeed be the right choice for advancement. But making that determination through a structured, objective process ensures that their success is built on solid foundations rather than assumptions and relationships.

When internal candidates do advance through professional evaluation, they integrate more successfully into their expanded roles because the assessment process reveals both their strengths and areas where they may need additional support.

The stakes are too high, and the relationships too valuable, to leave these crucial decisions to chance or sentiment.

Ready to ensure your next internal promotion is set up for success? Contact Stranberg to learn how our executive assessment process can provide the objectivity and structure your internal candidates need to thrive in expanded roles.

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