At a family business, nepotism trumps common sense

Think twice before working for a family-owned business — or at least the large, unnamed “Acme Corp.” I once worked for. The people who started the business may have known what they were doing, but that same expertise did not magically pass on to future generations who inherited the family empire. Stiil, being a family member was seen as a qualification to run a business even if the skills did not measure up.

At the time of this story, the third generation was in charge, handing down a fair number of questionable business decisions and leaving employees to scratch their heads in puzzlement.

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For the most part, IT wasn’t directly impacted, but we weren’t exempt from their meddling either. Take, for example, the time when a coworker was tasked with purchasing and installing a new phone system for our branch, where we had grown to about 100 extensions.

A routine upgrade goes awry

This coworker had handled installing a new network at our branch a couple of years previously, and we’d been happy with the results. As part of his research, he solicited info from the networking company about a VoIP system, which was fairly new technology at the time. To be thorough, he also sought bids for an upgrade from the company that had sold us our existing (ancient) switch.

The networking company’s bid came in well under the other company’s. Additionally, the VoIP technology was rock-solid on our multilayer network, the service working invisibly to make certain that voice had priority over other network traffic. My coworker submitted a green sheet to our local management team to go with the VoIP option.

Local decisions such as this did not have to be signed off by headquarters, but we were required to file paperwork documenting any changes. The decision saved the company money and made sense for our branch’s needs, so we didn’t expect any problems. But we underestimated the power of family connections in a family business.

As it happened, the corporate IT guy who handled the phones in the main office heard about our decision and went ballistic. He had been responsible for obtaining our branch’s previous switch, which was so old that we kept 5 1/4-inch floppies to program it and demanded that we buy another switch from the same company — though it was now financially unstable.

My coworker went to his boss, who went to his boss, who went to our branch’s manager. All agreed that we were on solid ground with the lower-priced equipment that provided higher functionality than a POTS switch. A tactful letter was drafted to the corporate phone guy stating thanks for the input, but the decision was ours, and we were going with the VoIP setup.

The benefits of knowing the big boss

The phone guy in the main office did not like this, so he went and complained about the situation to his boss, who happened to ride bikes on the weekends with one of the owning family members — and who happened to be our branch manager’s boss.

The next thing you know, this family member contacted our manager and told him that (a) we would be buying the POTS switch, and (b) anyone fighting the decision would be looking at a greatly shortened career.

We got a POTS switch that was outdated before it was even manufactured. Within six months of delivery, that company had gone bankrupt. And the corporate phone guy? He retired about the same time.

I — and many others — grew tired of waiting on people who were in charge for no other reason than they were descendants of the company founders, and we moved on. For all I know, my ex-employer’s building still “enjoys” phone technology that was obsolete long before it was installed. I’ve heard from other people that many family-owned companies suffer when generation III takes over. I wouldn’t doubt it.

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This story, “At a family business, nepotism trumps common sense,” was originally published at InfoWorld.com. Read more crazy-but-true stories in the anonymous Off the Record blog at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.