Loyalty and limitation for professionals in family firms

IN the management of Asian family firms, owners often rely on trusted professionals to handle the execution of day-to-day business. These so-called loyal lieutenants spend years working with the firm's owners, becoming intimately familiar with both the business and the values of the family owners.

This has many advantages: a clear family leader with an army of experienced non-family executors is a very efficient way to run a business. Long tenures also build consistency and deep experience, as well as closely knit teams that can move fast. In this context, most loyal lieutenants become excellent managers.

There is however also an argument that this model can be a bar to attracting the most capable outside talent. Since decision-making is often in the hands of family members, even the best managers can face career limits. Another risk is that less talented loyal lieutenants may use the family's trust to block the ascent of capable middle managers whom they see as a threat.