Family Business
Advisor & Coach

Family Business: Take me to your leader(s)!

In Family Business lexicon, the ownership and often the management stage that follows the controlling sole founder is the sibling partnership.  In the business world, the word “partnership” conjures up legal business arrangements where all parties involved provide input into the business and are entitled to get benefits from it. In the world of cricket, batting partnerships have thrilled fans and broken records, leading to spectacular team wins. There are high order partnerships, where both batsmen are equally skilled and free to play to their own styles.

In the lower order partnerships, there is usually one batsman who is more adept and has the task of shielding his partner from facing balls. Yet the star batsman needs his lower order partner to play along or the partnership may come to an untimely and abrupt end resulting in team loss. The sting of team defeat outweighs any individual high score.  Marriage is often referred to as a partnership, and there are enough admonitions about making it 50-50. Indeed, the failure of one partner to “pull his or her weight” is often cited as a factor in divorce. The overriding common theme here is that no one person excels at the expense of another or without the involvement and co-operation of the other.

Waterloo Moments

Yet, I have seen so many siblings who work together in the business and do not get this elementary concept, often to the detriment of both the business and the family.  The infighting and measurement is sometimes unwittingly supported by parents who had always encouraged competition, rather than co-operation among their children.  Business-owning families who wish for generational succession in the business need to promote joint efforts and shared rewards among their children.  This notion often meets its Waterloo moment when the time arises for selection of the next company chief executive or managing director. The jockeying for position and title could degenerate into a playground fight with blows flying everywhere.  And the reality is that given shared, even if unequal, ownership, the leadership of a family business that is owned and/or managed by siblings is not about titles and salaries. Without consultation and taking into account the views of his/her siblings, whether they work in the business or not, no brother or sister CEO is going to fulfill the promise of the business and maintain the family harmony that is the backbone of family business growth.

Bestowing Titles

Titles do reflect some kind of role differentiation and make it orderly for employees and external stakeholders. Yet no major decision stands much of a chance of smooth execution if there is no consensus among the team. This is more so in a family business than in non-family firms, where there is not joint shareholding and the high level of emotional ownership among family members.  So, go ahead and select or elect one sibling to be CEO and another to be COO and maybe, if it is a talented and big family, another to be CFO.  I often tease sibling teams that they can select titles like Mr. Universe and Miss World; it matters not to me as I seek to ensure family business continuity. In this regard, I concur with Shakespeare that “a rose by any other name would smell as sweet”.  All partners are expected to make a worthwhile contribution and give serious input into major decisions.  And they must share in the risks and benefits of same.  My most successful sibling teams operate in this fashion and there is usually one sibling who carries the CEO/MD title.

In some cases, the role and title confers to a team member the status of “first among equals”.   That person, though, is well aware that he needs to consult, convince and secure consensus among his sibling partners.  In other instances, a CEO title is given usually for convenience, and while team members have some role differentiation, the team meets often to discuss, debate and decide before implementation of any substantial course of action.  And I have seen cases where the title conferred nothing more than a bully pulpit from which the “leader” operated to practically destroy the business and the family by seeking to exercise dictatorial rights, channeling the most damaging features of controlling owner.

In its most vicious forms, sibling partnerships degenerate into unresolved and often childish sibling rivalries that should have been left at the gate of adulthood. Sibling rivalry can be healthy and beneficial and encourage superior performance –up to a point. And that boundary needs to be drawn when sibling teams inherit a business and are charged with adding value for future generations. There is no place in that scenario for excessive individualism and benefit at the expense of another or touting of any nameplate or business card.  For sibling partnerships to work, the mantra must be that when the tides come in, all boats rise, even those boats with more cargo and heavier weights. So the invitation is to recognize each other’s shortcomings, move beyond blame, and capitalize on each other’s strengths.  And it sometimes does involve “dying to self for the greater good.”

Shared Leadership

Shared leadership is not a popular or romantic notion. I hear often enough that “there must be one person “calling the shots” or “someone has to be in charge”. In fact, there are those who will contend that shared leadership is not possible, since leadership is often viewed as the influence of one individual who exerts authority.  If influence is distributed among members, then that is a situation in which there is no leadership, according to those who argue that shared leadership is an oxymoron. There is research that refutes this claim and examples where shared leadership proved successful in contexts as diverse as theater groups and the army. Indeed, proponents of the team concept point to the superior decisions and results that obtain when there is shared decision making and genuine mutual influence.

In family businesses, especially at the sibling partnership stage of the business, shared leadership may well allow the business to survive what is often the most dangerous generational transition.  In fact, family businesses are leading the way in appointment of co-CEOs, a phenomenon that is gaining traction.