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The Partnership charter

The Partnership Charter by David Gage Millions of people co-own closely held companies, family businesses, and business partnerships, but establishing them and keeping them together is never easy. Here, finally, is the guide they have been waiting for.... Read More
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Am I My Brother’s Keeper?: Brothers in Family Business

Posting by Ed Kopf, Ph.D., Principal at BMC Associates

Sibling-partners’ relationships are among the most challenging in family businesses. Such siblings are often second-generation co-owners of an inherited business. This means:

  • They may not have had a free choice as to who their partner would be.
  • They may be 50/50 owners – a demanding arrangement under any circumstances.
  • Finally, they have a lifetime of emotions and experiences to deal with in their relationship in addition to the demands on all business partners.

The strains on brothers who are partners may be even greater than those on other configurations of sibling co-owners. Business founders are often competitive and dominant males. Sons may well emulate such founders’ traits. This can pit brothers, who will someday become partners, against one another throughout their lives in seeking approval and jockeying for position.

These issues go back a long way. One of the earliest stories of Western civilization is about brothers who ran into difficulties in the “family business.” Considering that case (tongue-in cheek) may be interesting.

Case Summary: Adam & Sons. Adam ______ was a pioneer in the emerging field of agriculture. He and his first wife, Eve, had two sons: Cain (the older) and Abel. Cain joined his father operating the core farming business. Abel was assigned the secondary, low-growth herding division. As a result, Abel did not work with his father and older brother on a daily basis. Abel’s contribution was also viewed as marginal compared to Cain’s burgeoning agri-business output.

In Adam’s absence, the brothers were each asked by the critical Backer of the family business to make a presentation on his branch of the enterprise. To the older brother’s amazement, Abel’s presentation was well received and Cain’s was not. Cain’s anger was evident. He asked Abel to meet with him in the farming division’s fields and there killed his younger brother. The Backer withdrew all support from Cain; he was ejected from the family firm and spent the rest of his life as “a restless wanderer on the earth.”

Lessons: What lessons can we learn from Adam & Sons? I’ll list a few here. But I hope that you’ll add to the insights as you respond to this post.

  • Work together. Separation is frequently a strategy for dealing with tensions between brother-partners. Each brother takes responsibility for a distinct set of functions, products, or services (e.g., farming vs. herding). This minimizes the amount of collaboration required and can be useful. But there are inevitably occasions when joint decisions have to be made or a common front has to be presented to outsiders. If each brother has been isolated in his silo (or sheepfold), long-avoided interpersonal issues can flair up just as important business demands have to be confronted.

A balanced mix of distinct and collaborative management roles will serve brother-partners best. A conscious effort should be made to partake in joint management on a regular basis, in addition to any specialized roles. The benefits of this include a heightened sense of solidarity, enhanced skills in joint decision-making, and a venue for interpersonal issues to arise and be addressed.

  • Grant equal access. “Working together” should also apply to brothers’ interaction with their founder/father or mother. If one brother has far greater access to the “Adam” in the family, the seeds of presumption, jealousy, and conflict are being sown. Practical day-to-day considerations may tend toward an unevenly shared parental relationship. But long-term issues of cohesion and collaboration demand purposeful attention to maintaining a balance.
  • Communicate courageously. Someday, someone’s ego is going to get a shock. Someday, someone’s sense of fairness is going to be violated. Someday, childhood resentments are going to resurface. (After all, childhood isn’t really Paradise.) That’s when the brothers have a choice. They can talk about deep and difficult things. Or the blood can flow.

These lessons may be hard to apply, especially the last. Help may be needed from family business advisors and others. But successful brother partnerships create special demands. They also offer special rewards when the demands are met.

Conclusion: The primal brotherly business conflict had an extreme outcome. But other than that, it provides a paradigm for much that has followed. Tensions over public recognition, paternal favor, management roles, and simple greed have crippled or destroyed many second-generation family businesses. Well-known names speak to the problems that so often arise between brother-partners: Ambani (Reliance [India] conglomerate), Dassler (Adidas and Puma), Koch (Koch Industries), and Gucci are among the most prominent.

Negative outcomes are not universal. Names such as Warner, Brooks, Lehman, and Wright testify to the potential of brothers working well together. But what all of these sibling-partners – successful or not – have in common with Cain and Abel is intensity. Feelings and history go far deeper and mean much more for brothers in business than for other partners. This may yield exceptional trust, loyalty, and compatibility – or it may mean sharp envy, grudges, and misunderstanding. (The writers of Genesis apparently thought the latter more likely.) But, either way, brotherhood can’t be ignored.

 

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