All of the “Millers” realized that the transfer of ownership of their business from the founding father to his son and daughter would be challenging and risky. When the children had joined the real estate development and management company in their late twenties, they had done so with considerable hesitancy and difficulty. Given the strains of numerous personal and family issues, adjusting to working together with their father had been hard. The three had turned to BMC Associates to help them iron out their issues — management and personality problems typically encountered by founders and their children.
Now the siblings realized that, if they stayed in the company, they would eventually face another critical transition — inheriting the firm and becoming business partners with one another. They knew that sibling partnerships sometimes fall apart after the parents retire or die. Determined to learn from experience and minimize future problems, they decided to discuss and negotiate how to make their prospective partnership work well before the necessity was thrust upon them.
The daughter and son went immediately to work with BMC on a Partnership Charter for themselves. In the charter process, they had thorough discussions about all aspects of working together. They discussed their personal styles and values and their expectations of one another. The discussed and negotiated all of the various business issues including managing, compensation, strategic direction, and governance. They also engaged in scenario planning, creating a set of guidelines for how to handle the unexpected. The charter process gave them the confidence that they could be successful partners and laid a firm foundation for that partnership.
Their new found clarity about how they wanted to relate to each other in the business also enabled them to work out a “more adult way,” as the son put it, of working with the father for however long he chose to remain in the company. The siblings also realized that real estate deals from almost two decades earlier had set them on a course of becoming partners with their uncle and eventually their cousins. They decided that the Partnership Charter process could apply there as well — “we’re going to have to sit down with them soon to discuss all of this.” In the real estate industry, there is a mountain of evidence that proves that working it through sooner is preferable to negotiating (sometimes litigating) later.