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Sibling partners: A special family business stage

Barb Dartt for Progressive Dairyman Published on 30 June 2017

Scott and Steve have been partners for 24 years. They have worked together for 38. And they have been brothers for 50. They know each other like the back of their hands.

Each brother’s relationship with his sibling is likely to be the longest of his life.

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Scott and Steve grew up in the same household, only one year apart, and worked in the business from a young age. Events and beliefs formed as children still impact their view of each other.

Siblings often have a deep emotional connection to the business. And an intense – and sometimes volatile – relationship.

Scott is the “inside” leader; he handles banking and other vendor relationships, nutrition, herd health, insurance, FSA and all things “office.” Steve is more of an “outside” guy and much prefers to be on a tractor. They are each glad their brother loves and is good at the role he has – and some days, they drive each other crazy.

Complementary sibling skills fuel business success. And differing priorities and perspectives often lead to misalignment around siblings’ visions for the business future.

Since they finished buying out their mom and dad, Scott and Steve each own 50 percent of the business.

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Without a majority stake for either brother, small sibling groups with equal ownership are yoked together for every ownership decision.

Mom and Dad, though they have no ownership, stop by the office nearly every day to grab their mail and a cup of coffee.

Sibling teams face the need to challenge “the way we’ve always done it” while also respecting the sacrifices their parents made to build the business.

Sibling partnerships are characterized by an intensity, connection and alignment around values and commitment to the business. These characteristics can make sibling teams work like a well-oiled machine – and these characteristics can be what underlie some of the most painful and contentious family business relationships.

And, somewhat paradoxically, the “well-oiled machine” sibling partners are sometimes the most dangerous for a family business. Sibling teams that perform work well together possess a couple interesting features.

  • A kind of “sibling ESP.” When you’ve shared your personal and professional life for 50 years, you begin to learn how another person thinks. Siblings tend to exhibit a kind of short-hand communication that is very informal and very efficient, especially in the early days of a business.

    Meetings aren’t required. A couple quick words in the driveway or the parlor at some point during the day are sufficient to organize the day’s or week’s work.

  • Unquestioning trust. Even though siblings might not cross paths much, the depth and duration of their relationship leads them to have confidence in each other’s priorities and alignment. Steve might not know what Scott is doing today, but he never worries Scott is leaving early and not completing the responsibilities, spending their money frivolously or focusing on work that doesn’t add value to the business.

    Being raised in the same household usually leads to holding very similar values. And knowing your brother has the same values you do allows a sibling to believe the other has the best interest of both of them and the business as the base of any priority or decision.

  • Deep commitment to the business. Because siblings grew up together, often eating, sleeping and breathing the family business with their founding parents, there is a profound emotional connection to the business. Founding parents sometimes view the business as another child – and sibling partners can feel an obligation to steward and care for that “child,” leading to a sense of responsibility and duty to the success of the business.

These strengths – great communication, trust and commitment – form the foundation of any successful family business, regardless of the stage the family is at, and these strengths happen to be present in respectful, caring sibling relationships. What a fortunate coincidence.

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The challenge comes as siblings look to set the stage for their own children to work in and own the business. The strengths siblings developed simply by virtue of years of living and working together must now be deliberately nurtured. Communication must be practiced individually through difficult conversations and in groups through meetings.

Trust must be built by setting clear expectations and giving feedback on how team members are doing compared to those goals. And commitment must be earned by thinking about the business as an entity separate from the family … and engaging the family in creating something future generations can be proud of.

Deliberately growing skills and nurturing their practice is a lot of work, and it demands a formality – meetings, gathering input, talking about the future – sibling teams did not need to be successful.

Transitioning ownership and management past a sibling-stage family business is often considered to be the most challenging transition for all the reasons above, but take heart. If you’re part of a successful, trusting, committed sibling team, you have many of the elements required for that successful family business transition – and the first step is to be aware the management and ownership decision-making style that worked for you is very unlikely to be successful for the next generation.

Much more effort must be paid to characteristics siblings were able to take for granted. There are lots of resources out there on communication, trust and commitment. If you can learn how to steward those features as well as you have stewarded your business, you have a great chance for a successful family business transition.  end mark

For more depth on this topic, check out: Aronoff, C.E. (2011). Making sibling teams work: the next generation. New York: Palgrave Macmillan.

Barb Dartt is a family business consultant with 16 years’ experience supporting folks in business with family. Email Barb Dartt.

Barb Dartt
  • Barb Dartt

  • Consultant
  • The Family Business Consulting Group
  • Email Barb Dartt

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