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They stared in disbelief. Did it really happen?
They were all familiar with how the natural tension of sibling rivalry surfaces in a family business. Still, they had never seen anything like this before.
“Yes, I did it,” Laurence said. “I fired him. Then my dad made me hire him back.”
And then everyone around the table broke out in laughter. Hysterics, actually. They all knew it was about time. Laurence had just turned 20 and was in a bit of a power struggle with his twin brother. Laurence had recently been promoted to a management role at the brewery his family owns in Saskatoon, which means a dozen employees reported to him – including his brother. His twin had been trying to undermine his authority. It started in simple ways, like taking credit for Laurence’s ideas. Then it became more overt. Their father didn’t seem to notice. Everyone in the business mentoring group knew Laurence was frustrated.
After Laurence’s announcement, the stories started to flow. Everyone in the room knew each other well. Some had been part of the group for over a decade while others had joined just last year. Despite the wide age range – from 20 to 65 – there was a level of respect that made it a safe place. The group was a trusting place to share stories, feelings, and worries, a group of peers that helped you navigate the troubled waters of family business.
One of the older people in the group told a story about his three daughters entering the business. “It was really hard for me to not treat them like children,” he explained. “They’re sisters but have their differences. They also love each other a great deal. They just had to sort out their own working relationships if they were going to run the company. So I stepped back. Was it the right thing to do? I don’t know. Maybe. But if I am always a referee, how are they going to run the business without me?”
Growing up with your business partners
Although fictitious, these scenarios encapsulate the very real complexity of family business. What is a family business? There is no clear definition. In its most obvious form, a family business is a company owned and managed by multiple family members. In some situations you might find three generations of family members working shoulder to shoulder. In other cases, a family business might be owned by both spouses but only one is active in daily operations. The definition is not the point. What is important is that family businesses have a unique dynamic. Family relationships are tough; family relationships that straddle the boundary between family and career are tougher.
Collin Schaan, CEO of a local family business, is quick to point out the tremendous positive benefits of being in business with your family. “When you grow up alongside your future business partners, you tend to know them pretty well. It’s not an issue of trust or familiarity. It’s deeper than that. It’s the basis for a different type of working relationship. I work next to my three siblings in our business and my son works here now too. Relationships are not easy, family or otherwise, but they can be a strong foundation for the business.”
Entrepreneurs in a family business need peer support and mentorship, but they also need to learn about family business.
Schaan volunteers on the board of directors of Family Business Association Saskatoon. This association organizes peer mentoring groups like the one our fictitious twin, Laurence, benefited from. Cheryl Leier, a local family business owner who volunteers alongside Schaan on the association’s board, is a strong advocate of relying on other family business owners for advice. “Being an entrepreneur is isolating. It’s lonely. You need someone to speak to who is out of the family business.”
Leier has benefited greatly from her own peer mentoring group. She explains, “We call our groups Personal Advisory Circles, or PACs. There might be 8 or 10 people in a PAC. We know each other so well. When one of us has a difficult decision to make or an awkward situation to work through, someone else always has a story that relates in some way.”
Entrepreneurs in a family business need peer support and mentorship, but they also need to learn about family business. Education is crucial. As Leier explains, the association welcomes professional advisors into its membership. “Some of the things we have to deal with as entrepreneurs and family business owners need some special knowledge. We’re busy running our business. We need advisors with backgrounds in areas like corporate structure, governance, and finance.”
Family business members get to know these advisors at networking events. There are also educational sessions throughout the year with seminars or discussion panels where advisors and family business members share stories and knowledge.
Universal yet unique
Challenges that family businesses face are almost always universal. It’s common to struggle with managing family relationships, grooming family members for decades for management responsibility, and treating children fairly when decisions are made around estate planning and control of the family business. But even so, every business is unique and so is every family. A one-size-fits-all solution just won’t work. People need to connect with peers, hear how others have worked through their own situations, and make decisions for their own circumstances.
So how does our make-believe story of sibling rivalry in the brewery business end? Almost always, the person bringing an issue to the table has some insight and added context for their own situation. Laurence will have to make his own decisions on how he’ll manage his relationship with his brother.
You can bet Laurence will be wiser and more confident as he walks out of the room.
First published in the December 2018 edition of The Business Advisor.