Turning Sibling Rivalries into a Positive Force for Business SuccessNortheastern University
Family Business Quarterly
“When sibling relationships are going well, they can be the most wonderful thing in a business. When they are not, they can mean the end of the business.”
That observation by Shari Wyner Narva, a consultant with Genus Resources Inc. of Needham, Massachusetts, wasn’t disputed by any of the sixty or so attendees at a recent session of the Northeastern University Center for Family Business on “How Relatives Relate: Siblings in Business Together.” Narva presided over a panel consisting of two sets of siblings from family businesses: Matthew and Andrew Hayes of Bernett Research Services and John and Brendan McSheffrey of MIJA/Bestek. More…
by Ernesto J. Poza
Three brothers run a retail chain catering to a well-defined market niche. The business is people intensive, and customer service is very important. Competition is fierce in their industry. As a rule, profit margins are low. New products and product/service combinations do offer opportunities for healthier profit margins. The brothers have grown the business four-fold in their twenty years of leadership and are now preparing for the transition to a third generation of owner-managers.
The next generation is better educated and has worked outside the family business in well-regarded Fortune 500 companies. Motivation to professionalize the firm, update its managerial practices and ramp-up the growth curve is high. The third generation is ready to use organizational and human resource systems to support increased teamwork, delegation with accountability as well as a more strategic approach to the business’ market niche.
The family is now larger. Each of the brothers has three children, expanding the potential pool of successors to nine. To prune the owning family tree, the brothers entered into a buy-sell agreement funded by life insurance. It specifically states that next generation family members need to be full-time employee/managers to qualify for ownership. This is, briefly, the business and family context in which succession is presently taking place in many family-owned businesses. More…