When Zeus started bossing his siblings on Mt. Olympus, they rebelled and tied him up with a hundred knots.
Some years ago a group of scientists studied the bumblebee and concluded that, according to all known principles of aerodynamics, it could not possibly fly. The same has often been said of certain sibling partnerships in which stock is split more or less equally among a group of brothers and sisters. In some of these companies all of the partners are active in management; in others, only some are.
Portraying a distinct bias in favor of rule by one-and-only-one leader, many organizational experts have argued that such partnerships cannot fly. But the fact is that many do-often quite efficiently.
Sibling partnerships are a special type of family business which remains poorly understood by management scholars and professional advisors. Since this form of organization is becoming increasingly common in second-generation companies, we need to find out much more about the conditions under which it does or doesn’t fly, in order to design better structures to support it.
In some family businesses, one sibling emerges as a dynamic entrepreneur who can carry the company to new heights. One thinks of Sam Steinberg, for example, whose leadership grew a small grocery store in Canada into a multi-billion supermarket and real estate empire, Steinberg Inc. Sam was in a different league than his four brothers; as Ann Gibbon and Peter Hadekel point out in Steinberg: The Break up of a Family Empire (Macmillan of Canada, 1990), he virtually “carried” his four brothers at Steinberg Inc. all their lives.
The “first-among-equals” in a sibling partnership may be anointed as such by the parents but can seldom rule without earning the respect and support of his or her brothers and sisters. Usually the person who rises to the fore has clearly demonstrated that he or she has the entrepreneurial or organizational ability to build the business for the benefit of all.
The partnership will ultimately crash, however, unless the lead sibling recognizes the limits on his or her authority. Even in the most harmonious families, rivalries left over from child-hood can shake the foundation of the partnership if the leader tries to act like a sole proprietor and make major decisions without consultation with his partners. The biggest mistake that these first-among-equals can make is to try to rule in the style of the single owner-manager, which very often was the company structure under the parent.
As in most age-old human conflicts, Greek mythology offers a timeless lesson about the risk of abuse of power in single-sibling rule. In one hyperbolic Greek tale, Cronus, the father of the gods, eats his five children because he has been told by an oracle that one of them will ultimately overthrow him. Furious, his wife, Rhea, vows to protect her sixth child, Zeus. After Zeus is born, she gives him to the nymphs on Mt. Ida to raise, presenting her husband with a stone dressed as a baby instead.
When the boy is grown, Rhea conspires with him to slip a potion to Cronus at a banquet that makes him regurgitate their other five children. The young gods led by Zeus then defeat Cronus in a battle and, through this demonstration of his courage and skill, Zeus overcomes the bias in favor of the eldest sibling (Poseidon) and becomes leader of the Olympians.
He rules effectively at first. But gradually he starts to boss his siblings around, even insisting that the other gods—his siblings included—call him “father Zeus.” His two brothers, Poseidon and Hades, decide to teach him a lesson in humility. Rallying the other gods in rebellion, they tie up Zeus with 100 knots and throw him in a closet.
He is eventually rescued. Since the knots can only be untied all at once, according to the story, it takes the 100-armed gardener Briareus to undo him! Zeus gets his old job back, but he never forgets the powerful lesson that his siblings taught him: While they accept him as a leader, they will never allow him to become their parent.
Leaders of sibling partnerships find it easy to slip into a parental role. They may attempt to tell their siblings how to raise their children, where to live, how to behave in the community. To his brothers, Sam Steinberg became the father they never had, according to the Gibbon-Hadekel book. His daughter Mitzi recalled with distaste that he dictated the brothers’ every move. “When he said sit, they sat down; lie down, they lay down.” No doubt, this dictatorial style planted seeds of resentment that contributed to the downfall and sale of a very successful family company.
Often the leader’s self-esteem is threatened when his siblings reject these efforts to control their lives. Since in the previous generation the parent was not only the boss in the business but the family leader as well, first-among-equals tend to measure their own authority by the degree to which they fit this model and are accepted in both roles.
Real enlightenment comes when the lead sibling realizes that circumstances have changed and a new style of leadership is called for, one requiring more teamwork and consultation. Zeus’s siblings were willing to accept his leadership up to a point, and he had to figure out where that point was. But while Zeus had a dreaded weapon to enforce his sway, a lead sibling who controls only 51 percent of the stock in a business doesn’t exactly have thunderbolts to hurl.
Usually in a sibling partnership, the limits of the leader’s authority are defined through trial and error in the early stages of the partnership. The first-among-equals who takes it upon himself to make a major capital expenditure without soliciting his partners’ views beforehand may get knocked down to size by sibling reminders that “We are your equal partners, and we demand that you bring us in on those decisions.” Sometimes, however, the partners will develop more formal guidelines. For example, they may agree that the leader must consult with them on all expenditures over $100,000, or on any long-term commitment of the company to joint ventures, or on any decision that implies a shift in the mission or strategy of the family business.
This does not mean that all decisions in sibling partnerships must be made by consensus. The first-among-equals is usually trusted to move the company in a direction he sees fit, so long as he is sensitive to the wishes and concerns of the group.
Leadership in such companies requires knowing how far one can push siblings before simmering rivalries erupt. It also requires having the generosity of spirit to share the glory and the rewards of the business with others—even when some may not entirely deserve it.
Ivan Lansberg, Ph.D. is a co-founder of Lansberg • Gersick a research and consulting firm in New Haven, Connecticut, that serves family businesses, family offices and family foundations. Ivan was previously on the faculty of the Yale School of Management, and is currently on the faculty of Kellogg School of Management at Northwestern University. He is an advisor to business families worldwide, a frequent presenter at conferences, and the author of many articles and publications, including Succeeding Generations (1999, Harvard Business School Press).
Source: Family Business Magazine, Winter 1994
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