All posts by Barbara Dartt, DVM, MS

The Confused Cheerleader: A Lesson for Sibling Partnerships

Barbara Dartt
Barbara Dartt

At my son’s middle school basketball game this week, I overhead a young cheerleader say (to her coach!), “No offense to our guys, but I want the other team to win.” The coach is a friend of mine, so I caught her eye and we shared a good laugh. She certainly has her coaching work cut out for her!

Every time I picture that exchange in my head, I laugh out loud. It’s just so incongruous: a CHEERLEADER, whose whole purpose is to support a team in their pursuit of victory, pulling for the OTHER team. It just doesn’t make sense. And, as usual, the example got me thinking of family business. (Stay with me here!)

I have had the honor of interacting with several sibling groups over the last couple months and these groups fall into two camps: siblings who respect each other and siblings who do not.

The sibling groups who respect each other can lack a shared vision. They can lack structure and governance needed to effectively govern their business. They can be stressed by changes in their industry. But the foundation of respect and true appreciation for each other give them a base to come together and effectively work through these challenges. I’ve even seen situations where they come together to do the needed work and decide that one sibling is no longer aligned with the business vision. Departure of a respected sibling is difficult and strains relationships, but holidays and family togetherness are almost always preserved.

I’ve also observed sibling groups put in terribly difficult situations. Often, the siblings have been together for decades but don’t have the foundation of respect and true appreciation for each other. These situations were brought to mind by our young, confused cheerleader. Her role was clearly to cheer for one team (she had on the uniform for goodness sake), but she was rooting for their opponent.

These siblings love the family business and enjoy their roles within the business. They bring value to the organization with their competence and passion. And they deeply dislike their “partners” – co-managers or co-owners – who happen to be their siblings. How can you be professionally fulfilled when you love your work, but disrespect your coworkers? How can you be fully effective when your uniform puts you on one team, yet you feel like the opponent of the very team you’re supposed to be cheering for?

It is definitely a confusing and challenging place to be with stakes much higher than a 7th grade basketball game. I have deep empathy for adults who have devoted decades of their life to a family business and feel like their profession and passion can only be fulfilled if they stay in the business. However, staying in the business puts them in daily contact with folks they don’t respect.

If you’re contemplating becoming part of a family business in an owner or manager role, think deeply about your potential “partners” – the siblings (or cousins) you will interact with regularly. If you don’t respect or appreciate those folks, I urge you to pass on the opportunity. While our young cheerleader just needs a little coaching, I rarely see these feelings improve with time in the family business.

The Power of Questions

Barbara Dartt
Barbara Dartt

There will come a time during your family business succession journey when progress requires you to give up what you love to do and what you are very good at to make room for successors to learn, grow and flourish. This is some of the hardest work of succession.

Part of the trauma in this process is watching your bright, passionate and energetic successor – someone you have great confidence in – make decisions that you’ve made for 20 or 30 years. As you would expect, they make some missteps. They collect the wrong information. They take too much time. They move slowly on small decisions and too quickly on big, complex ones. They don’t treat people right. They screw up.

As the senior team member (some prefer “seasoned” team member), it’s often hard to know when to step in. How do you ensure they make some mistakes but none that are too big? How long do you let them bark up the wrong tree?

Today, I had the honor of watching Scott, one senior generation member (who would NOT appreciate that title), hit the ball out of the park while guiding a successor.

Scott is the CEO and the oldest of a four-sibling ownership team. He is fast paced, smart and loves to engage in stimulating conversation. Scott, while effective at his job, does like folks to know how smart he is and does not suffer fools lightly. He can easily dominate a conversation. And over the 18 years he and his brothers have worked together, his brothers have taught themselves to defer to him. And why not? Scott is almost always right. His guidance has brought the business a lot of success.

However, Scott (and his brothers) have recognized that his natural style – which has been a strength of the business for a long time – will not position it for long-term success.

The successor in the business is Derek, Scott’s youngest brother by 15 years. Derek presented a feasibility study today to the Board that he and Scott developed about an acquisition target. Scott has traditionally done the majority of this kind of work and been the one to present and lead discussions.

Derek had worked very hard to be ready for the presentation. He’d done his homework, gotten Scott’s input and worked with an outside consultant on both the content of his report and his presentation style.

I have watched Scott in similar situations before. When he already understands the content of a report, Scott has a hard time staying patient. He fidgets. He sometimes adds a point but then takes the conversation off topic. Scott’s become aware of these tendencies and their effect on other’s confidence.

Today, Scott was a superstar – just like Derek was. He was relaxed. He listened well. When he thought Derek missed something, he asked a great question. The tone was truly curious. He deferred to Derek’s knowledge and really asked his opinion on the topic – it wasn’t a rhetorical question that he already knew the answer to. (Well, it didn’t sound rhetorical.)

Questions can be transformative and sometimes very hard for experts to ask effectively. Questions can make the asker vulnerable – someone might think you don’t know something when you ask a question. For the CEO who’s been charged to know everything for a very long time, vulnerability can be an extremely hard place to put yourself.

The next time you’re tempted to add your perspective, hold off until you can do it in the form of a question. A real question – not one designed to point out what you know. And get the tone right. Tone probably contributes 90% of the effectiveness of a question.

When you get it right, watch the successor bloom with confidence and initiative. What an honor to watch Scott and Derek become a case study in how the hardest work of succession can pay off.

When the Dead Pick Your Business Partner

Dartt 100x150
Barbara Dartt, DVM, MS

“I had always wanted to be a nurse,” explained Rachel. “After 15 years as a stay-at-home mom, I went back to school, earned my degree and then got a great job. I worked just one town over from where we live and where my husband Tom’s family business is located. Tom was at work all the time, managing the business and I was close by with a flexible work schedule. After 20 years of patience and work, our ideal plan had come together. And then Tom died.”

When Tom died, Rachel became a 50% partner with her mother-in-law, Rita. Rachel’s father-in-law had passed away many years ago and Rita had been an active business manager and owner for years. She’d recently begun to step away from day-to-day decision making. But now that Tom was gone, she moved back into her active role.

Tom has three siblings, two of whom had worked in the family business, on and off. Rachel had never worked in the business and was concerned with Rita’s intentions. Rachel and Tom’s dream had been for their (young adult) children to have an opportunity to work in and own the business. What did Rita want? “Rita won’t say what she wants right now. I think she’s afraid that whatever she says, it will make someone unhappy. It will be hard to get her to decide.”

Rachel chose to quit her job and come to work in the family business. She saw no other way to ensure that her voice was heard. And no other way to protect the future she and Tom had discussed for their children.

Tom passed away with life insurance and strong operating agreements for his entities – ones that protected owners and the businesses from liability. However, there was no buy-sell agreement. No future plan for business ownership. Today, the business is saddled with two reluctant owners.

Rachel is an owner by default. She’s chosen to exercise her owner’s voice by trying to manage the business, with no experience and very little knowledge about financials or operations. Rita is an owner by legacy. She had hoped to back away from management but also felt the only way to exercise control and “protect” the business was to be an active manager. And that’s about all they have in common.

A team functions best when they have common ground — a shared purpose. Logically, Rachel and Rita could work on that shared purpose by jointly answering the question, “Why do we want to be in business together?” Practically, they don’t have the depth of relationship, the understanding of their roles (as both owners and managers) or the trust to answer that question today.

So they are 50/50 owners, yoked together by fate. They are both working to overcome grief of Tom’s loss that came suddenly and too early. Owners, thrown together by the death of a key business figure, rather than owners who affirmatively chose to be in partnership together.

The obstacles are huge. And preventable.

This is obviously an extreme example. However, every family member who owns or manages a business can ask themselves two key questions:

  1. First, do you have “affirmative” and engaged owners? Affirmative owners are those who have chosen to be owners. Engaged owners are ones who are clear on the rights and responsibilities of ownership and have the knowledge and maturity to effectively make ownership decisions.
  2. Second, are the owners aligned around why they are in business together? This trait is fundamental to effective owner teams.

Talking about what ownership might look like after you are gone is not usually fun or easy. But it’s one of the best gifts you can give your family. And one of the best investments you can make in the future of your business.