The agony and ecstasy of sibling partnership


First published in the Financial Times on 29th May 2012.

Relations tend to be more intense, volatile and intimate than other business arrangements

A few years ago I bought a business owned by three brothers. They sold it to me because they had decided to go their separate ways after working together as entrepreneurs for decades. One told me that his older brother, now in his fifties, behaved towards him as if they were still in their childhood nursery – and that it was finally time to break free.

On that occasion I didn’t envy the deep bonds that come with sibling business partnerships. But I have often admired how brothers and sisters can create value jointly, able to build an undertaking with someone whom they know and trust implicitly. That knowledge can be an advantage when competing against rivals where the connections are weaker. Indeed, as a team, siblings can be hard to beat – as successes from the Wrights in aviation, Warner brothers in film, and the Waltons in supermarkets attest.

 I have two older brothers and a younger sister, but none pursued a career in business – so such an opportunity has never been available to me.

Having grown up together, sibling partnerships tend to be more intense, volatile and intimate than other business arrangements. They arise most often when family firms are inherited. Interestingly, such combinations are more common than ever, because women are now much more likely to take over a family business. In previous eras, female chief executives were extremely rare; now such appointments are frequent.

Unfortunately you cannot choose your siblings, and they may not be suited to running a company – yet there might be an obligation to share responsibilities. At least when picking colleagues in conventional circumstances, one can assess them for their skills and compatibility – whether they are a relation doesn’t come in to it. Usually sibling partnerships collapse because one party becomes idle, angry or dishonest – and the other is unwilling to follow the lesson of the Parable of the Prodigal Son.

Tragically, when such relationships break down emotions can flare even more violently than the usual partnership fallouts. The family feud between the billionaire Koch brothers has been an epic dispute, costing many millions of dollars in legal fees, involving allegations of fraud and blackmail, and a series of lawsuits lasting over 20 years.

For siblings to fight over commercial matters must be much worse than non-blood partners arguing. No doubt such rows involve much more than money, and will include struggles over power, recognition and ego. Indeed, one Koch brother reckons his sibling used to bully him as a child, and that being cheated of hundreds of millions of dollars of assets was simply a continuation of that brutality.

The world’s richest siblings, the Ambani brothers, waged an eight-year series of court battles. These arose because their father died intestate, and the siblings could not agree how to manage his diverse interests, so they split their late father’s Reliance industrial empire. But, if anything, the conflict multiplied, including defamation suits and hostile advertising campaigns. Ultimately the intervention of government and their mother brokered a truce two years ago.

Similarly complicated partnerships are where husband and wife choose to start or operate a business together. A highly successful television entrepreneur told me recently that she enjoys having a husband work with her who is totally dependable and similarly motivated. But she also said that in such a relationship there is no escape – work is omnipresent in the office, at home and even on holiday.

Such “copreneur” pairings are not necessarily egalitarian, but work best where each half of the couple offers complementary talents. For example, at Body Shop, Anita Roddick was seen as the principal founder and driving force behind the retailer’s achievements. But while she provided the passion, her husband was the business brain. Gordon thought of turning it into a franchise – as Anita said: “He’s the doer, I’m the dreamer.” Yet without her genius, Gordon might have remained a poet, rather than the co-founder of a chain of more than 2,000 stores in over 50 countries.

Working with a sibling or spouse can be heaven or hell, depending on the pairing. My advice would be that for those who have a choice – think carefully.