Is it better to have one of the children to run the business in the future or can they run it together as a partnership?
Earlier, we set forth the reasons why choosing a single leader is usually recommended. There are, however, some structures involving the sharing of control that have been successful for some families. There are two basis approaches that have been know to work:
• Family partnerships – Family partnerships can work if each child is a full partner and the partnership agreement specifies that complete consensus is required for all important decisions. This alternative works in situations where the children see each other as equals and there is a strong desire among the children for succession of the business within the family. If a single leader is chosen and other children in key positions with the business do not accept the choice, the conflict created could destroy both the family and the business.
• First among equals – In an alternative we call “first among equals”, one child has more control over most day-to-day decisions, but important, fundamental changes are decided on by the group. In this situation, the boundaries of the leader's responsibilities should be clearly defined and disclosed to all.
The success of both arrangements will depend on shared vision and a strong enough bond among the children that will allow for successful teamwork. The children will need to adopt a balanced approach to building consensus, as very few business partners will agree on everything. As one would expect, the family partnership arrangement is the more difficult of the two to successfully implement.
It should also be noted that the skills required to make these arrangements work don't come naturally to most people. To help smooth the process, the use of a family business advisor as a facilitator can be valuable, particularly in the early stages.
Another approach that some families consider is the idea of rotating control among the children. Though this approach appears to deal with the issue of fairness, it is often a poor business decision. Becoming a leader of a business is a learning process and rotating leadership among a group will more than likely mean the business constantly has a leader in training. In addition, from a customer's point of view, the business can appear to lack clear direction if each successive leader takes the business in new areas.