Better Together, To a Point

Hundreds of years ago in a small Fijian village, a brother and sister could no longer get along. They agreed to split into two separate villages and placed a large stone to demarcate the border. I had the privilege of visiting these villages a few weeks ago. As someone who works with families, I was curious about this story.

When did this happen?
Why did they split up?
Did conflict spring up over the years?
Were there still tensions?

No one had great answers to my questions, except to say the split avoided a war. To the current occupants, it had always been this way. But I did hear some things that piqued my interest. The stone still marked the borders of the villages (which combined, were smaller than a football field). Each village had its own chief and community center (the village’s main gathering place). However, at some point in time the villages decided to share some critical resources, most notably a farm and a school. How could that be?

Conflict in families is inevitable, even more so in families that are running an enterprise together. As Blair Trippe and Doug Baumoel explain in Deconstructing Conflict: Understanding Family Business, Shared Wealth and Power, the high level of interdependence between family members who own assets together increases the likelihood of family conflict.

Our original protagonists, the brother and sister, figured that out – as did the future generations living alongside one another in the villages. Here is what is fascinating. They reduced the interdependence enough that they were able to constructively work together on the things where they were aligned – the school and the farm.

I am reminded of the wise counsel of my colleague (and Harvard Business School professor) Josh Baron who taught me that sometimes families need to “right size” their enterprise. Doing everything together puts a lot of pressure on everyone; pressure that can be released if family members are able to have some freedom to act independently.

Families that acknowledge the tensions that come with owning a business together are much more likely to find the right level of togetherness in their enterprise. While intentionality is a faster path to rightsizing, sometimes it happens by accident. Families who once struggled to work together found common ground after selling one of their businesses, doing philanthropy separately, or even just issuing a distribution.

Not surprisingly, the human need for independence plays a big role. When owners feel locked in to, and reliant on, their family business, the lack of autonomy can draw out some serious anxiety. Reducing that interdependence, financial and otherwise, and exchanging it for independence allows family members to be together by their own free will – which is much more powerful influence than being forced to stay in a locked room.

So, what’s the right way and right time to right size? Will we proactively place our own boundary stones, or will we wait for conflict as a catalyst?