Splitting a pie into three pieces all the same size and giving a slice to each of your three kids is EQUAL treatment. Slicing the same pie the same way and giving two slices to your very hungry youngest child, one to your moderately hungry middle child, and none to your oldest child (who has told you he/she is not hungry and would be okay giving his/her slice to the youngest) is FAIR treatment.
An attorney friend called yesterday to enlist my help and introduce me to a client of his. The father is the founder, one son has worked diligently for 30 years to learn, develop and grow the business, and three additional siblings are not in the business at all. Dad has decided to sell the business and plans to give equal slices to each child. One child is very well off on his own and said he does not want a piece of the “pie” at all. The son in the business feels like he has spent most of a lifetime building something and that suddenly it is being taken away from him. He and his father are not speaking.
Equal is not always fair and fair is not always equal – and the distinction between the two often varies based on whose perspective is considered.
There are many ways this scenario can play out, but without some open conversation and planning at the intersection of family and enterprise, both entities may suffer.
What is the Lesson?
Enterprising Families: Give some thought to the distinction between equal and fair, and consider some discussion with all family stakeholders (in and out of the business) to begin to understand ramifications for family and enterprise alike.
Advisors to Enterprising Families: Introduce these concepts to your clients if they are not already considering them. Encourage them to have some basic high-level discussions with family stakeholders to get a broad understanding of the issues.