Too much pruning kills the family tree

“My brother and I were stripped of emotional ownership when Uncle Robert took over the farm that had been in our family since the Civil War.”

By W. Clifford Atherton Jr.

My mother was a High. That meant something in Tallapoosa County, Alabama. It meant that you owned land. Good, rich, red dirt that yielded lots of cotton. Of the 1,200 acres that comprised the High farm, approximately half—the superior parcel—was accumulated by my grandfather, Poppa High, during the Great Depression. His five dark Irish daughters, including my mother, grew up there, and as adults steadfastly gathered the family clan on the farm every year. His only son, Robert High Jr. (my Uncle Robert), was always present but kept his distance.

My brother and I learned early what it meant to be a High. Summer and Christmas vacations meant packing our old 1953 Ford and navigating the two-lane highways that led interminably from our home in Texas to the farm outside Camp Hill. While our last name was Atherton, we associated everything about an extended family with the Highs. Poppa took us everywhere. We learned to pick cotton and were pampered by the field hands. We rode on the cotton wagons to town where the cotton was ginned after it was picked. We went to the sawmill when lumber was needed, and to the livestock auction when cattle needed to be sold. Best of all, we went to the two-block main street in Camp Hill, where Poppa would show us off in the hardware store, buy us a Coke in the grocery store, and treat us to ice cream in the drugstore. We basked in our small town renown as Poppa High’s grandsons from Texas.

My identity as a High ended abruptly when I was seven years old. Poppa High died of a heart attack. Soon after, with my grandmother’s consent, Uncle Robert moved his family to the farm. With some of the cash from the estate, my uncle purchased a house in town for my grandmother to live in. The plan was for her to lease the farm to my uncle and receive rental income for life. The expectation was that at her death, the estate would be divided equally among her six children: my mother, her four sisters, and Uncle Robert.

Within a year, however, my grandmother let slip that she had sold the farm to Uncle Robert. That led to a split in the family that has been irreparable to this day. Of Poppa High’s 16 grandchildren, 12 of us had, in effect, been disinherited. We were a mixed bunch of cousins—Athertons, Lands, Woolfolks, and Folkses. But we were no longer Highs. We had been uprooted from the land that had given the family its identity since the Civil War.

As an adult, I have reflected on what happened—on how it has affected every branch of our once close-knit extended family, as well as my own encounters as an investment banker who works with other family businesses. Transferring ownership from a single owner to many more family members in the next generation can create problems for a business that is not growing rapidly. That is why it is common for family business leaders to prune entire branches of the family ownership tree. Many consultants also recommend this step as essential to giving the new leaders the power they need to run the business. While this makes sense from a business perspective, it can destroy the family if it is not done with deliberate attention to maintaining the emotional ties that members of the pruned branches continue to feel toward the business and its deep-rooted place in the family’s history.


Loss of identity

To explain what I mean, let me relate the family experiences my brother and I had after our Uncle Robert moved onto the farm. Naturally, my parents continued to bring us to my grandmother once she had moved to town. But visiting the small, white frame house in Camp Hill simply did not compare with the sights, sounds, and smells of a working farm bigger than a boy could explore. We would never again gather the whole family together under one roof. While we would congregate in the small house during the day, in the evening we would scatter to sleep with a neighbor or at my Aunt Kathleen’s house. Occasionally during these visits, my mother and her sisters would hold conversations in hushed tones out of my grandmother’s range. I always knew they were discussing my Uncle Robert. They wanted to have compassion for their brother. But it was hard to forgive.

It was also hard for my brother and me to understand why we were no longer allowed to roam the farm. We pleaded with my father to let us go there. But he was only a brother-in-law to Uncle Robert, and forgiveness was not in his heart. Just before my grandfather died, he had confessed to my father that he was troubled by Uncle Robert’s ambitions and selfishness. Despite the warning, my father had advised my grandmother to move into town and let Uncle Robert manage the farm for her. After Uncle Robert bought the farm outright to everyone’s apparent surprise, I overheard my father tell one of my other uncles, “I have no respect for a man who would cheat his own mother and sisters.”

While I did not realize it at the time, my mother and sisters held an informal family meeting each summer when we visited. The siblings talked about raising children, the quality of schools, and other parental concerns. They also talked about how the business was doing, and reached an annual consensus about what its future would be. Unfortunately, a significant family member—Uncle Robert—was absent from those discussions.

Other important things occurred during the summer ritual. Family stories were transmitted from one generation to the next. Cousins shared experiences and built childhood bonds that would last a lifetime. Important decisions about family cooperation were made. And the daily preparations and activities created a deep tie to the farm, the archetypal family business.

What grew each summer, indeed, was what I have begun calling emotional ownership of the family business, which is distinct from economic ownership. While my brother and I never expected to become farmers, the farm was a very important part of our identity. While we never expected to own the farm, we expected to always have a connection to it and the right to visit occasionally. We were stripped of our emotional ownership when Uncle Robert took the farm for himself and his nuclear family, and pruned away the rest of the extended family.

Each of us learns to identify ourselves in the context of membership in a family. If the family owns a business, a link to the business is an important part of that identity. For me, being a part of the High family business meant being successful through hard work, and persisting through hard times by sticking together as a family. The lessons were instilled by my grandfather’s success and the family stories about how he achieved it, and were sustained in me and my brother by our childhood play on that rich red dirt. They became a central part of our character. Yet our younger brother, who was born several years after Uncle Robert took over, has none of this experience to benefit him. All he knows is that he has some cousins he’s never met.

Furthermore, pruning the ownership tree converted the sense of success and reward for hard work into a plain sense of loss, for me and my brother and all the other cousins who are not Uncle Robert’s children. It also exacerbated the grieving process my mother and her sisters went through after their father’s death, and continues to fill them with a fundamental sense of grief at having lost the emotional center of what tied the family together. We all feel this connection is lost, and that we have been cheated.

Uncle Robert’s method of pruning hurt his own family as well. His family had to endure a number of hardships, including the death of a son, on their own.

Uncle Robert ended up running the farm, and from a business perspective, that’s what should have happened. But it did not have to happen the way it did. Pruning economic ownership without preserving emotional ownership only caused grief for every family member.


What might have been

A few simple actions could have sustained our family’s emotional ownership. Uncle Robert could have honored the intended deal, paying rent to my grandmother and slowly working out an equitable distribution of the estate among the family that left him in clear control. Real family meetings with the five sisters and their brother could have been held to explain why Uncle Robert should have operating control, and to explore other economic arrangements that would have benefited the rest of the family. With this consensus in place, the family visits to the farm could certainly have continued, preserving emotional ownership and the ties that bound the extended family.

Families with all sorts of businesses can take similar steps to maintain emotional ownership. The issue comes up most noticeably when succession planning begins. Often owners I work with place their full attention on which successor will inherit the business, or which family shareholders with minority interests should be bought out to concentrate control. They routinely ignore the emotional ownership issue. I strongly advise them to consider it as early as possible, because whatever the financial arrangement, if the issue is not attended to, distressed family members can hamper the succession process, and the family can be permanently harmed.

Before, during, and after succession, the family members in control can preserve emotional ownership with simple activities that keep non-owner relatives involved. The head of one nursery business invites non-owning family members to special community events the nursery sponsors, gives them important roles to play, and introduces them to the public as family representatives. Another owner invites family members to annual stockholder meetings so they can remain aware of how the business is doing. Others invite family members to company picnics and Christmas parties. These actions may all seem subtle and symbolic, but symbols are important to the non-owner family member. Consider your own family’s tradition of, say, getting together each Thanksgiving holiday. What happens on any given Thanksgiving is not what matters; the fact that you always get together becomes a symbol of your unity, and that is what matters.

I also advise all the owners I work with to hold family meetings, which are effective for communicating the need to concentrate economic ownership, preventing divisiveness, and heading off possible hard feelings about succession when that comes. Simply getting everyone together helps establish and protect emotional ownership. Scheduling visits to the business, and creating family social gatherings around the visits, further keeps the emotional ties alive.


A return visit

In 1993, a few years after Uncle Robert died, I took my own children to visit my Aunt Kathleen, who lives on 80 acres near the High farm. She was older than my grandmother had been when she had moved to town. She leases her land to her ex-son-in-law who raises cattle on it and maintains a large fishing pond. The arrangement is similar to that which was supposed to have been kept between Uncle Robert and my grandmother. My boys thought they were in paradise. They had never known anything better.

Late in the week, Aunt Kathleen arranged with my Uncle Robert’s widow, Aunt Christine, for me to come visit. It was the first time I had set foot on the farm in 36 years. The old farmhouse had burned down and only the chimneys and fireplaces were standing. I walked the path that led from the old house to the barn. I passed the old well, which was caved in and roped off, and reached the site of the barn, now marked only by the brick piers and large beams that once provided its foundation. Later I stood under the old oak tree in which my brother and I had built a tree house one summer. I looked down the long overgrown drive that led from the county road to the old house. We could always hear the signature whine of Poppa High’s old Ford pickup well before it turned off that road onto the drive. We would scramble down the ladder and wait expectantly to find out what he had brought us from town.

As I walked, I took pictures to share with my brother, who now lives in San Francisco. When we were in college we talked about buying the farm from Uncle Robert. We had no idea what we would do with it, but we always agreed that there was a part of us that needed to be restored.

After walking through what was once a cotton field and standing at the edge of a cool, clear brook where we used to swim, I had seen enough. I headed back to Aunt Christine’s house and entered the back door. She and Aunt Kathleen looked up from their conversation.

“It hasn’t changed much, has it?” Aunt Christine asked. “No, not much,” I answered, as I joined them at the kitchen table.


Cliff Atherton directs the Forum for Closely Held Businesses at Rice University. He is also managing director of GulfStar Group, a Houston-based investment banking firm, where he specializes in advising family companies.