The Third Entity: Give the Family Business a Seat at the Table
“I need to fire my brother.”
A client said this to me recently.
Maybe you’re thinking, “Wait, what? How could he do that to his brother?”
I’ll tell you how.
In my work as The Family Business Coach, I often talk about the business like it’s its own living, breathing entity. I even place an empty chair at the table during meetings to represent it.
That chair reminds us that sometimes, we have to make decisions that feel painful in the short term but are necessary for the health and future of the business and the family.
This particular client called me one afternoon and said, “David, I’ve been thinking about that chair. And the business needs me to fire my brother.”
Not because he wanted to. Not because of anger or resentment. Because the business needed him to.
It wasn’t about punishment. It was about patterns that couldn’t continue and a culture that needed room to grow. His brother had stopped showing up, both physically and emotionally, and the ripple effects were starting to wear down the team. The business—the third entity in the room—was suffering.
Understanding the Third Entity
This concept of the "third entity" comes from Organization and Relationship Systems Coaching (ORSC) and also has roots in family therapy.
This concept acknowledges that in any relational system, there exists something beyond the individuals. It’s a shared dynamic or container that has its own needs, energy, and future.
In a family business, that third entity is the business itself.
Just like in a marriage, where there’s the husband, the wife, and the marriage, in a family business, there are the individual family members, the family unit, and the business.
If you don’t listen to the business, you run the risk of compromising everything, including the relationships you’re trying to protect.
So in our work, I ask:
What does the business need to thrive?
What kind of leadership does it deserve?
What patterns are undermining its growth?
In this case, the answer was painful, but clear.
It was time to let his brother go.
Legacy Leadership Is Built in These Moments
The work my client and I are doing now is even harder. It’s not just about the decision in the moment. It’s about what comes next.
We’re helping the family recalibrate the working relationship while preserving the family relationship. That kind of work doesn’t happen by accident. It requires dedication, intention, and courage.
Without that work, the hurt feelings, blame, or silence from the aftermath of the decision can poison the very family culture the business was built to honor.
Family and business can coexist. But only when we’re willing to face the hard conversations head-on, with honesty, empathy, and a commitment to the health of both.
These are the moments that define legacy leadership.
Invite the Business to Speak
If you’re leading a family business and feel torn between your role as a family member and your role as a leader, try this: put an empty chair at your next meeting. Give the business a seat.
When a difficult topic comes up, ask yourself:
What would the business say if it had a voice?
What does the business need to move forward?
What does the culture of this business deserve?
That chair becomes a powerful symbol. It shifts the perspective from “what I want” or “what they did” to “what does the business need to survive and thrive?”
Treating the business like its own entity allows family-owned businesses to respectfully set emotion aside and start leading intentionally.
Family businesses are living systems. They carry generations of emotion, memory, and purpose. It takes tremendous strength to lead with both head and heart.
Are you ready to help your business thrive? I can help.
Keep the family in your family business. Book a free assessment today to see how David, the ORSC-certified Family Business Coach, can take your enterprise to the next level.
