A family business can have many positive advantages, including strong cohesion among members and a shared commitment to success. However, family businesses can also sometimes be highly conflictual and chaotic.
It seems your strength can become your weakness.
Managing a business with family members creates several issues that can have a huge impact on the survival of the business, as proved by research showing fewer than 30 per cent of family businesses survive to the second generation and only 10 per cent pass to the third.
Among the different issues leading to such failures, conflict between the children involved in the business can be especially damaging.
This kind of conflict is commonly referred to as “sibling rivalry” and can be devastating when the siblings are highly involved in the family business and are intensely engaged in competition between one another.
Behavioural research shows that sibling rivalry has two different sources: the emotional and the strategic.
Below, I will differentiate between the two types and then provide some solutions for each.
The first type of rivalry is based on an emotional issue stemming from childhood. This can be observed in different levels of intensity among children who may fight between each other in order to gain their parents’ attention, recognition and love.
In such cases, the parents may — either consciously or unconsciously — show their preference for one child over the other.
According to many studies, almost two-thirds of adults reported that their parents did have favourites. This situation during childhood leads to a competition between the siblings as they fight over a limited resource: the love of their parents.
When parents have raised their children sufficiently well, this fundamental issue is corrected in adulthood.
But when this is not the case, the siblings remain stuck at the level of a child with regard to emotional intelligence, and they are not equipped to deal with their need to be loved.
The struggle for their parent’s affection and attention can be so intense that it often leads to unhealthy conflicts in the organization.
In some cases, the rivalry becomes so intolerable that it is impossible for the siblings to continue working in the same environment together. In some cases, it can directly cause the business transfer to fail.
To solve emotion-based rivalry, it is important to work on improving the emotional intelligence of the children. This can be accomplished by encouraging them to engage in activities outside the organization, for example by working in another business. Such off-farm experiences can help them recognize their own value and trust their own capabilities. They will then gain more confidence in themselves and understand that they no longer need as much love and recognition from their parents.
Another method of preventing this issue is to ensure that the siblings do not have the same expertise within the company. This way, they won’t be able to compare themselves to one another as much and will need to rely on each other’s specialty. Having two distinct fields of expertise lowers the risks of siblings fighting to outshine each other in front of their parents.
Seeking the help of a professional can also be very helpful in dealing with this issue. Two approaches can be explored. The expert could directly work with both parents and the children in order to improve their own emotional intelligence. Another approach could be for the expert to help with the siblings’ emotional intelligence and lack of confidence.
It is important to know that if the source of the problem is not dealt with, the rivalry can continue even after the death of the parents. This is because the issue is founded on an emotional deficiency during childhood and not the relationship between the siblings.
We also can observe a strategic rivalry. In this case, the problems are rooted in diverging visions of the company. For instance, the children cannot agree on business goals, level of risk tolerance, roles, responsibilities and salaries.
This can also be related to the personal issues of a sibling, such as if one brother is always late. This might not be a problem when encountered a few times a year at family gatherings, but might be a serious issue if the siblings work together. Tardiness can be the source of various conflicts within the organization.
A similar problem occurs if a sibling has a dependency on alcohol, drugs, sex or technology. The addiction will affect a lot more of the relationship between the siblings if they work together every day.
Strategic development with a professional could be very helpful to define the organization’s vision and mission, the rules, the paycheque, the holidays, the business’ goals, and so on.
The professional can also take part in the annual meeting to help facilitate discussion and to ensure that the overall family objectives are respected by all members.
In the end, choose your fight!
Sibling rivalry is a very serious issue that must be addressed as soon as possible. Otherwise it can lead to the ruin of the family business or even bankruptcy.
Once you have made the distinction between the two sources of the sibling rivalry, then you can start thinking about finding appropriate solutions, remembering that some siblings might show symptoms of both rivalries.
Your priority is to be part of the successful 10 per cent.
But be aware that even though there are many professionals and advisers who may be able to help, sometimes a separation between the business holders is the only solution.
It is a very tough decision to abandon the family business. But is it worth risking your whole family for?