Sibling Rivalry or Revelry in a Family Firm?

Pacific Coast Business Times

by Ralph M. Daniel, Ph.D.

How many times have you heard family business owners grumble about feuding brothers and sisters? They report that business and family morale is decaying, and productivity has gone to the dogs. There may even be a scandalous lawsuit between family members, or just plain disagreeable behavior. Perhaps you’ve read spectacularly ugly cases in papers like the Wall Street Journal. You may have the misfortune to be a member of a feuding family firm.

However, you might be surprised to learn that adult sibling rivalry is normal, healthy and predictable. In fact, it can be downright enjoyable, enliven a family firm, and even give the firm a special edge over its competitors.

The true challenge is to convert disabling cutthroat rivalry into good-natured revelry. It is actually not that difficult to channel dueling sibs into a united duo or trio successfully taking market share from their external competitors.

How do siblings make this shift from rivalry to revelry? The first task is to practice resolving conflicts just between the warring sibs. Take the Blois brothers--today they co-manage a highly successful underground construction firm based in Oxnard, with major construction contracts in Santa Barbara, Ventura and Los Angeles.

Blois Construction is considered to be among the finest pipe construction firm in the area. They are viewed by a host of construction companies to be the ‘gold standard’ for innovative management practices, with an emphasis on teamwork, continuous learning and improvement.

How did Blois Construction recover from a near bankruptcy five years ago and a near melt down in brotherly relations? The brothers realized they would have to personally take charge of their sibling relations--a new challenge for partner Steve, the oldest of five brothers, and the firm's CEO at the time, and his partner Jim, the fourth of the five brothers.

The brothers had to break out of four decades of the traditional pattern of older brother (knows the most)--younger brother (knows less). The brothers decided to start settling their differences on their own and this meant not seeking or listening to the well-meaning, but disempowering advice of other family members.

The Blois's solution path may seem counter-intuitive. Shouldn’t other family members intervene, play the peace-maker, mediate or calm down feuding siblings? In most cases the answer is surprising NO! The well meaning interventions of others just keeps siblings from learning how to solve conflicts quickly and effortlessly on their own--a most efficient system for siblings in business together. How much more efficient it is for a brother and sister to walk into each other's office and settle a disagreement on the spot!

Using the Solution Sage Family Business Assessment tool™ for a self-study, the firm earned a healthy 4.1 (out of a total score of 6) on the "Sibling Rivalry Directed Outward" factor, one of 16 factors measured by this diagnostic tool. Here was an objective measure of their ability to channel their natural competitiveness into a unified team, aimed at getting market share, rather than each other.

Using the Solution Sage Family Business Assessment tool to measure family dynamics and sibling cooperation,  the Blois brothers earned high marks for actively using self-reliant conflict resolution techniques. In contrast, the siblings running Specialty Laminates were utterly dependent on aging parents and proxies to repeatedly rescue them from bitter conflicts.

Contrast the Blois's success with the feuding brothers and sisters at the ever deteriorating Specialty Laminates* (pseudonym). Dad died, and left the firm's management in the hands of his ex son-in-law, while his four offspring feuded over whether to sell the company. Each sib tried unsuccessfully to make a private alliance with the rogue ex brother-in-law. Feuds were so pronounced, they couldn't even agree to a recommendation of an immediate fire-sale while their rapidly aging inventory still had some market value!

The firm earned a meagerly 1.7 on the "Sibling Rivalry Directed Outward" factor-- typical of a family firm in which sibling rivalry is unchanneled and unbridled, and wreaking havoc amongst the family and the firm.

What was the key difference? At Specialty Laminates, even after turning over the day-to-day operations to his ex son-in-law, Dad ruled. He mediated each and every one of the multitude of disputes between his adult children. After Dad's death, his long-time friend, and the firm's attorney, took over mediating the siblings' constant battles until his death at age 86. When Dad's "second" died, the crisis blossomed into a full scale war, leaving the sibs to fight it out until little value was left in the firm--and only ill-will remained in the family. A true tragedy could have been averted by simply teaching, and ultimately letting the brothers and sisters practice conflict resolution years or decades earlier.

Adult sibling rivalry in a family enterprise can be replaced with cooperation and revelry--simply provide brothers and sisters the opportunity to practice conflict resolution on their OWN, and encourage them to try it until they get it right.

Ralph M. Daniel, Ph.D. is a business psychologist, and principal of the Center for Family Business Dynamics, located in Larkspur Landing, California. 



Posted on October 8, 2013 .