Navigating the peril (and promise) of sibling relationships in a family business
Successions in a family business are difficult—but become even more so when there is more than one child who will inherit the business and assume its leadership positions. Many family business leaders dream of the day they can pass the business onto their children—but that’s easier said than done. If there is more than one sibling involved, things can get complicated quickly. Sibling rivalries dating back to childhood can resurface. Jealousy, tension and disagreements will quickly bubble to the top. And if you’re not prepared, things will get worse before they get better.
The Issue(s) at Hand
A variety of issues can arise when multiple siblings are involved in the business, but what they all have in common is that they are emotional issues that were created outside of the business—they are simply part of being in a family. In my work as a family business consultant, I’ve seen these emotion-driven problems arise in different forms. For instance, a parent with lifelong dreams of the eldest child taking over as the next leader, but the eldest child doesn’t want to be in charge—they’re just afraid to say it because of fear or guilt. Another emotional roadblock I’ve frequently encountered is the inability of a family member to overcome their family “brand.” If one sibling is known as the “party guy,” that label can be difficult to overcome, even if it no longer holds true. The family brand you carry into the family business—the responsible one, the crazy one, the quiet one—tends to stick, and I caution family members to understand their existing brand and cultivate a new one if necessary.
These emotional family issues can and will spill over into the business part of the family business. Here are some common operational issues that surface due to the “family” part of the family business:
Who’s in charge here?
Each sibling will naturally feel like they have some control over the big decisions in the family business. After all, it’s a family business. But if there is no clear direction as to who has final say, what happens when there’s a stalemate? Leadership ambiguity can quickly create resentment among family members.
Who gets paid what?
Whether a family member is the CEO or hardly involved in the business, everyone in the family usually sees some level of ownership or compensation from the business. But how do you determine who gets what? Compensation is a touchy subject in a family business—but you must touch it.
Clashing values and styles
Siblings naturally have different personalities from each other. But in a work setting, those personalities can clash. And if siblings don’t share the same values when it comes to the business, the result is often stagnation.
Baggage from home
They way siblings communicate with each other at home cannot be the way they communicate at work. Emotional shorthand like interrupting, joking or snide comments are visible to the rest of the team and can undermine leadership.
Fear of telling the truth
Many (most?) families avoid the hard conversations out of fear or guilt. Even large issues can go undiscussed—predictably leading to disaster.
All the above can and will have a negative impact on the business. From sibling rivalries that reverberate across the entire company and damage the culture, to clashing values and work styles, to deterioration of family relationships in the business and at home. It’s not optimal.
But how do you solve issues that are emotional, historical, and largely out of your control? You can’t. But you can solve the puzzle of how to balance the business with the family to create success, and a legacy. You just have to control what you can control.
The Solution: Governance
Governance isn’t a dirty word, and it’s not a bureaucracy. It’s an act of love to your family and it’s responsible stewardship of your family business. Creating clear governance rules around exactly how the family businesses is to be run eliminates the emotional issues that are baked into any family business. It gives clarity, comfort, and a true guiding document for the business that will carry it into the future.
Governance can help your business:
- Define how decisions are made—and who is responsible for making them
- Develop protocols for conflict resolution
- Clarify roles and expectations
- Determine compensation and involvement in the business
- Build guardrails wherever necessary across the business
Developing air-tight governance rules for your family business is essential. View it as mandatory—but do it with love. It can be the ultimate family meeting and will lead to a very positive outcome for everyone. The process isn’t always easy because of the emotion involved. You may want to consider outside help. But taking the time to create governance will be a big step in securing the legacy of the business, and the family.
