Is it possible for brothers and sisters to work together? Is there still an underlying competition, dating back to the nastiest of childhood rants: “Mom always liked you the best!”!!! On occasion, the family company is put in jeopardy.

Family businesses can work just as well with family members as they can with non-family members unless siblings aren't getting along. A fight between, or among, siblings is one of the most common roadblocks to a thriving family-owned and operated company.

Any parent who starts a business hopes to pass it on to their children one day. However, these fantasies can easily transform into nightmares. When competing personalities are involved, even the best-laid plans of family business leaders can easily fall apart.

When passing a business on to multiple children, parents can unintentionally build an atmosphere that fosters pressure, strife, and, ultimately, disaster. The reason for this is mostly due to personality differences. - child is special, as anyone with several children will testify, and sometimes has a completely different personality than their brothers or sisters. It's normal, but it can cause problems at work.

That is why the vast majority of family businesses do not survive to the third generation. According to research, sibling rivalry among family members and a lack of formal business structure are often to blame.

In 2010, the Northeastern University Center for Family Business held a panel discussion titled "How Relatives Relate: Siblings in Business Together" with two sets of siblings operating two family businesses. All of the siblings were brothers, and they talked about their family relationships and experiences running their family business, as well as offering advice about how to deal with common issues. Childhood rivalries resurface at work, turning the workplace into yet another arena for resentments and rivalry in a complicated, lifelong relationship.

What types of competition do they face on a regular basis, and how will this affect the family business? And, in a similar case, what does a family-business practitioner do? Details will be discussed in the article below!

Sibling Rivalry 

Managing a business with family members raises a number of problems that can have a significant effect on the company's survival, as shown by studies showing that only 30% of family companies survive to the second generation, and only 10% survive to the third.

Conflict between the children involved in the company can be particularly damaging among the various issues that lead to such failures.

This type of dispute is known as "sibling rivalry," and it can be destructive when the siblings are heavily involved in the family business and are fiercely competitive with one another.

Sibling rivalry has two origins, according to behavioral research: emotional and strategic.

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Read: Family Business Challenge: 3 Issue You Can't Ignore‍

1. Emotion-based rivalry

The first form of rivalry is motivated by a childhood emotional problem. This can be seen at various levels of intensity among children who may compete with one another for their parents' affection, recognition, and love.

In such situations, the parents can display their preference for one child over the other, either consciously or unconsciously.

According to several surveys, almost two-thirds of adults said their parents had favorites. During childhood, this circumstance creates a rivalry between siblings as they compete for a limited resource: their parents' attention.

This basic problem is corrected in adulthood when parents have taught their children properly.

However, if this is not the case, the siblings' emotional maturity remains at that of an infant, and they are ill-equipped to cope with their need to be cherished.

The competition for their parents' love and attention can be so severe that it often contributes to unhealthy organizational conflicts.

In certain situations, the sibling rivalry becomes so intense that the siblings are unable to work together in the same setting. It could, in some situations, directly contribute to the failure of the business transition.

SOLUTION:

It is important to focus on enhancing the emotional intelligence of children in order to resolve emotion-based rivalry. This can be achieved by allowing them to participate in tasks outside of the company, such as working in another company. Off-farm interactions like these will help them understand their own worth and believe in their own abilities. 

They will gain more self-assurance and realize that they do not need as much affection and recognition from their parents.

Another way to avoid this problem is to make sure that the siblings do not work in the same department. 

They won't be able to compare themselves to one another as much this way, and they'll have to rely on each other's expertise. Siblings fighting to outshine each other in front of their parents are less likely if they have two distinct areas of expertise.

Seeking professional assistance can also be very beneficial in dealing with this issue. There are two options to consider. 

In order to develop their emotional intelligence, the specialist should interact directly with both parents and children. Another option is for the specialist to assist the siblings with their emotional intelligence and lack of trust.

It's important to understand that if the root of the issue isn't addressed, the rivalry will last long after the parents' deaths. This is because the problem stems from a childhood mental deficit, not from the siblings' relationship.

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Read: Ways to Manage Conflict in a Family Business‍

2. Strategy-based rivalry

Strategic competition can also be seen. The issues are rooted in the company's divergent visions in this situation. The kids, for example, can't agree on business objectives, risk tolerance, positions, obligations, or salaries.

This may also be attributed to a sibling's personal problems, such as if one brother is always late. This might not be a concern if the siblings just see each other a few times a year at family events, but it may become a major problem if they work together. In the workplace, tardiness can lead to a variety of conflicts.

A sibling's addiction to alcohol, narcotics, sex, or technology causes a similar problem. If the siblings work together every day, the addiction will have a much greater impact on their relationship.

SOLUTION:

Strategic planning with a specialist will help determine the organization's vision and purpose, as well as the laws, paycheque, holidays, and business objectives, among other things.

The professional will also attend the annual meeting to help encourage dialogue and ensure that everyone is on board with the family's overall goals.

Finally, pick your fight!

Sibling rivalry is a major problem that needs to be resolved right away. Otherwise, the family company will be destroyed or even bankrupted.

Once you've distinguished between the two causes of sibling rivalry, you may focus on seeking suitable remedies, keeping in mind that certain siblings can exhibit symptoms of both rivalries.

Your top priority is to be one of the 10% who succeeds.

Identifying Conflict Resolution Styles

When siblings are at odds, it's not as easy as getting a fast sit-down to repair the relationship. The clash of personalities that caused the chasm in the first place is also the explanation for the difficulty in reaching a resolution. Making changes to how a dispute is handled is important, and it all begins with figuring out how each sibling wants to express themselves. There are five common conflict revolution models, according to the Thomas-Kilmann Conflict Paradigm: Competing, Collaborating, Compromising, Avoiding, and Accommodating.

Knowing when to use which style is crucial to resolving the dispute, reaching a mutually beneficial compromise, and, most importantly, assisting the business. As a family business consultant, I spend time with each sibling to learn not only about their problems with their brother or sister, but also about how they choose to handle conflict.I then use this knowledge to bring all parties to a neutral state, where they can see how their actions affect their sibling and their business. Most siblings are able to "buy-in" and start changing their behavior until they realize the implications of their actions.

Applying the Conflict Resolution Styles

A recent situation between a sister and brother, both in their 40s and working for the family company, is depicted in the following example. This example shows how recognizing your conflict style and making changes will benefit both your sibling relationship and your company.

These siblings are second-generation co-owners of the company their parents created. 

The CEO's sister has an MBA, has worked outside of the business, and has held many leadership positions. The younger brother has only worked in the family business and has a two-year community college diploma. 

At first, the older sister was enraged and irritated by her brother's perceived lack of management skills. When she interacted with her brother, she was typically defensive and used a "Competing" confrontation style. 

Her brother had a more passive personality and developed a "Avoiding" style when it came to dealing with conflict at work, especially with his girlfriend. Neither was aware of the frustration and dissatisfaction that their dispute solving styles were causing among the staff. Furthermore, crucial decisions requiring both of their input were not taken in a timely fashion.

They were both open to evaluating their own styles and making behavioral improvements after we pointed out how their approaches to conflict were negatively impacting the workers and the business. 

They realized that their failure to provide a fruitful dispute resolution mechanism was creating significant problems in the organization. The types of decisions that would fit best for the five different styles were decided. 

They've greatly decreased negative experiences, employee productivity has increased, and they've met their sales targets (in spite of COVID-19).

It doesn't happen immediately, and I use a variety of behavioral interventions and advice to assist them. Over time, the sibling working relationship improves dramatically.

Repairing the relationship will take time, but it is the only way to forge a new path forward and reach a settlement that all parties will agree on. 

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Read: Becoming an Effective Executive Member in a Family Business

Sometimes this entails one sibling leaving the company, and other times it entails establishing solid governance that eliminates gray areas and directs all future decision-making. The ultimate aim, however, is to establish a system that benefits the business while still preserving the family relationship.

Since prevention is better than cure, the first step in succession planning should be to consider the possibility of sibling rivalry. 

While ensuring sibling fairness is a good idea, it isn't always the best option. A better alternative would be to offer the company to a few children rather than all of them, with non-shareholding children being compensated appropriately. If this isn't feasible, will a well-drafted shareholders agreement be used to resolve any conflict?

If it's too late, resolving the dispute to prevent damage to the company must be the top priority. A trustworthy non-family member in a position of authority (e.g. chairman) may be useful in helping to diffuse family problems by being able to see things critically.

If they can't handle the feuding siblings, the only alternative could be a de-merger of the company or an exit by one of the feuding shareholders. 

However, if everybody wishes to retain the company, finding a compromise may be difficult. Judicial action may be the only option at that stage, but formal alternative dispute resolution mechanisms such as mediation should be pursued before resorting to litigation.

Conclusion

In conclusion, as any parent knows, sibling rivalries can be a bloodbath. It can be extremely damaging to a business. If informal methods of resolving the conflict are unsuccessful, formal legal avenues may be pursued (click here for a more detailed article on this topic), but they are costly and time-consuming. If it comes to that, you can seek legal advice from an experienced lawyer as soon as possible.

Sibling rivalries have existed since the beginning of time, but in a family business, avoiding confrontation and establishing governance rules between warring parties is critical to survival.

For the perfect integration of business operations, inventory, sales, and business accounting and financial records, you can use easy-to-use ERP software according to your business needs such as SAP B1.

By using this ERP software, your business can easily collect the data needed as well as become a reference for accurate decision making.

Schedule a 45-minute-free consultation with TBI Senior Consultants to help your business grow with ERP.