Conflicts That May Affect Your Family Business
When a father and his son, brothers, or other family members who hold positions in the firm, or at least profit from it, have conflicts, operating a family-controlled business can be extraordinarily difficult. Unless the executives confront their feelings of hatred, the company will fail and perhaps perish, according to the writer. He offers suggestions on how family members may learn to cope with their unusual circumstances. However, he comes to the conclusion that professional management is the only truly viable option.
The most successful business executives in the United States are frequently men who have created their own firms. Ironically, their tremendous success is frequently accompanied by personal difficulties of a severity seldom seen in professional managers. These difficulties make family businesses among the most difficult to manage.
It is self-evident that when managerial judgments are influenced by emotions about and obligations to family members in the business, when nepotism has a negative impact, and when a firm is run more for the sake of a family tradition than for its own needs and goals, there will be difficulties.
However, the problems of family businesses extend beyond these issues. I’ll take a look at some of the more challenging underlying psychological aspects behind running these enterprises and offer some methods for dealing with them in this post.
Find out more about the problems that can plague family business
The Entrepreneur is the Starting Point
The difficulties of the family business, start with the founder. He is frequently an entrepreneur for whom the company serves at least three important purposes:
(1) According to research, the entrepreneur, frequently has unresolved issues with his father. He is, therefore, resistant to being overseen and begins his own firm in order to surpass his father and avoid the dominance and rivalry of the most powerful personalities.
(2) A business is the entrepreneur’s “baby” and “mistress” at the same time. Those who work for or alongside him are typically his instruments in the organization’s formation.
Any of them who aspires to be more than a tool for the founder—i.e., if he or she wants to take power for himself—is very soon likely to find himself on the outside looking in. This is why many companies fail when their creators become aged or pass away.
(3) For the entrepreneur, his firm is essentially a part of himself, a means for him to achieve personal satisfaction and success above all. If he is concerned about what will happen to his company after he dies, it’s most likely that he’ll consider the type of monument he’ll leave behind.
- In family firms, the basic psychological difficulty is rivalry, which is exacerbated by feelings of guilt when more than one family member is involved.When a business begins to attract significant attention, particularly when it becomes successful, its founder may be affected by the rivalry. Even though no relatives are in the business, the founder may feel threatened (justifiably or not) that employees want to take him out of his position of power.
Rivalry between fathers and sons
As I stated, the business is a tool for the founder, and it is an extension of himself. So he’s having trouble giving up his baby, mistress, instrument, source of social power, or whatever else the firm represents to him. Typically, he has difficulties delegating power and will not retire even after being repeatedly assured to do so.
This type of rivalry has long-term effects on father-son relationships. While he wishes to pass his business on to his son and see him succeed, the father unconsciously believes that ceding control would reduce his masculinity.
He must, at the same time, and also, unintentionally, continue to demonstrate his own competence. That is, he must constantly assure himself that he is the only one who can make his organization succeed. The father does not want his son to win, even though he may not realize it. Remove his baby and lover from him. Displace him from his position of superiority.
The father’s conflicting emotions make him act unpredictably in an inconsistent manner, which leads those who know him to believe that while he desires the firm to flourish, he is also determined to see it fail.
The father’s feelings of rivalry are represented in the son. The growing boy naturally seeks greater responsibility and liberty to act responsibly on his own, as he matures. He is furious, however, by his father’s intrusions, broken retirement promises, and self-promotion.
Why Don’t You Allow Me To Grow Up?
Fathers and sons, particularly the latter, are extremely devastated by these quarrels; the father views his son as ungrateful and undeserving, while the son feels guilty for his hatred.The father feels that his son will never be man enough to run the company, but he tries to conceal it from him. The younger son desires to take the stage and awaits impatiently, but he remains steadfast in the wings, sometimes for years after his elders at non family businesses typically assume executive responsibility.
If his demands become so great that he considers quitting, he feels disloyal yet also anxious about missing out on the chance if he could only wait a bit longer. He defers his expected pleasure and gratification, but as each delay occurs, his anger, disappointment, frustration, and tension grow.
‘He’s Ruining the Company’
Naturally, the son has strong rivalry’s emotions as well. Alternatively, he might face aggression from his father and rejection of him, or abject reliance on him. The competition may result in a manipulative alignment with the mother against him at times.
‘The old man really made it’
The problem for the son, on the other hand, grows increasingly severe when he eventually takes control. The father has frequently been rendered obsolete in his management theories. The organization may have outgrown the ability of one person to manage it efficiently. That individual may have been a one-of-a-kind talent with an almost unrivaled level of imagination, creativity, or drive. In addition, he may have been a dynamic figure admired by both coworkers and the general public. Whatever the combination of variables, the son will most likely be required to assume control of an organization with a number of flaws hidden behind a powerful façade. For these reasons, many firms fail at the conclusion of their founders’ tenures, are stolen or combined with another company.
Rivalry between brothers
The rivalry between the brothers is matched by the rivalry between the fathers and sons. The sons’ rivalry could be exacerbated if the father tries to play them off against each other or has chosen one as his successor, as I demonstrated previously. (In my experience, the most difficult situations of this sort occur when there are just two brothers in the business.)
The issue is made more difficult if their mother and/or their wives are also active within the company. Mothers have their own favorites, regardless of what they claim, and each wife has a vested interest in her husband’s job. She may also use him as a vehicle for her own ambitions and fantasies.
The battle for their father’s approval, which began in childhood, continues into adulthood. It might reach such a degree of intensity that it colors all management decisions, adding to the competition for power that exists in every organization.
Normally, the eldest sibling succeeds his or her father. But this tradition reaffirms the younger brother’s (or brothers’) conviction that the oldest is, in fact, the favorite. However, the older brother frequently has a superior attitude toward the younger. Simply because they are older, the elder is larger, physically stronger, more competent, and more knowledgeable than the youngest in their early years, as in the case I just cited. Only in rare circumstances does the younger brother have a chance to match his older sibling’s abilities, competence, and experience until they’re adults. But the older brother, when he is younger, may believe that his relationship with him is adequate and competent.
In addition, the eldest kid is in touch with his or her parents sooner and for a longer period of time, and their control efforts are distributed more strongly with him.. As a result, the older children have greater consciences, work harder, expect more of themselves, and regulate themselves more firmly than younger ones. The eldest, as a result, will be even more critical of himself than his siblings.
Young and the Younger…
The younger brother tries to make up for the hurt caused by their childhood relationship and his older brother’s attempts to dominate him by establishing a position in the company that is all his own. The younger brother, on the other hand, is kept at bay by this older brother. He guards his territory jealously, keeping the older sibling out so he can show himself, his brother, and others that he’s capable and has a part of the action for which he is solely responsible. Problems become worse if the brothers’ own equal shares in the firm and both are on the board, as is frequently the case. Their board expertise enables them to defend the policy with equal confidence. In contrast, the senior brother does not have this problem. When they return to operations in which one is subordinate to the other, however, the subordinate one, usually the junior brother, finds it difficult to think of himself as a subservient individual.
The younger sibling is usually unable to overcome this problem in their shared relationship. He is similar to his brother in many ways, but he is less confident and believes himself to be under controlled and disregarded at all times. Since the older brother believes the younger one to be less skilled, he is drawn into self-fulfilling prophecies. He is highly unlikely to believe in his younger brother and will thus over-control him, give him less freedom and responsibility—which promote maturity and growth—and most certainly reject all indications of the younger brother’s growing competence.
The younger brother is guilt-ridden if he displaces the older one, especially if he becomes subordinate to him, because he has assaulted and usurped what is often regarded as the senior brother’s rightful position.
Friction among family members
When the father and brothers are involved in a business, their difficulties extend to other relatives. In some cases, it is expected that everyone who wants to join the firm will be given a place. This may have serious consequences, particularly if the positions are sinecures.
The leader of a family business, by definition, has a significant sense of duty to the family fortunes. If he does not make a profit, his reputation in the financial markets may be less important to him than the revenue reduction that will hit his family. This is why he may be easily backbitten by people he knows well and who cannot be dismissed as faceless individuals.
Take Responsibility for It
What are the best strategies for dealing with these challenges?
Most entrepreneurial fathers appear to be having a difficult time coping on their own. They are inflexible and judgmental, finding it difficult to comprehend that there is another viewpoint available to them that they can accept without becoming cowards. Well-intentioned friends who attempt to assist the father recognize the consequences of his actions and consider succession usually encounter resistance.
A number of strategies have proved to be successful. Sons has expressed their fathers that they realize how crucial it is to run their own business, but that it is equally vital for them to be able to “do their own thing.” They then start up little new businesses either under the corporate umbrella or outside of it, demonstrating neither desertion
A father who runs a retail business opened a shop in each of his sons’ communities. They do their purchasing together, with different versions for each community and a shared name and format, but each son operates his own store while the father continues to manage the family business.
The father, for example, combined his firm with a larger one. Each of his two sons was named president of a subsidiary, and the father began a new business while advising his sons on policy.
Whether such alternatives can function is also dependent on how the son behaves. He must be honest with himself and look at his paternal relationship without prejudice.
It’s critical for brothers notice that in their relationship, they are recreating ancient hatreds, and to comprehend the psychological position each takes toward the other. They must talk about them once they have identified these two problems. They should strive to openly express their worries, concerns, anger, and disappointments in order to help one another. They should also be able to express their love for one another. Theirs can’t, by definition, be 100 percent pure because there’s love and hate in every relationship. They shouldn’t feel bad about their animosity with each other, but they should talk it out. They must also consider how to split up the responsibilities in the company so that each person has a chance to learn and display proficiency, and work in a collaborative relationship with other individuals.
A brother can’t easily be subordinate at one level and equal on another. When a brother wants to act as an equal on the board of directors, he runs into difficulty when he’s an operating executive under his sibling. If there is more than one brother on the board, it is generally preferable that only one of them be an operational executive. Of course, such restrictions are simply PC if the brothers get along well.
If the brothers are still unable to resolve their issues, they should seek professional assistance. If that doesn’t work, they might want to go their separate ways and form new organizations. The main issue in this case is the remorse the departing brother will likely have for leaving his family and company behind.
Professional Management is Key
Where there are numerous and intricate family connections and obligations in a business, and particularly confusion over succession, the ideal resolution is one that transcends time. The relatives should establish a trust, removing them from company operations while allowing them to continue to function as a family. The trust may give financial assistance to each member who seeks it in order to start new business ventures on behalf of the family, thus providing a commercial interest that takes the place of previous operational activity. This also aids in keeping family ties tight and maintaining the family’s leadership position in the community.
In general, the fastest approach for any company, family, or non-family to move to professional management is to do so as soon as feasible. Every organization must establish its core goal and then derive goals from it. The company must have a method for assessing how well it and its components are achieving the stated objectives inside this planning framework.
All organizations must raise young people in a planned fashion, thus providing the necessary groundwork for their own renewal. There is no family firm, in my opinion, that can simply rely on family members to keep it going over the long haul.
Members of the family should immediately move up and out of operations in situations with conflict or inadequately rationalized territories. It understands the fact of ownership, but it does not confuse ownership with management.
It also creates a pathway for professionally educated managers to move on to leading operational roles rather than being forced out of the company as soon as they have the ability. The more competitive the industry, the greater this succession pattern is.
The family members, more than anybody else, require their own outside interests from which they may obtain a pleasure equivalent to that provided at work. Otherwise, they will be unable to let go and will continue to act as barriers for others. Furthermore, they will make it difficult to hire and train young people with leadership potential as they grow up, seeing the same
Several families have handled these problems effectively and have developed into highly professional managers. The Dayton-Hudson Corporation and E.I. Du Pont de Nemours are two good examples. In both businesses, family members must compete for advancement on the same footing as nonfamily executives. A comprehensive performance appraisal system, which includes evaluation of the chairman and president by a board committee, is reinforced by this practice at Dayton-Hudson.
It’s tough to manage the difficulties of a family business. That is not to say that one should just put up with them. There’s no sense in getting bent out of shape and moping about it, since self-flagellation is a form of chronic irritation. It does nothing to solve the problem; it simply fan the flames of anger and hatred, paving the road for outbursts, recriminations, and damaged relationships.
A family member can take action to address any issues that have been caused by another individual. If he takes no steps to fix the difficulties and is still compelled to the company, his issue is typically psychological. To be free to make decisions about what he wants to do, he must discuss his feelings with his competition in the organization, which is best done in the presence of a third party. Sometimes expert assistance is required.
As a result of this, the individual will be able to see possibilities more clearly and make decisions more freely because he or she will have less emotional intensity. That’s preferable to the years of protest that usually come with these difficulties, unless the opponent has to atone for his wrongdoing by continuing to punish himself. It is his problem, not necessarily the family business’s, in that case.