Strategies for Siblings in a Family Business

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Much has been written about how to deal with the parent-child relationship in the context of a family business, but less is said about how to address the very common instance of multiple siblings working in the same environment. When parents and children are involved, the balance of power lies with the older generation, but that clarity becomes blurred when two or more siblings are involved.

As a family business advisor, I recently worked with the owner/CEO of a family business who was in the process of creating a succession plan to include his two sons. These siblings, both in their late 30s, grew up very close—even rooming together in college—and expressed great affection and respect for one another…until leadership decisions needed to be made at their family business.

The brothers were at odds; their viewpoints were often diametrically opposed to one another and their discussions typically became heated. Both expressed concern about the other’s perspective and behavior—and their differences at work negatively affected their personal relationship.

The Solution: Family Governance Rules

Stories like this are all too common in family businesses, but, as a family business advisor, I believe there is a way to help prevent such conflict: create family governance rules and specific sibling-focused strategies. By providing family members with a sense of identity and mission that transcends their role as owners of the business, and finding consensus on matters where the owner’s wishes matter most, the hope is that siblings will work as a team rather than as adversaries.

Family governance should focus on areas of concern such as:

  • Setting policies for family behaviors, actions, and decisions
  • Articulating vision and mission or motivating values
  • Setting up a framework to promote learning together, sharing decisions, and communicating
  • Setting family ownership policies.

Additional areas of focus include resolving conflicts; fostering family education and information; coordinating civic, political, and philanthropic roles; and ensuring family fun.

Strategies to Avert Sibling Issues

Other strategies to avert sibling-sibling issues include:

  • Ensuring siblings do not report to one another—encouraging them to find their own areas of expertise.
  • Defining the pay scale, whether it’s based on ability, responsibilities or birth order—or everyone gets paid the same.
  • Providing a clearly defined path to entering the business and equal opportunities once employed.
  • Establishing boundaries between work and personal relationships.

Creating governance rules and employing specific sibling-focused strategies like those noted above provides less room for ambiguity and conflict. That, in turn, helps ensure that siblings in a family business work together to better the business rather than fighting one another, an occurrence that never has a happy ending.

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