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Families in Business Together: Set up Rules to Develop a Sibling Bond

Canadian Association of Movers

Siblings can have the most volatile and complex family relationships – and the issues become magnified in a business.

Your brothers and sisters share the same ancient memories of car trips and long-dead pets, know what you mean when you talk about Mom and Dad, and can make you laugh so hard you cry.

But they also push buttons you’d forgotten you had, never overlook old humiliations and painful nicknames, and don’t let you grow up.

Now, place these boiling cauldrons of emotion around a boardroom table and watch the scalding words fly.

The conflicts are often practical. Can one sibling work for another? Should birth order determine hierarchy? Should siblings give in to the one who whines the most to preserve peace, then work around him or her?

The answers depend on the situation. But underlying these problems are some repeating phenomena. The first is that, although they share parents and many memories, siblings often must come to grips with having different perspectives and paths because they grew up at different times in a changing family environment.

Another is that, at least in North America, adult sibling relationships follow no rules. In other words, brothers and sisters have no culturally prescribed joint responsibility, except to care for their aging parents – and the other "child," the family company.

But toward each other, there is no obligation to love, respect, protect or even pretend to get along.

Unlike any other kinship or friendship tie, the typical sibling bond in our middle-class culture is ambivalent – both involved and fundamentally disconnected.

The fact that parents try to interest their children in the family business but give them little assistance in co-existing – because they don’t know how – puts the kids in a double bind: an obligation with no road map.

Jack was a fairly typical entrepreneur. All his life, he told his sons and daughters how important it was to be independent. "I could never work for anyone else," he said. "I made my own success by making my own decisions."

But when the children became adults, he desperately wanted the business to remain in the family. He handed over responsibilities and asked them to run the company as a team. He couldn’t understand why they wound up fighting over territory.

"Consult your siblings," Jack would say. "Why can’t you just get along?" He didn’t realize they were only following the lone-wolf path he had laid out. He even offered to "help" them run the business together, a ludicrous idea because he didn’t know how to do that co-operatively.

This type of situation is common. Without rules for how siblings should work together, and with different views of what the family business should be about and what should take place, destructive conflict is almost inevitable. Businesses need rules by which to operate – and if they don’t have them, they fail.

So how can brothers and sisters make some fair rules that will help them live with – if not solve – their differences as they run the family business? The first step is to recognize that "the relationship" is not just one relationship – it’s three.

In a given setting, they may be relating to one another as brother or sister, as business shareholders or as operational managers. Again, each relationship must have rules.

The family: Siblings need to decide, and preferably put in writing, what kind of family they are. What is the nature of the bond? What does the family stand for and what kind of legacy does it want to leave, if any?

The shareholders: The owners of the business – who are not necessarily the managers – must decide what their goal is, and determine the requirements of future inheritors. Who can own shares? Is the idea to build an empire that will provide training and jobs for all members of the family? Is it to leave a legacy for the owners’ children? Is it to sell the business before the next generation grows up? Will one partner be permitted to buy out the others? Everyone must be on the same page in this respect.

The managers: These are the rules for running the business. Can one sibling report to another? What is the compensation for each job? What information will be shared, and in what time frame?

With the relationship divided into its parts, combatants can decide whether a particular conflict is a family, shareholder or managerial issue, and go to the rule book. Note that this also means that if you can’t abide by one set of rules, you can bow out without affecting your status in the other categories. If you can’t work for your brother and the rules say you must, find another job. You are still a shareholder and a member of the family.

"Fixing" a sibling relationship comes down to whether you want to make it work. The first step is to decide to do so, and to be ready to give up the fantasy that it should be perfect. If you’re willing to work hard and not try to take everything for yourself, you can have a profitable relationship, if not a close one.

ALL ARTICLES PERVIN FAMILY BUSINESS ADVISORS INC.

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