Sibling rivalry is a complex phenomenon. It has been observed in the animal world since the beginning of time and has been captured in the written word at least as far back as the book of Genesis. For an enjoyable, historic perspective, read “Sibling Rivalry, a History” by Peter Toohey, The Atlantic, 30 Nov. 2014.

As Toohey points out, “[a]t its most benign, family jealousy between siblings reflects a competition for resources.”

Rarely is the dynamic of sibling rivalry played out more dramatically than in second generation family businesses, where the resources at the center of such competition are power and money.

Competition among adult siblings can be fierce, particularly when childhood emotions that were never fully acknowledged or processed may influence behavior in the business for many decades.

I have been present at board meetings where second generation sibling owners—in their 60s and 70s—jousted over which of them had been allowed to play little league baseball as children, and which had been required to work in the family business by the founding patriarch, as though the latter group had been conscripted into the Czar’s army.

Drivers of sibling rivalry

While biology, psychology and experience all contribute to the causes of sibling rivalry, within the family business there is often an added driver unique to the experience of the children of entrepreneurs.

Typically, the family business was started to support the family and was operated in a manner, therefore, with few boundaries between work and family. Accordingly, the founder served in three pivotal capacities: as owner of the business, as chief operator of the business, and as chief provider for the family.

Consider, then, what has been modeled for the members of Generation 2 about what it means to be “the owner” of the family business. A man or woman, respected by all stakeholders, with all of the answers and all of the power, and accountable to no one: an omnipotent, benevolent Army of One.

Can there be any wonder why this mantle can be so alluring to the members of Generation 2 … the yearning for control, respect, power, and freedom? But, first, that mantle must be earned.

Then imagine the resentment…

…if you were the sibling not allowed to play little league baseball, and your brother who did, gets the nod to succeed the founding parent as CEO; or,
… if you were the daughter who worked longest beside Dad in the family business, who among her siblings knows the operations of the business best, and Dad gives the nod to his eldest son.

Then…imagine the RAGE!!

Mitigating sibling rivalry

Central to the ability of the founding entrepreneur to have functioned successfully as an Army of One—from inception to the point in time where other family members enter the business—is that when one individual occupies the three essential roles described above, the system is free from conflict in decision making. This is not to say that there are no tensions in the family business–just that there is no conflict; that is, everyone knows how decisions will be made, and who will make those decisions.

When it is time for the siblings of Generation 2 to take the reins there can no longer be an Army of One; as, there will be multiple owners and, inevitably, divergent ideas. The “how” of making decisions is no longer obvious. Rules and processes are required. Neither rules nor processes in decision making, however, were ever modeled for Generation 2 by the founder.

If sibling rivalry is to be mediated in the family business, the idea which has historically been modeled for Generation 2 – that is, that to be the owner of the family business is to be the omnipotent One – needs to give way to a more sophisticated but foreign concept: A concept which recognizes and respects the unique and separate roles which ownership, directorship, management, and family are called upon to play in the family business dynamic.

There must be rules for the making of decisions. The rights and obligations of an individual’s status in each of the four constituencies need to be understood, agreed to, and respected. Though all four constituencies need work in a coordinated manner, systems need to be adopted to ensure that family and owners do not interfere with or frustrate the work of directors and/or management.

This is not a matter of intelligence. It is a matter of will.

The matter of embracing the roles of ownership, directorship, management, and family as separate and distinct from one another is almost always complicated by the fact that some (or all) of the members of Generation 2 occupy positions in all four categories. This reality requires an additional level of discipline and support.

Once siblings come to understand that the position of greatest power and reward in the system is that of owner, and develop a respect for the other three functional roles described, the internecine squabbles over position and title may begin to be mediated.

For such growth to occur, the family must be introduced to new forms of behavior through education and modeling of those new behaviors. A catalyst will be needed: one with the ability to understand and help guide the business, on the one hand, as well as the ability to help change human behavior, on the other.

Had Cane and Abel had such a catalyst, it might have made for a very different story.

Until next time …

The Owl

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