Family businesses need to navigate a fine line between the personal and the professional. It’s one of the many challenges unique to these businesses. If you manage to get this balance right, your family life and your business can thrive. But on the other hand, having personal issues creep into the business side can be catastrophic for both your relationships and your bottom line.
This is particularly the case with any kind of rivalry in family businesses. And as if that wasn’t difficult enough to navigate, different management styles can alleviate or exacerbate these issues.
In this blog, we’ll take a deep dive into how family rivalry can adversely affect your business. We’ll cover how to mitigate and avoid potential personal clashes, and how to ensure your business is using the right management style to thrive.
Understanding Rivalry in Family Business
When most of us hear the word ‘rivalry’, we immediately picture a pair of bickering siblings.
Conflicts between siblings aren’t a foreign concept. But when they start to affect your family business, because you have siblings as colleagues who can’t see eye to eye, it’s problematic in a whole new way.
Sibling rivalry is one of the most common types of conflict in many family businesses. In fact, it’s often the reason many family businesses don’t make it past the third or fourth generation. After all, if a parent or grandparent is still around, they can act as a mediator. But what about when these bickering brothers and sisters need to take over? If not properly managed, sibling rivalry in family businesses can seriously affect a company’s future.
First, it’s important to understand the root cause of rivalry. This is often the greatest challenge, as such disputes could be strategic, emotional, or a little of both.
The different types of rivalry
Strategic rivalry between siblings takes place when there are differences between their values, business styles and beliefs, or appetites for risk. They’re the kind of differences that don’t really have an impact on their personal lives. However, they do pose major challenges in the workplace.
And then there’s the minefield of emotional rivalry. Whether the goal here is to get more attention, react to perceived favoritism, or lash out because of jealousy, these kinds of issues affect both personal and professional relationships. Whatever the cause, the end result is generally the same: an ability for rivals to reach a common goal. Unfortunately, they are often deep-rooted, usually stemming from childhood, and therefore can be especially challenging to confront.
This means that how you handle sibling rivalry in the family business depends on the cause.
Resolving rivalry
Strategic rivalries should be handled professionally instead of personally. In other words, they should be tackled the same way as any normal business conflict would be – through established resolution practices. How that’s done should be outlined in your operating agreements. It might include calling in an objective mediator, having team discussions and workshops, or even resulting in disciplinary proceedings.
And what if the rivalry is emotional? In these cases, it’s best to take proactive steps to guide family members toward a more mature relationship with each other. This can be done in a number of ways, including:
- Establishing clear boundaries to help separate personal and professional relationships.
- Conduct a SWOT analysis to determine if it’s possible or necessary to redistribute or retrain family members to work in different areas.
- Call in professional assistance. This can be through business advisors and mentors, to coach your staff on how to share a common business goal. You could also consider an organizational psychologist to help rivals work through their differences.
Regardless of how rivalries present themselves in the workplace, a key factor in handling them is having the right management style.
Differing Management Styles
Just as no two businesses are the same, it’s possible to have a number of different management styles within a company. Unfortunately, not all of them are suited for success – especially within a family business. After all, here, personal relationships and family dynamics also need to be considered.
Some of the more common management styles include:
- A visionary. These are the ideas people who help create the shared vision, and want everyone to get there, but may not be able to tell staff and family how to do that.
- A coach. These managers help employees connect their personal needs to those of the business, to try to get everyone on the same page.
- The affiliate. Here, managers encourage a sense of harmony, through a collaborative style that factors in their staff’s emotional needs.
- Democrat. Such managers value input from the team and encourage participation, but often listen more than they direct.
- The pace-setter. They’re motivated by challenges and setting goals. This means they have high standards, but they can lose faith in themselves and their team if things go wrong.
- A commander. The autocratic leader who expects full agreement and compliance. They give clear directions, but these can often be perceived as orders.
Of course, there are pros and cons to each style of management. But what happens when you have a family hierarchy with rivals who each want to implement a different – or even conflicting – management style? This can lead to demoralized employees, inefficient processes, and a failure to reach business goals. All in all, it’s a recipe for disaster.
Different leadership approaches can cause clashes
Rivalry in family businesses can lead to several leadership issues. For instance, if you have someone with an autocratic style vying against a leader advocating for a collaborative approach, it can lead to confusion and resentment about decision-making processes and tasks.
Management is also responsible for the roadmap that ensures a business can reach its future goals – whether those are expanding, branching out, or continuing without change. But without a unified approach and clear communication, this can become an unattainable goal, stifled by conflict.
One positive is that It’s easier to avoid future conflicts between leaders than it is to mediate existing clashes. After all, there are tools available to help you dictate how the family business should be managed in the event of a change in leadership – these are your succession plan and estate plan.
But how do you handle current management clashes and sibling rivalry in family business?
Mitigation Strategies for Success and Continuity
As with any conflict resolution, the first step to resolving disagreements and rivalry in family business is to ensure effective communication. Your family needs to be able to communicate their concerns, triumphs, and challenges professionally, without it spiraling into tension and drama.
This requires effective governance structures. After all, everyone in the family business needs to know exactly what goals they’re working towards. But they must have clarity on how to do that.
To start with, you’ll need to ensure you have documentation that clearly outlines the following:
- Employee roles and responsibilities. To avoid crossing boundaries and encouraging rivalry, everyone needs to know their sphere of influence, as well as the repercussions of overstepping.
- Meeting agendas and structures. Clear communication is vital, but without structure, this can be difficult to achieve. With standards for how meetings should be structured, you can ensure that all topics are covered professionally.
The next important step is to ensure that everyone has the skills necessary to carry out their roles, and the communication associated with it. This may mean that some family members need additional training or coaching. That could mean team building, refreshed leadership strategies, or simply conflict resolution. Expert advice is a tool you should always prioritize. A business mentor or coach can help you stay objective while working towards a shared goal.
Embrace the challenge
Allow your family and your business to learn from mistakes. No matter how prepared you are or how well-trained your staff is, some risks and experiments fail. But by using failures as an opportunity to review, reflect and revise strategies, you can turn losses into long-term wins. The business world is always changing, and so should your company. Don’t be afraid to try something new, or explore different paths.
For help getting your family business on track with a common goal for business success, Schedule a Discovery Call with our team today!
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