It’s time to Sit Down and Talk as Family

By Prof. Enrique Soriano

“Every family business is unique and complex in its own way, so boilerplate solutions don’t always work. Still, there are common rules of engagement for handling employees who are related by blood or marriage.” – Don Schwerzler, a US-based family business expert

Conflicts can come in different shapes and sizes and are part of a normal experience for many family-owned businesses. However, family members have intrinsically complicated relationships, and problems are generally more difficult to resolve because there are three zones of conflict at play—family issues, business issues, and ownership issues. A problem or a dispute (no matter how petty) that happens in one conflict zone can quickly cascade into the different other zones. Whether it is power, envy, control, disagreements about business strategy, issues about in-laws, or any type of family feud, it can be emotionally draining, especially if there is no attempt to resolve it. “It can get so overwhelming. To hide my dislike for my brother, I just ignore it, so when Papa calls us for lunch or dinner with the intention of reminding us about family unity and how he started, I end up faking my emotion just to appease him. I believe my brother does the same too. And I feel miserable because every day seems like a battlefield. Everyone in the family and our executives acknowledge that the ‘elephant in the room’ continues to grow. I am sure Papa can sense the brewing conflict, but he prefers to just downplay it. Personally that is dangerous because the moment he goes (dies), I am sure real animosity will spill out in the open. Unless the family develops a formal structure that is transparent, fair and each of us cultivate open communication now, I cannot imagine what it is like to be family members, owners and managers clashing in the Boardroom!”

That was a veiled threat from one of the adult children of a founder that started the business more than four decades ago together with his siblings. However, due to different management styles, the siblings exited one after the other. Some of them ended up competing with one another. Like most of my clients in Southeast Asia, the founder’s ‘angkong’ (father) left Fujian, China after World War II when he was in his teens.

Bubbling Beneath The Surface

The adult child’s anger and frustration related to favoritism, insecurity, resentment, and rivalry, among the many predictable sibling issues, have made him rethink whether he has a future in the family business. As long as the parents are alive, these issues are just “bubbling beneath the surface.” Asian culture frowns upon the open defiance of the offspring toward their parents. They prefer to just suffer in silence and hide their conflict beneath the facade of a happy face. Metaphorically speaking, bubbling suggests something that is simmering and fermenting or active, and what makes these bubbles suddenly surge and surface above water is when these conflicts transform into real hostility where the battle lines are drawn and the leader is no longer around to reign the warring siblings in.

When these businesses, despite their size, continue to operate without any formal management structure that encompasses standard policies and practices, we can expect and predict chaos under a post-founder scenario. Internal conflict restricts the growth and profitability of the business and jeopardizes family relationships. When the hostility moves into the realm of hatred or extreme dislike, any amount of conflict resolution will be difficult to enforce.

To minimize this future event from happening, it is important for the family to seek help from a family advisor who can understand the family dynamics. This person can act as a mediator and propose creative resolutions to diffuse the tension and mitigate an ongoing conflict. Critically, the role of an experienced family advisor is to guide the family through several phases of the stewardship and succession journey under a climate of trust and understanding.