Sibling Revelry Questions Answered

Carol Ryan
Carol Ryan

Below are a few of the questions that were posed during our Sibling Reverly webinar.  If you missed the webinar you are still in luck.  The replay of this program is available at http://eventcallregistration.com/reg/index.jsp?cid=600t11pk

Q. What about those of us who are not in the sibling generation?

 A. If you are not a member of a sibling generation then much of what we talked about in the webinar is still relevant. For example, if you are a parent, you can think about how you raise your children and the effects this could have on them in the future if they are in a position of making decisions together. Even later generation businesses (cousin owners and beyond) may be affected by sibling bonds as there are plenty of situations where a family branch has to come to a consensus about how they might respond to a situation or decision and the ability to collaborate as a family unit could be very valuable.

Q. How about adopted children as siblings in family business operations?

A. Families will define ‘family’ in different ways – the ways in which families treat adopted children is often related to the age at which the children were adopted. In our experience most children who were adopted at birth or as very young children are treated the same as ‘blood’ descended children in the family. There may often be distinctions when a child is adopted into the family in adulthood – or as part of a second marriage. In this case I have seen those family members sometimes treated differently than blood descendents – from having no access to opportunities to work in the business nor ownership, to having the chance to make a career in business but not have ownership, to having access to it all. I know of a family where an owner adopted the adult children of her new husband and included them in her estate so they will inherit ownership just like any other member of the generation. In terms of working opportunities – whatever requirements are put to all family members should certainly also apply to children who have been adopted into the family.

Q. What do you do when the founder won’t let go?

A. This is a very common challenge. The best advice we can offer to siblings is for you to start to make the decisions that are actually empowered to make. The first one is to have an honest conversation with the founder. Ask him or her if they have any desire to retire, and if so when (some will honestly tell you no, some will say yes and mean it, and some will say yes but everything in their behavior suggests this is not likely to happen any time soon, or in a timely manner…). If they express a willingness to retire but you have your doubts you can certainly ask them about that they perceive as a reasonable timetable. Then you have to determine two things: do you believe them & do you have the patience to wait?

If you think it will be a long journey, if at all before your generation gets any real authority, then you have to ask yourself if you are willing to wait. If you find your patience is very strained by the process of waiting, you need to seriously consider getting out. Do not become a hostage of this situation if it is wearing you down – it will only damage your family relationships and will likely not do much good for the business either (especially if you become bitter, hostile, etc…). When you have a founder who is unwilling to let go it is sometimes much easier if you have siblings who understand your pain. In addition, if you have siblings then you make some joint decisions as siblings that demonstrate to the founder that you are able to work together. If you are not empowered to make decisions about the business – you could make decisions around how you would make decisions in the future when you do take over. For example, draft a policy on how perks will get treated in the business; determine if you would like to have a board and how board directors would be selected, etc… The exercise of working together will be a way for you to feel like you are moving the ball forward on things where you have a voice & as I mentioned, demonstrate to all stakeholders that the siblings can make complicated decisions together. This can go a long way to reducing the founder’s stress that everything will fall apart when they leave, and if their anxiety is reduced on that front, who knows what changes they may be ready to seriously consider…

Q. What is the best way to get siblings to begin sophisticated mode of communications?

A. The best way to ensure the siblings are able to really listen to one another. It is amazing to me how much can be accomplished if individuals will really give each other a fair hearing and seek to understand an issue or concern from their point of view.

If there is limited harmony between the siblings this may initially need to be facilitated conversations to help create the ‘safe space’ where everyone trusts that they can really speak their mind and be heard by others. When we work with families we almost always interact with each family member individually initially, to help us better appreciate the diversity of views or concerns, and to build an alliance and comfort with us, so that we can be trusted by all to create a ‘safe space’ where hard discussions can be had.

Q. How do you create an atmosphere of trust when the feeling is that only one sibling is the confidant of the founder?

A. If can definitely be a challenge when there is a ‘first among equals’ dynamic in a sibling group. If one sibling has far more access to information than the others this can breed distrust and jealousy. One important point for all families to bear in mind is that even if a member of the sibling team is the ‘most’ qualified to lead the business because they have the most experience or best knowledge – that person will not succeed if they do not also have strong ties to the family. Therefore, the sibling who is in that ‘favored’ spot has a challenge that they have to invest in their relationships with their siblings – and while they do not want to violate any confidences of other family members, it may be important for them to use the ‘special status’ they have with the founder to explain to that person that they have to share more broadly with the family or run the risk of creating mistrust between siblings.

Q. How do you get around entitlement – i.e. I’m an owner so I’m entitled to a place on the Board I’m entitled to make executive decisions?

A. As I believe we said on the webinar – entitlement is about the most toxic attitude you can find in a family business. Once a person believes that they ‘get’ to do things just because they are in the family the risk is that will compromise both family and business relationships. It is important to make clear to family members that if you have strong non-family executives, meddling family members who offer input on management decisions & expect their views to hold sway, are a serious risk for turnover. The best and the brightest employees will not tolerate this for long. Likewise, if you go to the trouble of putting together a serious and professional board, there is nothing that will kill its effectiveness faster than populating it with unqualified family members who are unwilling to work at developing skills & competence to add value – but rather feel their last name is necessary & sufficient.

Having said that – there are plenty of family businesses who want family on their board and do not have family who are as well qualified as outsiders. We would typically advocate for having some voice of the family on the board, but would suggest that this person should have as strong business experience as possible, or get some training around the governance role, etc. so that they are positioned to add value – not be a distraction. No one enjoys feeling useless, board members appreciate having some grounding so that they feel they can follow the conversation more effectively.

The bottom line is if a family member just feels entitled to warm a chair and are unwilling to put in any effort to learn how to do a good job, this is a huge risk (to the business and family – as all competent people will be angered by the presence of such an attitude) and should not be tolerated in any family.

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