Family Wars: Classic Conflicts in Family Business and How to Deal with Them

Or, you might have a boss who should have retired years ago. Why is she still around? Well, she's probably unwilling to hand over the reins, which means you won't get promoted until she's ready to let go. If you'd like to learn how to get her to step aside without losing face, then you're in luck. Family Wars covers this as well.

The authors stress that when families are able to work together, their businesses have a distinct, competitive advantage over their competition. At the core of a family business are bonds of love, commitment, and trust that are rarely found in other companies.

Sounds like a rosy picture, right? Sure it does. But, just like everything else in life, problems inevitably begin to crop up.

The authors draw on a long history of family-run businesses to show us exactly what can happen when these conflicts get out of control. They give us a juicy, inside look at dramas that have unfolded in the corporate world. Dozens of well-known corporate families that have been splashed across the news for their squabbling are used as case studies in the book.

This focus on the mistakes some corporate families have made is one of the reasons why Family Wars is so appealing. It makes it very easy for us to pull valuable lessons from each case. We get a behind-the-scenes peek at some powerful dynasties like Ford, Gucci, and Guinness, and we can see what they could have done differently to avoid the damage that they caused, both to their business, and to their family. These lessons are picked out by the authors and set in a commentary section at the end of each case study, sometimes with suggestions about how that particular conflict could have been avoided.

And who are these authors?

Grant Gordon is the Director General of the Institute for Family Business. And, he's also a fifth-generation member of a leading U.K. family business. Nigel Nicholson is professor of Organizational Behavior at the London Business School.

Together, the two of them make a perfect team to teach us about the ins and outs of getting along in family business.

So, keep listening to find out why families go to war with each other, why brothers fight more often with each other than with their sisters, and the warning signs that can tell you if your own family is on the brink of a feud.

The book begins by explaining the root causes of family wars.

Starting out, you might think that money would be the biggest cause of conflict in a family business. But surprisingly, it's not. In fact, a much more common cause for fighting is when one family member feels threatened in some way.

For example, picture a typical family business. The father has just retired, and his son has stepped into the role of CEO. He invites his younger sister to sit on the board of directors. Within a few short weeks, her popularity in the company has skyrocketed. She's innovative, enthusiastic, and has a lot of progressive ideas about the company's direction. Suddenly, the new CEO finds himself being constantly compared to her. He becomes jealous, and fires her from the board. She then files a lawsuit over improper termination, and a family feud begins.

Situations like this happen more often than you'd think, and they're especially damaging to morale, for both the family and the company.

In this chapter, the authors effectively lay out a range of reasons why families fight. Sibling rivalry, parental control, inequitable rewards, and scapegoating are all covered here. Readers will find this valuable, because many of the problems discussed show up in every business, not just family-run companies. Once we learn how to recognize these different situations, we can move forward to try and resolve them.

Our only complaint here is that the steps to resolve many of these conflicts are not located at the end of each chapter, as you might expect. Instead, they're lumped together in chapter nine, which is arguably the most valuable chapter in the book. So, although the book as a whole gives us all the tools we need to identify and resolve workplace conflicts, you might find yourself skipping back and forth a bit.

The authors spend the next six chapters expanding on the most common reasons why families fight.

They start with the oldest and most primitive form of family conflict, that of brother fighting against brother. As they see it, brothers have a tough time co-existing peacefully because of male machismo and the competition for limited resources. If the brothers are close in age, the odds of them competing with each other are even higher.

The authors add that problems between brothers can also stem from having inattentive or absent fathers, and a strong desire to be the sole figure in the limelight.

This is why brothers and sisters often work together much better than their same-sex counterparts. Because men and women are inherently different, they often gravitate towards different roles, with different responsibilities. They can co-exist because they're not competing for the same resources, and their goals often don't conflict.

If you're having trouble working with a brother, or even a same-sex rival, the authors suggest finding a neutral third-party mediator to help you work through your differences. In a process called de-centering, most mediators will strive to bring peace by showing each party what it's like to be on the other side of the fence.

If you can't find a neutral mediator, the authors advise taking time to envision what it's like to be in the other person's shoes. They caution that although this won't always solve the problem, it can give you the time and introspection you need to cool off and start engaging in a meaningful dialog to resolve the issue.

The next type of conflict covered is that of leadership transitions in family businesses. What happens when the founding parents die with no will detailing who will take over the business? Or what happens when there is a will, and one child is chosen over another to head the company?

Often, transitions pose the most risk for family companies, because at heart, they're battles over control and power. In most family firms, no succession planning is done at all.

Why? Well, think for a moment what succession planning really means. It requires that a business leader come to grips with his own mortality. He must accept the fact that he's going to hand over everything he's spent his life trying to build. Often, his successor is one of his children, someone who's younger and less qualified. This can be a hard pill to swallow, and it's why so many family business leaders fail to plan for their companies' future.

This chapter is particularly valuable because of the case studies the authors cover. These illustrate clearly just how dangerous a lack of succession planning can be. Several companies have been profoundly affected by the transition of power, and readers can see this in the stories of the McCain family, who owned McCain Foods, and the Watsons, who owned a large percentage of IBM.

If you're currently in a family business, this chapter will inspire you to make sure that you, and your family patriarch, has a transition plan. Without one, it's almost guaranteed that your company will suffer.

Another theme that's covered is called the "insularity trap." This family business problem is very much the opposite of the others covered so far. Instead of being a hot-blooded feud, the insularity trap is a result of family members becoming too secure in their roles.

This often happens when companies experience periods of success – short or long. The ruling family members becomes complacent in their positions. They act very much like spoiled teenagers, expecting that the world will give them whatever they want because they're special.

They appoint sons and daughters, cousins, nieces and nephews to positions of high power, even when there are other people better suited for the job. Their desire to keep the business in the family becomes so consuming that the company begins to weaken.

The case studies in this chapter are particularly interesting, because they cover major companies that most of us are familiar with. In one of these, the consequences of falling into the insularity trap become vividly clear. Eager to prolong their dynasty, the ruling family regularly promoted younger family members to important leadership positions. Yet these executives lacked the skills or experience needed in those senior roles. As a result, more and more decisions began to be made by lower-level managers who were outside the family. Eventually, the company began to slide downward, and the family lost complete control of the business their ancestors had founded.

What we learn here is that ruling families should never get too comfortable. No matter how successful your company is, it's still a business that needs leaders with good judgment. Families must not be afraid of taking risks and trying new things, or ultimately, they'll be doomed to fail.

In each chapter, the authors do a great job of proving each of their points. They offer dozens of examples from history, which makes their warnings impossible to ignore. They give us plenty of reasons why we should stop our family feuding; and if we decide to ignore these, all we have to do is open the book to almost any page to see the consequences.

As you heard earlier, Chapter Nine is where all of these lessons are brought together in one fell swoop. The authors point out here that although family feuding is almost inevitable, it doesn't have to be a bad thing. Conflict can be productive, allowing families to cleanse and renew themselves. Any family can come out of a fight wiser and stronger than before, but only if three key elements to success are followed.

One is to know your own fatal flaws. If you can't face the uncomfortable truths about yourself, then it's all too easy to jump on the back of someone else. When you can face the facts about your own worst tendencies, it's easier for you to be empathetic to others.

If you want to know the other two elements, you'll have to read Chapter Nine.

The authors also give us a helpful checklist of twenty early warning signs that point to an impending family conflict.

For example, behavior change in a family member is a key indicator that an argument might be about to break out. This often points to a change of heart or mind, and you should immediately to try to find out the root cause before things get out of hand.

Other big indicators that trouble might be brewing are procrastination, frequent errors, communication gaps, and bad gossiping.

The warning signs also include hot-button issues that can arouse conflict, such as lack of planning, role ambiguity, and nepotism. Readers will find these two pages invaluable for helping them see whether or not their organization is headed for a feud.

So, can you help avoid catastrophe in your own organization by reading Family Wars? Absolutely. Although the book spends a great deal of time covering the compelling stories of dynasties around the world, it's easy for anyone to draw valuable lessons from these examples. Each story is a dramatic tale of love and loss, feeling and neglect, and each shows us clearly just how complex our family ties can be.

The authors don't shy away from giving us advice on these complex situations. The commentary they provide at the end of each example shows us clearly what we need to learn from each family's mistakes.

Family Wars not only serves as a dire warning to the dangers of feuding with your closest relatives, but it also reminds us why family businesses are so prevalent in our society. Families have incredibly tight bonds that, when called upon, can support a company to reach new heights. Family-run businesses can have a distinct advantage over corporate counterparts if, and only if, family members use their strengths together, instead of sinking into conflict and petty jealousies.

"Family Wars: Classic Conflicts in Family Businesses and How to Deal with Them," by Grant Gordon and Nigel Nicholson, is published Kogan Page.

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