From the October 2005 issue of Investment Advisor • Subscribe!

October 1, 2005

Family Feud

Getting along with others in the workplace is hard enough. It's worse if those problem co-workers, are also family members

When Rupert Murdoch's oldest son recently left News Corp., where he was being groomed to succeed his father, it was a reminder of the powerful undercurrents in family businesses.

Unexpected and seemingly irrational behavior often lurks just below the surface of family-owned companies. Even businesses composed of unrelated individuals can exhibit dysfunctional family dynamics. When members of real families are involved in a business relationship, the intensity and depth of decades-old feelings tend to compound the emotional charge.

Despite 30-plus years as a psychotherapist and coach, I'm still somewhat leery of diving into these deep waters. But if family conflicts in the workplace are affecting your clients' plans and peace of mind, knowing how to approach them is important.

My client heads the human resources department of her father's business. Her biggest frustration is the behavior of her brother and sister (the sales and customer service managers), who tattle to Dad about her and undermine her authority. How should she handle this? First, ask your client in a gentle and respectful way to identify specifically what her siblings are "tattling" about. What is she doing (coming in late? taking too much time off?) or not doing (missing deadlines?) that gets their goat? If you can get her to 'fess up about the ammunition they are taking to the father, this may suggest how you can help her address these problem areas.

If she insists that she's done nothing wrong, you may need to talk to her about her past history with these siblings. Is she the youngest? When they were growing up, was she viewed as the family doofus? Did she lag her sibs academically or did she outdo them, prompting them to want to get even?

Once you identify where the past is intruding on the present, you'll be able to address the issue with more understanding. She may then be able to take some positive action to deal with the situation.

To begin, she could give her father a self-assessment of her job performance, ask for feedback, and discuss the "snitching" problem with him. Next, she might meet with her brother and sister, perhaps separately. While admitting her imperfections to them, she needs to insist that they bring any complaints directly to her rather than running to Dad. Finally, I would suggest that she get everyone together so that the dynamics are out in the open. Her goal should be to obtain her siblings' commitment to talk to her when they have problems, and her father's agreement to enforce this policy.

It sounds to me like this company could profit from regular meetings with a business consultant or coach. You might suggest an expert like therapist Judy Barber (judy@familymoneyconsultants.com), in San Francisco who mediates family disputes over business, estate, and probate issues and buy/sell agreements; or Marty Carter (marty.carter@charlesdhaines.com), a communications consultant in Jefferson, Maine, for families, family-owned businesses, and foundations. Being on the outside, a professional is often in a better position to spot dysfunctional dynamics and to suggest ways of combating these habits.

The competition between my client's father and uncle has been fierce ever since one was picked to head the family business and the other left to start his own company. Although my client has become president of his father's firm, his dad (who is now chairman) is still making business decisions aimed at outdoing Uncle Phil. Is there a way to resolve this? This is a truly complicated situation. Not only is your client's father having trouble letting go (a common problem for business owners), but he also seems to be locked into an intense sibling rivalry that may have predated the business competition by decades.

Your client and his father need to talk about Dad's difficulty in turning over the reins and the continuing competition with Uncle Phil. Your client should address these issues with a strong measure of compassion, not criticism or anger. He and his father need to hash out the role that Dad wants to have in the company, which will allow the son to decide whether or not to accept an incomplete transfer of power.

This is another instance in which an outside business consultant can help. By assessing the roles and responsibilities of the company's managers and employees, this impartial advisor may be able to suggest ways the father can withdraw from the contest with Uncle Phil in order to transfer his legacy to his son.

With or without a facilitator, it's important for your client's father to realize the downside of his insistence on staying at the helm and keeping the bitter rivalry going. By communicating his feelings with open-hearted vulnerability, your client may be able to help his dad understand the cost of this destructive behavior and change his ways.

My client is angry and frustrated about her mother's decision to make her and her brother co-owners of the family business. They've both been with the company for several years, but my client is passionate about her work while her brother is chiefly interested in reducing his golf handicap. Unfortunately, before their father died, he led the son to believe he would play a big role in the business. How can I help my client untangle this mare's nest? I've heard many stories about unequal and unfair transfer of family businesses. It's not unusual for a parent to leave the company to a son who is ill-suited to run it, while passing over a competent and motivated daughter or the other way around.

Either way, such an irrational choice has a damaging effect on the talented child's self-esteem and morale, while overindulging the sibling who is not up to the task. In many cases, old traditions are so rigidly held that the only option is for the child to break free and find work elsewhere.

Before taking this drastic step, your client needs to have a series of thoughtful and considered one-on-one conversations with her mother and brother. Perhaps the first step should be to find out how her brother feels about the business. Does he care about it? Does he like his work? How does he feel about the difference between his dedication to the business and hers? Maybe he thinks she's a workaholic who should lighten up.

Once she knows his point of view, your client should tell her mother how she sees things. She needs to make sure her mother knows that she is highly motivated to help the company succeed--but also that if the situation continues to be so inequitable, she may not be willing to stay.

If neither the mother nor the brother show any interest in rewarding your client for her hard work, long hours, and passion for the business, her best course is to sell her share of the business to her brother and move on to a venue where her gifts and experience will be more fully appreciated.

A couple I've been advising co-own a company that the husband founded. As part of the planning process, I asked them to list obstacles to business success. She wrote that she was frustrated because he rejects most of her ideas on how to run the company. He doesn't seem to think there's any problem. I'm no marriage counselor, but is there a way I can help them work better together? It's important for a couple to discuss difficult topics and come to a joint decision. In my experience, however, many men have a hard time learning to share the decision-making process. This may be due to their inclination toward self-contained functioning and their discomfort with marital conflict. To avoid having to wade through a murky swamp of emotions while struggling to negotiate a satisfactory outcome, they may rush to a quick solution that they think is right, or at least best under the circumstances.

Many women need a slower, more emotionally sensitive decision-making process where both individuals' opinions are heard and respected, and where negotiation toward a solution comes after all the thoughts and feelings have been aired. Your female client's dissatisfaction may also reflect the tendency of some women to waffle on claiming their own inner authority (a direct expression of their power). A wife may acquiesce to her husband's preferences for the sake of harmony in the relationship, but later resent him for not soliciting or accepting her input.

These are generalizations, of course. Only by exploring this particular couple's dynamics will you be able to identify where their decision-making has gone awry, and suggest ways to improve it.

If you want to take on the task, ask them to identify a decision that they have been discussing or will soon face. Help them brainstorm opinions and ideas, and work with them to come up with a solution that integrates the underlying needs, concerns, and preferences of both parties. This may help the husband see if he has been hogging the decision-making power, and ideally lead to a better work partnership. If the tension between the two is so extreme that a mutually acceptable solution is impossible, your only choice may be to refer them to a marriage counselor, therapist, or relationship coach who works with couples in business together.

I recommend Azriela Jaffe's Let's Go into Business Together (Career Press, 2001) as an excellent resource for couples like your clients. Family members who are thinking about working together can also anticipate sources of conflict and identify ways to resolve them upfront with guidance from The Partnership Charter: How to Start Out Right with Your New Business Partnership (Or Fix the One You're In) (Basic Books, 2004), by psychologist and business mediation expert David Gage.

When family businesses function well, I believe it is because everyone is committed to well-balanced adult behavior: supporting each other's strengths, tolerating weaknesses, communicating with compassion and honesty. Quite often, this also includes a willingness to hire outside experts to analyze business processes, institute performance reviews, and conduct coaching or team-building sessions to open up an otherwise closed system. To the extent that you can help facilitate the transition from old family dynamics to rational and creative new relationships, you have an opportunity to span the generations as a trusted advisor to a strong, forward-thinking family business.

Olivia Mellan, a speaker, coach, and business consultant, is the author with Sherry Christie of The Advisor's Guide to Money Psychology, available through www.investmentadvisor.com. You can e-mail Olivia at om@moneyharmony.com.

Reprints Discuss this story
This is where the comments go.