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Case Study 1: A Case of Sibling Rivalry

In one small family business with a father and two sons the conflicts were not faced in a timely way. Over the course of twenty years the brothers had built up a large amount of resentment, with Dad mediating the conflicts for years. By the time Dad was ready to retire the brothers could barely sit in the same room together, never mind run a business together. Their conflicts were not new. They had been fighting for years and had never found ways that resolved conflicts that left their egos and sense of self esteem intact. Further they had never learned “how” to resolve conflicts. Dad approached us hoping not to have to sell the business

What We Did
As is our custom, we began by interviewing not only Dad and these two sons, but also Mom, the daughter and several non-family employees.  We learned not only the above information but also that the communication and ability to resolve conflicts were quite low.  The children were carrying a lot of resentment towards the parents and the parents felt guilty for several actions in the past.

We first suggested Executive Coaching for each of the principals (father and 2 sons) so that each could learn how they could adapt their communication style for optimum results. These private meetings gave each person a place to reflect on their own behavior, each other, the family and to develop communication skills.

We also recommended a series of meetings, Teamwork Skills for Family Members. These training sessions were used to teach the skills. Usually these sessions are 3 hours long and provide a model plus practice opportunities to improve Family Communication and Conflict Resolution. It is here that a number of values and techniques are taught regarding development of Healthy Family, Self-Esteem, Trust-building and Conflict Management.

Third, we recommended the development and implementation of a Family Council. The Family Business Council provides a Forum for in-depth discussion of the critical issues facing the family business. In small companies, they become like a board of directors or advisors. With careful facilitation they become a place to resolve family conflicts, deepen communication and most importantly prepare the family and the business for Long-term Strategic and Succession Planning.

In this case after clearing a lot of old anger and misunderstandings the family was able to come up with a plan which allowed for the father to retire comfortably, for the family to meet more often without discussing business and for the brothers to divide the business responsibilities in ways that felt fair and clear to them.  At this time they are developing a Board of Advisors, the majority of them not family-related members to help keep the business focused on their objectives.

Case Study 2: Succession in a Complex Family Business

The XYZ Company has been flourishing over the last 30 years.  They currently have over 5000 employees and one foreign strategic partner. Begun about sixty years ago, the entrepreneur turned it over to his 7 children to jointly manage.  They have done an excellent job growing the company into the largest company in their market.  The role of the Chairman of the Board has been in the able hands of the second generation for over 40 years but the second generation is aging.  There are 36 individuals in the next generation, about 7 of who work in the business and already over 100 family shareholders.  They called for assistance in creating an effective succession process and to maintain family harmony in the process.

What We Did

We began by interviewing a number of family members and learned that the family has become increasingly alienated in the last few years.  Several members stated that before they had Holiday Gatherings, but now they have none.  There have been several large conflicts between family members and although there is no open feuding, it was quite clear that there was still a great amount of unhappiness between them.  Although family loyalty remained high, many family members rated the amount of trust relatively low.  Many family members were quite worried that the next generation would not be able to hold the family and business together as well as the last generation.

In working with complex family systems we generally recommend a number of steps, which include, the development of a Family Council, Vision and Mission Statement, Family Seminars and a clear Succession Process.

First we suggested a Family Council. This subcommittee would be responsible for guiding the family through the Succession Process. It was composed of representatives of each family. They met on a monthly basis and became the forum for initial dialogue of succession issues. In this case the Family Council worked parallel to the Board of Directors taking the family conflicts out of the Board meetings.

Second we recommended a series of Family Seminars for all family members. These seminars focused on the development of a healthy family business, the ingredients for success, communication and trust-building skills.  Through careful facilitation these Seminars allowed family members to discuss difficult issues and begin healing the old angers and resentments that were blocking future progress.

Third we encouraged a thorough review and assessment of the Board of Directors.  In this case the Board was quite contaminated by the family dynamics. We helped the subcommittee come up with a structure to reform the board, a profile for new board members and performance standards for the Board.

Fourth we helped the Family Council bring together a Shared Vision of the different family branches.  We use a structured format to facilitate understanding of the organization’s and family’s values, purpose and vision of hoped for achievements. The Family Seminars gave the broad overview of the vision while the Family Council specified and articulated the vision in detail.  The Shared Vision set the goal of family harmony and responsible ownership.

Fifth we assisted the Family Council in writing a Family Protocol and agreement between family members. This agreement included such issues as: the buying and selling shares of the family business, involvement of spouses in the business, performance review of family members working in the business, qualifications needed for members of the next generation to join the business and a training and orientation program for members of the next generation who are interested in working in the business.

Five years later, the family and that business are going strong.  The Family Council has been able to resolve family shareholder differences amiably.  Both the second and third generation are contributing positively to the business and the 4th generation is being groomed. As one of them recently stated: “We will always have conflicts;  now we have ways to resolve them”.


Case Study 3: Dad Just Won’t Let Go

In this 25 million-dollar business two sons had worked with their father for over 20 years.  The father was a vigorous 72-year-old who had quite set ideas as to the direction of the business. His autocratic leadership style had molded the business and his Marketing acumen had gained a strong foothold in a very competitive market.  However, the sons were increasingly restless.  Having assisted Dad for years one son was eager to show his leadership ability, the other was less committed and showed less leadership or need for power. The diagnostic interviews showed a great deal of alienation in the family, an inability to have constructive family meetings and a long –build-up of anger and resentment between the generations.

What We Did

We began with a training model with the family members involved in the business on communication skills, negotiation and conflict resolution skills. We worked to develop a deeper level of trust between the family members – particularly in the 2nd generation. We worked on communication and trust-building skills with all family members both with Executive Coaching and in carefully facilitated family meetings.

We then worked with the family on development of a Shared Vision. We helped the family create a Shared Vision for the Business and the Family. In this case the goals for the business between the generations were quite different.  The Vision for the Family was quite harmonious, although current family relationships were not.  There was more room for negotiation then either party had previously thought. This critical process began strengthening the family as a whole.  This Shared Vision at the top of the organization was then utilized to develop a Mission Statement and eventually a Strategic and Succession Plan for the business.

We encouraged the revision of their governance structure. Like many small businesses, the Board of Directors was really acting like a Family Council, but fairly ineffectively. The Board included several family members who did not work in the business plus the family executives.  We suggested and implemented a Family Council, and a Board of Advisors not dominated by family members.

We recommended a Family Council to deal with all issues that interfaced the family and the business such as family employment, capital investment, long-term planning and a Succession Plan – as this family had already decided to keep the leadership within the family. The fight was about the timetable and decision-making power of the CEO.

We worked with the family to revise and revitalize the Board of  Advisors. We suggested that at least half of the members not be family members. We helped the family create a profile of competencies needed for their board members, and to find the business professionals who could contribute to the firm’s growth.

In this case, although there is still substantial conflict between family members, all agree that their ability to communicate and solve problems as a team is significantly improved. The family continues to struggle but for the first time in many years, they get together for the holidays and are beginning to enjoy each other. The Family Council is improving family relations, key non-family executives have all commented on the improved functioning of family members and the Board of Advisors is seen as quite helpful. Dad continues to steer the ship but has given up several major areas of responsibility. Most important he has set a deadline for his retirement and has begun to make some plans in that direction. The second generation is beginning to work as a team – they both feel that their trust level and ability to solve problems as a team has been greatly improved.  The enjoyment of family life has improved and members of the third generation have now entered the business.

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