By Prof. Enrique Soriano
In the high-stakes arena of family businesses, where fortunes are made and lost, a covert war often unfolds behind closed doors. It’s a battle fueled not just by financial aspirations but also by the intricate dynamics of sibling rivalry. Is it solely about money, or is there a deeper, more intricate game at play?
The Heart of the Matter
Peeling back the layers reveals that the battleground isn’t always about cold, hard cash. It’s a multifaceted clash, a symphony of emotions echoing from childhood wounds. Sibling rivalry, the silent saboteur of family enterprises, emerges from the shadows of self-esteem issues and the insatiable need for parental recognition.
Research into the psychology of these power struggles uncovers a primal desire to fill the emotional void left by unmet childhood needs. Even in adulthood, the quest for parental approval continues, sometimes persisting long after the parents have departed. It becomes a saga of emotional hunger and dependence, with the business becoming the arena for seeking validation.
However, not all battles are fought on emotional frontlines. Some rivalries transcend familial dynamics and manifest in the strategic realm. It’s a clash of business styles and risk appetites, a chessboard where siblings position themselves strategically for supremacy.
Unlike the emotional tussle, strategic conflict falls under a different arena, driven by divergent business styles and financial risk preferences. It demands business acumen, financial savvy, and a knack for strategic planning. While psychological wounds may heal with time, strategic scars require a different kind of remedy—one rooted in business solutions rather than familial therapy.
Case Study: AS Corporation
AS Corporation, a successful family-owned manufacturing business, faces a unique challenge as two siblings, Aimee and Allan, find themselves at odds over the company’s future direction. The conflict stems from differing perspectives on business strategy and risk-taking.
- Aimee (49): Cautious and with over two decades in the Corporation, Aimee prioritizes financial stability, focusing on existing markets and avoiding unnecessary risks.
- Allan (45): Eager for innovation and expansion, Allan advocates for aggressive investments in new technologies and market diversification.
- Father-Founder (78): No longer active after he suffered a debilitating condition.
The Conflict: Aimee and Allan’s strategic conflict becomes apparent during a family meeting. Allan proposes a bold expansion plan, emphasizing significant capital investment in cutting-edge technologies. Aimee, on the other hand, stresses the importance of stability and warns against overextending resources.
As discussions escalate into heated arguments, the once-powerful founder, now in his late 70s, takes a meeker stance due to failing health, choosing a non-confrontational approach. The family enterprise teeters on the brink of defeat, prompting a crucial question: how can the frayed bonds be mended, and the business legacy salvaged? Decoding the true nature of the rivalry becomes paramount. Is it a quest for emotional dominance, or is it a strategic standoff that threatens the very foundation of the business?
Consultant Intervention: Recognizing the need for an impartial perspective, the family engages my firm, W+B Advisory. As part of our intervention, we conduct individual sessions with Aimee and Allan, facilitating open discussions about their visions for the company and uncovering the underlying motivations behind their respective stances.
Key Points of Conflict:
- Risk Appetite: Aimee favors a conservative risk approach, prioritizing stability. Allan believes in seizing growth opportunities through calculated risks.
- Innovation vs. Tradition: Allan pushes for innovation, while Aimee emphasizes historical strengths.
- Decision-Making Authority: The siblings disagree on who holds the final decision-making authority.
Right is might. But who is right?
To be continued…
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Join us on December 2 for an insightful webinar on navigating the complexities of family, business, and the family business, all at the same time! In W+B’s upcoming webinar, we’ll feature Cebu Landmasters Director, Senior EVP, and COO Jose Franco Soberano, along with family legacy coach and advisor Steve Legler from TSI Heritage in Canada and myself. Secure your spot now and explore strategies to align core values with growth objectives in family businesses. Reserve your seat today through Pat at email@example.com.