Clearly defining roles and responsibilities is essential for success in a family-owned business.
Jimmy ate my candy. Susie touched me. Michael hit me. These are the phrases all parents endure as they strive to raise their children. The rivalry continues as they grow older, just with more complexity. The good news is that it is a phase. The bad news is that is does not really end until 25- the age when your body and brain have completed their growth. At this age auto accidents fall off so dramatically that insurance companies slash their premiums. (More good news, but accompanied by the bad news that at 25 you are now growing old.)
Many adults harbor resentment against their siblings for these childhood events, such that whenever discussions get heated they will conveniently launch these past incidents as retaliatory weapons. “You were always such a jerk growing up” is a phrase you may have heard. The same behavior is often found in unhealthy marriages and other relationships. However, you can end a relationship, but you are stuck with your parents’ other children.
If you are in business with your sibling, your financial well-being and career path are highly dependent on the health of your relationship with your sibling. To have a successful working relationship with your brother or sister, it is vital that you find a way to get past your childhood differences. Get them addressed, get them forgiven, and put them in the past for good.
Another area that muddies a sibling working relationship is confusion over responsibilities. If you both jump into a problem unbeknownst to the other, other tasks fall to the wayside and someone’s effort will be wasted. More often, each thinks the other is handling the issue when neither is. Then the problem goes unaddressed, blows up, and accusations fly.
At a recent family business seminar the panel was asked, “What is the number one action that can be taken to ensure cooperation among family members?” Tommy Mayes, CEO of the family office for the family that invented Vicks Vapor Rub, insisted that “clearly defining roles and responsibilities was essential”. When working with your siblings, it is critical to agree who will be responsible for what. This way, all the important tasks get addressed and there is accountability. Moreover, each child has their own “turf” that they can call their own and take pride in developing it. Teamwork is essential, but it is also nice to be recognized for individual achievements.
Effective communication is also critical for a healthy sibling partnership. Have regular meetings, allow siblings to put whatever they want on the agenda, leave time for discussion at the end and be sure to rotate who leads the meetings. Practice active listening: paraphrase back what you heard to the listener and ask if you understood correctly.
However, money, as we know, is the root of all sibling misunderstandings. Many siblings in business find themselves all with equal pay as mom or dad would not address the issue. We had a client with three brothers all receiving equal salary. One was the president; another was in sales, and the other in design. In the open market these titles alone would demand different compensation. Benefits are simply another form of compensation, and vacation days are usually at the epicenter. While it can be a hard conversation, sibling owners need to agree on a vacation policy among themselves. Ownership is also a form of money: who has how much and how much dividends will be declared can created issues. Discussing and deciding this all upfront will save extraordinary future pain.
Finally, it is important to understand each other’s life goals and ambitions. Life changes as we go through it and so do our life goals. Check in with your brothers, sisters and cousins to see where they are on their path. This will ensure you are all working together in a way that will enable each of you to achieve what you want and need out of your family business.
Henry Hutcheson is the President of Family Business USA, a consulting firm dedicated to preserving the wealth of a family business and improving family harmony. Henry will be presenting “Resolving Family Conflict in a Family Business” at ISSA/INTERCLEAN North America show on Monday, Sept. 11, 2017 in Las Vegas.