Multi-Unit Franchise: Dysfunctional Behavior within the Family Business

A few years ago, I was at a neighborhood party talking with friends. Sounding too much like the intro to a bad joke, a CPA, an attorney, and a business succession planner gathered at the bar where the conversation quickly turned to a discussion about family businesses. I was shocked to learn that the attorney, whose dad had passed a couple of years previously, was no longer on speaking terms with his brother who lived no more than five miles away. He spoke of the great relationship they had shared their entire lives but when it came to dividing up their dad’s estate between the two of them, his brother became greedy to the point of wanting more than was stipulated in their dad’s estate documents. My neighbor initially balked but in the interest of maintaining family harmony, acquiesced to his brother’s wishes. Unfortunately, the damage was done, and they became estranged.

Unfortunately, this is but one of several scenarios that we encounter as a business succession planners working with closely-held and family owned businesses. It may be differences between siblings, cousins, in-laws or between parent and child but the results can be devasting for family relationships in any of these scenarios. It may begin with some small incident that escalates or a series of decisions that never gets resolved due to differences in perspective or opinion but regardless of the trigger, it can lead to devastating results for families and the businesses they own. A few of the more flagrant issues we see include the following. 

Money

The old adage says that ‘Money is the root of all evil’. While this certainly is not the norm (there are many families who handle wealth with grace and constraint) wealth can tend to bring out feelings and emotions that were otherwise dormant when we find ourselves staring at large estates and assets. This is especially true with new wealth as a result of the death of parents or unrealistic and/or unearned high income for the position held. The easiest answer is to not let money be the sole driver or motivation for work. The most successful business owners and families I see are the ones who recognize their stewardship responsibility to help others succeed.

Power or Control

For some, the ultimate power trip is power itself. The ability to control departments, organizations, or other people (including family members or partners) can run strong for those with high dominance as their main behavioral trait. Not content to collaborate, it can be ‘my way or the highway’ for some of these strong-willed leaders. Their lack of humility usually gets the best of them as they see themselves as doing most of the work and providing most of the wealth through their singular efforts. Recognizing that success is a team effort and that part of motivating and developing others is allowing them make decisions on their own is a great first step. Learn how to delegate and allow others to learn from their mistakes. Successful businesses are the ones that can run without a leader’s constant presence and input. Besides, you will never be able to retire or take a vacation if you believe the entire business revolves around you.

Jealousy

Jealousy can be found anywhere that family members are intent on comparing themselves to others, whether it be other family members or perhaps those in similar positions or businesses. This can be somewhat typical between siblings who lock onto anything that might prove to be differentiating factors, from who entered the business first (‘I started first so I should be in the position of leadership’) to who is working the hardest or producing the best results (‘I work harder than my brother so therefore I should be the one rewarded with stock ownership’). Jealousy can also be common between in-laws. Brothers, for example, might work diligently together to run a successful operation while their wives are in competition to see who has the biggest house, the most recently redecorated resort condo, or the newest car. By the way, the guys are not exempt from this comparison!

Jealousy is a dark companion and can begin with an unreasonable and unsustainable feeling of personal inadequacy. One of the most important and most difficult lessons in life to learn is that we can never be happy if we are not content with what we already have. Certainly, there is nothing wrong with striving for greater success and indeed, those motivations tend to drive performance, but we run into problems when success becomes a substitute for happiness, either as a driver or as a reality. Finding happiness where we are or in the direction we are heading to better ourselves keeps us authentic without worrying about what others have or what others think about us.

Conflict

Some conflict is normal between family members working within a business but constant conflict, especially that exhibited by outbursts and anger, are sure signs of dysfunctions within the family. These types of behaviors easily create tension and resentment within the family which can be difficult to resolve without counseling. This is by far the most common element of family members working together that we find. There are many avenues for overcoming conflict. One method is to develop covenants between individual family members (or any two parties of unequal standing) that outline expectations between them. What do I need from you? What do we do when we experience conflict? What are your expectations of me? This can include behaviors as well as operating expectations. Another element to avoid conflict is to develop a key word or sign, such as raising one’s hand, that tells the other that we need to take a break and address the issue after a cooling down period. This prevents outbursts or escalating arguments, especially in front of others. Weekly meetings to address matters of importance can also be a great way to table issues until you can meet behind closed doors. Open communication is the key to understanding what is going on, not only within the organization but also with partners and key personnel. You cannot over-communicate!

There are no easy answers when there are dysfunctions within a family or behaviors that tend to drive relationships off course. If the issues described here are the result of compensating behavior for lack of love as a child, unrealistic expectations from parents, abuse, or other serious behavioral issues with deep-seated causations, they are best addressed with professional therapy. Certainly, if behaviors are a result of addictions, there is a need for professional intervention and treatment. In most situations, however, the realization of one’s own tendencies and behaviors can be the beginning of finding a greater peace and balance within family relationships.

Ultimately, though not always easy, it is best to determine everyone’s gifts and skills, and place them in the role that best utilizes those traits for the good of the company. Provide training and development to keep family members growing and succeeding. Schedule weekly meetings, sometimes referred to as a Family Business Council, to openly discuss not only business issues but how the family is doing working together. Establish expectations and review them regularly. If caught in situations that are not healthy and appear to be escalating, call a time out and agree to discuss at a later time. These are a few ways to get the ball rolling to ensure that families can enjoy their time together both within the business and outside of the business.

I moved from our old neighborhood a few years ago and upon following up with my old friend and neighbor recently, I was saddened to learn that he had passed away after battling cancer. I asked his widow if he had reconciled with his estranged brother. Fortunately, the illness brought them back together yet without any acknowledgement or apologies for what may have started the initial tiff between them. And perhaps that was the way it should have been. No finger pointing and no blame. It would appear that both brothers realized the most important factor within families, whether working together or not: unconditional love. When someone’s life is on the line, we often recognize the insignificance of the battles we incur for the benefit of ourselves, not for others. My advice: don’t wait for someone’s life to be on the line; act as though it already is! If you recognize these behaviors within your family or within your family business, seek guidance. There is no business (or personal) gain worth a family loss. Look at yourself in the mirror and ask yourself if there would be any regrets in your behavior if you lost a loved one tomorrow. Run your business with passion but also with compassion.

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