Family Fighting

It is hard not to notice all of the recognizable family names that have appeared on the front pages of the newspapers these days because of their personal infighting and becoming a public spectacle.    

Over the generations, family fighting has affected so many Canadian successful family enterprises, including the McCain’s, Stronach’s, Rogers, and more.  

Family fighting is not new, and dates back to biblical times. The first case was the story of Cain and Abel—Cain, the first born, murdered his brother Abel out of jealousy. Then there is the story of Jacob and Esau.  Jacob was second born, and Esau had the birthright. Jacob stole Esau’s birthright on his father’s deathbed by deception. Why does this happen? And can it be avoided?

Family fighting tends to be motivated by power (and often greed).  And power of course involves ego.  Ego is something that relates to the individual as a person, and not as a part of a larger integrated system. Ego based infighting goes directly against the grain of successful family enterprise planning.

Another large part of family fighting is fear.  Fear is natural, powerful and a primitive human emotion.  We all experience it. Fear alerts us to the presence of danger or the threat of harm.  Sometimes fear stems from real threats, but it can also originate from imagined dangers.  An acronym I’ve often seen used for FEAR is: False Evidence Appearing Real. Can you openly face your fears and communicate them with your family members? Do you have the strength to show these vulnerabilities?

The absence of trust is another motivator to family fighting. How are these questions being answered?

• Can I give them the bad news?
• If I disagree, will they be angry?
• Do they have my back?
• Are they more about stewardship or self-interest?
• Do they have the competency to help us forward?
• Are they limited by their skills?
• Can I trust their personal integrity?
• Are they accountable?

Are the answers to the above questions promoting trust or not?

In the Family Enterprise Advisor (FEA) program, we learned about successful family enterprises that had lasted 100 or more years, with multi generation family members now owning shares as a united team.  When these fortunate families were asked how they were able to work together successfully and survive this long, the answer they gave was truly enlightening. 

Invariably, they said they treat the family enterprise as more important than the individual self in terms of their decision-making i.e. they ask how the outcome of each decision will affect the family enterprise, rather than themselves. In essence, they have removed the personal ego from their decision-making equation, to make it more likely they will unite in their decision making.

To unite in your decision-making and decrease your family fighting you must have effective governance to work out differences. This can be as simple as setting rules of the game to how you communicate with one another and knowing things as simple as “How do you know a conversation is over?”

The time to set up these governance structures was 20 years ago.  The next best time is right now.

The key attributes to family governance are:

• Safe space: A place where a person can feel confident that they will not be exposed to criticism, or any other emotional or physical harm
• Relationships are horizontal. No one person is more important than the other and everyone has a voice.
• Communication is honest, kind and truthful. Difficult conversations are important to have

In determining how decision will be made and setting up governance structures, you must also define the difference between the content and the process.  That is the “what” and the “how”.  Too often families go around in circles saying they’ve communicated for years and have gotten nowhere.  This is because the process to the task at hand was not determined.  Asking “how the “what” will be dealt with?” is often left out of the conversation and no one is accountable for moving decisions forward.

The content is what the meeting will deal with. For example, tax planning, estate planning, family therapy, investment strategy and the like.  This is the task, the “What”.  On the other side is the process, which is the attitudes, behavior, and environment. This includes how the “What” will be dealt with, specifically: communication, collaboration, decision making, facilitation and the like.  When the how is focused on accountability is given and an action plan is put in place to move forward.  A skilled FEA has the ability to put such a process in place, and stick handle the sensitive conversations that sometimes a family is not able to handle on its own.  Let’s face it, it is much harder to raise your voice or use profanities with a stranger in the room acting as a facilitator.

In the FEA program there was great focus on relationships and looking at a families relationship capital.  A great question to ask a family enterprise is, “Do you have the relationship capital for long term wealth creation?”

The power of a family leader is to build relationships.  Why aren’t family leaders better leaders? Because they pretend that the challenges of leadership are rational and tactical rather than emotional and conversational.  To eliminate family fighting you must focus on your relationship capital.  There must be trust, loyalty, and a focus on positive attributes.  There must be the presence of goodwill, grace, forgiveness, commitment and stewardship motives that allow for effective interpersonal interactions.

Another powerful question to ask your enterprising family is, “What are you doing as a family to build relationships?”

Relationships build trust.  When there is trust there is greater connectivity, greater forgiveness, the presence of goodwill.  With all these character traits, decisions are made simply and quickly.  When you are all prepared to run the same race and on the same team with the same vision forward the baton passes from one hand to another with a much greater smoothness to win the race.

When there is a break in relationship capital, there is a great cost as we have too often seen in the headlines.

Choosing the road to be a family enterprise is a hard one.  You will have to push yourself past your comfort zone and the things you know.  You will have to face emotions and the better prepared you are to embrace all emotions the stronger your relationships will be.  The stronger these relationships within the family are, the less family fighting you will have.

Decision Tree Question: Are assets intended to be retained in a single pot and managed on behalf of future generations?