Siblings often build family businesses. These founding partnerships between brothers and sisters are often sound and strong but there usually comes a point where they decide to go their own ways. This separation can seed a very unhealthy rivalry that is best stopped before it starts.
Active Knowledge Questions:
Does a degree of competition exist between your children and your nephews and nieces? Is it healthy competition?
Many people believe competition to be healthy and encourage it as a form of self-development. But there can be an almost sinister side to competition that can exist within families, which can become very destructive to individual family members, family harmony and, most certainly, family wealth.
Let’s use a simple example to illustrate this point:
Grandad founded the business and passed it onto his two children. They continued to grow the business successfully and also had children of their own. It is an extremely successful business and the families have become well regarded in business circles. However, recently the family decided to break the business up and to each go their own way.
The reasons for the break related to differing views regarding future growth plans and risk and whose children should step forward to lead the future business (when the existing leadership team steps back). It was an amicable split.
The eldest child of each family has now stepped forward to assume leadership of their own family’s business. Each sees their reputation as a business leader on the line as everyone compares their individual success in leading each business unit forward. This has become a very public affair.
Without doubt, one will be seen to outperform the other but the commercial risks that each may take to exceed the other can very quickly, and without warning, diminish the wealth of either family. At the same time, it can destroy the lives of their family and the wider family.
Some would rejoice in such a competition, but I have seen the price for the individuals and the families who unwittingly are drawn into such a battle, and it is not a pretty outcome for anyone.
Always remember, family wealth is typically built upon the foundations of harmony, individual growth and a sense of contribution. Competition can be a great form of individual growth but it can also be destructive. When it comes to compounding family wealth, destructive is not an outcome that you should encourage or seek.
Be very conscious of the dynamic that is developing between family members and ensure it is one that will build unity, harmony and wealth – and not destroy it.
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All the best in the success of your business,
Richard Shrapnel
