Curing destructive family conflicts

It is a vicious cycle that business leaders are keenly aware of but have chosen to procrastinate rather than take action.

After hearing shocking stories about the destructive family conflicts that I highlighted during my recent talk organized by global giant Sun Life Financial, plus the testimonies of other fellow attendees who shared their unfortunate experiences, James N (not his real name) approached me during a break.

He said, “Prof, the business was started by my parents and up until today, our business is still run like a traditional mom and pop operation. My father still calls the shots and at 72, and sickly, I have never been scared until today when you narrated the ‘Bahala na kayo’ (It’s up to the next generation) mentality of the senior generation when it comes to matters involving offspring behavior. Your description also fits my father’s personality, and you were correct when you said that business leaders are tough as nails in deal making but soft as parents when dealing with disciplining children.”

History of sibling rivalry

Then I asked James N how many siblings, relationships, vision for the future, etc., and he replied discernibly discouraged: “My siblings and I are in our 40s, and sadly, we have differences on how the business is run. There are times when we would all be engaged in heated arguments, and I have to admit, the last two years have been stressful. We tried hiring professionals and they all left after staying for less than a year. What is aggravating the already tense situation is that all of us (siblings) never had the opportunity to experience working outside, so I really do not know what you mean about best practices.

“You also mentioned in your talk about being fair and transparent but honestly, I don’t feel it. And from your definition of entitlement, I think we are all entitled. I am embarrassed to say that we even ask our parents for tuition and the regular allowances of our kids. After hearing your presentation about death and its unintended consequences, I am scared that if papa goes, the business will follow.”

James N is a second generation member of a family business based in Manila. Listening to my talk, he realized that for the family’s 40-plus-yearold manufacturing company to survive another generation, the enterprise must undergo some form of transformation, and he felt that time was running out. He described the business as a ticking time bomb.

I shared with James my experience seeing dozens of family-owned businesses under similar circumstances, where unqualified family members join the business, handed power, became entitled without any defined roles, then suddenly when the leader unexpectedly becomes incapacitated or dies, the business becomes embroiled in a tug-ofwar conflict between the surviving heirs.

It is a vicious cycle that business leaders are keenly aware of but have chosen to procrastinate rather than take action. I painted a tragic scenario of a downhill drive for the business and suddenly James N remarked, “We totally want to avoid that Prof. But how?”

Now is the time to act.

You’ve probably heard the saying “the bone is strongest where the break heals.” The same applies to relationships, and this may, in fact, give family firms a competitive edge. Unresolved conflicts are harmful and put the family and business at risk. Family companies are emotional systems that are more likely to have conflicts.

To be continued...

Curing destructive family conflicts is one of the core topics in the family business forum happening in Cebu on March 9 at the Elizabeth Hotel. I am privileged to have been invited as one of two speakers. The exciting event entitled, “On Becoming A 100-yearold Family Business: Building an Enduring Legacy of Stewardship” is the second of a series of family governance advocacy initiatives organized by Exced Institute and Icon Executive Search, in collaboration with Wong+Bernstein Family Advisory.

Second-generation chief operating officer Franco Soberano of publicly-listed and family-inspired Cebu Landmasters will join me as co-speaker. The event is a follow through leg of the hugely successful program held at the Manila Marriott last year, where my co-speaker was Kevin Tan, the second generation successor who recently assumed the chief executive officer role of Alliance Global, the holding company of his billionaire father, Dr. Andrew Tan. Due to limited slots, please call Dennis Uyaco at 09177983118 to reserve seats.