RESOLVING CONFLICT IN THE FAMILY OWNED BUSINESS

BY: Bernard Liebowitz, PhD

ABSTRACT

Horror stories about conflict in the family-owned business outweigh reports about successful ones. If, in fact, there are more conflict-laden family businesses than otherwise, then why do family members choose to enter business together at all? Surely, easier and less bruising ways exist to earn a living. An underlying theme observed in family businesses that may provide an answer is that forming or entering such a firm is intended as a positive attempt to resolve long-standing family issues that may not otherwise or easily be resolvable. These conflicts usually appear in full regalia and drama during the process of succession. Numerous vignettes are presented to illustrate this theme, and suggestions as well as a point of view about intervention are offered.

INTRODUCTION

The family owned business (FOB) is part of the fabric of the American work ethic. Threaded throughout are the traditions of entrepreneurship, providing for one's own, and hard work. What could be more warming than a picture of a three-generation farm family (if they still exist) around their computer as they develop a hedging program, with the early sun breaking the horizon over their shoulders?

In addition to this heritage, FOBs also share many of the same economic and psychological advantages all entrepreneurial businesses potentially enjoy, including quick responsiveness to the marketplace, lack of bureaucracy, and close employee identification with the company and its products, among others.

However, despite being woven into tradition and enjoying many advantages over the large corporate undertaking, FOBs have more often been condemned, blamed, cursed, and ridiculed. They are often sources of employment and financial security for otherwise unemployable offspring and relatives. They can be a battleground of constant criticism and tension between founders and their relatives in the business. Ambitious and talented outsiders frequently avoid employment in family businesses. In general, the FOB is often viewed by outsiders as grossly inefficient and by relatives as the fountainhead of unsolvable family disputes.

Given the potential for serious problems in FOBs outweighing their attractiveness, why would a relative want to enter such a business climate? Is financial security or ambition sufficient motivation to overcome the expected stress of being in a business with one's family?

Secondly, for the consultants invited to intervene in the struggles and gory dramas often played out in the newspapers, what can they do? What skills, qualifications, and outlook might stand them in good stead in the frequently perceived battleground of the FOB?

And, thirdly, if they are engaged as consultants, what techniques might be appropriate?

The first of these three questions is the more important one. A consultant cannot not attempt to answer it, either explicitly or implicitly, as he engages a client business. In fact, the drama of family business participants virtually begs an answer from the consultants. Answering this question offers a frame within which the other two questions may be considered.

A basic assumption underlying this paper is that the entrepreneurial business, be it family-owned, closely-held, or partnership, is a different breed than the publicly held firm. There are many characteristics held in common, but essential differences that make the difference exist. The differences between the entrepreneurial types are not as distinct. However, concentration on the main topic of the FOB requires not being tempted by the interesting distraction a discussion of these distinctions would offer.

ENTERING THE DEN

An uncommon interpretation of the attraction FOBs hold for relatives is that forming or entering an already-established FOB is intended as a positive attempt by them to resolve long-standing family emotional issues seen by relatives as not otherwise resolvable, that the surge of subterranean emotions and conflict surrounding these issues is most apparent when succession is being considered and implemented, and that how the succession process as well as the business progresses is one of the best measures of how well family issues are being resolved. This is not to say that other motives for entering the FOB do not exist. However, alongside and prompting these other motives lies the desire of offspring, siblings, in-laws, and parents, in varying combinations, to resolve long-standing family conflicts.

Sometimes the psychological issues and conflicts border the conscious. It may be the goal of a father to give his aimless-appearing son or daughter a last chance, "but this time I won't let my wife interfere and baby him!" A mother may appeal to her son to enter the business (or reenter the business he had previously left in a huff) in order to rescue it, thereby saving father from facing the effects of his bullheadedness (once again). A son, in a close harmonious relationship with his father both in and out of the FOB, may know that at some point he will need to assert his independence of father, and that a business decision may be the vehicle for accomplishing this. Or, the grandchildren of the founding father may be fighting out among themselves the battle their fathers, the founder's sons, never resolved as to who was (is) his favorite. A daughter, in seeking the presidency of the FOB after having proven her worth to the company, may be attempting to wrangle from her father, the current president, acknowledgement of this fact and acceptance of her as his "emotional" heir; father, meanwhile, still cannot entertain the possibility that a "mere woman" could fill his shoes.

The threads of family and business are invariably intertwined in such a way that the family emotional issues are sometimes not immediately apparent.

The refusal of a father to agree to the new marketing plan conceived by his son may have been only partially based on its merits. It may have been that the plan was too creative, adding weight to the ever-raging argument about whether the son was ready to become president. A father seeking a partner for his son, i.e. a partner who would buy out the father's remaining shares, may seem a "logical" way of ensuring for himself an economically secure retirement. However, the bank had been willing to support a leveraged buyout which would have had the same effect on the father's security. A question this particular father had to deal with was how he would feel if the son were to succeed as president without the help of a partner, this in view of the fact that the father has only had partners throughout his business career.

Many times the psychological issues are so denied or hidden that the business is allowed to deteriorate, requiring bankers, friends, creditors, stockholders, etc., to intervene. Only in this way in this kind of situation are the psychological themes bared. Witness the revealing TV interviews of warring relatives who are (soon to become "had been") in a FOB together.

However, regardless of the degree of awareness involved or of the interwoven character of business and personal issues in any particular FOB, the motivation to enter a FOB is witnessed as a positive attempt to resolve a family issue. The business and decisions made to ensure its viability become a powerful and dramatic medium for resolution. During the process of succession the FOB becomes the stage for these enactments.

Not all FOBs produce the kind of overt conflict and turmoil that will be detailed here. This does not mean that the thesis is true only for a narrow spectrum of the FOB population. The many that do function successfully both as business and family are engaged in an ongoing process of resolution well before succession is raised. In fact, the process for them begins at the moment an entrepreneurial business is designated as a FOB by the introduction of relatives. These are the FOBs that are open to external sources of information (e.g., outside boards of directors, consultants, advisors, and the like). They are the ones who involve the entire management team in planning , as opposed to reserving this task solely for the founder. These are the businesses continually learning about themselves.

All FOBs experience conflicts and varying degrees of accompanying hostility. What distinguishes viable from problem-laden FOBs is that the former have anticipated that conflict will occur at various stages. For these companies conflict is a signal that it is time to make changes in the business and/or the family, and the only question is how to implement them. Problem-laden FOBs may acknowledge the build-up of conflict, but view it as unnecessary, "bad", as evidence of greed or disloyalty -- anything but the occasion for planning and change. For these businesses, conflict is to be resolved in the same old way, only more so.

There is another group of FOBs that do not put their emotional upheavals on display, but also do not resolve family issues. They leave the process of resolution to the next generation. Typical of these families is the presence of a founder/father who dies at age eighty while still sitting in the president's chair. A son, usually about sixty or so, finally becomes president while his brother continues as vice-president. These prototypical brothers and their children are the ones who have to confront the family issues that have been contained in cold storage.

THE ROLE OF THE CONSULTING PSYCHOLOGIST

One implication of the "positive attempt" assumption is that consultation to FOBs entails helping the family as family to work through and resolve long-standing emotional issues. This approach is clearly in contrast to most theorists dealing with the FOB.

Barach (1984) suggests that the "cure" for the paralyzed family business is for individual family members to grow and go their own ways either by separating from the FOB or by heading up different businesses (as the result of diversification) under the auspices of the original firm. However, it is not clear how either approach helps. Family members can in effect leave, but the problems back at the FOB will still persist. Diversification simply compounds the problems, albeit on a grander scale. In other words, a warring father-offspring will continue to war even while in different businesses (under the same financial auspices) in different cities. Also, many FOBs cannot afford the luxury of diversification as a solution.

Levinson's (1971) position is that the unique psychodynamics of the founder and the historical family rivalries, which would otherwise not persist, perpetuate family business tension. Conflicts emerging in the FOB are reflections of individual psychopathology and require individual therapy to resolve. A consultant in one case failed in his assignment ipso facto, according to Levinson, because of engaging several brothers and their wives in the consulting process rather than supporting a referral to a psychotherapist.

Levinson assumes that individual psychotherapy provides an answer for the FOB. A major criticism of this approach is that therapy becomes an instrument of the "court": the one in therapy is identified as the "problem". The "problem" is thus seen as "in the individual". Levinson simply overlooks family dynamics entirely, dismisses group dynamics cavalierly, and promotes the consultant to the role of judge.

Danco (1978) takes the position that the success of the FOB requires the planning for a father relinquishing authority to a heir. Were an emotional problem in succession to occur, it is attributed either to the inability of the father to hand over control or the incompetence of the heir to assume control. Danco's task as consultant is to make a Solomonic decision about which is which, similar to Levinson's position.

None of the authors cited above consider that the emotional upheaval frequently exhibited by FOBs serves a function. They assume its occurrence is a negative by-product of individual psychopathology and only rarely, if ever, an expression of a family system issue. Neither the solution offered by Baruch, the psychodynamic view of Levinson, nor the role of the consultant as perceived by Danco, add to our understanding of the persistence and ubiquity of the FOB.

A STRATEGY FOR CONSULTANTS

The particular role the consultant assumes cannot but reveal and simultaneously hide certain features of the client situation, be it individual or marital therapy, business consultation, or family business assistance. The criteria for role selection, to the degree the consultant is conscious of them, evolves around what works for him or her. The following comments, if not the entire paper, might be considered in that light.

My basic stance is that a family member blaming one or the other relative is an utterly useless exercise. Also futile are attempts to undo the ill effects of the past and to right past wrongs: there is either no end to the amount of retribution sought by the supposedly wronged party, or else a new cast of "wronged" characters will be created. For example, the son, disparaged by his father throughout their business relationship, becomes the avenger when he succeeds his father as president. He now disparages his father in kind. Both mother and father become incensed by their uncaring and ungrateful son's attitude. The now-retired father seeks out alliances with lawyers, bankers, creditors, other children, etc., to undercut his son's authority…… ad infinitum.

A new frame of reference has to be introduced, one that is future-oriented and goal-directed and that channels psychological conflicts into viable economic goals. Instead of, "why do you favor one son over the other?", the question becomes, "If you were to favor your other son now, how would things be different?" "What would occur were you and your brother to stop fighting now?" replaces "Why did you start competing so viciously as kids?" In the earlier situation describing the son's vengeance, a question to ask is, "How does the satisfaction of humiliating your father improve the fortunes of your business? In fact, how could it not but hurt your business?" Even the apparently most self-destructive behavior ("I may be cutting off my nose to spite my face, but at least my brother will be begging out on the street with a tin cup!") can be dealt with similarly: namely, "What then would happen with you not having a nose or a source of income, though feeling satisfied?"

A second fundamental reframe is that everyone in the family, and not only those in the business, are assumed to be involved in the problem. This includes the brother who teaches at the university, the sister married to a physician, and especially the mother who is volunteer of the year at the hospital.

A frame of reference that is future-oriented, goal-directed, channeled towards economic goals, and centered on the family as a whole yields surprisingly rich sources of information about individuals' feelings, fears, and hopes.

THE PLAYERS

THE HELP SEEKERS

The person or persons in the family who at least want to initiate the process of conflict resolution are the ones who feel that they stand the most to lose if something is not done or a decision is not made, and, to gain if in fact something is done or a decision is made. However the help-seeker presents the problem, it is crucial that both gain and loss be explored.

The person in the family acknowledging the problem might be the founding father afraid of alienating one son if he makes his daughter the president. He can no longer delay making the decision. The bank will not otherwise extend the loan necessary for the business's growth . Another situation finds the founder's wife threatening to go on vacation alone (for the first time in their marriage) if her favorite son is not appointed president.

It might be the son who no longer can wait for promises to be fulfilled. He has been offered an attractive position at a large corporation and the offer has a short life-span. If he stays, his bargaining position with his father might weaken and the chances of resolving their emotional issues might decrease. On the other hand, becoming ensconced in a responsible and lucrative corporate role might shatter any hopes of resolution. Of course, staying or leaving could have the opposite results as well.

The daughter not in the business but caught in the conflict between her father and husband (who works in the business) might seek relief by insisting a consultant be introduced. Otherwise, she might be forced into choosing sides and loyalties, thereby losing a husband or a father.

The mother might want to stop being referee for the free-for-alls between her husband and daughter. She knows that her husband cannot continue to run the business and that her daughter is better equipped. However, she fears that a retired president would become a depressed husband hanging around her to the point of distraction.

The family member who wants the ostensible problem to be resolved is frequently dissuaded by others and/or becomes frustrated in the process of seeking help. As the family begins to discuss the problem, all too often the underlying and long standing family issue threatens to emerge. Buried family secrets (e.g., who loved whom the most, living down past sexual escapades, etc.) and myths (e.g., that father really was a tough and shrewd businessman who built the business without help or advice from anyone) begin to flutter as the window is opened. Unspoken resentments are stirred. The veil over incompetence is pulled back. The delicate threads of family and business can appear to unravel as attempts are made to resolve the problem. It is usually at this point where consultants not trained in family dynamics pull back and suggest that one or more individuals seek psychotherapy.

THE FOUNDER'S MARRIAGE

The most significant influence on the family problems and their successful resolution is the marriage of founder and spouse. Usually there is little or no mention of mother when the FOB gets together to discuss their problems. All too often mother, her role, and her marriage to father are part of the hidden agenda, the family secret that is too explosive to reveal. A long-standing fear experienced by family members is that either she or her marriage to father is too fragile to be questioned. It is felt as almost better to continue the family conflict than to resolve it by discussing mother's role in it. Yet, business decisions and the marriage are undoubtedly intertwined in the fabric of the family business and, often, right on the edge of the tear.

The following vignette illustrates how vivid this process can be and at what price discussion of the marriage relationship is avoided despite its blaring influence on business.

The employees in one FOB would repeatedly complain to the owner's son about the extreme amount of stress they experienced in the office. The employees worked in close physical proximity to one another and to father, mother, and son. Mother would scream at anyone whenever she was upset or felt challenged by someone. As father was reluctant to take issue with mother on any topic that he thought might upset her, they only rarely discussed business. Even this, however, could not prevent their sniping at each other. The son half-heartedly attempted changes in the office in order to reduce stress and inefficient management practices.

The son saw his life-long task in the family to be a mediator between his parents, thereby softening their conflict and acting as a buffer between his parents and the staff. He knew they could and would disagree about anything on principle alone. And, he also knew that the business could not much longer bear the burden of their fighting.

He complained that employees were weighing him down with their complaints of stress. They were also constantly asking him to make the simplest of decisions; otherwise, they feared their work would be the occasion for another encounter with mother or for another disagreement between the parents.

Why didn't the son simply tell his mother that her yelling was bad for business, advise father to get mother out of the office, or suggest to both that they both leave and allow him to run the show? The son was afraid that pursuing any of these options would result in the immediate dissolution of their marriage and of the business. Better to suffer the ulcer and related stomach problems.

What allowed the FOB in the next vignette to resolve the ostensible problem, succession, was the mere suggestion to include mother in consultation.

Tom and Herb were in charge of different departments in a large firm founded by their father. Their older divorced sister was not active in the business, but she and her children were being supported by the parents. The younger son, Tom, was father's confidante. Herb had joined the family business within the last three years after having earned his MBA and worked at a large company in an unrelated field. Succession had recently been brought up by Herb who had flatly stated that, unless he were made president, he would leave the business. Tom's reservations about this proposal were that, if Herb were made president, he wanted to be sure that decisions would nevertheless be a joint endeavor.

It was apparent that Tom was father's choice to succeed him. In his opinion Herb's ideas were too "radical", "impractical", and "impulsive". Besides, he wasn't sure that either son wouldn't run the business into the ground. The financial future of his wife, daughter, and himself in retirement might be at risk.

After establishing that Herb's opinions and suggestions warranted at least a hearing, it was suggested that perhaps the next meeting be with the mother present. Although this suggestion was hurriedly set aside, that meeting marked the beginning of a series of steps rapidly taken to resolve the problem of succession, to everyone's satisfaction.

What was there about the suggestion to include mother that put the process into motion? Until Herb had joined the business, there was little family cohesion. The daughter had been a source of worry throughout her life, and mother was constantly in attendance. Meanwhile, Tom and father had been forming a team, while Herb working in the corporate world became an outsider (or, simply remained one by not going into the FOB). Herb's entrance into the business can be seen in retrospect as his attempt not only to bring together the two halves and himself, but to make contact with father in a way he never had before.

Herb's attitude was that he knew best what was best for both family and business. In a sense he did, but this put him into direct conflict with father. The split in the family was emphatically denied by father and Tom. Father emphasized how he and his wife had treated their sons equally and without disagreement. The very presence of mother in the consultation would have shattered this myth, might have opened up how in fact the parents had been split, and would have most likely disclosed other issues that the family preferred to conceal. Rapidly resolving the matter of succession had the intended effect. An important byproduct was that father and Herb had to spend more time together to iron out business-related details. They had to draw closer for perhaps the first time in their experience. Herb no longer needed to make shocking statements about "...going down the drain unless we do .." such and such in the business. As he had the decision-making power he required, the presentation of his ideas became less dramatic, and his father could listen without dismissing them immediately. Another way of stating this is that Herb needed and wanted his father's respect and a sense of family cohesion, but did not know that the way to secure it was by involving mother directly, not simply confronting father over every issue, big or small.

FATHERS AND SONS

So very often the first question, whether verbalized or unspoken, asked about a FOB is how do the father and son(s) or daughter(s) get along. When the FOB is characterized as inefficient, the analysis often revolves around the father-offspring conflicts that frequently prevent adequate management, planning, and decision-making. Generally the themes of exiting from under father's authority and becoming one's own independent man or woman are the surface expressions of these conflicts. A question that highlights the paradoxical nature of these themes is whether one can be independent and simultaneously inherit. Resolving this paradox is the key to resolving the conflicts.

Nick, after being in a large and successful FOB for approximately five years, had begun to disagree with his father rather frequently. Father announced, "My wife and I have never disagreed with each other and that's how I want my son and I to work together in business!" Even seeking a consultant had become a point of contention between them until the father had agreed to have one enter the picture. The content of their recent arguments was not the crucial matter. It was simply the fact they disagreed and, lately, too frequently.

"What would happen if you two could never agree on decision X?" Father's reply was that they would grow to become antagonists and one or the other would have to leave the business. "And what would happen if you still couldn't agree, but didn't become antagonists and no one left the business?" Father said, " I wouldn't be able to stand the tension!"

As the father continued to pursue what "not being able to stand the tension" meant for him, the son sat with his mouth and eyes wide opened, shocked into rigidity. As he later explained, this had been the first time he could recall ever seeing his father uncertain. The revelation for him was how much he, the son, had adopted a lifestyle of also agreeing with the world to preserve the peace, even in the face of his better judgement. In fact, one reason he had decided to enter the business was to learn how his father could preserve his equanimity, as he himself had enormous trouble controlling a tendency towards being argumentative.

The problem for Nick and his father, as it is in many FOBS, was disagreement over disagreeing. The family theme was that one does not openly disagree with others, especially family. But, how is this rule even possible to follow? Nick, in entering the business to be near his father, was preparing for that time when he could disagree with father, feel that it was right to do so, and begin to deal with the world differently than father. He had to learn once and for all whether conflict was good, bad, or in between. He learned that it depends.

In many FOBS the theme of "dying in the saddle" voiced by the founder is prominent: "What would I do with myself if I weren't working?" Indeed, it is a fact that many founders die within a two-year period following retirement, though physical health had never been in question earlier. Retirement is not a necessity, nor a good thing in and of itself. Not retiring, however, leaves open, and often painfully, the wound of unfulfilled ambition among offspring.

Jack wanted his father to retire and enjoy the wealth he had acquired. Father insisted otherwise. At age 70 he was a vital man who enjoyed his work, his wife, and his hobbies. What was it, then, that prevented a creative solution to Jack's ambition and father's desire to remain active in the business? What fueled their fighting?

Jack's criteria by which he would know he had escaped father's mantle would be satisfied were sales to increase two-fold under his sole management. Father's presence in the business meant for Jack that the glory accompanying such a sales increase, or any success for that matter, would never be clearly his. In fact father somehow had managed to turn Jack's past innovations into his, the father's , doings. This had been a lifelong pattern between the two and a source of intense bitterness. It appeared that mother had supported this pattern out of deference to father and had ambivalently encouraged her son to do likewise. Jack had entered the family business to settle this issue, and, even more dramatically, to do so on father's territory.

Jack agreed that being president wasn't his main concern, but rather being able to call his accomplishments his own was. Father's criteria for claiming or not claiming glory was whether he himself had tried something and succeeded, or , failed. Confirmation for this was that Jack's success in college had never been claimed by father as somehow his own doing ("If it weren't for my money, you wouldn't have gone to college and become the success you have become and it is all due to me!"). Since father had flunked out of several universities, it wouldn't have been part of father's style to claim glory. Thus, father would not be able to claim victory were Jack to open up an entirely new sales territory that he, father, had tried and had failed at.

It became clear to Jack what he had to do. A year later he had, in fact, opened up the new territory. Father had not intimated or implied that it was because of his involvement that the territory was being successfully tapped, and Jack's insistence on father's retirement had receded in importance. Needless to say, father had begun spending even less time in the office and had invited Jack to take over more of his former responsibilities.

A very common occurrence when succession is on the agenda is a father expressing a lack of faith in the ability of his offspring and heirs to manage the business. Often the father is seen as reluctant to give up control. However, just as often, or rather parallel in these instances, is the unwillingness of the offsprings to insist upon an appraisal of their abilities and a definitive succession plan that corresponds to the evaluations. It's as if father should "come through" for them. Many times fathers delay their appraisal because they fear hurting one or more of their heirs. An unfortunate consequence is that it may be too late for the heir to obtain employment elsewhere -- too late in the sense of being too old to change careers, or getting a job elsewhere, or only at a lower salary than the FOB paid. The results may be threats, lawsuits, appeals to the rest of the family, and loyalty splits in both the family and the business. Throughout their association in the FOB, both father and offspring appear to have been in a silent conspiracy not to allow underlying conflict to emerge and be resolved, even though when they started, each had hoped there would be a resolution that would satisfy everyone.

Frequently founders never had intended to pass the FOB along to their offspring, although making vague promises to the contrary. The offspring's competence may never have been tested, nor was he or she adequately prepared to move up.

Father, when asked, refused to increase the stock ownership of his son, Bruce, who had been in the FOB for several years. His reason was that Bruce was still a "babe in the woods", unseasoned and inexperienced. When asked to give specific examples of his objections, the father found it very difficult. In fact, he had been spending a good part of the year in Florida, leaving the day-to-day management to his son.

Bruce had left a previous career upon his father's invitation to join him, and had been promised a full partnership and buy-out option when he proved himself. Neither promise was in writing, nor had the meaning of "proving himself" been discussed.

For Bruce at this point, the issue was whether he wanted to continue a pattern of guessing father's intentions and consequently never being sure of where he stood with father, or whether he wanted to take a proactive stance to satisfy his needs. In opting for the latter, Bruce announced to his father that he had secured a management position at another company and was giving a month's notice, hereupon father offered to increase his salary if he would stay. Bruce maintained his stance and left the FOB.

Bruce's unfinished psychological task in dealing with father has been waiting for him to "come through" for him. The invitation to enter the FOB seemed to be that signal that "this time father would be different". Throughout his life Bruce had experienced father making promises to him and then breaking them. From father's point of view, the promises he had made to Bruce were at the instigation of and under pressure from his wife. Even father's invitation to Bruce to join the business had been extended to appease his wife. It was as if father saw Bruce as mother's son and, to keep peace at home, would accede to her demands on Bruce's behalf, resentfully and half-heartedly. Bruce feared that, were he to pin father down to a yes or no, this pattern of conflict between father and mother might be exposed. He gradually became aware of having tried to hide this pattern throughout his life. His perpetual hope that father would "come through" served to protect him from seeing his parents' unhappy marriage.

As it happened, father had no intention of giving over the business; he had been prepared to sell it all along.

BROTHERS

Frequently the creation of an FOB occurs when several relatives decide to form a business. Quite often the relatives are two brothers who, in creating the company, attempt to resolve issues in their personal relationships. One type of relationship is seen in the two playing out the roles of rescuer and rescued, of protector and protected, of the overadequate and the underadequate appearing siblings.

Joe and Mike, two brothers, fought as soon as they began their venture. But, then, they expected to fight; they had been doing so ever since they could remember. Their business was still in its formative stages and, though exceedingly successful, could abort because of their conflict. The pattern of their behavior was that Mike would make impulsive, dramatic, and often creative moves that committed Joe, the older brother, to a course of action he was never sure was appropriate and that obliged him to rescue Mike. This entailed fulfilling promises made, following up on necessary details, and the like. Their fights occurred after this pattern of events developed and stopped each time Joe threatened to leave the FOB. The most serious and recent episode preceded Joe's telephone call requesting consultation.

What would happen if Joe left the FOB? His dilemma, as it turned out, was twofold. Not only was he concerned about his ability as an entrepreneur, but he also would feel that he had failed to protect his brother, a role in life he had assumed early on. Mike's behavior had been screening Joe's lack of confidence. Mike had been the adventurous and daring son throughout his life, getting into scrapes as a youngster and into trouble as a businessman. Joe tagged along, vicariously reaping the benefits and then rescuing Mike when necessary. During their youth their parents would argue between themselves about Mike, praising Joe for his levelheadedness and holding him up as a model for Mike to emulate. However, they hadn't known what to do with Mike except to pray that Joe would be around to rescue him.

Though aware of this pattern, Joe nevertheless became a partner with his brother. Why? To paraphrase Joe, he was hoping that in business, with money on the line, Mike would at last change and free him from the role of rescuer, that the hard cruel world of business would wake Mike up, and that then he might be free to discover his own capabilities.

What would happen were Joe to assume the initiative and aggressively take a course of action that committed Mike, a tack contrary to their previous pattern? As Joe was prompted to propose the most outlandish business schemes he could think of, Mike objected more and more, toning down Joe's ideas, offering alternative suggestions -- in brief, acting the responsible businessman.

It wasn't that Mike lacked a sense of self-restraint or self-criticism. With Joe around he just didn't feel the need to exercise it. As Joe became more daring and creative in his thinking, Mike had to begin putting the brakes on his brother. The younger brother was no fool! If Joe wanted Mike to act responsibly, Joe would have to become more adventurous and depend on his brother to come to the rescue.

A second type of relationship is encountered when two brothers, while forming a business, attempt to clarify their lifelong competitiveness.

Nat, the eldest, had always been Dad's son, and everyone knew that Steve was Mom's. They had competed over toys as kids, over girls and in sports as teenagers, and for grades in college. Retrospectively, one can see that they had gone into business together to settle finally who was top dog. Going into separate businesses would not have done it.

Their current competitiveness, however, prevented their making a crucial decision about an acquisition that potentially could solidify their market position, or, given the economy at the time, bankrupt them.

The following scenario was posed to them. "Assume that you both got along very well in business and were very effective as partners. Your parents found out that this was occurring after all the years of rivalry and competition. How would they feel? What would they think? What would then change for them?"

After the expected jokes ("Dad would have a stroke" and "Mom would serve you your favorite meal one day a week for the rest of her life"), both brothers sadly recounted the many fights and arguments that characterized their parents' marriage. As they continued reliving these memories, they became more heated and argumentative with each other about which parent caused which fight and for what reason.

"And, what if it turned out that their conflictual marriage had no right or wrong on either side, that after recognizing this, they would miraculously stop fighting? What would then change for the two of you?"

This question stopped their arguing! It enabled them perhaps for the first time to experience their competitiveness as an extension of their parents' battle over who was right and who was wrong (about anything, but especially about which son was "better"). Nat and Steve had been acting as if, were they to agree or cooperate, they would be disloyal to that parent whose son they had become. Were their parents to stop fighting (as imagined by the brothers), there would be no reason for the brothers to continue competing as stridently as they have been.

An important aside in this regard is that the wives of the brothers had also become involved in this competitive struggle, thereby complicating the issues.

In forming an FOB, siblings often become partners with a third party who might be a cousin, a friend, or someone with particular expertise in finance, production, marketing, etc. This type of partnership also represents a desire to open the family doors and to resolve conflict. Usually the attempt fails because of the burden upon the third party to be a consultant when he or she is in fact a partner, to be an impartial arbitrator when he has vested interests, and to be a wise "parent" when she feels neither wise nor parental in a situation where her financial future is at stake. This partner, in rightfully preserving his or her interests, all too often chooses sides between the brothers, fueling the fires of the conflict to the detriment of the business.

THE SON-IN-LAW

There are many different reasons a son-in-law is invited into a FOB. From the point of view of the owner, these include the preference for hiring an available family member rather than spending the time and money involved in searching for an outsider, the need for the special expertise the son-in-law has and the owner requires, the desire to perpetuate the business through the son-in-law in the absence of a blood relative who could or would take over, and the wish to make room for any family member who would want to enter the business.

From the son-in-law's perspective, he may prefer the FOB because it is available, thereby avoiding the problems associated with job-seeking. He may accept an invitation to "save" a floundering FOB. His wife may have prevailed upon him to "keep it in the family". He may see the possibility of satisfying his ambitions earlier than expected. He may simply need employment.

A theme underlying these circumstances is that of giftedness, i.e., as the son-in-law is not blood-related, his being in the FOB is a gift. As a recent television commercial has it, his reward for good work is the owner's daughter. This theme is present even if the son-in-law is essential to the FOB. Giftedness is the package within which other themes are contained though hidden: father not having to let go of his daughter, mother not wanting her daughter to move away, parents wanting to protect and provide, etc. In resolving the question of giftedness for himself, the son-in-law becomes a participant in family conflict resolution.

Jack's marriage to Edna was welcomed by her parents. It meant that Edna would be settling down after a career as an artist which they had been supporting through liberal financing, and begin to raise a family. It was the first time the parents could remember feeling that Edna's rebelliousness was at an end and they could now have the relationship with her that until now had been denied them.

Because he had entered the FOB without a business background, Jack wondered what his future would be like there. His attempts to earn an MBA, to attend seminars, and to learn the business were minimized by his father-in-law, or at least not encouraged. His suggestions and opinions were tolerated but had little functional impact. His father-in-law's basic attitude was that Jack was Edna's husband, not a potentially valuable partner. Jack's marriage was progressively suffering. Whenever he talked about leaving the FOB, Edna angrily withdrew. She had become accustomed to the security the business offered.

A critical juncture occurred when Jack insisted that either the present sales force, his area of responsibility, be revamped in terms of personnel and accountability, or else he would leave. Many months after winning this battle and proving his plan to be eminently successful, he announced that Edna and he were divorcing. Father needed to resolve the dilemma whether to retain an ex-son-in-law who had shown his value to the company, or fire him at the insistence of his wife and daughter.

"What would happen to your relationship with your wife and daughter were you to retain Jack?" Father related how he had always tried to appease his wife by giving in to her over the years. He was sure that one reason he worked such long hours was to escape an unhappy home life. He had agreed to take Jack into the business in the first place only because of his wife's insistence, not because he needed another employee. But Jack had grown in stature and had become a trusted and well respected vice-president in charge of sales. Were he to retain Jack in the business, his home life would be jeopardized. He would be forced to stand up to his wife in a way he had never attempted before. He did decide to retain Jack and to face the consequences.

What had been seen originally by father as an opportunity to forge a relationship with his daughter evolved into a decision to stand up to his wife. It was not having made this very decision earlier that had prevented Edna from being the daughter her parents had wanted. She had all along felt ashamed of her father for his weakness and angry at mother for being so overbearing.

The entrance of Jack into this FOB set the stage for family conflict resolution in a way perhaps no other event could have done. If Jack had been given a gift, he returned it in full measure.

The outcome was not as successful for the business in several other similar situations. For one owner whose children were divorcing, the decision to fire the son-in-law and keep the peace at home was based on father deciding he really preferred the status quo, i.e., having a family life that did not intrude on his long-standing extra-marital relationship. The unspoken agreement between father and mother was that it could continue as long as mother got her way otherwise. In another situation the threat by his daughter never to speak to him again prevented the father from acting in the best interests of the FOB and the family. He settled for peace at any price, not understanding.

What of the son-in-law who is in constant conflict with his father-in-law, with the daughter in the middle?

Cherie had prevailed upon her husband, Roger, and father to seek help. Their fighting was becoming too intense for her, each telling her how incompetent the other was and getting angry at her when she wouldn't agree. A specific business decision the men had been particularly virulent about was the content of a meeting with Cherie, mother, Roger and father present. After each man listed the pros and cons of both sides, with facts and figures to back up their respective positions, further discussion was halted and the women were asked to continue the discussion despite their protests of ignorance concerning business matters. The women began to argue the merits on the basis of the expertise of the men, with mother choosing her son-in-law's position and Cherie taking up father's side. As this continued the mother-daughter discussion brought up old issues of favoritism and side-taking, mother feeling that her husband had always favored Cherie and Cherie seeing mother and her brother (who was not in the FOB) as a team.

It soon became clear that father hadn't as yet let go of his daughter and that Roger, as competitor, felt impelled to disagree with or critisize anything father suggested. Cherie was the prize and mother was left out.

Cherie was asked to take her husband's side and mother, her husband's side, as they continued the discussion about the business decision. Even if they didn't agree with their spouses' position, they were to act as if they did.

What now emerged was how threatening it was for both father and daughter to disagree with each other. Disagreement for each meant an irreparable rupture in their relationship. What was a surprise for father was how good it felt to have his wife agree with him and take his side, an experience he could rarely recall having.

Roger had entered the FOB having many other attractive job offers. He recalled having felt at the time that unless he would go into the FOB, he would never truly be married to Cherie. He had not further questioned his decision consciously. However, at some level he had known that he would have to deal with his competitor, his father-in-law. In the process of doing so, his mere presence forced the family to confront a long-standing theme.

REFERENCES

Barach, J.A. "Is There a Cure for the Paralyzed Family Board?". Sloan Management Review, l984, Fall, 3-12.

Danco,L.A. Beyond Survival. Cleveland: University Press, Inc.,1978.

Levinson, H. "Conflicts that Plague Family Businesses". Harvard Business Review, 1971, March-April, 90-98.

Dr. Liebowitz specializes in business, organization and management development for family owned businesses and the entrepreneurial and closely held firms. With over 30 years experience in this area, he has tailored a unique program integrating the organizational structure of businesses, their performance and goals and the psychological aspects of management and ownership.