Sibling success

There’s hardly a sadder tale of sibling problems than that of the Chadha brothers, the family behind Indian conglomerate Wave. The beginning of the story will be familiar to many families – a migrant father who started a small retail business and a second generation that took that company to a new level, turning it into a successful empire with interests in food processing, technology, distilling and real estate among others.

But behind the scenes, things were far from rosy. Much has been reported recently about the problems between the second-generation brothers, although little has been confirmed. But it’s fair to say eldest brother Gurdeep Singh Chadha, better known as Ponty, who drove the changes at the family business, and younger sibling Hardeep didn’t always see eye to eye. And in an incident that grabbed headlines around the world, both ended up dead last year after a shootout, allegedly over the ownership of family assets (the funeral pictured, right). An investigation is ongoing.

It might be an extreme case, but sibling rivalry is nothing new. Indeed, it’s in some of mankind’s oldest myths and most enduring and resonant stories. Think of Cain and Abel, or Joseph and his brothers. Think of the rivalry King Lear created among his daughters. More prosaically, look at the long-running and gruesomely fascinating slanging matches between musicians Noel and Liam Gallagher.

The world of family business is also full of stories of siblings who didn’t see eye to eye. There’s the very public and long-running spat between the Ambani brothers, Asia’s richest siblings, whose family business Reliance had to be split following their father’s death. In Europe, the brothers behind the Aldi supermarket empire decided to divide the company in two, rather than work together. In Canada, a similar story played out with McCain brothers Harrison and Wallace. Despite working well together in their frozen-food empire for years, a feud over succession saw Wallace forced out of the company in the 1990s. He later took over rival Maple Leaf Foods.

Of course, many siblings work well together. The Marcegaglia brother and sister share the top role at the eponymous Italian steelmaker, as do the Decaux brothers at JCDecaux, who were together named top family business leader at 2012’s CampdenFB European Families in Business Awards. The next-gen award last year was also won by siblings, the brother and sister team of Ramon Näf and Sarah Flieg-Näf, who head the Naef Group (pictured, left).

Yet in a recent CampdenFB.com poll, three-quarters of respondents said they believed sibling rivalry was the worst of the rivalries found in family businesses. This is because sibling partnerships face challenges that other family partnerships don’t, reckons Randel Carlock, the Berghmans Lhoist chaired professor in entrepreneurial leadership at business school Insead.

“Our longest human relationship is with our siblings,” he says. “Our parents are with us for part of our lives, our children are with us for part of our lives [and] our partners – marriage or life – are with us for part of our lives.” Siblings, in contrast, are often around for much longer. “If you’ve got a brother who is two years older than you are, you will probably live your entire life with him.” This makes for a relationship that is fraught with emotional baggage, even without adding a business into the mix. “It is a life-long relationship and there are going to be life-long injuries,” says Carlock (pictured, right).

Some of these will stem from childhood and teenage years, as each sibling tries to find their place in the family – and the business. “The older kids have primogenitor and age on their side,” says Carlock. “If you are the seventh or eighth child in a family, you don’t have a lot of high-power strategy. So you have to do low-power strategy where you use your personality and your humour.” Wayne Rivers of the Family Business Institute consultancy says: “It is almost always the case that the oldest child perceives somehow that they are intended to succeed mum or dad in terms of authority.”

Problems arise when a sibling doesn’t fit the role he or she thinks they should. “Think what happens if your sister got into a better school, is a better executive and a better leader, but you are five years older and her brother. She is married to someone else and carries his name and you carry the family name. I don’t care what culture you are in, that carries a heck of a conflict,” says Carlock.

It doesn’t help that siblings are rarely “equipped to be in collaborative partnerships with each other by training”, reckons Rivers. Many next-gens grow up under a strong-willed entrepreneur who has an autocratic style. Even in businesses that have gone through a generational transfer, the tradition has generally been for one person to take the helm.

“Since [the head of the business] was the one and only supreme leader, that person made decisions quickly without consultation from other people,” says Rivers. “And so that person is incapable of teaching consensus decision-making to his children. Subsequently you get next-generation family business siblings who have no model whatsoever for communicating with each other and no model for sharing in collaborative decisions.” Struggling to communicate, siblings find themselves unable to deal with conflict.

Conflict is usually divided into three categories by academics. Relationship conflict is a result of personal clashes, task conflict is disagreements over a particular, discrete plan or project, and process conflict is about ways to approach a task. Task conflict is generally considered to be healthy, as it leads to the airing of different opinions, while the other two are seen as destructive. But too much conflict of any type tends to have negative results.

“If you get a lot of process conflict and a lot of rivalry or psychological stress between family members, this can lead to relationship conflict,” says Carlock. Nigel Nicholson, a professor of organisational behaviour at London Business School and author of The ‘I’ of Leadership, adds: “The danger is you get conflict about one thing leading on to another. You disagree about what should be done or the way it should be done and then you personalise it. The big risk is the personalisation of legitimate disagreements in family firms.”

Professor Nicholson reckons there are also some genetics at play when it comes to family rows. “You can raise your kids with the best will in the world but if they are both stand up and fight kind of people, that’s what they’ll do,” he says. “Personality is 60% genetic generally speaking and the other 40% isn’t easily explained. Upbringing seems to have little effect on personality – it has some effect, but it is very hard to pin down what.” Putting two bossy brothers in charge of the family business is probably not going to work out, but in other cases siblings will complement each other. “You could be lucky or unlucky in the chemistry of the personalities within the family,” he says.

That being said, most people “are fairly reasonable”, Carlock reckons, and problems that emerge between siblings are often due to the processes or structures in place, rather than the individuals. For example, John Nicholson, family law partner in Irwin Mitchell, says share structures can often lead to issues – if shares in the business are split equally between two siblings and they don’t agree over something, then a deadlock is likely and this could result in conflict. “If you’ve got a stalemate, you can’t run the business. So you’ve got to have a mechanism for breaking deadlock,” he adds.

This is where a strong board of directors that includes non-family members and works to “really clear written plans” can be useful, reckons Carlock. If two siblings can’t agree, they can take the issue to the board. “It doesn’t mean people won’t get mad, but it is much better to be mad at your board of directors than it is to be mad at your sister,” he says. “It’s not a real big emotional loss to a 60-year-old board member if some 40-year-old [family member] doesn’t like him that much. But if a 38-year-old son and a 40-year-old daughter have a terrible conflict, it is going to make Christmas ugly. It’s going to make everything for the family ugly.”

It’s also worth remembering that in most families, siblings cooperate more than they fight, reckons Professor Nicholson. “Indeed one of the things that make family businesses so powerful and attractive is they have countervailing forces that help to deal with conflict – they have love, for example.” This means their margins for allowable conflict are often wider than you would find elsewhere – and this can actually prove beneficial. Professor Nicholson says: “Family members are able to differ, have arguments and so on in ways that are recoverable, and are able to tell truths to each other, which often polite people in business are not able to do.” But sometimes, perhaps, it might be wiser to keep some of the harsh truths to yourself.

Bad communication
Mario Preve, Riso Gallo
Mario Preve (pictured, right), the 71-year-old head of Italian rice-maker Riso Gallo, blames the problems his family had on a lack of communication. While his father was alive, he says, he and his two brothers got along fine. But after his father’s death, and having ended a business partnership with another family, cracks began to emerge. “I was managing the business in Europe and they were managing the business in South America and nobody talked to the other about what they were doing, what their strategy was, nothing,” he says. “Each one was doing business on his own and this was a mistake.”

Preve admits he struggled to manage the business/family relationship. “I always thought of the business and never thought of my brothers as partners,” he says, adding that future problems could have been avoided had he “taken care of his partners and not just worked”. In the end, the brothers split the business and “started a long fight that began in 1991 and finished in 1996”. He didn’t speak to his elder brother for years, although they now have a good relationship. “Time helps a lot,” he says.

Unsurprisingly, Preve didn’t want anything similar to happen among his own sons – so, working with an outside consultant, the family drew up an agreement. This outlined the qualifications and experience family members needed before joining the business, among other issues. Three of the four sons now work in the company, each in different areas. “Each one has his own work and this is important,” says Preve. The family – including wives and grandchildren – also have biannual meetings where business discussions are combined with a holiday.

Preve will retire in October, when he reaches 72, and the next generation has “already decided between themselves” who the successor will be.

Building a relationship
John and Chuck Clark,Clark Construction Company
Having worked together for decades, John and Chuck Clark (pictured, left) are well aware of the pros and cons of sibling partnerships. “We certainly have had our disagreements, but we realised the best way was to work together,” says 71-year-old John, the eldest of the 10 Clark children. How did they end up running Clark Construction Company out of all the siblings? “We were the best looking and the smartest,” jokes Chuck, the fifth child. More seriously, the 66-year-old says: “I think we were the only two who liked it.” Their other siblings followed different paths, into farming, teaching, dentistry and one even married a competitor – but all held shares in the business. “We’d all seen how hard our father worked and the vacations that hadn’t happened and those types of things that happen when you own a business, especially a construction business, and not everybody wants to sign up for that,” says Chuck.

The brothers now own the company themselves, having bought out their siblings following their parents’ deaths in 1989 and 1990. They were happy to sell, says Chuck. “They realised this was not just a money machine – there was risk and hard work to make it work, and they were pretty happy to let us do that,” says John.

He reckons their successful partnership is down to their personalities. “Our temperaments suit each other. We come from a large family and we actually get along really well with all our siblings. I think it was in our blood,” says John. Adds Chuck: “It’s not like we never had fights here in the office – I mean we’re brothers. We get angry and raise our voices. But at the end of the day we are very, very similar on the core beliefs of how we think the business should operate.” 

Click here for the top 10 tips for successful sibling working relationships. 

Images copyrighted to the Press Association, Getty Images, David Lyttleton.