This article was first published in the Economic Times on February 12, 2025. Co-author: Agarwal, Shailendra;
https://economictimes.indiatimes.com/news/company/corporate-trends/sibling-rivalry-in-family-businesses-navigating-the-fault-lines/articleshow/118147295.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Family businesses, often celebrated for their resilience and commitment across generations, face unique challenges that are deeply intertwined with personal relationships. Among these challenges, sibling rivalries stand out as a recurring theme with far-reaching implications. Recent high-profile disputes, such as those involving the Lodha brothers and the Kalyani siblings, underscore the relevance of this issue in today’s business landscape. These conflicts highlight how sibling dynamics can impact not only business operations but also the emotional and strategic framework of family enterprises.
Sibling rivalries have been a persistent theme throughout history, from the mythological Mahabharata to modern-day corporate conflicts. Such rivalries often have deep roots in childhood dynamics, often exacerbated by declining values and modern pressures. These tensions, if left unchecked, can evolve into significant barriers to collaboration and growth within family businesses, jeopardizing succession planning and it’s long-term success, trust, and overall family and organizational health.
Tackling Sibling Rivalry in Family Businesses
Rivalries and conflicts cannot always be avoided. But when their ugly face begins to surface, their effective management requires addressing their underlying causes and implementing strategies to foster harmony. Sibling rivalries can be deeply ingrained and multifaceted, but thoughtful interventions and proactive measures can transform these challenges into opportunities for growth. Below are key approaches to mitigate these challenges:
Understanding the Roots of Rivalry: Sibling rivalry often originates from childhood experiences, where perceived favoritism or competition for parental approval creates emotional fault lines. These feelings can intensify in adulthood, especially in a business setting, where power dynamics and financial stakes amplify existing tensions. Recognizing these roots is essential for addressing the rivalry constructively.
Establishing Defined Roles and Governance Practices: Ambiguity in roles and decision-making processes often exacerbates sibling conflicts. Clearly delineating responsibilities within the business ensures transparency and minimizes misunderstandings. Implementing governance structures, such as family business boards and formal decision-making protocols, promotes accountability and fairness. These frameworks help shift the focus from personal rivalries to collective business goals.
Strengths-Based Collaboration: Acknowledging and leveraging each sibling’s unique strengths fosters mutual respect and cooperation. Publicly recognizing each other’s contributions can build trust and reduce competition. By working to complement rather than compete with one another, siblings can create a collaborative environment that enhances business performance and stability.
Prioritizing Communication: Miscommunication and assumptions are common sources of conflict. Open and structured communication channels are essential for resolving misunderstandings and fostering trust. Whether through regular meetings or facilitated discussions, prioritizing clear and respectful dialogue helps maintain healthy relationships.
Encouraging Shared Recognition and Vision: Siblings often seek individuality and acknowledgment, which can lead to competition. Sharing credit for successes and working toward a shared vision helps align goals and reduce tensions. A unified vision provides a common ground for siblings to focus on the long-term success of the family business.
Seeking Professional Mediation: When internal efforts fail to resolve conflicts, seeking external help from a neutral, professional mediator can be transformative. Mediators create a safe space for siblings to express grievances, facilitating constructive dialogue and resolution. Professional intervention ensures that deeply ingrained issues are addressed effectively, preserving both familial and business relationships.
Managing deep-rooted sibling dynamics is never easy, but it is possible. In some cases, like the Hinduja Group, the realization of the benefits of unity came at a significant cost—the death of the patriarch prompted the siblings to end disputes and collaborate. Conversely, families like the Godrej Group have proactively avoided disputes through transparent communication, defined responsibilities, and shared goals. Though challenging, addressing sibling rivalries early is worth the effort. Let’s not wait for a crisis to act.
Conclusion
As a childhood story goes, each finger on a hand may seem small and powerless on its own, but when they come together to form a fist, they become strong and unstoppable. In the same way, siblings working together can achieve greatness that, though not impossible, no individual effort could match. For family businesses, unity is not just an ideal; it is a necessity for enduring success.
In the ever-evolving landscape of family enterprises, the ability to rise above rivalry and collaborate effectively is what separates lasting legacies from lost opportunities. Family businesses that prioritize harmony and shared purpose will not only thrive but also set an example for generations to come.
