Edwin Hoover helps family businesses manage family conflict using the tools and strategies first outlined in Getting Along in Family Business: The Relationship Intelligence Handbook, a book he co-authored with his wife in 1999. He is also the author of Getting Along: Making Significant Relationship Work, published in 2015.

The Hoovers’ collaborative involvement in the world of family business came as the logical next step in their respective careers. As a psychologist, Edwin Hoover worked extensively with couples and families. Colette Hoover came from a business-owning family before earning her Master of Science.

When they began in the 1980s, few consultants worked specifically with family businesses. Family firms that sought outside counselling could either work with behaviourally oriented consultants, who would focus on family relationships, or business specialists, whose work would concentrate on the organisational features of a company.

The Hoovers realised they could make a significant contribution to the field if they leveraged their collective expertise to combine these disciplines. They started from scratch, building the systems and processes they would later outline in Getting Along in Family Business.

Their work asserts that healthy family dynamics are intentional; developing Relationship Intelligence, or RQ, requires hard work. When families successfully increase their collective RQ, however, they are better equipped to manage potentially divisive situations – sibling rivalry is one such example.

Recently, Tharawat Magazine sat down with Dr Hoover to discuss the concept of Relationship Intelligence, the emotionally involved nature of fraternity and techniques to restore harmony in relationships on the brink.

Overcoming Sibling Rivalry in the Family Business
Image courtesy of Edwin Hoover.

“A fish does not know that it swims in water until the water becomes toxic and makes it sick. Similarly, human beings don’t realise we depend on relationships until those relationships become dysfunctional.”

Is there more awareness now about the importance of healthy personal relationships within the family business? 

When we first started, people would say that there are two kinds of family businesses: family-first and business-first family businesses. In a family-first business, everything revolves around familial relationships. Business-first family businesses are those concentrated almost wholly on the practicalities.

Over time, however, we’ve come to realise that both views in exclusivity are inadequate. Instead, they are interdependent, with the former family-first approach as a foundation for the latter.

The importance of maintaining healthy personal relationships cannot be overstated – not just in family businesses but in all aspects of life. Often, we fail to recognise their importance.

A fish does not know that it swims in water until the water becomes toxic and makes it sick. Similarly, human beings don’t realise we depend on relationships until those relationships become dysfunctional. Only then do we realise how fundamental personal relationships are to our lives.

These relationships have a direct impact on everyone’s economic and financial well-being.

Why does conflict arise?

Families tend to become more heterogeneous and dispersed over time. As families grow over generations, they become more diverse in terms of their values, interests, lifestyles and loyalties.

Family businesses, however, have a common economic interest that ties them together regardless. So, they must find ways to ensure a successful collaboration despite their differences.

What does Relationship Intelligence mean in practical terms?

Relationship Intelligence refers to the capacity of a group of people to resolve differences, communicate effectively, manage change, plan for the future and execute those plans effectively.

Relationship Intelligence is built on two pillars – relationship character and relationship capability.

Every relationship has a personality, and this relationship character is built on three fundamental principles: trust, respect and optimism.

Relationship capability refers to a collective’s capacity to manage differences, communicate honestly and solve problems.

How can families improve their Relationship Intelligence?

In our work with family companies, we address both relationship character and relationship capability.  We help families identify problem areas with regards to trust, respect and optimism. Then, to address capability, we teach them skills related to communication, change management and problem-solving.

Character and capability influence each other. When we communicate for the purpose of understanding, we build trust; when we manage change effectively, we build respect; when we are able to solve problems, we build optimism.

Why are sibling relationships often so volatile?

Here it is important to make a distinction between second and third-generation family businesses. The second generation grew up in the same family, while those in a third-generation family business did not. Loyalty, allegiance and bonding are generally strongest within the nuclear family. As a result, the second generation is often fiercely loyal to the first generation. Values, interests and lifestyles tend to become more diverse in the third generation and beyond; loyalty tends to dilute.

Unhealthy sibling rivalry is commonly expressed when the first generation leaves the business. Lines between family and business become blurred. Often, there exists the presumption of equality between siblings that is not always applicable in the business sphere. Whatever the tension or conflict, their parents cannot provide the emotional balancing effect that they once did.

As parents age, siblings must work to redefine their relationships from that of family members to business partners.  They must figure out how they will work together after their parents are gone. If they don’t, they risk their relationship and the business.

Why are conflicts that arise within the family business so hard to resolve?

An important factor that often comes into play is the psychological phenomenon known as cognitive dissonance. Our minds have difficulty reconciling two conflicting ideas at the same time. For example, I want to solve problems quickly to achieve closure because it will benefit the business immediately. However, my sibling wants to keep our options open and delay for fear of missing out on a better opportunity.

Both positions are reasonable and valid, but our brains have a hard time seeing this because we identify strongly with our own position. We assume that if we are right, then the other is wrong. In such a way, cognitive dissonance causes rivals to become entrenched in their opposing positions. 

How can siblings avoid this?

Often, rivalries occur because siblings don’t maintain the strength of their relationship by renegotiating their expectations. I call this redefining the relationship because family relationships are always primary to business relationships. They were family members before becoming business partners.

Redefining relationships means explicit communication about our expectations of each other. How are we going to make decisions together? Who’s going to be in charge of what? If siblings neglect these questions, they revert back to their family roles, which rarely align with business needs.