Solving "Ego" Problems in Your Family Business

Don't let sparring egos tear the family business apart.
Magazine Contributor
5 min read

This story appears in the July 2000 issue of Entrepreneur. Subscribe »

Like the Mississippi River, a strong ego is a powerful resource-as long as it stays within its banks," says Edwin Hoover, a psychologist and family business consultant in Oak Brook, Illinois. "We routinely find that family members with superior capabilities and the strongest senses of who they are end up feeling the most invested in the family business."

"A person's ego speaks to their passion about what they do and how they want to bring the business into the future," adds Colette, Edwin's wife.

Both Edwin and Collette are family business consultants, co-authors of Getting Along in Family Business (Routledge Publications) and principals of Crowe Chizek and Company LLP, an accounting and consulting firm located in Oak Brook, Illinois. Thanks to personal and professional experience on the matter, the couple has gained thoughtful insights into how strong personalities and egos fare in family businesses.

They agree that problems arise when strong egos become strong wills with differing ideas about where the business should go. For example, when one person says, "I think we should do X," the other says, "I think we should do Y." "It's what we call a 'right vs. right' dilemma," says Colette. The good news is, if relatives trust and respect one another-and make every effort to hear each other out-they can often work through such predicaments.

Unfortunately, things veer off in a different direction when a family member tries to paint himself or herself as more correct than the other person and strives to prove the other person wrong. When this happens, two strong-willed, out-of-control egotists can do some serious damage. They become staunch, then immovable, and sometimes end up destroying both family relationships and the business.

Before that occurs, "It's important to slow the conflict down, to get yourselves back to a common denominator, to a time when things were working well," says Edwin. It may even mean sitting down to talk about some very basic things, like what you both want for the business.

"Clashes of egos on an intergenerational level often come about when parents aren't sensitive to a son or daughter's strong need for creative expression," says Stephen Notari, a psychotherapist and family business advisor in Los Angeles. "The clashes are exacerbated when parents don't exhibit a reasonable willingness to enter into a neutral territory, where neither child nor parent dominates."

Poles Apart

Rick Lee and his father, Dick, ran into one of those "right vs. right" conflicts a few years ago. Dick founded his distribution business, Affiliated Steam Equipment Co., in 1958 in Alsip, Illinois. Rick ran a branch office for the company until the early '80s, then became the company's sales manager. He was eager to grow the business and did so by expanding territories and product lines. Because Rick was so successful, his father gave him the freedom to run operations the way he wanted.

"It was all going great, until I mentioned I thought we needed a new building in Chicago," Rick says. "Dad put his foot down. He said he wouldn't do it. Period. Dad was 80 at the time. My mother had passed away a couple of years before, and he had lost interest in the business." But Dick wasn't about to give up control. He had certain financial concerns, too, such as continued income and equal treatment for his children regarding inheritance. He wanted to divide his estate among Rick and his two sisters, and give Rick the company.

Rick agreed with his father's desire to be fair, but disagreed with the way he wanted the estate plan structured. And Rick didn't want to dedicate time and energy to building the business unless he had complete ownership. Fearing he'd have to someday buy out the shares held by his father's estate at a greatly inflated rate, and because of all the work he had put in at the firm, Rick decided he wanted to buy his father out. As he saw it, his dad could use the assets from the sale to fund inheritances instead.

With both father and son set in their views, the situation could have caused family relationships to rupture. Rick thought about leaving his dad's business to start one of his own, but then realized he'd have to deal with all the headaches of a startup and do without the solid reputation his father's firm had developed. He'd have also put his father's business in jeopardy, because some customers and sales people would have jumped ship with him. Fortunately, they averted disaster: father and son called on the Hoovers to help them ease the clash of wills and egos. In the end, Rick bought out his father, and the two developed a way for Dick to stay involved in the business in such a way that he could continue to draw income and maintain some perks.

Learn to Listen

"When people have differences of opinion, it doesn't mean one's right and the other's wrong," says Dawn Lee, Rick's wife. And everybody learned how to listen and leave the ego-clashing behind so they could resolve the problem.

Often, these kinds of situations arise when the younger generation wants something the senior generation isn't giving them-something that goes beyond salary and title. "Parents might not realize that the argument isn't a clash of egos as much as it is a fight for respect," says Notari. The problem, he continues, "is that if the older generation feels threatened by the younger one, they'll have a difficult time listening."

Dawn says it took skilled facilitators to help everyone involved elevate the discussions so that in the final analysis, they didn't end up having to sacrifice either family or business-just for the sake of being right. Says Rick of his now-87-year-old father, "We have a wonderful relationship now."

Patricia Schiff Estess writes family business histories and is the author of two books: Managing Alternative Work Arrangements (Crisp Publishing) and Money Advice for Your Successful Remarriage (Betterway Press).

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