5 Sep 2003

As published in Dinero Magazine

by Dr. Marc A. Silverman

Communication in any relationship like the rhythm in any song from a ballad to a symphony: it forms the texture of the relationship and provokes the actors or notes into beauty and grace or a cacophony of sounds that are discordant perhaps even hurtful to the ears. When the communication between family members is strong and healthy the love between the family members flow, and the work relationship flows utilizing the creative and entrepreneurial capital of the family members. If smart and lucky they will compete well in the market, But when the communication is discordant, even worse when it grows into rigidly held beliefs and positions between family business members, then not only is the family and business in trouble – each individual’s self esteem and view of the world often moves into a rigid paranoid belief system that doesn’t allow healing or growth in the individual, the family or the business, How can the deeper issues be resolved?

Disagreements and Conflicts are healthy in any relationship. Let’s take a hypothetical example of 2 brothers – one is promoting high reinvestment in the technology of production of the core business of the company, the other is promoting using these same funds for entering their current products in new markets. In a healthy family business these opposing views can serve for healthy debate, spirited dialogue and the development of a strong strategic plan that could truly better the company. In many family businesses the brothers are not able to have a healthy spirited discussion. The norm is more that each partner refers back to old beliefs about the other blocking the ability for healthy discussion.

Witness this conversation:

John – I would like us to invest 20% of our earnings into this new market. I believe with the right approach we can make a handsome return.

Robert – How do we know this won’t be like your last project that cost us over 20 million pesos without any return. Why are you always pushing for these kinds of projects when you know it goes against our strategic plan?

John (thinking) – my brother never supports my plans or ideas, I can’s stand working with him. I made a mistake 10 years ago – this disqualifies all my ideas. I would never work with my brother if it were not for my Dad’s insistence.

Robert (thinking) – There John goes again, throwing millions of pesos away. Doesn’t he ever learn? Here we spent thousands of dollars on a Strategic Plan which John conveniently forgets and disregards. I would never choose my brother as my partner.

How does it happen that healthy disagreement ends and becomes replaced with rigid and aggressive behavior. Why are the 2 brothers not able to dialogue the real issues, resolve them and move forward? How will their relationship impact the strategic plan, productivity and profit as well as the organizational culture? And most importantly what might help the situation?

There are two critical issues that need attention. First is what has been called by Stephen Covey (a well known international business consultant) and others the Emotional Bank Account (EBA). This concept suggests that when one person acts in a giving and altruistic way that is felt as helpful to the other it is like a “deposit” into an imaginary “Emotional Bank Account”. Conversely behaviors that require special attention from the other such as narcisstic or manipulative behaviors act as withdrawals to this EBA account.

Imagine in the first example there had been a number of behaviors by Robert which had previously added to the Emotional Bank Account. Perhaps Robert had spent quality time with John’s children, or had reached out personally to John giving him support in a difficult situation or perhaps Robert had in the last week given John several genuine strong compliments about Robert’s work performance. In this case Robert probably would not have said anything or if he did – he would make sure the tone was quite respectful.

Not meeting deeply held expectations or actual promises would act as serious withdrawals. For example, a son was told that when he became 45 he would become CEO of the company, and that happened – but in title only! Or a family member who invested much of the family’s money with unethical advisors, not following clearly set policies and procedures.

Family businesses are by definition filled with a deep and complex history. In this history are often a number of unresolved conflicts and old hurt and angry feelings which at least one and perhaps both parties feel are unsolve-able. Family business members often feel that they must simply accept the hurts (and sometimes betrayals) that the other did and simply out of loyalty or shared ownership and must simply go on with the business relationship (I can’t leave, it would break Dad’s heart). But the feelings remain.

This effects communication often to the point where perceived attitudes and behaviors are automatically entered into these imaginary bank accounts (there goes my brother once again taking advantage of me). The communication at this point is often practically nil. At this point the Emotional Bank Account is dangerously overdrawn! Further, due to many years of non-resolution –the trust is often quite low.

Can this kind of business relationship survive in a positive way for the two brothers and their self esteem? Can the business continue productively? How do the spouses of each brother get involved? Lastly, what happens in the succession process where the children of each brother learn and see of their father’s unhappiness. Typically each brother blames the other for the “problems” and this blame is passed on the children of the next generation. Can the children of both brothers – the next generation develop the trust they will need as shareholders to guide the business effectively?

It is for these kinds of reasons that the building of Emotional Intelligence is critical for the overall health and sustainability of the family and the business. Only by looking carefully at the role each character has played in the development of this discordant symphony can each person begin the healing process and take responsibility for their part of the problem. As this deep responsibility begins to take shape, and the actors change their behavior with each other they can then increase the Emotional Bank Account. As the EBA grows then trust, communication, like a beautiful symphony can flourish. In several instances where the older generation has not been able to heal or rebuild their Emotional Bank Accounts, but the next generation did! When this happens, like in a triumphant symphony, not only are the EBA’s filled – the self esteem, family and business all flourish.

Marc A. Silverman, Ph.D., President of Strategic Initiatives Inc. an international Family Business Consultant in North and Latin America. He can be reached at marc@sii-inc.net.