Family and money don't mix
I got a call the other day from my mom updating me on the latest family drama.
My aunt and uncle are in a pitched battle over money with their two adult children, and it’s causing nothing but heartache for everyone involved.
There’s no real need to share the details with you all because this is a scenario that plays out often in families. And the more money involved the uglier it gets. You probably have your own horrible money-family-strife story.
Take the Mondavi family, for example. At the very heart of this wine-making family was a rift between two brothers, Robert and Peter.
“The brothers were very different in terms of motivation, interests and values. Robert focused on the business, where he held the reins in terms of sales and marketing, with few outside interests, apart from getting married to Marge in 1937. His younger brother Peter followed a more balanced approach to life, leaving time outside his work, where he was responsible for all the production aspects of the company, to devote to his hobby – fishing – and his family.”
“Robert, wanting to develop the business, constantly pressured Peter to produce better wines to improve the family firm's reputation for quality. When Peter did not deliver Robert was angered. Increasingly, the two grew apart.”
This is an excerpt from a new book called “Family Wars: Classic Conflicts in Family Business and How to Deal with Them” by Nigel Nicholson and Grant Gordon. The book looks at family wars within many of the world's most successful companies.
Power, money, dominance – these are all factors that can fuel family unrest.
It's not surprising then that only one third of family businesses make it from the first generation to the second.
Indeed, the Mondavi family ended up splitting.
“With the death of the patriarch Césare in 1959 the family no longer had a peacekeeper and the divisions between the siblings widened,” the authors write.
“The family firm was no longer unified by a shared vision. Robert's ambition to be the best was not matched by Peter's honest but more modest aims. In November 1965, the Mondavis assembled for a family gathering, which turned out to be the stage for a fundamental point of fracture. Robert and Peter got into a fist fight over an argument about Marge's new mink coat, and whether it had been bought with company money (which it transpired it had not). Robert, now in his 50s, seemed to gather the negative energy of their decades of rivalry and let his emotions rip, landing several blows on Peter.”
A fist fight? A mink coat?
What the heck is it about money that wreaks such havoc on families?
I figured I’d ask the authors what conclusions they came to after doing their research.
“Money causes havoc in several ways,” says Nicholson, a professor of organizational behavior at the London School of Business.
“One, is that it ups the ante when win-lose games are being played among family members, usually siblings or family branches,” he explained.
“Another is that it is symbolic. It encodes value, so different financial outcomes become surrogates for love, regard, esteem, worth and such like.”
“Third, money represents the future – and people will fight for the right to shape the future of the family business according to their vision, not someone else's.”
Given all this, it makes me a bit nervous that family businesses make up about 50 percent of the gross domestic product in this country.
That's a pretty volatile group to hang your economic hat on, no?
