Being a family dynamics researcher and clinician, I was recently approached by a business owner looking for advice about the best way to navigate the upcoming addition of two new members to his business management team: his two children. With my expertise in family dynamics and interpersonal relationships he wanted to see what can be done to avoid a common issue plaguing family-run businesses across the country: the decline of the business as successive generations take charge. In the U.S., only 12 percent of family businesses continue into the third generation.
Although this issue may be more common in Western countries, cultures across the world have referred to this phenomenon in similar ways: "Shirtsleeves to shirtsleeves in three generations", "clogs to clogs in three generations", or "rice paddy to rice paddy in three generations."
The factors contributing to this decline have primarily focused on the challenges involved in falling into wealth. The story is a common one. A hardworking entrepreneur starts from nothing and builds a business. His or her child maintains the business and the wealthy lifestyle. The grandchildren, growing up in affluence, develop a lack of financial discipline or the inclination to work and end up losing the business.
Allow me to suggest an additional important variable, which is less discussed, but is an essential reason for the difficulty inherent in maintaining family businesses: sibling discord. Family businesses, or money matters in general, are notorious for being a fertile ground for destructive sibling dynamics. Family businesses are more likely to succeed if the children joining the family business have a close sibling bond.
Case in point is the Trump family business.
The latest of Donald's children to join the Trump Empire is Eric. Eric joins older brother Donald Jr. and sister Ivanka as Executive Vice Presidents in The Trump Organization.
The recent announcement that Donald and Ivanka Trump plan a new glitzy hotel at the Old Post Office Pavilion in Washington, D.C., is further evidence that the Trump brand is coming back and appears to be heading for a successful leadership shift led by the next generation of Trumps. In addition to their role in managing their father's projects, the Trump siblings are adding their own signature to the brand with their focus on integrating technology into the traditional Trump name. With Facebook, Twitter, and new apps to reserve Tee Time on Trump golf courses, Donald Jr., Ivanka, and Eric are holding their own and doing it all while maintaining a great sibling bond. A big part of their successful transition into their father's business is this warm sibling relationship.
What is the secret to their relationship?
The success of the close sibling bond in the Trump family business can be attributed to three factors:
1.Sibling deidentification: It is natural for siblings in the same family to be compared to one another often resulting in sibling rivalry. This would be particularly problematic for the Trump siblings considering the similarity they share in schooling (a combination of Georgetown or Penn), majors in college (Finance, Marketing, Economics), and work choice (Trump!). To compensate for the natural destructive sibling comparisons, families need to work on helping children carve out their own identity, known in sibling research as sibling deidentification. With all the similarities between the Trump siblings, they each have been able to find their niche in the business and in their work and life outside the business. Donald Jr. seems to be focusing on the hotel aspect of the business and has devoted time working on behalf of Operation Smile. Ivanka is also focusing on hotel management but has stood out with her fashion and modeling work. Personally, her unique identity is clearly visible with her recent conversion to Judaism. Eric is focusing his energy on the golf courses and on a newly acquired winery. His charity work for the Eric Trump Foundation focuses on raising money for children with cancer.
2.No parental favoritism: A common point of contention between siblings in any family is when there is a feeling that one of the siblings is favored by the parents over the others. This is particularly problematic in family business situations where competition among the siblings and finding the boss', or the father's, favor are common undercurrents. These dynamics can contribute to feelings of favoritism. Donald Trump is hard on everyone, including his children. From what the Trump children report, their father expects all of them to work hard with no exceptions. Each of the siblings feels that their father is treating them equally with no favoritism. In a recent interview Donald noted that their father would fire them if they slacked-off regardless of which one of them was the slacker.
3.Family time: Finally, and most simply, the Trump siblings enjoy spending time together and doing fun things together. From vacations to ski trips together the Trump siblings have always made it a point to spend quality time together. Although a recent hunting trip to African by the two brothers drew some criticism from animal rights groups, they should get credit for the simple activity of spending good time together with siblings.
The lesson for family business owners is clear. In addition to working on developing in your children a work ethic, a sense of responsibility, and an understanding of the business, make sure that they have a close sibling bond amongst each other. To paraphrase a famous Psalms: "How good and pleasant it is (for business) when siblings sit together."