Heir and spare: avoiding sibling rivalry in succession plans

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With the publication of Prince Harry’s book, Spare, comes increased discussion around the idea of succession and the conflict it can create among siblings.

The title refers to the idea that the second-born is a backup to the first-born heir – sometimes also the assumption in some family business succession plans.

In Prince Harry’s book, many of his resentments stem from not only his role, but the constraints of other family members’ roles, and the family disfunction he says came from the situation and the choices family members made between the institution and personal needs.

Traditional succession planning often favoured first-born boys, which, in more modern settings, can create family conflicts.

Some family businesses also face gender issues in succession planning, where female children may not be taken seriously as leaders, adding another dimension to sibling rivalry.

Two experts discuss how conflict management and advanced succession planning can take the edge off of sibling rivalry.

Ronit Lami, UNHW wealth psychologist

Los Angeles-London-based Dr. Lami works internationally with ultra-high-net-worth individuals and families, and family offices and family businesses, on the non-financial aspect of successful wealth transfer and succession planning, as well as family dynamics, legacy and relationship to money.

Do you see many situations where an “heir” is predetermined by birth order or gender?

“I see a mixture of situations: [succession] predetermined by birth and by gender regardless of their skills and capabilities, or no successor is predetermined – both scenarios are harmful to the family’s success.

In other cases, I see that a successor is chosen based on their capabilities, abilities and skills – in other words, they are qualified for the job.”

Is it unavoidable for the sibling not chosen as leader to feel less valued?

“It is natural to feel undervalued in such situations, unless the relationships between the siblings, parents and other family members are healthy and strong.  

 There is no quick solution to making someone feeling less valuable. However, the feelings can be diminished by planning it well and, making sure proper communication is taking place: parents sitting down with both siblings individually and together explaining the why and how, the reasons behind the decision and the situation, emphasizing and encouraging both siblings to work together and collaborate as much as possible, without feeling less or more than the other.  

 They also need to make sure that in all other aspects of life the second child does not feel that they are less preferred or are not as favorite and the first-born. Usually, parents need guidance on how to conduct these conversations because most are not skilled in delivering them well.”

Have you seen situations where sibling animosity came to a head?

“There are ample situations – siblings in family business who stopped seeing eye to eye on how to run the business, family members who could not sit together in board-room meetings and argued all the time, family members who resented each other and were not able to communicate at all without quarreling or did not have relationship at all but were ‘forced’ to talk to one another due to involvement in the family business, the family wealth system or the foundation, family members who did not agree on how wealth should be distributed, and more. 

It is hard to explain how these were resolved because it is a deep process that involves meeting each family member individually for several meetings before bringing family members together to the table, it involves helping them understand why they are reacting and behaving the way they do, the patterns that run them, their blind spots and trigger points, the impact of their upbringing on their family dynamic and much more. With 90 per cent of cases I was involved in, animosity, conflicts, lack of communication and bad or non-existing relationships were amended.”

What are your tips for patriarchs, matriarchs and siblings to enter into a succession plan without emotional turmoil?

“Successful succession and wealth transfer involves a great deal of preparation. Most families fail to do so and therefore witness a lot of turmoil amongst family members. [A majority] of family wealth is lost due to poor preparation and not due to poor planning.

The best tip is to get professional help because if family members are ill equipped to discuss feelings of any sort it will create disagreements that will not be able to be resolved in an appropriate manner, it can cause tension, fights, bring about anger, passive-aggressive behavior and cause separation and feud.

Communicate and work together: Succession planning can be a sensitive topic, so it is important to have open and honest communication with your family members about the plan. Work together to identify your goals and concerns and come up with a plan that everyone is comfortable with.

Seek advice: It is advisable to seek legal advice from a qualified attorney to ensure that your succession plan is in line with laws and regulations and your family’s best interests are protected.

Be prepared for unexpected events: It’s important to make sure that the plan you make is flexible and can adapt to unexpected events or changes in the family dynamic.

Set up a family council or committee to discuss and manage the business or inheritance to avoid conflicts and ensure fairness among the members.

Important to keep in mind is that every family is different, and each situation will have its own unique challenges. Therefore, it’s important to work with a professional experienced in the field to help you navigate the process.”

Kimberly A. Eddleston, Professor at D’Amore-McKim School of Business at Northeastern University in Boston

Dr. Eddleston is a professor of entrepreneurship and innovation with expertise on subjects related to family business management. She is the founding editor of FamilyBusiness.org and a senior editor of Entrepreneur & Innovation Exchange. Dr. Eddleston is also an academic scholar at Cornell University’s Smith Family Business Initiative.

What is your experience with succession plans where the “heir” is predetermined by birth order or gender?

“This is both a blessing and a curse.

On the ‘blessing’ side, it allows a family to prepare a specific child for leadership, starting at a young age. In turn, this allows other family members to find a role in the business (or choose to not join the business), thus preventing conflict down the line over who should take over.

On the ‘curse’ side, if the anointed one based on birth order or gender is not suited for the business – for example due to lack of fit, lack of intelligence or work ethic, lack of leadership qualities – the family and business can seriously suffer. This often causes conflict in the family, as well as with nonfamily employees, owners and managers, because they question the choice of the successor and his or her abilities, knowing that he or she was only chosen due to birthright. It also causes problems in the business because he or she is obviously not suited to lead the business, which, in the extreme, can cause the demise of the family business.”

Is it unavoidable for the sibling not chosen as leader to feel less valued?

“This strongly depends on the family’s culture. The family, particularly the parents, need to create a home where all children feel valued and important. Just as one child can be prepared for CEO leadership, another child can be prepared to be amazing in another leadership role – and understand how that role is just as important to the success of the business. Parents need to ensure that the children support one another, and that any sibling rivalry is normal and healthy (for example, they push one another to be better and to have high standards, without trying to ‘best’ or ‘outcompete’ their sibling).”

What are options for enterprising families in situations where sibling animosity comes to a head?

“One thing I have done several times is to get the non-CEO sibling to understand how the CEO role is often overrated and not as interesting as it may appear.

It can be much more interesting to excel in one area, such as operations, finance and marketing, and to clearly see how one makes an impact on the business. It is important for these siblings to understand their importance and impact and to not try to compare themselves and what they do with that of the CEO.

Another option when sibling rivalry is intense and detrimental is to find another CEO until the siblings can stop competing for the top seat (which may be never, although age can sometimes calm competition).

For very large businesses, splitting the business can sometimes be an option, so both children can be CEO of a division.”

Responses have been lightly edited for clarity and length.

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