Family Wars by Grant Gordon and Nigel Nicholson, published by Kogan Page

This book is a good read which appeals to my own (rather sad) enjoyment of reading about business troubles and also provides some interesting and surprising insights. I have always been firmly of the school that says ‘do not mix business and personal matters’ so have tended to see the family business as an anachronism that eventually produces pain for all concerned.

Yet early in the book such prejudices are challenged when it is confirmed that, despite all the dilemmas and conflicts, family businesses have, over time, outperformed others; this is confirmed by research in both Europe and the USA. These companies also have greater longevity than others, perhaps because they are less susceptible to the economic logic of acquisition.

The book then moves on to describe how, despite this overall comparison, family businesses have produced some amazingly bitter conflicts. I am sure that many of us could add to these stories from personal experience and anecdote and many other books have added to the list. (Blog readers may remember my review of the book about the fights between the brothers who ran Adidas and Puma as an extreme example).

The two best stories for me were those of two well known dysfunctional families– Ford and Guinness. The inability of Henry Ford to delegate and hand over drove his son Edsel to drink and an eventual early death; Ford Senior then entered into a bitter conflict with his grandson Henry II and tried to prefer an outsider as his successor. It only ended when the younger Henry humiliated his grandfather in front of the Board and secured his succession. The conclusion is that Ford would have become an even greater corporation if Henry Senior had been able to let go and allow a more objective succession process.

The Guinness story was a similar example of senior members of the family having little faith in the younger generation and being unable to let go. Rupert Guinness did not relinquish his Chairmanship until he was 88 and, by then, only younger grandchildren were available as family members. Non family members began to desert a sinking ship, believing that the company was failing and that they would never get a chance to save it. It is perhaps ironic that the man who eventually filled this vacuum and set the company on the road to recovery was Ernest Saunders, who created new scandals and conflicts during the 1980s.

The book is not all about stories; there are some interesting conclusions and lessons for anyone in a family business. The most interesting were:

• Understand that any family is a ‘gene lottery’ with no guarantees of continuing competence
• Undivided families are the exception rather than the rule
• The most dangerous relationships are father/son, husband/wife and brother/brother.

Readers will end up wondering how it can be true that family businesses outperform others when there is all this conflict going on. How effective they would have been if they had been able to work with one another!