Look around and notice how many family businesses are located in your neighborhood. Family businesses offer tremendous opportunity for the family principals, for support of employees, and for community contribution. Many have been there for two or more generations. Research has shown that many fail in the leadership of the third generation. The businesses that last past the third generation do so intentionally.
What are the particular challenges family businesses face? Transferable leadership, clear planning, tackling problems of fairness and accountability, and creatively managing conflicts when they arise, just to mention a few.
Large corporations have human relations departments to handle conflict. Most family businesses don’t have this luxury; the family principals have to manage the conflicts themselves. This is difficult for many family members as they are in the business to attend to the business, not to make a study of relating to each other in creative ways that get the internal problems resolved. Often an attitudinal shift is required get on board with dealing with conflict.
We need to develop two important attitudes when it comes to understanding conflict in Family Businesses:
- conflict is good and necessary
- avoidance of conflict guarantees more of the same, and worse
Conflict in family businesses is inevitable. The real question is how can we use it to strengthen the business? So much depends on the relationships between the principals in the family business. Is there honesty, openness, willingness to be accountable, to share power and authority, to admit limitations without shame or fear of reprisals?
What are some primary causes of conflict in family businesses? Here are just a few:
- fear of conflict
- issues with lack of trust
- fears of vulnerability
- fears of admitting limitations, weaknesses
- unbalanced loyalties
- feeling “trapped” in the family business
- unrecognized / unaddressed mental health issues among principals
- reluctance to express praise and appreciation
- triangulation instead of directness in communication
- personalizing & reacting instead of listening & accepting
Conflict is a form of stress. What is harmful is not stress in and of itself, but chronic and unresolved high levels of stress. Some level of stress is necessary for good physical functioning. Ever stay in bed for a few days recovering from surgery, a bad bout of the flu, or a slipped disc? Remember how weak your legs were when you got up and tried to walk? That’s due in large part to a lack of reasonable stress on your leg muscles for the last few days. Let’s face it, some amount of stress propels us to stay sharp, motivates us to do quality work. So let’s not “demonize” stress, let’s “normalize” it…let’s make it a matter of management.
What do we need to develop in order to handle conflict more constructively? There are a certain number of factors the principals need to be actively mindful of in order for the family business relationships to flourish:
- learning to trust each other in an ongoing and durable manner
- developing a culture of fairness and appreciation of each member’s opinions
- learning to complement each other’s strengths and limitations
- developing accountability to each other
- learning how to disagree while maintaining respect for each other
- creating atmosphere of safety to engage in conflict in order to resolve issues
If conflict isn’t managed creatively, what happens? Certainly, the problems get worse. People in leadership get polarized against each other. Inefficiency, dramas and hostility, hightened tensions that distract from the company’s basic goals all simmer below the surface and become part of the daily routine.
The one great task the principals have to learn is to talk with each other honestly, authentically, and without fear of reprisals. One way to help your business move in this direction is to hire a conflict management consultant. A consultant can help you understand the nature of the conflicts upsetting your business, where they came from, and how to deal with them. For instance, are the conflicts about succession issues, loyalty clashes, compensation disputes? Clearly identifying what is at the root of a conflict is key to resolving it. The consultant can also help you create family leadership meetings to establish a structure that allows for safe and respectful conflict management. The meetings should be all about the “family process”, focussing on how we are relating to each other. These meetings should be held twice a month for 1 to 2 hours each session. During these meetings the consultant can help the principals to take turns responding to some key questions. Each member can ask:
“how am I doing as a leader?”
“What could I be doing better?”
“What do you see as my strengths?”
“In what areas do you think I need improvement?”
Asking for feedback , receiving the input, considering it nondefensively…this fosters a “platform of parity” among the principals. Not talking about products, about margins and sales, but conversations about relationships within the leadership group. The ultimate question might be “What would I do, what might I say, if I were not afraid?”
My fee for Family Business Conflict Management consultation ranges from $200 to $300 per hour, depending on the extent and complexity of the issues. To schedule a consultation call 215-353-1455 or contact me via the contact form.
Chase E. Kneeland, M.Div. LMFT 