Conflict in family businesses is no more common than heat waves in the desert. In fact, conflict is one of the most frequent reasons family businesses call on us for help. Conflict is nearly universal and can be a healthy part of any business– unless it’s not dealt with in a productive and respectful fashion.
A conflict is essentially a disagreement between two people who both want success. But sometimes a simple disagreement can grow into something much more complex and dangerous. Families faced with unsolved, ever-expanding conflicts risk a raft of problems.
Conflicts can be especially bad in family businesses because they impact emotions and relationships as well as finances. On the personal side possible damages include hurt feelings and crippled relationships. Conflict-burdened businesses can get hammered by poor decisions, reduced productivity, lower profits and, at worst, forced sale or closure.
Due to the complexity of relationships, family businesses are more susceptible to conflict. In family businesses as in others conflict can spring from clashing personalities, differences in values, conflicting interests, scarce resources, power imbalances and more. However, family firms may also have conflicts spurred by marriages, divorces, children’s decisions to join or leave the firm and other non-business events. Disagreements may be about compensation, authority, performance, strategy and succession.
People embroiled in conflict typically respond in one of three ways: attack, escape and conciliation. They may attack opponents verbally, take them to court or make physical threats. They may seek to escape, denying a problem even exists. Last and best, they may try a conciliatory approach of trying to negotiate a resolution.
We rarely see families skilled at conciliation. They tend to solve conflicts on their own. Those that use the other two occupy a good bit of our time and attention. When escape and attack overwhelm efforts at conciliation, a skilled practitioner can provide the neutral, impartial input needed to get people talking again and headed toward a successful conclusion.
Not every outsider can do this. Good conflict mediators are known and trusted by both sides. They have mastered procedures for encouraging communication, solving problems and building consensus. They can understand and translate for both parties and help draft plans to put solutions into action. The best can teach participants how to resolve future conflict without outside help.
When an outside facilitator enters a family business conflict, the process starts with gathering enough information to understand the issues. He or she will then arrange one or more meetings at which all the participants are present. The advisor will ask everyone to explain their concerns, guiding the discussion to focus on interests rather than positions, problems instead of people and objective criteria in place of opinions. Participants will be coached to invent options for mutual gain, explore them fully and, finally, come up with a plan everyone can live with.
That’s not always how it turns out, of course. But with a skilled outside facilitator even the hottest family business conflicts can cool down as quickly and completely as the desert after sunset.
To learn more about how REGENERATION can help your family business cope with conflicts, visit our website.