Managing Conflict in the Family Business
25th October 2017
We are hosting a workshop on managing conflict in the family firm in London on 19 April 2018, starting at 8am. Find out more and register here.
As hard as one might try to avoid any conflict in your family business, it is not always possible. People are at the heart of family and business, and where there are people there will always be different opinions and emotions at play.
Some level of conflict is inevitable. In this article we look at steps you can take to prevent unnecessary conflict, and how to address it if it does occur.
Defining Roles and Responsibilities
The close bonds of families in business together can provide many advantages – a long term approach, shared values and a sense of common purpose - but it can also lead to confusion about roles and responsibilities. Who joins which conversations? What is the decision making process? Do family members who are not shareholders (spouses, children, etc) have a formal role in the business?
Without a clear understanding of these roles, misunderstandings and conflict become more likely. And as the family and business grow, they can become more complex.
That is why it is so important to formalise the family’s relationship with the business early on, and to continue to renew it as the family grows.
One way to do this is through a formal document called a family constitution, or family charter. By setting out roles and responsibilities of all family members, a constitution can ensure that everyone is aware of who does what and why. It can help to prevent misunderstandings and conflict in the long run.
Communication is Key
When you are busy running a business it can be easy to fail to make time (and space) for family members to communicate freely and openly. There is always something else that you could be doing instead.
But making time to communicate openly is crucial. Giving family members the opportunity to express their thoughts and concerns in a safe space helps to avoid simmering tensions, misunderstanding and conflict.
It is key to establish channels for family members to be able to express their opinions, whilst respecting others and without the fear of being judged. Such safe spaces might include family councils, as well as more informal family meetings or away days.
And finding time to have fun together is key to building and strengthening relationships within the family, increasing trust, understanding and engagement.
Dealing with Conflict
Despite best intentions, sometimes conflict cannot be avoided, no matter how solid and effective your family business structures are.
The general tendency of families is to try and avoid conflict altogether, because it is seen as a sign of failure. But it is important not to try to sweep issues under the carpet, but instead give disagreements a seat at the table. Do not view all differences in opinion as negative. Taking an open attitude to disagreements can help you hold constructive conversations.
Establishing spaces and rules for this healthy disagreement to take place is key to resolving ongoing issues within the family business. At the heart of this is creating a space where family members feel able to express their feelings openly, and without judgement.
This is often a difficult process, but can be incredibly rewarding. And it is not something you need to attempt alone. It may be useful to seek external help from an expert advisor to help create an environment that is conducive to open and respectful dialogue.
To find out more about managing conflict, access our family business challenges guide.