Creating Family Unity

They say that familiarity breeds contempt. Perhaps this is why conflict is inevitable in any family.

When it comes to families in business together, the implications of conflict can be devastating. But conflict need not always be bad. Depending on the circumstances and how it is handled, the outcomes can be positive. It's vitally important, however, to separate family concerns and issues from those of the business.

Sources of Conflict

There are almost as many sources of conflict in family businesses as there are families. Some of the more common ones though are:

  • Interpersonal relationships between parents and children
  • Equitable compensation of family members
  • Intra-family rivalries
  • Generational rivalries
  • Entry and promotion
  • Working vs non-working family members
  • Who has or will have ownership
  • Communication, or the lack thereof
  • Trust, or once again, the lack thereof
  • Feelings of not being taken seriously
  • The aspirations of individuals within the family business

Results of Conflict

When not handled appropriately, the results of conflict can be significant and destructive. Conflict which is not handled correctly can lead to: 

  • Poor financial performance
  • The disillusionment of management and employees
  • Time and focus spent on things that are distractions or even destructive rather than on business growth and direction
  • The severing of relationships
  • A loss of knowledge to the business
  • Personal disillusionment with business and family life

So what can you do?

Good communication doesn't eliminate conflict but it can help to manage it. Families need to learn to manage conflicts rather than becoming overwhelmed by them. Ultimately, good relationships depend on common business goals being stronger than conflicting personal objectives.

So the key again is communication - communication, communication, communication. It must be effective, direct and open. The common values of the business, aside from individual personal interests, need to be clearly expressed and embraced. And the process needs to be understood by all and implemented thoroughly and consistently. There needs to be a willingness on the part of all involved to put aside personal desires and listen and see other points of view. Sensitive issues should be tackled tactfully and early.

An extremely valuable and unique tool for families in business is a Family Charter or Family Constitution. This is an agreement between the family members on various aspects of the business, that becomes the authority for clarification and resolution when matters fall into dispute. The process of preparing the document is often more valuable than the document itself, because it make families communicate about their desires, expectations and needs for the family business.  

Find out more about family constitutions

The Way Forward 

The nature of family life is such that conflicts will occur. But this need not have a detrimental impact on the operational activities of family businesses. The solution is found in defining clear boundaries that are accepted by everyone involved.

It doesn't just happen though. It takes hard work, careful planning and deliberate action. Why not start with a family meeting, or even a longer retreat, away from the normal activities of business life? Establish ground rules for the meeting or retreat, and open up the lines of communication early so that honest discussion is encouraged and any reluctance to raise issues is removed. Often, it takes the involvement of an independent third party to provide direction and keep things moving. An experienced and trusted family business adviser can act as a chairperson, mediator and counsellor, to ensure that the meeting is productive and that a plan for action is developed and implemented.

If you need an experienced family business adviser to provide guidance and direction, Dewings.can help.