Conflict is part of life. And conflicts can often occur in family businesses. A “conflict” is generally a serious and protracted disagreement or argument.
The longer conflicts remain unresolved, the more resentment builds. This could ultimately result in a complete breakdown in the family and business relationship.
When you own a family business, unresolved conflicts can lead to:
- reduced business productivity;
- reduced profitably; and
- breakdown of key family relationships.
Likewise, unresolved conflicts in family businesses can take a huge toll on a business owner’s personal and professional life.
Fortunately, family businesses are in a unique position to reinforce both the business and the family to achieve success.
The most common cause of any conflict – family business or not – is lack of communication and/or failure of communication.
And the longer it goes on, the more resentment builds, so it’s best to nip in the bud quickly before there’s serious damage to the business and family relationship.
Conflicts in family businesses can often arise from:
- Differing perspectives on how the business should be run;
- Unmet needs of individual family members and employees;
- Generational differences; and
- Family dynamics that pervade the operation of the business, such as family alliances, and sibling rivalries.
Below are three ways that family businesses can minimize conflict:
1. Communicate Regularly.
One of the best ways to minimize family business conflict is for leaders to communicate regularly with all family members and employees. And to stay open and receptive to feedback.
All family members should be clear on the business’s plans and expectations. No one should be left out.
Ideally, general meetings should be held at least once a year where family business leaders can share their vision for the future. Other family members can also voice their questions and concerns.
2. Get the right person to do the right job.
As part of ongoing communication, family business leaders can find out what each family member particularly good at and enjoys. That can help determine the best role for each family member in the business.
For example, I have two cousins who are brothers. As kids, they performed a variety of work for their neighbors, such as mowing lawns, shoveling snow, hauling trash to dumpsters.
The older brother had the financial know- how and knew how to make money. His younger brother loved the physical work and being outside.
Over the years, the business grew into a successful landscaping and construction company.
The younger brother enjoys not having to deal with the books and finances of the business, while the older brother thrives on it.
Likewise, if a family member prefers to be behind the scenes and is particularly skilled at bookkeeping, it would likely be best not to place them in a sales role.
3. Manage Expectations.
Family businesses are generally passed down from one generation to the next.
Often, the first generation business leader worked hard to grow the business. Future generation family members might not share the same work ethic.
It can be wise to have younger family members start understanding business fundamentals as early as possible. Perhaps while in high school, family members can take business courses and work summers in the family business.
In contrast, it can be very effective for younger generation family members to first work outside of the business to expose them to different perspectives and business operations.
In any event, all family members should be clear on their expected role in the business. And all family members should be aware if another prefers to follow a different career path.
Ultimately, family businesses can minimize conflict and strengthen both the family relationships and the business.
Please contact us with questions or for additional information on how we can help your family business successfully minimize conflict.