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Tackling Conflict In The Family Business

Tackling conflict head-on and taking a no-holes barred approach to its resolution can lead to life enhancing benefits within the family business.

To fight or flee? That is the question. Harvard psychologist, Walter Cannon, explained that we have a genetic wisdom hardwired into our brains to protect ourselves from harm at all costs. So, we flee when we can: a predisposition readily seen in the family firm.

In my interviews with several family businesses, the most often heard statements related to conflict are: “We tend not to get into it…” “Some things are better left unsaid…” or “I couldn’t possibly tell them how I feel; the family will fall apart”.

But the irony is, the longer things go unsaid, the more likely the family is to suffer irreparable breakdown and that’s when the impact on the business can be catastrophic.

Studies reveal that family firms tend to deal with internal conflict by adopting one of five approaches:

  • Avoidance

  • Accommodation

  • Competition

  • Compromise

  • Collaboration.

I find the tendency is for the majority of families to either avoid conflict altogether, for fear of reprisal, to postpone a crisis for as long as possible or to accommodate each other in order to maintain friendly relations.

This may be because families in business have to simultaneously deal with a variety of relationships encompassing both personal family matters and business matters. It may also be because families in business hold multiple roles; within the family group a sibling, cousin, parent or offspring, might also be a CEO, chairman or executive director.

No wonder then, that in such a unique and often fraught structure, the complex, sometimes tense family landscape is likely to be dotted with potentially lethal minefields. And, while most families see internal conflict as being unpleasant, even ‘destructive’ and usually as ‘bad’ what they seldom see is that healthy debate, admitting to conflict head-on, is the obvious way to relieve it.

So families, our research tells us, tend to ‘avoid’ and ‘accommodate’ rather than enter the dangerous seas of debate and argument. The tendency to pacify is overwhelming, albeit that such tendencies may lead to bottled-up emotions and pent-up feelings. Unresolved conflict, worse unspoken conflict, is a pressure cooker and the avoidance of ‘debate’ or, if you will, ‘argument’, jams the safety valve closed; inevitably an explosion will occur and often the damage done is greater than if the pressure had been relieved in a controlled and sensible way.

If avoidance is ‘usual’, then I would argue that the best way to support families in business is to teach them how to fight, in a healthy way, of course!

This begins with presenting the possibility to them, that conflict can be viewed as “good” and “constructive”, not as ‘bad’ and ‘destructive.’ For many, locked in the throes of family variance, where business and emotional responses are inexorably confused, such an idea can be a revelation. A healthy, open attitude to conflict, allows us to recognise ‘difference’ and to make the important distinction between being ‘different’ and being ‘antagonistic’. If handled correctly, this approach will allow families in business to emerge from their conflict with renewed understanding and acceptance of each other and their individual personalities, problems and needs.

But How Does A Family Set About This?

How do they make the quantum leap from sullen resentment and suppressed anger, to open and articulate argument?

First of all, they do not attempt to address the conflict themselves. They find a facilitator who is skilled in conflict management nothing that a good facilitator should provide a safe environment, gather everyone’s expectations prior to commencement of debate and help to co-draft “rules of engagement.”

And a good facilitator will start by defining the problem with all key players involved and/or affected by conflict. Without a common definition or agreement about what the issue actually is, there is little hope of finding a solution. Only when the family understand what they are in conflict about, can we move on to resolve it.

Finding this definition will require certain rules to be laid down by the facilitator, of which giving each side a chance to express themselves and

each a chance to listen, is central.

A facilitator will ask opposing factions to be prepared to agree to disagree and will request that round table talks should be, above all, open, honest and rational. To that end, he or she will request that extreme language (“You always…” and “I never…”) is avoided, and she/he will achieve consensus that interruptions and quick retorts are not acceptable, nor is personal criticism.

The facilitator’s aim is to attempt to change the attitude of the family by discussion, suggestion and nuance – the goal being to change the fixed mindset, centred round the ‘I win – You lose’ syndrome. They will introduce more rational concepts where debate and the acceptance of another’s right to hold their own opinion prevail, eventually leading to the point where the facilitator can find a compromise acceptable to all parties.

Along the route to this end, the facilitator will doubtless encounter the need to ask the family to listen and reflect. These two, simple words are key concepts. They may appear trite but their neglect lies at the heart of most conflict in family business.

Central to the facilitator’s skill is the awareness of the ‘behaviours’ that indicate change and the ability to steer the family to the realisation that they can compromise. Compromise is the goal and what the family must realise is that compromise is not a failure or a battle lost; rather it is a mark of success and maturity. The achievement of reaching such a compromise is for the good of the family and also for the common good, i.e. it is to the benefit of all members of the family, and to the firm’s workforce, suppliers, customers and even the local community.

To reach this end the facilitator will have to introduce the family group to the importance of certain ‘negotiating’ skills, including the need for each family member to become aware of matters as basic as body language and eye contact and the slightly more difficult art of listening, retaining and mentally ‘playing back’ what is heard. This, to be certain that family members develop the skill to listen to what has been said and not merely to assume that if “‘such and such’ said this, then he must have meant that!”

The successful facilitator will also warn of the dangers, and actively discourage the desire, to form coalitions. Coalitions within the family are notoriously divisive, invariably lead to greater upset and typically create ‘victims’ and ‘bullies.’ Most family firms have within them, one or two members who hold onto entrenched views and any threat to these views are perceived as a threat to individual identity. Understanding this can breed willingness to compromise, on all sides.

Above all, the facilitator will lead the family to face the specific issue at the heart of the conflict; to define the problem and separate it from other disagreements about which there may also be ill-feeling. (Other issues can be acknowledged but we should move on and set them aside for another time. They mustn’t impact upon the issues in hand).

If this is the role, some might say the art, of the skilled negotiator, what of the family? Can they develop similar skills for themselves? Of course, but our experience shows that even when such skills are learnt, they are seldom as effective as when instigated by a third party – the impartial and professional outsider. However, if the family is to fully benefit from the introduction of an independent mediator then they need to work with that facilitator wholeheartedly and be fully committed to making the process work.

To achieve successful resolution, the family need to cooperate with the facilitator and they need to adopt a simple set of rules.

In most cases of conflict in family firms, people simply want to be heard…and genuinely heard. They want to be understood. They want their feelings to be validated. They want to feel they count.

Often in family firms, there are perceived imbalances of power, whether related to shareholdings, positions in the business or generational positions in the family. So, it is critically important that all family business members are perceived as “equal” in a conflict management setting.

A most effective way of enforcing this equality is to have family business members complete psychometric questionnaires which reflect their psychological orientations. This allows members to understand others’ views of the world rather than assuming others are deliberately trying to make their life a misery.

In summary, family firms should be encouraged to see conflict as a “tool” for enriching ideas, plans and relationships, indeed for seeing their business ambitions fulfilled in their entirety. The degree of ‘bad’ conflict we see in such firms, is often directly proportional to the amount of time the embryonic conflict has been avoided. The essential lesson therefore, is don’t let things fester.

When conflict arises, tackle it immediately and head-on before it grows into something uncontrollable. Above all, benefit from the experience and use the opportunity to get to know each other better and to cement closer relationships, to clear away negative and destructive undercurrents and to build for the future by resolving the problem together.

When conflict is tackled head on, families not only learn to manage complex systems of relationships, but more importantly, they will develop more attractive growth environments for the generations to come. In other words, families who bite the conflict bullet and take action, such as bringing in the professional outsider to arbitrate, are more likely to survive and prosper, than those who don’t.


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