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With Family Business Conflict, Strike When the Iron is Cool

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In the many years I’ve worked with family businesses, one thing remains true: family conflicts happen, no matter how close and loving a family is. Whether the arguments are related to compensation, job duties, or succession, plenty arise, and if not managed properly, the results can range from discomfort to disaster.

I often tell family business owners that to deal with conflict they should ‘strike when the iron is cool’ – anticipate issues that can create conflict and prepare in advance before things become heated. The right preparation can prevent destructive outcomes and create positive resolutions, strengthening both the family and the organization.

Here are steps you can take to get ready for the inevitable family business conflict:

Accept it will happen.

As nice as it would be to live in a constant state of kum-ba-yah, it’s an impossible reality. In a survey conducted in 2011, 44% of family businesses said they had argued about the future direction of the business, 36% had disagreed about the performance of other family members in the firm, and 21% had quarreled over whether family members active in the business were adequately consulting the rest of the family. (PwC, Kin in the Game, 2010/2011)

You will encounter tensions and conflicts in your family business. Having a “not if but when” perspective can help you keep your cool when differences do arise.

Know conflict can be good.

There is a difference between healthy and unhealthy conflict. Healthy conflict happens when differing approaches are openly acknowledged and addressed. The parties involved seek out processes that aim toward solutions. These sorts of conflicts can move organizations forward and strengthen relationships.

By contrast, unhealthy conflict is often caused by repressed tensions eventually boiling over. These conflicts become personal quickly. It’s not always obvious when these will erupt since they can be masked by passive aggression and artificial harmony, so it’s important to watch for underlying tension and unhealthy behaviors and get them out in the open before they spiral out of control.

Set up your offense.

Although many family businesses will wait until they are in the midst of a conflict before seeking help, a smarter approach is to plan ahead. Educate your family members on proper conflict management and help them understand how to voice concerns constructively and focus on a solution instead of placing blame. Third-party family business specialists can also help with information and training ideas.

You may also want to research family business mediators in your area in case they could help before conflicts become destructive.

We all have differences with our loved ones, but in a family business environment, what’s more important is the way we work through it and the changes we make for the future. The same bonds that keep families together are the ones that can help them resolve differences in ways that ultimately contribute to their success.

Questions?

To learn more about family business conflicts, or to sign up for our family business webinar, contact Marjorie Engle using the information below.

Marjorie Engle

Senior Vice President
Organizational Development and Family Business Services

Marjorie Engle guides clients and their companies through executive coaching, transition and succession planning, organizational analysis, conflict management, and corporate strategy development. A specialist in assessing and developing family councils, advisory boards and boards of directors, she has extensive experience with family-owned, closely held, and public companies across many industries, as well as with not-for-profit organizations.

Engle serves as associate director of the Kansas Family Business Forum, hosted by Wichita State University’s Center for Entrepreneurship. She holds a certificate in Family Business Advising with Fellow Status from The Family Firm Institute, is a certified coach with Family Business Partners, and a certified Change Leader.