5 Ways to Resolve Conflict in Family Business
Updated: Oct 27
Family Business Conflict Resolution
Conflicts are part of life and part of business. Conflict is a frequently occurring theme in family-owned business.
However, when colleagues and employees are also family members, normal conflict can take on new dimensions.
Non-family business have both natural and formal barriers to conflict between colleagues and make it unlikely that a workplace conflict will have serious repercussions on a business.
On the other hand, the interconnected nature, and often less structured form of family businesses means that family dynamics, workplace issues and conflicts about the business can more easily become serious problems.
Many, if not most, family businesses lack the formal processes and strategies to resolve disputes, making it difficult to prevent inevitable quarrels from developing into ongoing issues.
Here are five rules to help resolve conflict in your family business:
Rule 1: Implement Formal Governance Structures
In many family businesses, family members lack a forum for discussing issues in the business.
Formal structures like family councils, boards and family forums can offer family members a safe, organised way to bring up issues and negotiate conflict.
Formal governance can also help mitigate family and financial issues by separating ownership of the business from its management functions.
Rule 2: Allow Family Members Space to Air Grievances
In family businesses with a first-generation matriarch or patriarch, is that family members may lack a safe way to express their needs and concerns.
When people don’t feel listened to or appreciated, seemingly small problems can mushroom into major business and family drama.
To help prevent conflicts, family leaders should actively encourage family members to air concerns constructively and give them the space they need to disagree.
Senior family members / owners should come prepared to listen without judgment and be willing to fairly consider the concerns that are raised.
Rule 3: Prevent Business from Polluting Family
It’s hard to not bring business home, but sure way to increase the likelihood of family conflict is to bring the boardroom table home to the kitchen table.
Family business stakeholders must separate business from family.
One way to make this separation possible is by having formal spaces and structured times to discuss business issues.
In addition to making other times no-business zones.
Rule 4: Talk About the Tough Stuff
Many large conflicts start as small problems that could have been resolved with early communication.
Sometimes, spotting issues early and addressing them through clear communication can be enough to prevent a conflict from developing.
Whether it’s at a family retreat or simply at a separate meeting, making a break from daily routine to tackle the big issues can help open lines of communication.
A formal setting can also help ensure that issues are not ignored and that members of the family have the opportunity to make their opinions heard.
Rule 5: Don't Be Afraid to Brig in an Expert
Some issues simply cannot be resolved internally.
When family members become entrenched and constructive dialogue isn’t possible, an objective expert who is trained to help resolve conflict can help cut through the emotions and focus on issues.
A mediator can also help guide a family through initial conversations all the way to a final resolution.
We have found that many family groups can achieve more in a few hours with an outside expert than they have in years by themselves.
Ultimately, minimizing and resolving conflict in a family business comes down to creating formal channels of communication.
In addition, ignoring conflict or problems only serves to make matters worse.
Conflict, when healthy can have positive consequences for a family business. And developing healthy and formal means of resolving conflict will serve to strengthen family relationships and build trust between family stakeholders.
About the Author:
Chris Hall is a Business Management Consultant and Family Business Specialist who helps business families navigate the complexities of family business. You can learn more at: www.abbusinessbuilders.ca