Why the Future of Your Family and Your Family Business Depends on How You Handle Conflict

Updated: Oct 27, 2020

Family Business Conflict Resolution
Family Business Conflict

Family Business Conflict

Conflict in family business can occur in the largest companies (think Maple Leaf foods), to the smallest mom and pop shops.

If you are a family, and in a family business, conflict is almost inevitable.

So how you handle this naturally occurring conflict will affect both your family, and your family business.

The hard cold facts about family business is that the potential for conflict is woven into the fabric of family enterprise. 

Yet despite this fact, most family business stakeholders, (and unfortunately some family business advisors) do not truly understand the unique nature of family business conflict and are therefore unprepared to manage the conflict when it occurs. 

What Makes Family Business Conflict Unique?

In a family-owned business,family dynamics and relational history combine with business and economic interests.

The resulting mix of these potentially potent ingredients is that they are a recipe for conflict.

Family members may hold very different views on important issues like:

- the business decision making process

- pay and remuneration

- job titles, responsibilities and career pathing

- money and power

In a a non-family business, many of these views and concerns still exist, but the intensity of such concerns is often muted compared to those in a family business.

Additionally, employees in a non-family business can simply leave if they are not happy, so the chances of lingering conflict existing is often limited.

But in a family business, employees who are family members can feel under-appreciated, unheard and trapped.

The result of such feelings, and the business environment in which they occur can be significant disruption to the family unit and to the business itself.

Conflict or Dispute?

For many, the term 'conflict' and 'dispute' are synonamous.

When in reality, the two are quite different.

Disputes generally occur between two individuals. Disputes are isolated issues over which people disagree and normally they can be resolved through discussion or mediation.

Conflicts, on the other hand, are more difficult to pinpoint. Their start is often ambiguous, and it is rarely clear how the conflict will end. or if it will end.

 Therefore, conflicts need to be managed, as they can rarely be completely resolved.

As stated earlier, conflicts in a Family businesses are inevitable.

Not because of the people involved, but because of the system that they work and live in.

The family business system is inherent with certain flaws, or areas that create a natural breeding ground for conflict.

As such, no matter who you put in a family business system, systemic conflict is sure to arise.

Because conflict in a family-business is often based on very important and personal issues or beliefs, conflict that is left unattended can be devastating to the family-owned business.

Managing Conflict in a Family Business

If you have ever dealt with conflict in your family business, you know what a minefield it can be, and how difficult it is to diffuse the intensity of family business conflict.

It's never a matter of simply reading a book about conflict resolution and putting the books suggestions into play.

It's never that simple.

Even the best intentions to resolve the conflict can create unplanned and unwelcome negative consequences.

Conflict resolution needs to be done first from a high level, identifying any negative results that a planned course of action may cause.

It's much like playing, 'War Games' (but with bigger stakes).

Every action and decision will be perceived differently from family member to family member.

Because one can't account for every contingency, or predict exactly how each family stakeholder may react, additional conflict resolution strategies need to be employed.

Like many things in life, preventative maintenance is the key.

Much like maintaining your vehicle with care and regularity, a family and a family business needs to be cared for and well-maintained.

This way, when the conflicts and adversity of life occur, the family is ready to rise above it.

You wouldn't drive your car across the country without first checking the oil, or ensuring the tire pressure is right. To do so, would be irresponsible.

Why would you put yourself in a position to experience a mechanical breakdown on a cross-country trip?

You wouldn't.

But many treat their family business the same as an ill-maintained car.

No time, money or effort is spent to build reliability, capacity or resiliency into the family business.

So when conflict comes, it's like a flat tire, or a blown engine.

Everything stops.

So the first step to managing conflict in your family business, is to manage it before it happens.

Well planned, and well designed family business governance, family business communication plans and family business succession and transition plans need to be created and implemented.

Doing this well in advance of open conflict will go a long way in eliminating or diffusing family business conflict.

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