September 2019 Newsletter – Family Conflict

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Our topic for September 2019 has been family conflict. We’ve talked about why conflicts between family members in a family business are so complex. We’ve examined the spectrum of conflicts within a company, ranging from mild disagreement to outright war. We also emphasized how important it is to resolve conflicts earlier rather than later to avoid damaging the company and family relationships beyond repair.

September 2019

 

Every Business Has Conflicts

Creating a perfect business environment is impossible. No matter how capable or wonderful the people the companies hires, there will always be at least minor personal disagreements or squabbles about work issues or how the company is run. We are all human, we all have our own ideas and experiences, and sometimes goals or personalities clash. It’s easier to manage unrelated employees than it is family members, though, because family members have relationships outside of the company too.

Family members’ relationships are more complex because of the history they have with each other and the emotions involved. The fact that they know each other better doesn’t always translate into more harmonious work relationships. Often, it’s the exact opposite. People are more likely to repress or ignore the negative feelings they have toward their parents, children, or siblings. That doesn’t mean they don’t eventually come out. If those unresolved feelings emerge within the work setting, they can cause real trouble for the company.

For example, a business owner may have conflicting feelings about relinquishing control of his business even before a sale because he defines himself by his position and it gives him power and status. His son may interpret his hesitation as a lack of confidence in his abilities. And this may or may not be true. It can be hard for a parent to see their children as fully mature adults and give them a larger role in the company or more responsibility. If they try to discuss their issues at work, it’s likely that past personal issues may crop up in the conversation and sidetrack any progress they could make on the matter at hand.

Read more.

Exit Coach Radio Podcast

In this podcast Vincent talks about how expectations factor into creating or managing conflict in family owned businesses. Many first generation business owners built their companies by leveraging everything they had and working very long hours for years before they made a profit. What the company means to an owner who has done this will likely be very different than what it means to a son or daughter who seeks to assume a leadership role in an already established company. In many cases the upcoming generation may not have the leadership skills, the experience, or the work ethic to keep the business profitable or the employee pool happy. For employees who have worked their way up in the company through their own hard work and talent, a transition can cause real friction if they feel they will be working for new owners they don’t or can’t respect.

These kinds of family conflicts are one big reason why a transition of a family business from one generation to another is especially tricky. It can be done successfully, however, and Vincent talks about his experience in family conflict mediation, how he works with family members in these types of transitions, and the tips he gives to them on how to make it work.

Click here to listen.

What Are the Underlying Causes of Family Conflict?

Any number of things can contribute to conflict within a family and a family business, but the following are problems we’ve encountered again and again when we have been consulted about transitioning family businesses.

Poor planning – Only a very small percentage of business owners begin the exit planning process well in advance of a transition. When the new generation is inadequately prepared to lead or manage the company, that’s certainly not ideal. But when an owner dies or becomes ill or disabled suddenly without preparing his successors, that sets up a power vacuum that different family members will compete to fill with predictable results. 

Differing goals or expectations – If family members are not on the same page about what is best for both the company and the family, they will be working at cross purposes, and frustrations will arise. Because family members can have many roles – husband, father, shareholder, CEO – these expectations about everyone’s roles and responsibilities need to be clearly spelled out and accepted by all family members. Otherwise conflicts will invariably arise. 

Poor communication – Sometimes family members choose to not communicate their feelings or needs because they want to avoid conflict. Other family members do not have the skills to communicate their ideas or feelings or do so in a way that upsets people. In some families only certain members are allowed opinions or a say in how things are run. Bad communication is a root cause for a majority of conflicts. If you cannot discuss what the problem is, how can you solve the problem? You can’t!

Prometis Partners recommends that business owners be attuned to signs of conflict within their companies. It’s very common to wave away family problems until they are directly affecting the ability of the company to function. Unfortunately, by that time it’s much harder to get communication between family members reestablished and repair the damage done to relationships both at work and within the family. Often relationships with family members who do not work at the company are also damaged as is the value of the company. Call us before that happens to your business, please. We can help. 

Vincent Mastrovito

Vincent Mastrovito

vincent@prometispartners.com
(616) 622-3070
250 Monroe Ave. NW, Suite 400 
Grand Rapids, MI, 49503

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