Resource conflicts emerge when and because individual, group and organization interests are misaligned, so that choices that benefit interests at one level hurt the interests at another level.
Carsten De Dreu and Michele Gelfand
Introduction
Conventional wisdom warns us against family members working together in one business, with many a tale of years of conflict and the harming or even destruction of the family business when this rule is disregarded. As much as it is true that a family conflict can hamper or destroy a business, this need not be so, as we shall see. Personally I have had the privilege of working with family over a number of years in the earlier part of my career, and if it is effectively managed this can be a unique and dynamic business asset.
A few common errors made in the family business
While every family business conflict has its own features and details that must be taken into consideration, there are a few conflict errors made that we can generalize and use as a start in preventing these events.
The following examples rather inevitably lead to or exacerbate existing family fault lines in a business:
(i) A lack of clear boundaries – working together as a family does not need to imply that everyone gets treated the same, that everybody earns the same, or that the expectations and workloads of everyone should be the same. Emotional bonds, expectations of vague concepts such as “fairness” and different levels of leadership responsibilities can raise some early expectations that become progressively more difficult to resolve later on. In everyone’s best interests then, lay down very clear, objective boundaries, in written form where possible, and consistently keep to those boundaries. This prevents or limits conflicts caused by different expectations, communication failures and changing dynamics in interpersonal family relationships.
(ii) Family roles need not be replicated in the business – every family has its own established, if unspoken roles assigned for or assumed by every member of the family. So we have the pater- or materfamilias, the leader, the hard worker, the rebel, various roles played based on the chronology of birth and many others. A common mistake made in modern family businesses is to unquestioningly transfer those roles, as sensible as they may be in a family environment, to the business environment. While some of these roles may quite naturally transfer, say for instance an elder or leadership role, this is not always automatically and necessarily so, and should be examined on an ongoing basis. Leading a family, being the peacemaker in that environment, or the one with all the answers at the dinner table may not be the same as what a modern, high-pressure commercial environment may require. Business roles also are much more fluid than family roles, and the best person for a specific job in the business may differ from task to task, from time to time. Losing sight of this creates resentment, misunderstanding and at least the perception of disrespect, which in itself creates and drives a spectrum of other conflicts.
(iii) Changing your business ethical and standards because someone is a family member – this is a very prevalent cause of serious family conflict in a business environment. We look the other way, we forgive, we make accommodations that cause resentment and cyclical conflict and harmful expectations in themselves. An easy test is to compare conduct that you allow for a family member with what you would allow for a non-family member in comparable circumstances. A family member should comply with the standards, ethics and rules of the business just like anyone else, and be subject to the same standards of quality, performance, accountability and compassion as anyone else, and if you have to make exceptions based on family membership that should be an important red flag. There are several practical techniques to deal with this problem.
(iv) Sometimes a family member is simply not the best candidate – it is not always pleasant to realize this, but sometimes family appointments are made on laudable, compassionate and emotional grounds that have every place in a family environment, but should be very carefully approached in a business environment, and where possible avoided. A successful family business may attract a lot of attention in an extended family, and refusing someone a direct place at that table, or removing them from that table, can have harsh consequences in a family. Expectations are high, especially in difficult economic times, promises of high performance are easy to make and accept, and refusals are met with conflicts of their own. These situations should be handled with great skill and sensitivity, and any contentious decisions should be explained clearly, compassionately, and with enough focus on both the personal as the commercial reasons for doing so. Here again, clear and objective boundaries and consistent application will serve the family and the business well. It is easier to deal with the fallout of a refusal of an unqualified family applicant than it is to deal with the complex conflict of a subsequent removal of that person, not to mention the harm done to the business in the meantime. This, and the preceding error, can also of course create conflict with non-family members that were overlooked or prejudiced by the accommodation or preferential treatment of the family member.
A few practical modern conflict management tools applied to the family business
With these foundational considerations understood, let’s look at a few practical conflict management techniques that a family experiencing conflict can make use of.
(a) Adapt and upgrade your idea of what conflict is – conflict is not always loud and aggressive. Conflict between people is any clash of interest, any divergence of direction or opinion, and it comes with a variety of motives. People can be, and often are, in conflict with each without wanting to harm the other. People have different conflict styles and confidence levels in dealing with conflict, and conflict avoidance (in its many forms) can be as harmful to a business (and a family) as an overtly aggressive conflict could be, if not more so. Conflict can have different causes and triggers, even in a family and family business environment, and a good understanding of what causes specific people to have or cause these conflicts with others becomes a very important business skill. This also implies that conflicts are identified earlier on, which in turn makes resolution and effective management so much easier than trying to repair or manage conflicts that have been unresolved for years on end.
(b) Do not allow family dynamics to be used as commercial weapons – family members in the business should be reminded of the fence lines between family roles and business interests, and when they are being crossed. Family conflicts and tensions, such as sibling rivalry, grudges, favouritism and so on should never be allowed to carry more weight than the pure business interests of the concern itself. Where family dynamics can be accommodated in the boardroom, good and well, where not they should be dealt with early and effectively.
(c) Pay particular attention to the differentiation stage of the conflict. This is the phase of a conflict where the dispute is described, defined, where all of the facts and allegations are aired, and where we get to know how the various involved parties see the details of the conflict. This is a very important part of any conflict, as it limits what we know, from where we are further limited in our options and solutions. It generally takes quite some skill to manage this early but crucial phase so as to get all the information necessary without escalating that same conflict beyond the point of no return. This is often complicated in a family environment by subtle generational roles, boundaries of respect, past resentment and conflict rigidity, and needs a patient, skilful hand to get every relevant fact out in the open. We often, for various reasons (especially in a family business) rush to resolution, shortcutting processes that need to play out for real, transcendent resolution to have a chance.
(d) Conflict studies and practice also show many harmful problems arising from poor management of the integration phase of the conflict. This is where we have shared our complaints and accusations, where the conflict has been aired and where the parties now, maybe for differing reasons, realize that they should resolve the dispute somehow. In a family business we find a combination of normal business pressures (deadlines, loss of income caused by the conflict) and family dynamics (such as pressure to just get along, to “stop fighting”) leading to poor conflict outcomes, specifically in rushed peace treaties inadvertently designed just to restore some sense of calm and peace, while leaving the conflict cause or its triggers unresolved. As understandable as this strategy may be, it is an abdication of business responsibility and the loss of an opportunity to resolve it in a lasting and durable way, to everyone’s best interest. Be careful of these short-term solutions, as they invariably lead to distrust (of processes and people), cyclical conflicts, escalation and conflict rigidity.
(e) Any family business conflict of sufficient importance, especially where this has become a cyclical or repetitive pattern of conflict behaviour, should be referred to competent mediation as a matter of urgency. Family conflicts, despite what family members often believe to be true, spill over into the passages and corridors, and cause a lot of uncertainty, distrust and anxiety amongst fellow employees, an unnecessary self-inflicted wound that becomes increasingly more difficult to heal. A competent mediator will be able to resolve the merits of the dispute while retaining or healing the underlying relationships involved. Effective modern mediation enables creative solutions in drastically reduced timeframes, at a fraction of the cost in money, relationship and brand damage that litigation or conflict avoidance bring about.
Conclusion
Family businesses combine the best, and the worst, of the institutions of family and business, and combining these two forces can be a daunting experience. There is much wisdom in being very careful before such a venture is put together, but for those who can successfully navigate those waters, I believe that a family business, effectively run with skilful conflict management at the centre of that process, is a source of power that can take on the world, and win.
Suggested reading
1. The psychology of conflict and conflict management in organizations, edited by Carsten de Dreu and others, Taylor & Francis Group (2008)
2. Dangerous Magic – essays on conflict resolution in South Africa, by Andre Vlok, Paradigm Media (2022)
(Andre Vlok can be contacted on andre@conflictresolutioncentre.co.za for any further information)
Andre Vlok June 2023