Crisis in a family business is often the result of conflict between family members. George Kohlrieser offers a six-step guide to help you manage these tricky times
Conflict in family business comes with the territory and is inevitable. The underlying basis of the family is an emotional bond with loyalty as its foremost principle. A family is expected to nurture and care for each other with unconditional life membership, regardless of performance. When the rules of business and the rules of family overlap, conflict is probable.
It is the fear of conflict that leads people to do nothing about circumstances that are making them feel trapped or like a hostage. Why rock the boat if you disagree with your brother, sister, mother or father? After all, a harmonious family relationship has permanence.
When a person avoids conflict, however, the brain is working perfectly well. Humans are hardwired to avoid potential danger at the primitive survival level. We need to learn to "rewire" our brain to step towards conflict instead of stepping back from it.
Conflict occurs as a natural result of human relationships and, therefore, is best seen as a challenge, a problem to be solved, an opportunity and, in that sense, something positive. Handled well, the differences that arise between people will lead to creative problem solving and successful human interaction.
The negative effects of avoiding conflict include reluctance to exchange information, poor performance, negative stress, loss of self-esteem, and destructive relationships. A good example is where the succession of the family business has been disrupted when a son/daughter falls out with the father/mother over the strategic direction with the result being that they leave the family business to pursue a different career.
When mismanaged, conflict can lead to serious and costly consequences that can threaten the survival of the family business. However, although counterintuitive, it is vital to create an environment where conflict is encouraged for the positive benefits it can bring.
At the root of all conflict is broken bonding and loss. There are people with major differences and disagreements who are able to keep a bond with each other in such a way that they do not have a conflict. There are six steps to creating such a bond that enables conflict to be brought into the open and resolved in a constructive and healthy manner:
1) Separate the person from the problem
Issues cannot be resolved effectively if there is disrespect between the parties. It is important that people focus on the issue, not on the personalities or on the past. They can then use the problem to discover the other person's thinking rather than as an occasion to win.
The quality of the familial relationship can be protected by recognising and admitting to a growing problem while it is still small, and for both parties to be willing to discuss it. Family members must either bring issues up in a non-threatening way as and when they occur or choose to let it go. By focusing on the problem, as opposed to the person, people can maintain respect for the individual and work together with common goals to find a resolution.
2) Master the Mind's Eye
The Mind's Eye is an important function of the brain and enables a person to control the way he views himself and the world. When people have close bonds with others, they are more likely to focus clearly on what they want to achieve together.
If family members can visualise a successful outcome, they can then avoid some of the tension and polarisation that can be present in disagreements in order achieve a positive result. Family members need to pick issues thoughtfully and carefully, taking the time to clarify thoughts and feelings before reacting.
On emotionally charged issues, there is a great value in rehearsing before actually making a statement. The mindset with which people approach conflict can radically alter the outcome. Therefore, by focusing on the positive, people are able to influence the outcome in that direction.
3) Manage dialogue with mutual respect
Dialogue is the process of thinking together to find a greater truth. The words people use can make a significant difference to business performance. When stating a point of view, needs or feelings, people must be aware of their impact on the person with whom they are communicating, and vice versa.
In stressful situations, by focusing on their own point of view, people tend to speak to each other in a series of monologues rather than in a dialogue. Putting objections in question form as often as possible is a powerful way of advancing the dialogue (What would you think if … ? Have you considered the possibility … ? Would it work if … ?).
Another option is to offer an alternative as a different way of thinking about the problem if an objection is raised. It is also important for family members to avoid blocks to dialogue (ie passivity, sarcasm, discounting, personal attacks, overtalking, and failure to listen as reflected by the use of the phrase "yes, but,") so that they can engage in a true dialogue.
4) Look at options and proposals
In family disagreements, it is important that the parties involved brainstorm together to create a variety of possible solutions. Developing a number of options shifts the focus away from the entrenched positions of either party.
Offering choices, making concessions, and compromising where there is a focus on a common goal can help the other person save face and co-operate. Through conversation and dialogue, it is possible for both parties to engage in finding good solutions.
5) Invoke the power of concession making
When a person makes a concession, no matter how small, it is important for the other party to recognise and reward it. This approach helps to minimise the loss and maximise the gain. Successful negotiations are often resolved through a series of small steps in which making and giving concessions plays a key role in moving the process forward.
Concessions evoke the law of reciprocity: a person gives something to someone and that person then feels obliged to give back in kind. Unfortunately, many people see concessions as a sign of weakness because they view the negotiation as a win/lose scenario. Making concessions sets the stage for a win/win outcome for all. In the end, the art of concession making is at the heart of all conflict resolution.
6) Maintain the relationship
Once a resolution is achieved, a foundation for future agreements can be formed. Family members who learn the formula for dialogue can maximise the potential for everyone concerned. They can then create a climate that encourages the repeated raising of issues in a constructive manner, framed in a dialogue of mutual respect.
Once an agreement is reached, it is vital to communicate this to other family members or, as relevant, other senior managers. Maintaining positive relationships is a vital part of growing a family business.
While family harmony is a key goal in family business, it is important that it is not used to avoid dealing with conflict. Successful conflict management is an essential skill and helps renew harmony that has been broken through various disagreements. Unresolved conflict threatens both the family system and the business process.
The goal is to build a company culture of conflict acceptance and management with an open and engaged approach. With each successful resolution comes an increased capacity to deal with difference positively. Ultimately, addressing conflict can build family harmony and be a source of competitive advantage for the family business.