Conflict exists in every business – and no more so than in family-owned businesses where the principals often share boardrooms and living rooms.
As Josh Baron and Rob Lachenauer write in their new book The Harvard Business Review Family Business Handbook, conflict is different in family businesses because the owners make the rules, which means they can also break the rules. Once a major conflict gets started, it can be difficult to stop. Until the owners agree to stand down, conflicts will continue, with potentially devastating implications for the business and family.
To avoid this, many families focus on maintaining harmony. But that strategy can backfire. Avoiding conflict at all costs can have dire consequences, too. Both too much and too little are unsustainable.
Here’s a quick way to determine if you are getting conflict right:
- Is there general satisfaction with the direction of the family enterprise?
- Are decisions about critical issues being made?
- Are family relationships good enough to work and celebrate together?
If you find yourself answering no to some of these questions, you may need to find a way to get back in the “zone”. You don’t have to be best friends to own significant assets together. But you should aspire to be good business partners, which means you agree on the big issues and can enjoy each other’s company, at least most of the time. The ability to work through conflict is both healthy and essential for long-term survival.
If you find yourself on the “too little” side of the conflict spectrum, the authors offer the following advice:
1. Agree on meeting ground rules to help guide healthy discussions.
You should agree on these ground rules before you get into substantive discussions. And then review them before each meeting. When someone’s behavior deviates, gently but directly use the specific ground rule to call it out.
2. Start with building shared purpose.
Talk about what you are trying to accomplish by owning the family business together. Doing so helps create the foundation for collective action and sacrifice. You can also articulate a “negative purpose” – identifying outcomes you are trying to avoid by dealing with them now. Use this shadow of the future to help motivate action and retain cohesion.
3. Create “beachheads” to build momentum.
Oftentimes the sheer scale of change is daunting, and it can be valuable to have a small place to start. It’s usually better to be evolutionary rather than revolutionary. Make sure you work with the current sources of authority, rather than trying to overthrow them.
4. Focus on principles rather than people.
Try to avoid making decisions with particular people in mind, since each person’s position will be shaped by how it affects them. Instead, start with broader principles that you can then apply to a particular situation. Try to develop the principles before you need them.
5. Graft new ideas onto existing ones.
There is a lot of research on how ideas spread, and one of the key findings is that new ideas are more acceptable if they are added onto existing ones rather than being seen as brand new. Change is hard for most families and it can be easier to accept when it is perceived as evolutionary rather than revolutionary.
6. Affirm the value of what came before.
There is a tendency in a change process to make the case for what has to come next by denigrating what came before it. This is a mistake, as it tends to create defensiveness among the people who created the current system. Instead, start with identifying why what exists today is entirely rational given the prevailing set of circumstances when the choices were made. It is the change in circumstances that makes those approaches no longer viable, not some flaw in their design or intent.
No one aims to have conflict within a business – and even worse, within a family. But some conflict is actually healthy. You just have to work on getting it “just right”.