Resolving Conflict in a Family Business

It doesn't matter how many years or even generations it has taken to create a family business and to make it successful. Internal conflicts can shatter a family business more than all competitors combined. In today's world a business is not likely to be around for long, when family members spend more time fighting and blaming each other than working together and coming out with creative ideas.

One typical reason why family members fight is the limited resources. In any business, there are obviously only so many dollars, shares and top management positions available. It is not easy to please all family members when each of them strongly believes s/he is the one who should have that CEO job, those dollars, or those shares. Another typical reason for conflict is change. Some family members believe that change is necessary, arguing that the business will never improve without it. Others seem to have plausible reasons to resist it. If the business is doing fine, there is no need to change; if the business is doing poorly, there is no time or money for it.

It looks like the real challenge for a family business is not how to avoid conflict- since that is almost impossible- but how to deal with it, and how to resolve it constructively.

The way family members deal with conflict much depends on their individual personalities. Some have a "my-way-or-the-highway" approach; others prefer to compromise; and some try to deny that any problem exists, hoping that time and patience will eventually take care of everything. Depending on the circumstances, any of those approaches may seem to work.

Whether the real problem gets resolved is a different story. Conflict in a family business is often more complex and deeper than it looks. It could be that, before any issue around money or shares can be resolved, some other issues- of totally different nature- need to be resolved first, like the family members' difficulty in listening to and understanding each other.

It's a big step forward when family members can at least agree that continuing to fight against each other doesn't resolve their business problem. Instead, it would be far more productive to ask the help of a professional business mediator, experienced in conflict resolution.

As neutral third party, the mediator doesn't tell family members "what" to do, but "how" they can best decide what to do. During joint and private meetings with all family members and other professionals whom they trust (attorneys, accountants, management consultants), the mediator applies several problem solving strategies and techniques.

With the mediator's help, the family members start by defining their problem in a way that everyone understands and agrees on. Their next step is to come up with as many options as possible to resolve the problem. Finally, they negotiate with each other, with the mediator's impartial assistance, until they agree on a solution that they are all willing to accept and make work.