In the best of worlds, family businesses thrive because there is a high level of trust and cooperation among relatives who share not just blood but a strong work ethnic and commitment to making the business thrive.
But what happens when conflict arises? Workplace conflict doesn’t have to be negative, said Archie King, a retired counselor and consultant in Madison.
“Conflict can lead to greater teamwork and increased productivity if handled properly,” King sad. “Managers can make tough work easier by improving their communication skills, providing forums for employees and learning conflict resolution skills. Addressing problems before they escalate is imperative. Every business and company should have written and enforced policies baring threats, sexual harassment and racial discrimination. A formal system for resolving conflict should also be a part of their policies.”
Family businesses can face difficult challenges because it is almost impossible to keep the family dynamics from affecting the business. King recommends family businesses with conflict resolution seek outside help from a professional.
“They are dealing with family issues and business issues, which complicate the process,” King said. “Forums for resolving conflict and a facilitator who has the skills to help resolve the conflict are helpful.”
Workplace conflicts can have a huge impact on the productivity and financial success of a company. King said one of the reasons employee assistance programs are diminishing is because it is almost impossible to quantify their value by a dollar amount. But when you consider loss of work due to stress and illness, less productive employees, sabotage and employee turnover, the cost to business is tremendous.
They don’t go away
There can be a tendency to ignore conflict in the workplace, particularly when it is a family-owned business and problems could spread beyond work to home. But rarely do problems just go away if they aren’t addressed.
“You can actually document the fact that numerous family businesses have disintegrated over the inability to resolve conflict,” said Hal Miller, a member of the Public Law and Finance Group at Butler, Snow, O’Mara, Stevens & Cannada, PLLC, Jackson. “Conflict may get that bad with non-family businesses, but I don’t think so.
“If you don’t resolve the conflict, it isn’t the same as you and your boss having conflict. You can find exceptions, but generally speaking it is more difficult for a brother and sister or two brothers to resolve a conflict than two people who aren’t kin to each other. It is harder because we remember what we did to each other as little kids. Conflicts are more difficult to resolve to begin with because of the family relationship.”
Miller, whose family business, Miller Transporters, has had five generations involved, recommends mediation by an objective third party when conflict is causing major problems.
“Part of what I do is serve as a mediator sitting between people trying to resolve disputes,” Miller said. “These are mostly legal, but some involve family businesses.
“I recommend to family businesses and to closely held businesses, if you have a dispute, you ought to seriously considering using the services of an impartial third party to sit down and help you talk it out. I have been successful in helping families resolve disputes that they couldn’t resolve if their lives depended on it. I’m an impartial person who doesn’t have the hangups. There are a lot of people, myself included, who call themselves family business consultants. And resolving conflict is part of what we do.”
Conflicts that are just ignored can end up dominating the business. You can end paying more attention to the feud than the business.
“Business can go to hell in a bushel basket if you are not paying attention,” Miller said. “It is easier to happen with family businesses. Try to resolve conflicts in a rapid period of time because it just gets worse. Sometimes you forget what the dispute was about in the first place because you have gotten so mad and been mad for so long.”
Conflict can be avoided in the first place by having firm rules in the workplace. Miller advises developing them early before problems crop up because that is better than making a rule after a situation arises. Making rules ahead of time makes it impersonal.
“If you and I had a rule now that determined how we were going to choose the next head of the company, then it is not real personal,” Miller said. “But if it is time to choose a new leader and you don’t have a rule, it gets very personal. I’m a big advocate of rules. Unfortunately, a lot of family businesses don’t have rules. They just kind of wing it and deal with issues as they arise.”
Most of the time, family business disputes aren’t legal. But when one family member sues another, it can get very ugly. When not just words have been exchanged but a lawsuit filed, mediation is a good choice.
“Bring in an impartial third party and it enhances the ability to solve the problem,” said Miller, who teaches mediation at the Mississippi College School of Law. “A mediator can make suggestions that won’t make them mad. It really is that simple.”
Other advice from Miller includes finding a way to separate family from the business. For example, just because a brother is president of the company doesn’t necessarily make him in charge of the family, too. In the family context, he is just another brother. While it is difficult to separate family issues from work, that should be the objective.
Miller also recommends choosing the leader of the business not by birth order, but based on skills. The eldest may not have the best business skills.
It is important to have a leader, and not expect that each family member will always agree on business decisions. Miller has seen large family businesses go bankrupt because they had no business structure. One firm had a rule that everyone in the family had to agree on whatever they were going to do.
“The company went bankrupt because they couldn’t make business decisions,” Miller said. “The inertia of that killed them. A business not owned by families would never have those problems. Someone has to be in charge.”
Family businesses should also be sensitive to sharing power between males and females. Even if women aren’t left out of the economic benefits of the company, they can resent not having a say in running the business.
With a 50% divorce rate in the country, the issues of in-laws and what happens in a divorce can be problematic. Miller knows one firm with a son-in-law managing the business who was kept as head of the company after the divorce from the owner’s daughter. But that caused a major rift between the owner and his daughter.
In other cases, even if the son-in-law is an outstanding manager, he can lose his job upon divorce.
“Another sticky issue is whether in-laws get to own part of the business in the divorce settlement, which you don’t want,” Miller said. “These kinds of issues come up frequently.”
Line in the sand?
Wayne Rivers, president of the Family Business Institute based in Raleigh, N.C., said many conflicts in family and closely-held businesses begin when someone stakes out a position or draws a line in the sand.
“Staking out a position tells the other party that, ‘I’ve made a decision, your opinion is irrelevant, and here is the solution; now you must go along with it,’” Rivers said. “When decisions are already made, and a position is staked out, the result is inflexibility, and conflict resolution becomes difficult. Therefore, in helping to resolve conflict, we must focus on talking about interests and how we can focus on interests. Ultimatums, lines in the sand and staking out positions should be discouraged at every opportunity. Gathering input and prescriptions prior to staking out a decision lessens the level and amount of conflict.”
Rivers said it is a common myth that all conflicts are resolvable. There are, in fact, times when parties are not able, for whatever reason, to come to a mutual agreement. If this is the case, the next step is to determine ways to live with this reality. Family businesses in particular are susceptible to the “all conflicts are resolvable” myth. The theory is “because we love each other” that all conflicts should magically disappear.
“This is simply not the case,” Rivers said. “In fact, where family business systems have broken down, perhaps the only way that they’ll be able to return to a semblance of normality is to accept that all conflicts are not resolvable and begin to take steps to change or dissolve some of the business relationships which are hampering effective family communication and harmony.”
People often avoid conflict because they are afraid of what the outcomes of outright conflict might be. But ignoring conflict can make matters worse by resulting in stress.
“People get ill more often, get headaches, and they engage in avoidance behavior like coming into work late, leaving earlier, being absent altogether, or working in ways in which they won’t come in contact with other members of the family,” Rivers said. “Since they have no outlet for their grievances at work, they take out their aggressions at home and begin experiencing discord with their spouses or children. They may exhibit other behavioral changes like drinking, drug use, excessive time spent on non-vocational pursuits, depression, lethargy, apathy and mood swings. They may experience feelings of helplessness and no longer take the initiative to solve problems. They may even begin to sabotage the effectiveness of their business or the family. These actions can take place consciously or subconsciously. Suppressed conflicts can escalate to the point where the parties become total enemies.”
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.