Though Conflict Comes with the Territory in Business Families,
There is Hope for Resolving it
 By
Henry Landes
One of history’s first business families is described in
Genesis 13. Not surprisingly, there was conflict.
Both Abram and his nephew Lot were nomads, and it seems each had
accumulated quite a few worldly goods: livestock, silver and gold.
But the great out-of-doors in the Bethel vicinity wasn’t big
enough for "the both of them" (in any case their herdsmen
got to quarreling), so Abram came up with a conflict-resolving process
that was as magnanimous as it was ingenious.
"If you go east, I’ll go west—or vice-versa,"
said uncle to nephew in effect. Pending was one of the greatest
real-estate transactions of history. The aptly named Lot pondered
the matter, then went east toward the plain of the Jordan River.
Scripture says they "parted company." Problem solved,
conflict resolved.
It’s like two brothers today in a family business: "You
take the factory in Des Moines, and I’ll take the one in Columbus."
Ah, that it were always that simple. Trouble is, folks who feud
usually can’t—or don’t—go their separate
ways. They must try to work things out. That’s where things
get interesting.
As with the book of Genesis, let’s take it from the beginning.
First, conflict in all families is both normal and inevitable.
The question isn’t if, it’s when. Since family members
are always changing and growing, conflict is part of family life.
It isn’t necessarily good or bad; it simply is.
Second, conflict in business families is even more to be expected
and inevitable. And here the stakes are higher: for the family,
for the business and even for the surrounding community. The fate
of hundreds of employees could hang in the balance as family members
duke it out. The very future of the business, which may have been
in the family for decades, could be riding on the outcome of the
conflict. Issues that might be relatively straightforward in a nuclear
family now "blow up" with greater complexity and ferocity
in a family business.
"Normal" families may well be able to handle most of
their conflicts with basic conflict-resolving tools. We might think
of this as the "wheelbarrow model" of conflict resolution:
simple, lightweight and user-friendly.
Business families, on the other hand, require more sophisticated
conflict-resolving mechanisms. Let’s think of this as the
"pickup-truck model" of conflict resolution. Greater capacity,
in both senses of the word, is needed to handle the complexity and
conflict of a growing business family. In addition to more cargo
space for all the "baggage," four wheels are needed, not
just one, to provide greater stability. Other essentials include
good tires (emotional elasticity) to deal with whatever the road
or weather conditions throw at the family; shock absorbers (forgiveness
and humor, for example) to cushion the inevitable bumps in the road;
an owner’s manual; driver education; and a license to drive
it!
In my work the past dozen years with scores of business families,
I’ve discovered that families differ widely in their ability
to handle or manage the inevitable crosscurrents that pulsate between
family members.
The wise business family acknowledges the complexity of balancing
family, management and ownership responsibilities—and plans
ahead for conflict. This family develops, in writing, rules of the
road. At the Delaware Valley Family Business Center we call it a
"Code of Conduct." Included in this code is a conflict-resolution
strategy. Thus, when the going gets rough, there’s neither
denial nor panic. There’s an almost matter-of-fact acknowledgment
that what was anticipated has arrived: "Yep, we expected this—and
we have a way to walk into and talk through our conflicts."
Easier said than done, to be sure.
A "Code of Conduct" for meetings of business families
is simply the ground rules for discussion. We suggest the following
"starter set" to our business family clients:
- Listen, with both your head and your heart.
- Ask questions; seek to understand before being understood.
- Don’t interrupt.
- Be aware of sending non-verbal communication (studies show that
10 percent of meaning comes through words, 25 percent through
tone and 65 percent through body language).
- Speak your truth, succinctly and honestly, but attack the problem,
not the person.
- Don’t carry on side conversations.
- Take a time-out if necessary.
- Fight for fairness.
- Keep your sense of humor … along with a spirit of forgiveness.
Mahatma Gandhi had a word for his approach to truth: satyagraha.
It means: Stand for what you believe to the best of your ability,
but don’t put your opponent down in the process. Hold to the
truth but do so humbly and with respect for the one who disagrees
with you. The goal is not defeat or victory but a new harmony.
In my experience as a consultant to business families, I’ve
found two tools in particular that are very helpful in managing
conflict. First, regularly scheduled family meetings are—in
essence—fair, open and honest conversations that address the
tensions faced by every business family. These meetings provide
a safe place for all family members to share aspirations, concerns
or fears about the family business … and to nip simmering
conflicts in the bud. Business families who meet regularly and "speak
the truth in love" do better in the conflict department than
those who, like the ostrich, become adept at pretending things aren’t
the way they are.
A second tool is a board of directors that includes outside directors.
Such a board not only brings invaluable business perspective, it
helps to mediate the inevitable conflicts that bubble up in the
family. Usually the ratio is four "outside," three "inside"
(or five and four). The deck needs to be stacked in favor of objective,
trusted outsiders. Because familiarity can indeed breed contempt,
a younger brother who stopped listening to his older brother long
ago will be more likely to listen to outside board members.
Along with enhancing accountability by individuals in the family
business, such a board can help take the "claws" out of
the conflict by honoring the family’s diversity while at the
same time maintaining big-picture business perspective. Borrowing
an analogy from family life itself … children often behave
better (for example, they stop bickering) in the presence of respected
"outsiders" like their grandparents.
In an article titled "One for All and All for One" in
the Autumn 1995 edition of Family Business magazine, Ivan Lansberg,
a family business consultant colleague based in New Haven, Conn.,
describes two unorthodox conflict-management plans used by companies
run by siblings.
He tells of two German brothers who inherited a family business
(50-50 partnership) from their father. Not long before his death,
the father stated that if his sons would reach an impasse they were
to contact a trusted business associate living in Switzerland. So
three times the past 35 years Frederick and George have placed a
phone call to "the old man on the mountain." Each brother
would get on the phone and explain his point of view. The trusted
advisor would listen attentively, then say, "Frederick is right"
or "George is right." The brothers would hang up and abide
by his ruling.
In another example, a sibling team long ago adopted a process
whereby a string tie would be brought to family meetings. The person
wearing the tie would have "the right of last word" if
a deadlock developed on any issue. After exercising this right,
though, the wearer would need to give the amulet to one of his siblings
who, in turn, also would have the right to say the final word. The
unusual system has worked well—in large measure because it
tends to encourage consensus on tough issues. According to Lansberg,
"Whoever wears the tie tries very hard not to lose the power
and privilege it confers—and thus works hard to foster compromise
among the others."
Ken Kaye, another family business consultant colleague, has written
extensively about business families in which conflict becomes intractable—a
condition the Chicago-based family psychologist calls "sustained
conflict." In his book Workplace Wars and How to End Them,
Kaye theorizes that conflict actually fulfills a need in some family
systems—including business families. His research has shown
that the absence of conflict (yes, you read it right, the absence
of conflict) can raise apprehensions regarding:
- Lost relationship (conflict is better than no contact).
- Change (fear of the unknown).
- Intimacy (candor may engender intimacy and violate walls built
long ago around certain emotions).
- Skeletons emerging from closets or long-buried hurts resurfacing.
Kaye states that members of family businesses frequently are "fighting
about deeper issues than the ones they claim to be incensed about."
He adds: "Often, unfortunately, their reasons for sustaining
their conflict—reasons probably not even clear to themselves—are
stronger than their ostensible desires to resolve it."
Again, in my experience, an outside board of directors can be immensely
helpful even to business families locked in sustained conflict.
If key family members are unwilling or unable to sell the business,
to part company (as Abram and Lot did) or to do the hard work of
resolving the issues, an outside board can bring some objectivity
and perspective and reduce the negative impact of the sustained
conflict.
In intriguing analysis, Kaye speculates why family members would
behave so irrationally and sustain their conflict indefinitely.
"The answer is their shared … concern that if the problematic
behavior were to stop," he writes, "a worse catastrophe
of some sort might ensue: Dad would have a heart attack, or the
sisters would never speak to one another again, or the business
would not stay in the family."
But Kaye sees hope even for business families locked in sustained
conflict. One of his most effective tools with families is asking
variants of the question, "What would happen if …?"
Such queries, he says, are "an unthreatening way to make constructive
suggestions [and] the least provocative way to explore any shared
fears or assumptions that have kept family members laboring on the
stationary bicycle of stultifying conflict."
These families indeed may need to call in "roadside assistance"—expert
outside counsel to help get them out of the ditch of sustained conflict.
As our biblical progenitors demonstrated, there is hope for resolving
conflict in business families. Whether these families have a "lot"
of conflict or relatively little, all need to adopt their own unique
conflict-resolving process. This will honor both family and business,
paying dividends in the near future and for generations to come.
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