Family Business Counseling: It’s Never Just About the Money
Family businesses contribute to economies that offer stability, jobs, and prosperity. What makes these businesses unique is how family dynamics intersect with business interests. Conflict, differences in opinion, and disagreements are a part of any organization. In a family enterprise, they can be particularly intricate and challenging to overcome.
Common Causes of Conflict in a Family Enterprise
FOUNDER'S SYNDROME
Founders of family businesses often devote their whole adult lives to it, sacrificing their time, pushing themselves to grow the business, and providing for their families. Letting go stirs up conflicting feelings for them that the children and grandchildren often cannot fully appreciate.
STRUGGLE FOR CONTROL
In family businesses, different generations often have varying levels of involvement and diverse visions for the company’s future. This can lead to power struggles when making decisions and determining leadership.
PLANNING SUCCESSION
Selecting a successor is an issue within family businesses. Competition among family members for roles can clash with the company’s interests, sparking conflict, particularly among siblings.
COMMUNICATION CHALLENGES
Poor communication can breed conflict in any organization, and this holds true for family businesses as well. When communication channels are strained or ambiguous, misunderstandings may result in conflicts.
ROLE AMBIGUITY
Family-owned businesses often struggle to outline roles and duties. When family members take on roles it can lead to overlapping responsibilities and uncertainty which in turn can result in conflicts.
UNRESOLVED INTERGENERATIONAL OR CHILDHOOD TRAUMA
When working with our families, opportunities to get triggered from unresolved issues in childhood and across generations run very high. Read more about childhood trauma here.
Impact of Conflict
BUSINESS PERFORMANCE
Conflicts can affect the performance of family-run enterprises. When family members prioritize their interests over the company’s objectives, it can negatively impact productivity and efficiency.
EMPLOYEE MORALE
Internal conflict within a family business can spread like wildfire, affecting employees and their morale. A tense work environment may result in employee turnover rates, reduced job satisfaction, and an overall decline in productivity.
FAMILY RELATIONSHIPS
The foundation of family businesses is built on bonds and trust. However unresolved conflicts can strain these relationships causing lasting wounds and fractures within the family structure.
Strategies for Managing and Resolving Conflict
STRENGTHENING TRUST
Strengthening trust within the family system can go a long way to alleviating the founder’s discomfort, reassuring them that the next generation is reliable, competent, and responsible. This can be done by working with the wealth management team and their therapist to identify the root cause and clear the way for understanding.
OPEN AND TRANSPARENT COMMUNICATION
Cultivating a culture of openness and honesty is essential in family-owned businesses. Conducting family meetings, providing guidance, and fostering open dialogue can help prevent misunderstandings and minimize conflicts.
ESTABLISHING BOUNDARIES
Clearly defining family members’ roles and responsibilities can help mitigate conflicts arising from role ambiguity. Introducing performance measures and official assessments can also contribute to accountability.
SUCCESSION PLANNING
Having transparent conversations, about succession planning can prevent conflicts. Establishing an impartial process involving advisors can bring clarity and ease the transition.
EMPLOYEE MORAL MEDIATION AND CONFLICT RESOLUTION
Engaging mediators or professional consultants can facilitate discussions when conflicts arise. Mediation encourages respectful communication to find solutions that benefit all parties.
CONTINUOUS LEARNING AND PROFESSIONAL DEVELOPMENT
Supporting family members’ education and career growth can boost their skills. Promoting respect can help reduce conflicts arising from knowledge gaps or differing qualifications.
Conflict is a part of family-run enterprises, often arising from power struggles, succession planning issues, communication challenges, and unclear roles. However, conflicts can be addressed successfully in family businesses by implementing tactics like dialogue, setting clear boundaries, and ensuring fair succession plans.
Companies that invest in conflict resolution strategies and nurture relationships are more likely to maintain business performance levels, maintain employee morale, and sustain family dynamics. While conflict is inevitable, in settings, how it is handled ultimately determines the long-term success of a family business.
I partner with wealth managers to work with families to resolve the underlying issues related to family discord in family enterprise businesses. My focus is largely on helping both individuals and families resolve trauma, improve communication, and increase compassion across generations.