50 Common Causes of Family Business Conflict ... and how to deal with them

By Jon Kenfield

• Family Business - blessing or curse?

• Tied in. No escape.

• Good = unstoppable. Bad = disaster for health, wealth & h... more

· Business
· Management

FAQs about 50 Common Causes of Family Business Conflict ... and how to deal with them:

How many episodes does 50 Common Causes of Family Business Conflict ... and how to deal with them have?

The podcast currently has 50 episodes available.

50 Common Causes of Family Business Conflict ... and how to deal with them episodes:

July 08, 2020 Family Business Mediation Podcast No 41: The Next Generation.
50 Common Causes of Family Business Conflict ... and how to deal with them

Audio No 41: The Next Generation.

• The classic definition of a family business is one that substantially involves at least 2 family members as owners and operators.

• Family businesses tend to take themselves more seriously, the more generations of family they have in their pedigree.

• Almost every family business dates the beginning of recorded history from the commencement of their family business.

• Most families are, or can easily be, motivated by the idea of their business passing through to future generations.

• The prime cause lies in different personalities, education, and socio-economic upbringing.

• It’s nobody’s fault, but it can cause major conflict when the next generation doesn’t display the characteristics the older generation demands.
Solution

• Engage the next generation as early as possible in the ethos and operations of the family’s business - vacation work etc.

• Build next generation teams - investment, philanthropy and environment groups - & teach business fundamentals - meetings, research, problem solving, decision making, leadership & teamwork.

• No cloning - the next generation will stand on your shoulders.

I'm interested in your comments below.

#succession #business #conflict
...more
6min
July 08, 2020 Family Business Mediation Podcast No 40: Buying & Selling Interests In The Business
50 Common Causes of Family Business Conflict ... and how to deal with them

Audio No 40. Buying & Selling Interests In The Business

• Conflict occurs when family members feel locked into holding ownership in a family business against their wishes - they would prefer to sell / exit - and there’s no agreed mechanism for doing so.

• Conflicts also occur when family members can’t stitch up acceptable deals for trading their respective interests in the business.

• Conflict arises when some family members regard themselves as owners, and want to act as such, while others see themselves as stewards, and want to act as such.
Solution

• Does the family have a mechanism for buying and selling interests in the family business? Possible? Partly possible? Acceptable?

• If not, and it could happen, develop a formula and process when things are calm. Put it into a shareholder agreement, family constitution etc.

• Is it workable at this point in time Eg: money available, value & valuation formulas etc.

• Hold a Family meeting to discuss individual needs re ownership of the business.

• Negotiate / develop an acceptable basis for a deal (use a mediator if necessary).

• Do the deal, or agree to at a pre-determined time in the future.

I'm interested in your comments below.

#succession #business #conflict
...more
4min
July 08, 2020 Family Business Mediation Podcast No 39: Ownership Vs Stewardship
50 Common Causes of Family Business Conflict ... and how to deal with them

Audio No 39: Ownership Vs Stewardship

• Ownership entitles business owners to do whatever they like with the business.

• Ownership is here and now / short term, selfish thinking.

• Stewardship requires owners to hold and improve the business for the sake of current and future generations.

• Stewardship has a long term, altruistic focus.

• Conflict arises when some family members regard themselves as owners, and want to act as such, while others see themselves as stewards, and want to act as such.
Solution

• Hold a Family meeting.

• Explain the difference between Owners and Stewards and ask everyone to identify which camp they’re in.

• Develop a long term Family Plan, including intentions for the business, based on above decisions.

• Defuse conflict by recognising the different focus and responding to whichever is chosen for the family.

I'm interested in your comments below.

#succession #business #conflict

...more
4min
July 08, 2020 Family Business Mediation Podcast No 38: Sibling Rivalry.
50 Common Causes of Family Business Conflict ... and how to deal with them

Audio No 38: Sibling Rivalry.
• Often caused by family circumstances and parenting styles, exacerbated by distractions of family business.

• Perceived or actual parental favouritism.

• Differences in temperament and personality.

• Jealousy over parental love.

• Parental modelling of conflict styles - normalising / reinforcing aggression and lack of conflict resolution skills
- parents ignore conflict and teasing.

• Viewing the sibling as a competitor rather than a collaborator.

• Protection of weaker family members - bird with broken wing.

• Preferring and advancing one child over the other in business.
Solution

• Psychometric testing - science of personality differences.

• Establish objective and commercial objectivity in the business - performance, merit and contribution, rather than bloodline.

• Separate business support (performance-based) from family support (personal needs based).

• Have family members supervised and mentored by non-family staff / directors etc.

I'm interested in your comments below.

#succession #business #conflict
...more
5min
July 08, 2020 Family Business Mediation Podcast No 37: Lack of Agreed Policies & Procedures
50 Common Causes of Family Business Conflict ... and how to deal with them

Audio No 37: Lack of Agreed Policies & Procedures

• Business families are even more complicated than ordinary families - because they combine family with business.

• All complex organisms and organisations require clarity and certainty about what is to be done, and how to do it. This avoids the confusion and conflict.

• Family policies give shape and understanding to the family’s past, present and future actions.

• Business policies increase operational efficiency, and help to inject commercial objectivity.

• Lack of policies = lack of discipline > potential for conflict when needs and interests clash.

Solution:

• Take the time to identify areas of conflict, or potential conflict, in the family and/or in the business.

• Use the relevant issues as a focus for discussion about developing a policy for dealing with the issue - family benefits.

• The process of collaboratively developing a policy allows festering issues to be flushed, so they can be dealt with, resolved, and avoided in the future.

• Conflict can often be defused by validation and recognition.

• If compensation is appropriate / required, make it a sensible negotiation.

I'm interested in your comments below.
#succession #business #conflict
...more
5min
July 08, 2020 Family Business Mediator Podcast No 36: Personal Financial Security.
50 Common Causes of Family Business Conflict ... and how to deal with them

Audio No 36: Personal Financial Security
• Financial security tends to become a more serious issue as people get older and have less capacity to adapt and overcome financial challenges.

• Fear is always a major motivator and financial security, or the lack of it, is an easy thing to get bent out of shape over.

• Ages and stages: as older family members start looking towards retirement, or at least lower income generating capacity, they become more concerned about preserving money and transferring it out of the business into personal savings, or alternative investments.

• Meanwhile, younger family members have much longer time horizons, and more immediate funding needs.

• Owners cannot responsibly hand over the keys of the kingdom until they feel safe and secure.

Solution:

• Recognise and respect that “personal arrangements” can conflict with “business arrangements” when immediate needs clash with longer timeframes.

• Develop and agree a financial plan for outgoing family members that eliminates business liabilities.

• Consider vendor terms purchase arrangements for business interests if there are no other options.

I'm interested in your comments below.

#succession #business #conflict

...more
5min
July 08, 2020 Family Business Mediator Podcast No 35: Discipline (lack of).
50 Common Causes of Family Business Conflict ... and how to deal with them
Audio No 35: Discipline (lack of).

• Discipline: (a) Internal = self-control and self-regulation; (b) External = system of controls + enforcement measures + consequences for non-compliance.

• Lack of discipline = lack of accountability.

• Extreme situations, threats that threaten the family and the business.

• The concept of discipline is often ignored or dismissed in a mature family context, as family conflict experts, we constantly deal with the results of poor family discipline that’s been transferred into a family business.

• In essence, internal and external discipline are designed to ensure good and appropriate behaviours in relevant environments.

• Personality differences mean that:

o Some family members stick by the rules, while others don’t, conflict.

o Some family members are self-disciplined in the absence of rules, while others are not, conflict.

• When Parents provide unequal / unbalanced support for different children, conflict.

Solution:

• Discuss and agree behavioural expectations and rules, as a family.

• Use an experienced adviser to facilitate the process.

• Transfer outcomes into the business.

I'm interested in your comments below.
#succession #business #conflict
...more
8min
July 08, 2020 Family Business Mediator Podcast No 34: Family Dysfunction.
50 Common Causes of Family Business Conflict ... and how to deal with them
Audio No 34: Family Dysfunction.

• Family Dysfunction: A dysfunctional family is a family in which conflict, misbehaviour, and often child neglect or abuse on the part of individual parents, occur continuously and regularly.

• Family dysfunction occurs when the family system is broken. There’s a high chance of conflict developing if the dysfunction is allowed to spill beyond personal disruption into the wider family and/or into the family’s business activities.

• Systems need to be self-organising to ensure survival.

• In families, excuses and accommodations are often made, which unbalance the system because more resources
(financial / emotional etc) are sent in one direction - which causes greater unbalance, conflict and dysfunction.

Solution:

• Identify signs of dysfunction and respond promptly and decisively, in both family and business. The signs are usually products of lengthy states of being - so they won’t be fixed quickly, or through inexpert attention.

• Engage independent / external / expert resources to help.

“We cannot solve great problems at the same level of thinking that created them” - Einstein.

I'm interested in your comments below.

Thank You
#succession #business #conflict
...more
9min
July 08, 2020 Family Business Mediator Podcast No 33: Family Succession & Continuity.
50 Common Causes of Family Business Conflict ... and how to deal with them

Audio No 33: Family Succession & Continuity.

• This is a big one for conflict! Family succession and associated control of family wealth can be even more confronting than taking over control of the business.

• Loss of family leadership can feel like a loss of relevance and identity.

• Owner has reservations stepping aside, successor is in a hurry to step up.

• Succession should be a process over long time. Plenty of opportunity for tensions to rise.

• Outgoing leaders require financial security, and releases from liabilities. Need to be confident before handing over responsibility for future family stewardship.

• Incoming successors need freedom to stamp their personalities on the family after the changing of the guard.

Solution:

• Create, negotiate and agree a succession plan, over time, through an inclusive process that takes everyone on the same journey.

• Agree attitudes towards Stewardship and Legacy and formalise objectives, expectations and processes.

• Communicate, communicate, communicate to all stakeholders throughout the succession process.

• Recognise the outgoing’s fear of the abyss & respect its reality.

I'm interested in your comments below.

Thank You
...more
7min
July 08, 2020 Family Business Mediator Podcast No 31: Decision Making: Family & Business.
50 Common Causes of Family Business Conflict ... and how to deal with them

Audio No 31: Decision Making: Family & Business.
• Many business families, even large and sophisticated ones, don’t have any coherent form of problem solving or decision making process. Up to a point, decisions can be made autocratically, without concern for scrutiny or opposition. Beyond a tipping point, this no longer works, and family members, and/or employees, object to decisions being made without their input, or insist on decisions being made with their input.

• This is often seen as a challenge. It may be accepted willingly, opposed violently, or anything in between.

• Strategic decisions are big decisions that may have a major impact on the family and or the business.

• Big decisions cannot safely be made without adequate information, due consideration and appropriate consultation.

Solution:

• As a family or business group, develop and commit to a formal problem solving and decision making process, appropriate to circumstances.

• Practice using the process on small matters before putting it to the test on important, strategic issues.

• Document decisions made according to due process for a Board, Family Council, etc.

I'm interested in your comments below.

Thank You

#familybusiness #business #conflict

...more
7min

FAQs about 50 Common Causes of Family Business Conflict ... and how to deal with them:

How many episodes does 50 Common Causes of Family Business Conflict ... and how to deal with them have?

The podcast currently has 50 episodes available.

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50 Common Causes of Family Business Conflict ... and how to deal with them

FAQs about 50 Common Causes of Family Business Conflict ... and how to deal with them:

How many episodes does 50 Common Causes of Family Business Conflict ... and how to deal with them have?

50 Common Causes of Family Business Conflict ... and how to deal with them episodes:

FAQs about 50 Common Causes of Family Business Conflict ... and how to deal with them:

How many episodes does 50 Common Causes of Family Business Conflict ... and how to deal with them have?