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

Behavioural Issues.  

• Behaviours outside the normal /acceptable bell curve create tension and disruption / dysfunction.  Family infects business & vice versa.  

• Solution:  psych assessments, coaching & mentoring.  Defined performance and behavioural expectations.

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

Relationship Interplay's.  

• Family Business continues relationship pressures present in the family into the business - very different contexts with antagonistic drivers.  

• Family hierarchy:  starts age-based, increasingly personality-based.  

• Family Business hierarchy:  starts age-based, personality-based, power-based (rather than merit-based) (family/business lifecycle).  

• Solution:   Mediation if there’s serious conflict - family history & personalities considered carefully.  HR best practice: commercial / merit-based roles, responsibilities, authorities and accountabilities.  Reporting lines. Detailed Job Descriptions for everyone.

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

Divorce & Separation.  

• Relationship failure rates over 50% -  no wonder that fear of separation has become a common justification for not transferring equity to successors.  

• Being in a family business places extra strain on marriages - parents continue to have influence over children - wouldn’t happen in outside employment. 

• Solution:  Family Constitution requires BFAs + Trust structured ownership.

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

Equal Isn't Equitable.  

• One of the most common causes of conflict:  confusing equality with equity (fairness).  

Is actually an avoidance of responsibility to think and act in ways that any outsider would consider sensible.     

• Different family members have different needs.    

• Family is about nurture & support + celebration of success. 

• More support required by more needy family members.  Not equal support.  

• Equal reward for unequal contribution / engagement also causes issues.  

• Solution:  get real in your thinking.  Help where it’s needed, but only in a balanced way that negotiates acceptance of actions with the whole family.  Be prepared to change your thinking after getting honest feedback.

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

In Laws, Outlaws & Extended, Blended Families.  

• Increasingly complicated family structures.  

• Family policy:  inclusion / exclusion?  

• Communication breakdowns.  

• Partners are loyal to their micro-family units.  

• Pillow talk and nagging disrupts agreements developed.  

• Solution:  agree family policy for inclusion / exclusion (prepare to be surprised by the willingness of younger generations to include!).    

Ensure adequate information is communicated to all significant partners so they understand the Plan, the commitments required to meet the Plan, and the likely consequences of failing to meet commitments.

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

Fossilised Leaders.   

• Living longer,  later retirement:  personal / financial / alternatives.  

• Increasing numbers of businesses led by older people 70+.  Some good, many bad.  

• Fossilised:  all faculties, more risk-averse, less agile and able to make important decisions.  No desire for change.   

• Successors frustrated.  Employees terrified about security.  

• Solution:  real needs of older leaders need to be identified and addressed, with genuine sensitivity.  Negotiated outcomes (mutual interests) essential.

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

 Unmet Expectations & Broken Promises.   

• Common cause of one-on-one conflict, family cliques.  

• One day my son/daughter, indentured slave.  

• Repressive power play?  Financial necessity? Cultural, Ethnic norm?  

• Horrible consequences:  conflict, pain & probate litigation.  

• Solution:  Family Plan:  transparent commitments.

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

Human Diversity, Ages & Stages.  

Session #2 = Psychometric Identification of Personality.  

• Personal & Family tensions through differences that can be positive or negative.  

• Family in Business Life Cycle.  

• Ages & Stages:  Age = more risk averse.  Financial security.  

• Younger family members = high cost phase of life.  

• financial tension:  safety vs investment.  

•  Solution: acknowledge and respond constructively to different needs and interests at different times.

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

The Effects of Personality Differences on Family Businesses.   

• Common threads and differences.  

• Genetics, generations, ages & stages.  

• Family hierarchy - genetic cloning.  

• Compatible, complementary or antagonistic?  

• Conflict from childhood = emotional baggage.  

• Solution:  Psychometric Identification, psych profile = behavioural preference, clues to:   “do more, do less”.

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

· FB - blessing or curse?

· Tied in. No escape.

· Good = unstoppable. Bad = disaster for health, wealth & happiness.

· Focus (purpose), Structures & Systems required.

· Attitudes & Skills required.

· Series will map the terrain, describe the dangers & suggest ways & means to stay out of trouble / solve problems.

Thank You. 

For further information, please visit our website here  

https://solutionist.com.au/