Family Business Conflict

FAMILY BUSINESS CONFLICT

Family business conflict is one of the most serious categories of problems that impact the growth and success of family businesses – problems that keep the family business from reaching its true potential.

What are the major categories or sources of conflict in a family business? According to a survey conducted by a large accounting firm, family business leaders reported:

  • 30% - Discussions about future strategies
  • 27% - Performance of family members active in the business
  • 22% - Decisions about reinvesting profits vs paying dividends
  • 19% - Decisions about who can or who can't work in the business
  • 18% - Compensation for family members in the business
  • 15% - The business role in-laws should play or not play
  • 13% - Failure to consult the wider family on key issues

    In fact, conflict can jeopardize the “survivability” of the business, especially when the business is transitioning from one generation to the next.

    For instance, succession studies show that only about 30% of first generation family businesses successfully transition to the next generation. It is not difficult to understand that a primary contributing factor to this stunning statistic is - family business conflict.

    Of all the relationships we build throughout our lives, none are more complicated, yet delicate, as those within our families. It is the complexity of these relationships which can tip the scales between success and failure of a family business.

    Conflict of any kind within the family business is often exponentially more influential in the decision making process, forcing family business owners to choose between what is ideal for their family relationships and what is best for their business.

    When entangled in a tug-of-war between family and business – bringing in an experienced family business expert can bring clarity to the underlying question, “Are we a family first business or a business first family?”

    “A family business conflict, even in its most simplistic form, will negatively impact the business and harm family relationships,” says leading family business expert Don Schwerzler “Our logo is three interconnected circles that represent the three major systems in a family business – the family system, the management system and the ownership system. Conflict amongst family members can be generated from any or all of these spheres of interest.”

    Schwerzler has been studying and advising family business entrepreneurs for more than 40 years and is the founder of the Atlanta-based Family Business Institute Family Business Institute .

    “If there is only one thing I have learned over the years, it is that every family business is unique and complex in its own way. A strategy that works well for one family business will be a real disaster for another,” notes Schwerzler. “Off-the-shelf or ‘one-size-fits-all’ solutions simply do not work for family businesses.”

    As a family business troubleshooter, Schwerzler has a consistent reputation for success, even in some of the most difficult family business conflicts.

    The Family Business Assessment process Schwerzler pioneered enables him to be an advocate for each of the family members – as well as being an Ombudsman for the business (a voice for recognizing and protecting the needs of the family’s business).

    When asked why the business needs to have a “voice” in the process to resolve family disputes, Schwerzler replies, “To make sure the family business conflict does not kill the goose that is laying the golden eggs!”

    In almost every case, family business conflicts do not simply go away if they ignored. Just the opposite! The longer the problem festers and is left unaddressed, the more damage is done to the family and to the business - and the more difficult it will be to fix. Constant worrying about the unresolved issues can add to an already problematic situation - more frustration, hurt and distrust within the family.

    If your family business is dealing with any conflict amongst family members - we can help. Simply contact the Family Business Help Desk .

    Taking this important first step provides immediate access to a family business expert in dealing with family business dynamics – someone who cares,is objective & unbiased and, most importantly, experienced in successfully dealing with family business conflict.

    Succession time is a time when the family should be coming together to celebrate the success of their business and to recognize the contributions and sacrifices made by family members – and to protect the family business into the future. Unfortunately, “succession conversations” between and amongst family members can often provoke problems that have been unaddressed or unresolved between one generation and the next. “As a success strategy we have pioneered, we believe the "Nexters" should play an ever more significant role in preparing and managing the succession management process,” recommends Schwerzler.

    Introducing new and fresh thinking to your family business conflict can help break impasses and move toward effectively resolving family business conflicts - without destroying your family and your business.

    Don’t wait! Contact us - we can help!


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