An Action Plan for Family Business Conflicts

By Kathy Komaroff Goodman, MS and Karen L. LaRose, MBA, MS

Typical Family Business Characteristics    

Family businesses provide fertile ground for conflict, and add unique dimensions to already complex family systems.  When conflict arises in a family business, it’s often impossible to separate the family relationships from the business relationships.  Conflicts are often characterized from the perspective of long family histories, behavior patterns, and multiple identities.  They are costly emotionally, financially and relationally to family members and non-family employees, and can affect the health and longevity of the business.

Practitioners commonly categorize family business conflict into three categories: task, process, andrelationship conflict. Task-related issues arise out of confusion around roles and incompatible goals, win/lose orientations and scarce resources.   Process-related issues are arguments about the group’s rules, norms and processes.   Relationship conflicts are disputes between parties in a relationship, and are often about family members’ contributions and value to the family business.

We suggest that task, process and relationship issues are all connected to a deeper underlying issue of identity.  Which role is one playing in the office?  Manager or brother? Mother or founder?  Separating these identities is difficult given the often-automatic nature of behavior.   When the family role identity is evoked in a family business conflict resulting emotions and conflict can become destructive, presenting the most challenging type of emotionally-laden disputes.

Addressing identity and family dynamics early helps conflicts become less stuck, emotions are diffused, and conversations can flow.   This isn’t an easy process. Once present at home, corresponding dysfunction may have manifested in the family business, with issues such as:  relative levels of participation, variations in the values attributed to skills and capabilities of family members working, succession issues, and founder’s syndrome.  Another common situation arises when salary level turns into a symbol of a person’s position in, and importance to the family and the business.

Given the dynamic and emotional nature of this type of conflict, we have developed a three-step preventive plan of action to equip people to constructively manage family business conflicts.

Step One:  Introduce standardized assessment tools, to help individuals develop self-knowledge.

Two neuroscience-based tools which can help family business employees understand family disputes on a deeper level are: the Emotional Intelligence Assessment (EQ-i 2.0) and the Neethling Brain Instrument (NBI).

The EQ-i 2.0 Assessment identifies individual strengths and areas for growth, measuring competencies that influence the way we perceive and express ourselves, develop and maintain social relationships, cope with challenges, and use emotional information in an effective and meaningful way.   For example, it looks at competencies that play key roles in self-awareness and self-regulation.  Most importantly, the EQ-i. 2.0 offers an action plan, which allows individuals to leverage strengths to better manage weaknesses.  Employees who learn that they have high self-awareness but low impulse control can be coached in techniques using their self-awareness competency to monitor the self-control weakness, with the ultimate outcome of enhancing their ability to avoid unconstructive behaviors in  the business and home.

The Neethling Brain Instrument is based in neuroscience research of the whole brain.  A quantitative test for the measurement of psychological variables, it measures the extent to which a person prefers certain types of thinking or mental processes over others. It does not measure skills and abilities, but rather, it measures natural preferences.  The Neethling Brain Instrument is also a diagnostic tool, which can explain what is going on within a group, and can help individuals form productive teams.  For example, it is fruitful for businesses to have teams that mix creative brainstormers with reality checkers.

Step Two: Coach individuals in communications skills.

With effective coaching, individuals can use the information gleaned from the two tools described to build skills that may help prevent or diffuse inevitable conflicts.  For example, a significant low score in the empathy competency may be attributable to failure to listen, and small business conflict coaches can teach such individuals active listening and reflecting techniques.  Participants emerge better prepared for constructive discussions both at home and in the office.

This is possible because using the EQ-i 2.0 and the NBI in tandem allows us to weave how people feelwith how they think.  Just as the tools help in the creation of effective “whole brain” teams—teams that include diverse skills and approaches – the EQ-i 2.0 and the NBI assessments give a deeper understanding of the dynamics at play in family business disputes.

Coaches help turn this critical personal understanding into strategic next steps.  After assisting employees to understand and interpret their own assessments, coaches  help to point out individual orientations, strengths and weaknesses. Once we better understand ourselves, we can better understand, hear others, and work together. In this newly built environment, both family and business have more opportunities to thrive.   

Step Three:  Introduce the principles and process of mediation.

Mediation is often the best alternative dispute resolution choice where ongoing relationships are valued, and most family businesses put a premium on these relationships.  In mediation, individuals have an opportunity for a neutral third party to guide them in constructive conversation, including an exploration of basic identity issues and emotions that may be manifesting in, or worsening actual family business disputes.

Often the mediator hears in individuals’ emotional expressions, their underlying interests and needs.  Surfacing these interests and needs helps parties move off their stated opposing positions.  Rather than experiencing a clash of the same emotions that contributed to a conflict’s creation, the parties learn to see how emotions influenced their situation and how emotions now can contribute to conflict resolution.

How do we engage with emotions constructively? This process includes cognitive, physiological and behavioral components.  How people evaluate their circumstances shapes their emotions and coping strategies.   When emotions are heightened people are prone to make faulty perceptions and wrong assumptions.  The original appraisal can be fraught with distortions, and the key is moving swiftlyfrom appraisal to reappraisal.   Mediation and coaching assists the reappraisal process and offers an opportunity for perceptions and assumptions to be checked for accuracy.  When a situation is reappraised, new emotions and behaviors can be evoked. 

The process of mediation encourages parties to engage in a collaborative process with a win/win orientation.  Mediation honors a self-determined outcome, increasing the possibility of finding a sustainable resolution and builds a framework for future interactions.  Mediation gives the opportunity to create shared meaning and builds the foundation for understanding, problem solving and healing.

Conclusion           

           

This topic is dear to our hearts.  At one time, each of us owned our own family business and experienced this complexity first hand.  Simply put, it is difficult to be in a dispute with your siblings at work and then face a holiday dinner with family and unresolved conflicts.  It can be devastating to bring marital conflicts into the workplace, or to infect marriage with workplace grievances.  As a part of studying conflict we have learned that sometimes simply understanding more about ourselves and others, how we feel and think and how they feel and think, allows us to gain perspective, to recognize more deeply what is going on, and teaches us to be responsive rather than reactive.

About the authors:  Both authors founded and ran their own family businesses for many years.  Both graduated from Columbia University with an MS in Negotiation and Conflict Resolution.  Karen focused her thesis on family business disputes as dynamical systems and Kathy focused her thesis on the centrality of emotions in conflicts.  You can contact them at www.accordconflictresolution.com

                        author

Karen LaRose

Karen LaRose is a founding Principal at ACCORD, a collaborative of conflict management and resolution specialists serving both individuals and businesses. Conflicts are often costly—financially, emotionally and relationally. Accord Principals strategize with individuals and organizations and help move them towards resolution of their disputes.  Previously Ms. LaRose served as President… MORE >

                        author

Katherine Goodman

Kathy Komaroff Goodman is a founding Principal at ACCORD, a collaborative of conflict management and resolution specialists serving individuals and businesses. The goal of ACCORD is to assist our clients in moving from destructive modes of conflict engagement towards the development of constructive modes of conflict resolution.   Ms. Goodman is Founder… MORE >

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