Conflict is an almost unavoidable part of every family business. If not tackled, unresolved conflict can escalate and damage relationships or even the whole company. But are conflicts always negative, or can we analyse them under a different lens to increase cohesion and take the business to the next level? In this episode of our WiFB Conversations, Amy Katz and Ramia Marielle El Agamy discuss conflict resolution in the family business.
This episode of Conversations with Women in Family Business is co-produced with Amy Katz, founder of coaching-business Daughters in Charge.
Photo by Emil Jarfelt on Unsplash
R: Today we are going to talk about a timeless topic that is sometimes difficult to tackle but certainly at the forefront of everyone’s mind when it comes to family business issues – conflict and conflict resolution.
Amy, we both have encountered in our professional experiences many situations where conflict has escalated and almost destroyed not just family businesses but also the families themselves. In your experience working with women in their family businesses, what are the most common factors leading to deep conflicts that can damage family relationships?
A: There are two scenarios that I see most often. One is certainly sibling-related. Siblings who were not together a lot during their teenage years and never expected to work together find that they have to get reacquainted as adults. They went different ways, and their patterns may be different.
How we navigate the world can often be quite different than how we navigate at home. In some ways, it’s about allowing a sibling to appreciate one’s strengths and assets, even if that sibling has never seen you in action as a professional adult person. And the same is true for how you view your sibling.
The other scenario is more challenging but also predictable. It is the conflict that arises when you start to see your parents as real people with real flaws. Being part of an organisation where a parent is your boss can set up a lot of anger and confusion. Some next-gens feel it’s their job to coach their parents so that they behave differently in the workplace. While that’s a noble goal, it can sometimes be very fraught. The parent or uncle might not be ready to have that conversation.
Those are the two areas I tend to hear about the most. Recently, I have also heard of conflicts between the next-gen and non-family members. For instance, employees who have worked in that business for a very long time may find that the next-gen is coming in with the expectation to take over.
Having a 50-year-old employee prepare to work for a 20-year-old has to be managed quite delicately, or it can make for an unhappy workplace. For parents who want to support both, it’s a challenging management situation.
R: Absolutely. The two main sources of conflict seem to be money and love, either in a positive or negative way. Either a lack of money or an abundance of money. A lack of love or perhaps too much love. People don’t believe it, but too much love can be a real problem. It can lead to situations of guilt and misunderstandings.
When you’re in a family, it is taken for granted that you know what the other person means. But just because you’re related to each other, that doesn’t make you immune to misunderstandings.
It’s easy to fall into that unforgiven trap where we behave based on an assumption instead of letting a person react to something and then acting consequently. I find this scenario very common, and it’s strange how we still very blindly walk into those conflicts.
Conflicts resulting from the factors we’ve mentioned often become complicated very quickly. Everyone has their own home life that they flee to where maybe they’re being reinforced in their own position and opinion. Getting everyone back around the table and coming back to the root of what happened is a difficult process.
I think early conflict detection is one of the most important things you can do if you work with family. If two family members or a family member and a non-family executive keep having the same argument, it has the potential to escalate and destroy that relationship forever. Having a warning system in place is vital.
A: As you mentioned, once adults create their own families, if there’s conflict, they can bring that into the workplace, just as anyone can. Sometimes, the conflict needs to be identified. In a family business, there could be more attention to that because what is troubling a person might have not so much to do with the business, but rather with conflicts at home.
R: This also comes down to the fact that we’re more susceptible to conflict when there are high-pressure situations. I think family businesses around the world can agree that there are a lot of unexpected and fast changes happening in their industries, environment and society.
The gap of misunderstanding between generations is greater than ever because now we have a natively technical generation that sees the world through a lens that perhaps their parents and grandparents never did.
Fast-paced change naturally brings more friction between those who are holding onto the past and those who want to embrace change quickly. If we add that to money and love, change can be a huge source of conflict.
Amy, when should we allow conflict in the family business? Do you think conflict could be intentionally provoked to get the family business to the next level or is it always negative?
A: I don’t think conflict is always negative. As we have discussed, conflict is a sign of something. What seems like a disagreement or an emerging conflict between two people might not be about the personality but rather the stances they’re taking. What does that tell us strategically about where we are right now? Reframing a conflict as a serious choice point that needs to be reckoned with is important.
In family systems, as in business systems, people can be scapegoated. Sometimes they’re lightning rods because the positions they are taking may be controversial, and the system may not be ready to hear them.
Trying to keep a very wide-angle lens on a conflict is important. External pressures can increase cohesion. Even in very dire external market situations, families can find new resources within each other and within the organisation.
Competition is another source of conflict that I think is worth mentioning. Sometimes, when you peel back the onion, you’re left with the competitive strivings of two family members which may be long-standing. In the workplace, it becomes a turf battle – the recognition that one has talents the other doesn’t have and vice versa. That is a powerful source of conflict that can be chronic and does need to be dealt with as early as possible.
R: I think you’re hitting on the cause of some of the most famous family business rifts and conflicts that we’ve seen. Huge family businesses have been split in two or shut down because of siblings’ conflicts and extremely competitive behaviour to either impress the founding members or to get control of the business.
For example, one of the largest companies in India is being torn apart by two brothers. There is also the very famous example of Adidas, where the two brothers split off from each other.
There are interesting stories of successful businesses that survived conflict, but there are probably way more that fell victim to the fact that family members couldn’t see eye-to-eye.
Since we’ve had the Internet, there’s a lot more room for discussion, and we are challenging a lot more notions. Amy, do you think that today humankind should technically be better equipped in understanding and dealing with conflict because there is so much knowledge about it? Or is it one of those things we will never learn from history?
A: I think we have professionalised conflict management. Family business advisors come from a variety of professions. Too often, despite their training, they serve as the conflict managers. There are family therapists and mediators. Nowadays, organisations are also teaching meditation techniques as part of the training and development toolkit.
I think there are more methods that have emerged. They may have always been there, but they haven’t been named or required certified professionals. That doesn’t mean, however, that resolving a long-standing conflict is easy. I do find it’s often women who seek that external help. They’re often the ones to find the resource and introduce that into the workplace.
R: I’ve actually experienced the opposite. I know a lot of women who find it extremely hard to ask for help because it feels to them like they’re admitting failure. Unless it becomes part of their culture early on, I see them struggling when they have to ask for help.
But there comes the point in a conflict where the two parties do need an outside perspective. We are not living in large communities anymore. People have largely stopped going to church, and religion is having less of an impact on people’s lives. I think we had this professionalisation because there’s a gap that the priest, the Imam or the rabbi used to fill.
I believe in peer platforms for family businesses because nobody understands a family business better than another family business. There is enormous comfort in just knowing that you’re not crazy because others are going through similar things. Conflicts tend to repeat themselves, and being aware of that fact alone can really help.
A: A lot of family business centres have business roundtables. I facilitate a group of eight women who have met together for five years. Not only can they learn from each other’s long-standing conflicts, but they can also confront each other. They help each other. I wouldn’t call it professionalisation; I like peer support instead.
Family businesses are such a unique organisation forum. While a lot of people benefit from these roundtables, family businesses can also use them to learn and manage their conflict.
R: Those are great words of wisdom. Sometimes, there are conflicts that you have to live with. Thank you very much, Amy, for this great episode on conflict. We’ll be back soon with another topic.
About Amy Katz and Daughters in Charge:
Amy Katz is an executive coach and social psychologist whose business, Daughters in Charge, focuses exclusively on supporting women in family businesses. She is the author of Daughters in Charge: Learning to Lead in Your Family’s Business.