How to Resolve Family Business Conflicts and the Mistakes to Avoid

How to Resolve Family Business Conflicts and the Mistakes to Avoid

06 Jan 2020


How to Resolve Family Business Conflicts and the Mistakes to Avoid

Going into business with family members can be incredibly gratifying and enjoyable. However, it's not without its challenges - and they can escalate into major conflicts if not handled quickly and in a professional manner. While such conflicts are to be expected in family business, they shouldn't become the norm. Here's how to resolve conflict and the mistakes you should avoid to ensure successful working relationships with family members.


Ongoing Communication is Key
Discussing issues when they first arise will help prevent bigger problems later on. Allow family members time and space to speak up about grievances - and listen without judging. A formal setting will stop meetings from descending into heated family arguments.


Set Healthy Boundaries
Healthy boundaries should be set between work and play. Failure to separate business time and downtime will result in tension, conflict and resentment among your team. Allow family members to take time out and fulfil their duties at home with their spouses and children.

Family business conflict resolution is about agreeing clear boundaries, setting a clear long term strategic plan for the business that all key members agree with, plus agreeing individual roles, objectives and goals for each key member.

Regular updates, meeting and confirmation of the vision of the business together with monthly financial reviews are key elements to a clear and open business plan, that every major shareholder in the business can understand, agree with and help with finances when needed.

In short keep family business activities Transparent, Fair And Focused on actions that boosts all members.

 

  • Define each persons role
  • Confirm job titles 
  • Agree job functions and activities - short and long term
  • Agree salary structures 
  • Set performance reviews
  • Set KPIs and individual professional goals
  • Agree the vision / plan for the business 
  • Talk about the long term strategy for the business or growth plan
  • Set boundaries

 

Family business issues, can occur when there is no formal management structure or style to the running of a private business.

Businesses salary structures should be kept fair, with a percentage based on the companies overall ongoing profit, and based on a yearly performance review.


Sometimes, Expert Help is Needed - and That's OK
Many family businesses fail to put in place formal processes for the mediation of disputes. When conflict can't be resolved internally, it's helpful to bring in an expert; an objective voice who is trained to resolve business disputes. Without this objective viewpoint, emotions will run high during discussions and cloud your focus. A trained "outsider" can help guide you to a final resolution that's fair for all team members.


I offer specialist family business guidance that is beneficial in all aspects of your business, not just in conflict situations. If conflict is hampering your firm's growth and day-to-day operations, I'll work to understand the source of the issue and offer practical solutions in a non-judgemental way.

Get in touch to find out more about how I can help.

 

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