1800040-2005-04 - conflict in the family - good for business or bad
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Sep/ Oct 2004 Families in Business 67
BUSINESS FOR FAMILY BUSINESS: GOVERNANCE
In the many years that we have been involved in business, both
running our own,working in someone elses and advising oth-
ers on how to run theirs, we never cease to be amazed by the
plethora of initiatives, projects and plans undertaken by organi-
sations to bring about change and improve performance. We
have seen appraisals, competence models of managing perform-
ance, through to empowerment and self-managing teams. We have
been involved in outdoor management development through to
the more esoteric mind games approach to management. We have
seen fire-walking, the use of theatre, painting, poetry and even the
army used to motivate and persuade people towards better per-formance. We have seen team building, team development and
team destruction la The Office. We have seen downsizing,re-engi-
neering, total quality, Investors in People and a myriad of other
approaches from vision and mission to corporate culture and the
learning organisation. Organisations of all shapes and sizes have
embraced the change culture, spending millions chasing the elu-
sive answer, looking for the quick fix and hoping the next man-
agement fad will bring the long awaited results.
So what is it all about? Why are organisations interested in
developing people? Organisations want to achieve the best from
their employees in order to boost sales, output and profit.This is not
a comfortable habitat for (mostly male) managers charged with
ensuring maximum performance. Men do not find this stuff easy
much of it is right brai n,intui tive, creative, touchy-feely and scary.
POWERFUL RELATIONSHIP ISSUES
So what has all this got to do with families in business and more
mysteriously, what has it got to do with a Crosby Stills, Nash and
Young song written more than 30 years ago? The song says it all: it
tells us why life in a family business is so different from life in any
other form of business, particularly if you happen to be a member
of the owning and/or managing family. The song suggests its sim-
ple,dont ask questions,dont try to understand the relationship,just
know that it is based on love. Parents are often intrigued by how
closely their children resemble them, physically, emotionally and
intellectually. Children are even more horrified to think that they
may have anything in common with their parents, until well past
their 30th birthday. Parents teach their children and often in the
context of the family business children learn most, if not all of their
knowledge about the business from their parents.
In the context of a family in business,most of the change, quali-
ty, people initiatives will fall at the first or second hurdle if we don't
understand and consider the powerful relationship issues encoun-
tered when engaging with a family in business. It is within these
powerful relationships that many of the conflicts reside, particular-
ly between fathers and sons working together in business.
It is very difficult for a son to emancipate from his father (a crit-
ical task in becoming an adult),when they both work together and
the son does not have his own universe in which to mature.From a
The concept of learning is gaining currency among researchers in entrepreneurship andfamily business. So are disputes in a family business a constructive or a destructiveforce for change? Andrew Godfrey andJohn Tucker explain
CONFLICT IN THE FAMILY:GOOD FOR BUSINESS OR BAD?
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68 Sep/ Oct 2004 Families in Business
BUSINESS FOR FAMILY BUSINESS: GOVERNANCE
business perspective the son almost always has some independent
ideas that differ from the fathers, if for no other reason than a gen-
erational perspective. Given the essentially emotional nature of
family relationships, it would not be surprising if there were con-
fusion about whether a sons actions were a form of rebellion
rather than a reasoned disagreement over business issues. Sorting
though this requires some understanding of the history of the
father/son relationship,as well as the dynamics of the entire fam-
ily constellation.
Research published by Grant Thornton in Family Values in
Family Business showed that During periods of challenge or
change, families and their businesses are supported by their
belief in a set of shared values. These are sometimes described as
lived values, in contrast to espoused values, which may not
always survive the challenge. The report adds: When a familybusiness goes through change such as generational transition,old
habits and vested privileges are frequently challenged.
E mbe d de d, or lived , family values that remain intact can ,
arguably, help to sustain the business during periods of difficult
change. The challenge can also expose the distinction between
espoused values and lived values. These revelations may create
conflict. It is within conflict that values are tested and exposed to
critical appraisal.
TAKE TIME OUT TO LEARN
Families need to take time out to learn how to learn from each
other. The concept of learning is gaining increasing currency
among researchers in entrepreneurship and family business, both
as a driver of research agendas and as an emergent, integrative per-spective for understanding the dynamic nature of entrepreneur-
ship and family business management.A primary advantage of the
learning perspective is that it provides linkages between the com-
plex processes of personal and business development. There is an
emergent consensus that there is extremely complex interplay and
interdependence between these parallel processes of personal and
business development and that these are not adequately explained
within the dominant personality and process paradigms within
entrepreneurship theory and family business theory.
In these terms, the multi-generational family firm is a special
and particularly interesting context in a number of ways.Firstly, the
involvement of the founding generation is often protracted and
overlaps the involvement of younger family members, enabling a
range of possible mentoring roles. Secondly, younger generations
growing up in the family business environment enjoy a lengthyperiod of socialisation, not only into the family and society but also
into business and the specific family enterprise. Thirdly, this sociali-
sation process may be undergone within an environment where
there are powerful and explicit family expectations about future
roles in the business and perhaps eventual management succession;
on the other hand, these expectations may operate only at the sub-
tle, tacit level or indeed be non-existent.
Whatever the nature of expectations of involvement in the
family firm, it is reasonable to suggest that, compared with the
population at large, the formative experiences of children who
grow up in family firms may include protracted and extremely
complex processes of learning about business and management.
Parents
You, who are on the road
Must have a code that you can live by
And so, become yourself, because the
past is just a goodbye
Teach your children wellTheir fathers help did slowly go by
And feed them on your dreams
The one they fix, the one you're known by
Don't you ever ask them why
If they told you, you would cry
So just look at them a sigh
And know they love you.
Children
And you, of tender years
Cant know the fears
That your elders grew by
And so please help them with your needs
They seek the truth before they can die
Teach your parents well
Their childrens help will slowly go by
Feed them on your dreams
The one they fix, the one they're known by
Don't you ever ask them why
If they told you, you would cry
So just look at them and sigh
And know they love you.
Source: Crosby, Stills, Nash and Young
TEACH YOUR CHILDREN
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Sep/ Oct 2004 Families in Business 69
It is also reasonable to argue that these
experiences set them apart from people
from non-business backgrounds in terms
of the potential preparation for business
careers that their environment provides.
It is also the breeding ground for future
relationship conflicts that often emerge
when parents and children work closely
together.
WORKING WITH CONFLICT
Conflict is not something anybody enjoys
but when it occurs in a family business it
can be even more pro b l e m at i c. T h e
dynamics of a family generally mean thatsaying something critical about another
family member can be difficult so within
a family business delicate issues can be
delayed for fear of offending a family
member. Yet conflict resolution is essen-
tial if the business is to survive and a
degree of objectivity is required to do
this.Conflict need not be destructive if its
aims are beneficial to the business and
u l t i m ately all of its dependents. It is
essential therefore in family businesses to
distinguish conflicts which are personally
based from those which relate to the com-
pany. You may ostensibly be in conflictwith your brother over a decision he
made in the boardroom but is the real
reason you are annoyed the new car he
gave his wife out of company funds last
year? Conflict like this is destructive and
needs to be addressed.
The main relationships that cause con-
flict are parent/son or daughter relation-
ships, sibling rival ry, and relationships
between cousins and other relatives. Oneof the main causes of conflict between a
parent and their child is the father or
mother wanting the child to enter the
b u s i n e s s. H o w ever most parents are
reluctant to give up the reins and want to
continue to run the business and ignore
their childs desire to take control. The
ambitious child may, after years of trying
to introduce their own ideas and initia-
tive into the business, decide to leave the
business altog e t h e r. W h at the pare n t
must recognise that to encourage their
child into the business and then not allow
them to take control removes their motivation and interest and
may, ultimately, put them off the business completely. The
mature decision is to invite the child to participate in the busi-
ness and then establish a fixed period within which the parent
will step aside and allow control to pass to the next generation.
Sibling rivalry is, of course, normal in a family but in a busi-
ness in can have a corrosive impact. The most obvious example
is when more than one child wishes to take control of the fami-
ly business. A decision by a parent to promote one over the other
is difficult and frequently outside help can be used to take the
heat out of the situation.A suitable shareholding structure must
be put in place to ensure all children involved feel motivated and
rewarded for their participation in the family company. You
dont want to see your personal relationships and your business
destroyed so you must negotiate a contract which provides allsiblings with fair rewards and a motive in seeing the business
succeed. This can be done using a variety of motivational tech-
niques including share allocation, places on the board and tasks
allocated to those most suited.
Running a business with a brother or sister means that your
children will be involved in the next generation and, if you have
other brothers and sisters, their children may want to become
involved also. The problem is you may find you have around four
children keen to get involved and a further half dozen cousins.By
the following generation you may have 20 family members keen
to be involved. All are likely to believe they deserve a job in the
family business and at a senior level. It is vital to ensure that this
is resolved. Some shares can be allocated and a general review of
who owns the business and where it is going is essential. You can-not assume that a family business can be large enough to support
every member of your family. What is vital is to ensure that the
children most suited to manage the business are selected against
fair and objective criteria. Frequently it is helpful to involve a pro-
fessional adviser in this decision as it is very difficult for parents to
have to choose amongst their children.
Resolving conflict is difficult but to ensure that it is handled
smoothly you need to consider the following objectives: plan a future together
address critical issues relating to the familys involvementwith the business
articulate core values for the business
do not be put off making difficult decisions
establish continuous processes to resolve conflicts, maintain
communication and monitor progressOnly by re cognising and acting upon co n flicts can yo u
e n s u re that your family business doe s nt collapse into acrimo-
nious disputes.
Consider developing a family charter to address some of the
destructive conflicts that threaten not only the stability of the
family, but often the sustainability of the business. The process
will allow the family to learn together and embark on a journey
of exploration culminating in the production of the charter.s
ANDREW GODFREY is international director of PRIMA, the family
business consulting practice of Grant Thornton. JOHN TUCKER is
head of UK Family Business Serv i ces at Grant Thornton.
www.grant-thornton.co.uk
CONFLICT NEED NOT BE DESTRUCTIVE IF ITS AIMS
ARE BENEFICIAL TO THE BUSINESS AND DEPENDENTS
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