How to fight fair in a family firm

By Kathy J. Marshack, Ph.D., P.S.

Ask yourself who you would rather work with, a family member or a trusted friend or colleague. List five family members whom you trust and five friends or colleagues whom you trust. Of these ten people, with whom would you choose to start a brand new business? When I asked this question recently of attendees at a trade show, the majority said they would work with a friend before they would a family member. Their reasoning is that they wouldn’t want to risk alienating a family member and upsetting the entire family if the business partnership should not work out. What is most interesting about their responses is that a good 90% of the attendees were already working in a family firm! While the rewards of working with the ones you love are many, such as the benefit of working with someone whom you trust and who will work as hard as you do, there are significant liabilities. The major one that plagues most family firms is the inability to resolve conflict constructively. This inability leads to resentment, hostility, alienation and family feuds. Family firms have the unique distinction of blending both the needs of a family and the needs of a thriving business. While the goal of the business is growth through competition, the goal of the family is to nurture and protect all family members. As a result, family firms grow more slowly than non-family owned firms because the business growth is compromised by the need to protect family members, even those who do not really belong in the business. Conflict in any family is disagreeable, but it is even more so in a family that also works together. Ordinary conflicts that other business owners have to deal with are submerged in a family business for fear of “hurting” a family member’s feelings, or offending one’s parent or spouse.The need to protect the family system, to keep this system in tact, is quite strong. All of us grew up with the knowledge that to betray a family rule was to risk the safety of the family. Anthropologists suggest that this protection of the family system is a part of our survival as a species.

We seem to have a genetic need to belong to a family where we can share food, shelter and emotional comfort with our kinfolk. Political experiments that disrupt the standard family unit usually do not last. Research is even showing that children learn better in school if educators structure assignments to better represent individual student’s family values. Given that belonging to a family is a stronger need than striking out on one’s own, families tend to discourage conflict and confrontation. This keeps family members home. However, in a business, avoiding conflict can lead to serious problems. Sometimes out of conflicts arise tremendous ideas for the growth and success of the business. Wrestling with ideas brings out resolutions never before thought of and it often clears the path for junior members of an organization to show what they are made of. But in family firms, all too often conflicts get submerged rather than aired in a healthy context. Those of you who currently work with your spouse or other family members may be thinking that conflict is rampant in your family. The problem is that the frequent fighting may not be solving anything. When ordinary conflicts get submerged as they too often do in family firms, things fester. Family members may brood or bicker but never really confront the issue head on. Sometimes there is a major blow up at the office, but this is not healthy confrontation. This is merely “letting off steam,” only to have it build up again until the next fight. Some of the signs of submerged conflict in family firms are (1) the increase in alcoholism and drug dependence among family firm members; (2) infidelity and multiple marriages or liaisons; (3) child abuse; (4) acting-out children (i.e., poor grades, suicide threats, drug abuse, numerous traffic violations, disregard for the rights of others); (5) chronic depression; (6) frequent fighting to no end.

In order to get to the bottom of conflicts, family firm members need to be brave. You need to trust that you are doing what’s best for the family as well as the business by confronting family problems. Even if you have the minority view, it may be an important view. In your family and family firm there may be room for more than one view. Confrontation need not be nasty and abusive. Confrontation is just “taking the bull by the horns.” Be respectful but firm. Acknowledge that you may not be right, but that the family needs to talk. Keep talking until the family has come to a mutually agreeable solution. Most people report that they feel closer to those with whom they have resolved conflicts. The misunderstandings that lead to the conflicts are often just that, misunderstandings, not a major difference in values. And if you discover that there is a major difference in values and these differences are not good for the business, it’s best to discover these differences so that sound business decisions can be made. If a father and son really want to take the business in different directions, perhaps they should part the business, not maintain a cool emotional distance from each other in the office. But rest assured whether a member leaves the business or not, the family goes on forever. Conflict and confrontation strengthen a family, despite the unpleasantness in the moment of unresolved dissension. While it’s true that families take on different shapes and sizes over the years as children marry, grandchildren are born, founders die, even an occasional divorce, the family as an entity survives. The same cannot be said for a business. It can be sold or dissolved permanently. One of my daughters brought home this poem by an unknown author and I think it sums up the values that any family business should be proud to live by.

Our family’s like a patchwork quilt With kindness gently sewn. Each piece is an original With a beauty of its own. With threads of warmth and happiness It’s tightly stitched together To last in love throughout the years — Our family is forever.