– By Suraj Malik
Apart from death and taxes, another inevitable certainty for any person is conflicts within a family. Every member of a family seeks peace and harmony along with prosperity; however everyone is unique with a different set of beliefs, and aspirations as well as goes through different conditioning that causes conflicts.
In the context of family-owned businesses, it is commonly observed that role and powers along with finances are the most common grounds of conflict. Nonetheless, there are more subtle and sensitive aspects like ego, personality clashes, lack of alignment on priorities, and sibling rivalries that also generate conflicts. The main reason behind the emergence of any conflict is the lack of communication, which causes a lack of alignment, lack of trust, and consequently lack of respect.
Mitigating conflicts is critical, not just to the survival of the business but to the survival of the family relationships since what may appear as minor disagreements, unless managed properly, will end up in serious conflicts that not only is fatal for the business but also damages relationships and image in the society.
Strangely, family members in a business usually feel that there is a competition going on between them. This results in tensions and misunderstandings and gets intensified into conflict with favouritism or nepotism coming into play. Lack of clarity on roles and responsibilities, lack of succession planning, or governance structures are signs that a family does not have a mutually agreed approach to address conflict.
A false sense or assumption of harmony can be far more damaging than fights because it results in the avoidance of crucial conversations on decisions about the business or the family. Max Lucado has said, “Conflict is inevitable, but combat is optional.” This means, there are ways in which conflicts can be mitigated and managed properly whenever they arise. Enlisted below are practical tips for family business owners that can help foster legacy and usher growth by mitigating conflicts.
1. Build governance structures: Backed by a mutually aligned charter, constitution, or similar moral agreement, a formal and clear governance structure would bring stability and also help de-escalate conflicts that are brewing. The family governance structure is independent of the business authority or ownership structure, enabling members to share their thoughts and grievances. Depending on the size and complexity of the family, a panel of trusted advisors or family councils can create a framework for formal dispute or conflict resolution.
2. Open and honest communication: This not only prevents conflicts but is also a key to conflict resolution. Every family must permit everyone involved to express their views and feelings and at the same time ensure they listen attentively to other’s perspectives.
3. Alignment on family values, goals, and objectives: Clarity on vision and cultivating the same family values across all members of the family create a strong sense of unity and purpose. Continuous engagement and efforts are needed to reinforce the alignment to ensure that member’s behaviour and actions will all be dedicated towards a constructive outcome and there is mutual respect and trust.
4. Mediation and external help: Professionals do not carry bias and their independence allows solutions to emerge without the baggage of emotions. Trusted advisors can facilitate discussions that help to mitigate or resolve conflicts. Mediation as a dispute resolution tool is often more flexible, private, and straightforward as against arbitration or litigation
All the above best practices create a robust framework that when followed in the true spirit, will ensure that there is no conflict that cannot be resolved.
(Suraj Malik is the Managing Partner at Legacy Growth.)
(Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.)
