Running a family business is very often a balancing act. There can be huge advantages to be had, but there can also be issues that arise simply from the fact you are working with your family.
The last thing any business needs is conflict, yet this is often something that occurs when family members work together. Not only can tension be damaging for the business, it can also be destructive to the personal relationships involved. Many family run businesses have folded as a direct result of a breakdown in the relationships of the family members involved.
And the impact can be far-reaching; even employees of the business that aren’t directly involved can become embroiled in, or impacted by, family relationship dynamics, particularly if they feel left to act as ‘piggy in the middle’.
In this blog, we’re going to take a look at some of the main causes of conflict in family businesses, and we’ll provide some tips on how these can be addressed or even avoided altogether.
What Is The Impact Of Conflict In Family Run Businesses?
Family run businesses are the lifeblood of the global economy. According to a study published by the Houses Of Commons Library,
“Oxford Economics estimates that there were 4.8 million family businesses in the UK in 2020, making up 85.9% of all private sector businesses. These businesses employed 13.9 million workers (51.5% of all private sector employment) and contributed £575 billion to the UK economy.”
There are huge benefits to running or working in a family business, not least a greater sense of loyalty, trust and a shared vision. However, there can also be huge challenges too.
Inevitably, no matter how good your planning or prevention strategies may be, at some point there will be conflict.
Workplace conflicts between employees who are also family members can be incredibly disruptive to businesses, and they often end up impacting more than just the immediate parties involved. Family disputes can easily spiral out of control and, if not dealt with swiftly and firmly, can end up causing sometimes irreparable damage to the business, its employees and the family itself.
Naturally, the best option is always to put measures in place to prevent conflict from occurring in the first place. However, that’s not always achievable, so, should the worst happen, it’s wise to have some strategies to hand that will enable you to resolve the problem as quickly and effectively as possible.
What Are The Most Common Reasons For Conflict In A Family Business?
Conflict can arise in your family business for a number of reasons, and they are often not exclusive to each other. Unfortunately, by the time familial disagreements come to a head, they have often been festering for some time and will likely have more than one cause at the root.
Here are some of the most common reasons for internal conflict in family run businesses;
Rivalry
Even the most affable of families on the surface can have rivalries circulating underneath. And for some families, those feelings of jealousy and competitiveness are not even attempted to be concealed. Families that are in business, particularly successful ones, are potentially even more likely to be prone to ambitious streaks.
Of course, a competitive drive can be beneficial at times, especially in driving a business forward and growing it. But, when more than one family member within a business wants to be ‘top dog’, the issues can quickly spiral.
Here, the key is to identify who the rivalry is between and what is fuelling it. Perhaps certain family members feel they are in competition with one another, and this may even be something that goes as far back as childhood? Maybe one family member feels that another is trying to out-perform or even usurp them? Perhaps the fight is one for dominance in the company?
Whatever the cause, rivalry can create situations of extreme tension and discomfort in the workplace, so it must be identified and dealt with as quickly as possible.
Favouritism
Whether you’re a child or an adult, favouritism in families can be a deep-rooted and long-running hurt. When that spills over into a family business setting, the implications can be hard to deal with. Particularly if multiple siblings are employed in a family business, accusations of favouritism can be constant and difficult to resolve, often because they may be based on perception and/or unfounded.
Even if favouritism is not occurring, family members can often feel they are being discriminated against, particularly if the structure of the business mirrors the family hierarchy. Younger siblings or relatives may feel they are not being promoted or given sufficient responsibility because of their age or position in the family, even if they believe they are more capable of performing the role in question.
As such, it’s important that feelings of favouritism are identified and addressed fairly and quickly, to ensure the business does not suffer,
Nepotism
Accusations of nepotism can be rife in family businesses, either between family members themselves or between members of the family and other employees who are not family.
Occasionally, family members can be expected to be hired by the family business and promoted into positions of authority, despite that role not being appropriate for their skill set or ability. Giving in to these expectations can cause issues for both the existing staff, who might be better equipped to do that job, and the business itself, which will suffer for not having the right employees in the right positions.
It’s important to remember that the priorities of the business must come first and nepotism can be fundamentally damaging to a family business. If the wrong people are promoted to positions of authority simply because they are family, the repercussions will be far reaching. Hence, it’s important that managers act responsibly when hiring and promoting family members, and ensure that rewards and accolades are granted on merit to avoid allegations of nepotism being levied.
How Do I Resolve Conflict Within My Family Business?
Even with the best will in the world, conflicts are bound to arise in family businesses. Sometimes these may be minor, sometimes they may be epic. But, in either instance, it’s important to act professionally and swiftly, to nip any burgeoning resentments in the bud.
Here are some ways that conflict in your family business can be resolved;
Have Regular Family Meetings
Communication is key in these circumstances and many disputes can be avoided entirely if issues are discussed on a regular basis. Naturally any business wants to avoid meetings for the sake of meetings, but effective communication in frequent face-to-face sessions can prevent a whole host of issues arising.
As such, hold regular meetings and invite all family members to attend. Have a recurring agenda to ensure standing issues are discussed: most of the time, this can be enough to prevent matters from deepening and hardening. Ensure all attendees understand these meetings are a confidential and safe space, and dedicate time to discussing any issues that may have arisen in the workplace. Use the time to encourage attendees to explore their own feelings, as well as suggest resolutions to the worries of others.
If the subjects slated for discussion are likely to be particularly contentious, it may be a good idea to invite an objective third party to attend, such as an HR consultant or an independent mediator (see point 4 below).
Have Policies
Policies are crucial to any business of any size, but they are particularly important in family run businesses. Above and beyond the standard policies required by law, it’s a good idea to have additional policies in your family business that cover aspects such as the decision-making processes, succession rules, salary guidelines, equity guidelines and the process for resolving disputes. These documents can even detail more family-specific elements of the business, such as what is expected of family employees, how meeting goals will benefit both the family and the business, and the shared ethics, values and business culture of the family.
Remember that, whilst these documents should be drawn up with legal professionals, all family members should be involved in writing and defining them, to ensure everyone feels equally involved in the running of the business and their place in it.
Have Performance Evaluations
Performance evaluations are particularly important in family run businesses, because they can be the main way of avoiding accusations of favouritism, discrimination or nepotism, whether from within the family or from other employees in the firm.
Develop a formal and structured evaluation process that works for everyone in the company and is applied equally to all employees, whether family or not. Ensure this is fairly implemented and any and all promotions and appointments are awarded on merit, not relationship to the manager/owner.
It’s also advisable to foster a learning culture at the company, where all employees are teachable, as this will enable constructive criticism to be given and received without the perception of it being a personal attack. Again, this will ensure fairness and enable you, as the employer, to monitor the performance of your employees and take action to improve productivity where required.
Engage Mediators
Often, in family businesses, it can be difficult to separate the home and work relationships and act (or be seen to be acting) without emotion or prejudice. That’s why it may occasionally be necessary to use an impartial party to mediate objectively between parties.
Mediators are trained to act in an unbiased way in such situations, and are able to ensure all parties engage in a meaningful and productive way to ensure solutions are reached peacefully and in a way that is satisfactory (as much as is possible) for all parties. As such, they can be a great option for family businesses that are struggling to overcome conflict, particularly where several strong personalities are involved.
Using a mediator is often viewed as a ‘last ditch’ attempt for family businesses in crisis, but most mediators are actually trained to act proactively so, the earlier you can bring in a mediator, the better your chances of avoiding conflict in the first place. Many mediators are also able to provide in-house training to companies, so they are better equipped to deal with any future conflicts head on, or avoid them altogether.
Contact Metis HR For Helping Resolving Conflict In Your Family Business
Metis HR are a Rossendale based, specialist HR consultancy firm who specialise in conflict resolution. Our motto is that we ‘protect employers from their own employees’, even if those employees are your own family members.
Our trained workplace mediators are experts at providing a professional mediation service, that helps you resolve conflict quickly and satisfactorily. Once we have completed an assessment of your individual needs, our mediators will work closely with your team to ensure you get a bespoke solution to your HR problems.
Please speak to one of our experienced team members today by using the contact form on our website, emailing info@metishr.co.uk or phoning 01706 565332.
