As a family grows in size, there is more diversity of generations, personalities, opinions, and values which can naturally create conflict. While every family is different, being proactive and providing opportunities for engagement, whether they work in the business or not, can be a gamechanger for managing conflict.

Disagreements are inevitable, more so in family businesses. As family businesses develop through the generations and additional members are more involved in the set up than slowly but surely more disagreements creep in. So how can you manage conflict challenges proactively in the framework of a family business?

First and foremost, it is important to get back to basics, honour your family roots, and the vision and values of the founders. To keep the family connected to its roots, it is important that family traditions are recreated in a new and different way in locations conducive for promoting engagement and interaction. Creating a safe environment outside the boardroom for communication is key for transparency and collaboration.

Second, use an anonymous assessment to gather data to understand differing perceptions in a family business allowing every voice to be heard. Knowing data is important for the family business, it proves to be a gamechanger and the start of family governance as we know it within the family business context. It is not what family members were saying, it is what they were not saying. Opinions matter and by having neutral data provided for productive conversations can be had to help manage any potential conflicts that could arise.

And finally, systems and processes need to be put in place before they are needed. For example initiating family governance to mirror business governance. This could include forming a Family Council. In the beginning it may not be clear why it is needed or how it would function. Until these systems and processes are put into place would family members recognize the value and importance. The bottom line is that a Family Council would have been formed long before addressing any issues and inefficiencies that could arise and potentially cause conflict.

Conflict and challenges are natural in a family business and make the family business stronger and more resilient to stand the test of time. By getting back to family roots, gathering useful data to address differing perceptions, along with creating systems and processes before they are needed, can assist in successfully navigating a proactive pathway to effectively manage conflict. It is also important to recognize that differences in a family are a good thing, and help families grow and thrive for generations to come.

( All factual and statistical information presented in this blog has been obtained from an extract of an article from Forbes.com) Follow us on our Facebook page and Family Business Office website at www.familybusiness.org.mt

At the Family Business Office we can offer you assistance in dealing with family business succession planning issues through incentives supporting advisory and mediation services. Contact us today on familybusinessact@gov.mt.