Category: Covid Legacy Series: 50 Common Causes of Family Business Conflict … and how to deal with them
Cause #50 3rd Parties – Externals
Observations The actions and inactions of non-family: Directors, Managers, Employees and Advisers (“Externals”) are a common cause of conflict in Family Business. Family Businesses are notorious for birthing warring cliques and factions – supporters for: Mum vs Dad; siblings against siblings (or cousins); generation against generation; and employees against family – please get them out […]
Read MoreCause #49 Old Retainers
Observations Old Retainers are a common cause of conflict in family business. Typically, Mum or Dad has worked with “old Phyllis / Sam” since the early days and over the years has (allegedly) promised: “we’ll always look after you”, in return for their unconditional loyalty. Conflicts arise when new business leaders are pressured to honour […]
Read MoreCause #48 Emotional Trauma & Disruptive Behaviours
Observations Psychology is the science of understanding how people think, feel, behave and learn. Collectively, this is the functional domain of the mind – which is not the same thing as the brain: a single, identifiable, physical organ. Psychological trauma describes damage to the mind that occurs as a result of a distressing event – often the […]
Read MoreCause #47 Religious/Ethnic Issues and Cultural Norms
Observations Every family has its own culture – which determines how it rolls. Some family cultures are based on strongly traditional religious and/or ethnic guidelines and directives, while others are more modern and laissez-faire. All family cultures exert powerful influences on personal values, expectations and behaviours – in the family, and often in its business […]
Read MoreCause #46 Family Talent
Observations “Talent” describes a person’s natural aptitude. It’s a predictor of potential ability, but it’s not ability itself. Most people can generally learn basic skills. Acquiring advanced skills and capabilities requires the application of training and experience to an appropriate measure of talent. Along the scale, talent separates the incompetent, the mediocre, and the sublime. […]
Read MoreCause #45 Retirement & Other Exits
Observations Generational transition (aka “succession”) and the retirement of one or some people that comes with it, is THE major cause of conflict in family business. 85% of my working life is spent trying to resolve the tensions that arise in business families through stalled and/or conflicted successions, and their many related issues. “Retirement” means, […]
Read MoreCause #44 Business Performance
Business performance or, more often: lack of same, is a common cause of conflict in Family Business. When business results are not what they could and should be, and worse, are not what people need them to be, tensions mount, and conflict often follows close behind. Poor business performance has many causes – some avoidable, […]
Read MoreCause #43 Aligning Personal, Family, and Business Values
Observations Values are personal internal motivators that encourage humans to do what they do, the way they do it, when they do it. They’re a key component of character and personality, being created by a mixture of: genetics, intelligence, education, environmental upbringing and training (from home, social, ethnic and religious sources), lived experience, and (possibly) […]
Read MoreCause #42 Next Generation “Issues”
Observations Next generation “issues” are a common cause of conflict in Family Business. We’re talking here about macro, contextual causes. Lots of other micro causes are covered in other chapters – specifically around personality differences and succession scenarios. A Family Business is defined as any business that substantially involves at least 2 family members as […]
Read MoreCause #41 Buying & Selling Interests in The Business
Observations Another common cause of conflict in Family Business gains oxygen when family members are, or feel they are locked into ownership of the family’s business interests – notwithstanding their wish to not be involved. This uncertain feeling develops into conflict when it begets an uncomfortable sense of: “obligation to do stuff” – either in […]
Read MoreCause #40 Ownership vs Stewardship
Observations Ownership attitudes are grounded in a self-centred sense of: “here, now, and mine”. They encourage individuals to consider the family business as theirs to do with as they see fit, irrespective of whether they built or inherited it, in whole or in part. This attitude may be entirely rational and justifiable, but in pure […]
Read MoreCause #39 Sibling Rivalry
Observations Sibling rivalry involves any form of competition between siblings. It can range from good-natured tussling to all-out aggressive/destructive behaviour. Its roots lie in competition between young siblings – for things, recognition and parental attention – and can start when a baby is introduced into a family, and causes older sibling(s) to fear they’ll be supplanted in their parents’ affections. […]
Read MoreCause #38 For Lack of a Loving Reality Check…
Observations A common cause of conflict in Business Families has roots that date back to childhood, studenthood (not quite a word, but you get my point), business family ethos, and youthful career planning / decisions. Family members grow increasingly frustrated with themselves, with their role in the family business, and with their lot in life […]
Read MoreCause #37 Policies & Procedures
Observations If a Family Business is a more complicated beast to manage than an “ordinary” business, it follows that the Business Families that stand (by definition) behind each and every Family Business, are also more difficult to manage than “ordinary” families. Policies document things that must be done within an organisation, or entity. Procedures describe […]
Read MoreCause #36 Financial Security
Observations Desire for personal financial security becomes more urgent and powerful as business owners age, consider their options, alter their priorities, and recognise their reduced capacity to adapt to changes in circumstances – especially when that change relates to an increasing inability to overcome serious financial challenges. Fear is a primal motivator that stimulates “fight […]
Read MoreCause #35 Family Discipline in Business Families
Observations Family Discipline, or more accurately the lack of it, is a common cause of family business conflict. The concept of discipline is often ignored by mature business families, who tend to think of it as only applying to children, as children, but when there’s a family business in the mix, it’s perilous to ignore […]
Read MoreCause #34 Dysfunctional Business Families
Family dysfunction is a common cause of conflict in business families. Family Dysfunction (clinical definition): a family is dysfunctional when conflict and/or serious misbehaviours occur regularly and are accepted as the family’s behavioural norm. Business Family Dysfunction (family business definition): a business family is dysfunctional when its fundamental inability or unwillingness to solve problems and […]
Read MoreCause #33 Business Family Succession
Observations If Family Business Succession is “The Big One” – being the most common cause of conflict in family business – Business Family Succession runs a close second, in business families. Businesses “enjoy” having legions of advisers at the ready with reams of rational, objective, precedent-based, best practice advice. The consequences of their success or […]
Read MoreCause #32 Family Business Succession & Continuity
Observations This is the Big One! Succession, being the process of replacing one generation of owners, leaders and/or managers with another (usually younger) group is, in my experience, far and away the most common cause of Family Business conflict. For the many family business owners, and business family leaders, whose whole sense of identity is […]
Read MoreCause #31 Decision-Making Processes
Observations Many family business groups, from small to large, young and old, don’t have an agreed, coherent process for problem-solving or decision-making. Given that family and business life is a constant progression of issues, challenges, and problems that need to be resolved by wise decisions, it’s inevitable that the absence of good processes is a […]
Read MoreCause #30 Implementing Change in Business and Family
It’s one of the more curious features of human nature: many people will put up with known pain, rather than risk something worse by changing their circumstances. The condition even owns its own phobia: metathesiophobia, from the Greek: “meta” = change and “phobos” = fear. Fear of change, and problems implementing change, are common causes […]
Read MoreCause #29 Rules of Engagement
Observations Most Family Businesses are private business. This gives owner/leaders the legal and practical ability to do virtually whatever they like with the business, since they only have themselves to answer to. Or do they? Similarly, family leaders (Patriarchs and Matriarchs) can wield their authority over “junior” family members in ways that would make Genghis […]
Read MoreCause #28 Unrealistic Expectations & Entitlements
Observations Family Business can be a source of great pride to a family however, pride can get out of control – encouraging family members to create unjustified and unrealistic expectations of benefits they “should” receive from the business, including: cars, phones, travel and entertainment expenses, and credit cards for personal use. Whether caused by unthinking […]
Read MoreCause #27 Employing Family Members
Most first generation family businesses are private businesses. Their leaders are also their owners. This gives them the ability to do (almost) whatever they like within the business, since said leaders are only accountable to themselves, as owners. When there’s shared ownership, in any generation, things get more complicated, because business leaders are accountable to […]
Read MoreCause #21 Nature vs Nurture – Parents as Bosses
Observations The debate about whether Nature (genetics: innate qualities you were born with), or Nurture (environmental conditioning: learned behaviours and abilities), has the greatest influence on personality development, is one of the oldest in psychology, dating back to the ancient Greeks. It may even predate the invention of Souvlaki! Current thinking is that it’s not […]
Read MoreCause #20 Family Systems & Skills (5): Teamwork
Observations Strong and harmonious family teams are good indicators of a healthy business family culture. The absence of good teamwork in a family is a common cause of conflict when family members are involved in a family business. Most families want to believe that their “familyness” means that family members naturally work well together as […]
Read MoreCause #19 Family Systems & Skills (4): Respect & Trust
Observations Healthy levels of mutual respect and trust are key indicators of a good family business culture. Their absence is a common cause of conflict. “Trust” is a combination of thoughts and feelings that give confidence you can rely on the character, ability, strength, or integrity of someone, or something, to meet your expectation that […]
Read MoreCause #18 Family Systems & Skills (3): Decision Making
Observations Cause #17: Problem-Solving – described how and why poor problem-solving systems and skills are a common cause of conflict in family business, and in business families. Problem-solving is the front end, mechanical part of a process. For a problem to be solved, there needs to be a decision (agreement about what will be done), […]
Read MoreCause #17 Family Systems & Skills (2): Problem Solving
Observations When left to fester: issues become problems; problems become tensions, and tensions become conflicts. Inadequate attention to issues, as a result of inadequate problem-solving systems and skills, are a common cause of conflict in family businesses and in the business families that lie behind them. Families may be: (a) inclusively engaged as collaborative problem-solvers; […]
Read MoreCause #16 Family Systems & Skills (1): Communication
Observations Communication is both a key builder, and an ultimate destroyer, of relationships. Communication is the process of sending and receiving messages, between two or more people. Its quantitative, tangible elements (words used) convey information. Its qualitative, non-verbal elements (tone, gestures, choice of word) convey how a person feels about another. In any given situation, […]
Read MoreCause #15 Emotional Baggage (not given as a medical opinion)
Observations “Emotional Baggage” refers to unresolved emotional issues that have a detrimental effect on individuals, groups, or organisations. The baggage metaphor suggests carrying around past disappointments, wrongs, and trauma that hold current relationships hostage to negative expectations – based on experiences of long ago. In Article #14: “Parenting Styles” – I observed that the root cause […]
Read MoreCause #14 Parenting Styles & Practices
Observations (not given as medical opinions) Many of the root causes of current family business conflicts can be sheeted back to the parenting styles and practices – behaviours and emotional contexts – of the family’s home life, from many years ago. Whether or not there’s any validity to the analysis, in dispute resolution practice it’s […]
Read MoreCause #13 Broken Wing Syndrome #3 (Family Business)
Observations Article 11: “Broken Wing Syndrome #1 (Individuals)”, described Emotional Resilience as a person’s ability to cope with, and adapt to, challenging situations. Resilient individuals minimise their anxiety, consciously and unconsciously, to remain personally, socially and vocationally effective. A non-resilient individual is less able to handle challenges and stress, hence their “broken wing”. They require […]
Read MoreCause #12 Broken Wing Syndrome #2 (Parents & Family)
Observations Article #11: “Broken Wing Syndrome #1 (Individuals)”, posited that Emotional Resilience is the personal ability to cope with, and adapt to, challenging situations. Hence resilient individuals, both consciously and unconsciously, tend to minimise their anxiety to remain personally, socially and vocationally effective. Broken Wing Syndrome (“BWS”) refers to non-resilient individuals, and specifically to those […]
Read MoreCause #11 Broken Wing Syndrome #1 (Individuals)
Observations Excessive protection, and inappropriate amounts of support provided by parents to offspring working in a family business, are common causes of conflict within business families. Emotional Resilience is the personal ability to cope with, and adapt to, challenging situations. Resilient people, consciously and unconsciously, minimise their anxiety levels to remain personally, socially and vocationally […]
Read MoreCause #10 Behavioural Discord
Families are always “interesting”, due to dynamic interplays between the diverse personalities that make up the group – as manifested by their behaviours towards each other. Every family develops a unique behavioural style, which evolves as its members age and mature. Resilient families learn to tolerate and accommodate disruptive individual styles; others never learn how […]
Read MoreCause #9 Relationship Interplays
Family Business can have a “force multiplier” effect on family relationships, especially when interpersonal relationship issues present in the family, often built over many years of family interactions, are projected or absorbed into the business. Commercial environments provide all the nutrients required to turn historical/personal/domestic niggles into full-blown, competitive, adult conflicts. Weak, strong and/or distorted […]
Read MoreCause #8 Divorce & Separation
Australia 2019: 113,815 marriages registered; 49,116 divorces granted. We’re marrying later (32 for males, 30 for females), and more couples are living together for several years before marrying. Consequently, marriages are generally lasting longer, and divorce rates are trending downwards from their peak in the 1970s and 1980s (Australian Bureau of Statistics, 2019). The bottom line […]
Read MoreCause #7 For want of a Family Plan …
“For want of a nail the shoe was lost, For want of a shoe the horse was lost, For want of a horse the rider was lost, For want of a rider the message was lost, For want of a message the battle was lost, For defeat in battle the kingdom was lost, And all […]
Read MoreCause #7 Equal ain’t Equitable
One of the most common causes of family business conflict arises from (innocently) confusing equality (providing equal benefits), with equity (providing fair treatment). On careful analysis, this almost always indicates avoidance of responsibility to exercise discretion towards family members in widely different circumstances, even where most outsiders, and most family members, would think it perfectly […]
Read MoreCause #6 In-Laws, Outlaws & Blended Families
All forms of matrimonial relationship can create conflicts for business families – with increasingly complicated family structures resulting in a bewildering variety of happy, working, blended, extended, dysfunctional and broken family units forming parts of larger family groups. Higher general and business education levels; social pressures demanding greater equality, inclusiveness, and communication transparency; broadening perceptions […]
Read MoreCause #5 Fossilised Leaders
“Fossilisation” is the process of rusting in place in a business leadership role, by becoming more averse to change and innovation. It’s usually caused by age. We are living longer, working longer and, despite having to deal with a global pandemic, we expect to do far more in our lives than ever before. This encourages […]
Read MoreCause #4 Managing Unmet Expectations and Broken Promises in Family Businesses
When people feel betrayed, or unfairly treated, by people they believed they could trust – frustration, resentment, anger, and a strong desire for revenge, are common consequences. Conflicts brew, and eventually spill over. Despite the fond wish to believe that every family business is a haven of peace, integrity and high trust, the reality is […]
Read MoreCause #3 Human Diversity – Ages & Stages
We don’t pay enough attention to the effect of different ages and stages on people’s thinking and behaviours. This raises real issues when family members working together in a family business are at different ages and stages in their respective lives. We see this most powerfully when two or more generations of a family are […]
Read MoreCause #2 Managing Personality Differences in Family Business Conflicts
Personality differences have huge impacts on the nature and quality of interactions between family members – in and out of a family business – and between family members and family business employees. “Character” is how the world sees you, and how you see yourself – as a stable, accumulated collection of traits and qualities that […]
Read MoreCause #1 Family Business – Blessing, or Curse?
Oh, the drama! The very word “Family” engages us all, at a visceral level. Whether it’s a light, dark, hot, cold, happy, sad, loved or lonely response, “family” always stirs some sort of emotional response. The words “Family Business” engage us in several additional dimensions: emotional, intellectual, professional and financial. And from the outside they […]
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