How to Address Conflict in a Family Business

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When most people hear the phrase “dysfunctional family,” they take it to mean that a family has issues or challenges that may have broken down traditional loving bonds. While unfortunate, episodes of dysfunction, or even conflict, are fairly common in many families, but, in most cases, they don’t have fiscal repercussions.

That’s certainly not the case when a family business is at the center of a family conflict. And, if the underlying issues that have led to surface issues like compensation, hidden agendas, and communication are left unresolved, the family will derail — and so will the business.

The fact is, most complex conflicts at family businesses aren’t really about a specific issue but are the result of relationship-driven problems that could go back to childhood.

These underlying issues can include:

  • Feeling disrespected, patronized or not taken seriously
  • Need for love and recognition
  • Lack of trust
  • Presence of favoritism
  • Lack of fairness

Left unresolved, these issues will be exacerbated, as the way family members communicate devolves. Some may choose the passive route and ignore the “elephant in the room,” others may choose the aggressive route and be combative, and still others will choose to be passive-aggressive, where they’ll act like everything’s OK but will be bent on sabotage. You can easily see that this is a recipe for disaster for any family business.

Tips for Resolving Conflicts

Resolving conflicts among family members who work in a family business starts with learning to communicate honestly while respecting the differences in perspective of each individual. It also involves identifying each person’s strengths and challenges and aligning everyone’s values. It’s a mistake to assume that all family members have the same values since they are shaped by individual experiences.

This process usually requires someone to facilitate the conflict resolution process, and, as a family business advisor, I’ve had a lot of experience in that role. Take the following situation, for instance:

A brother and sister found themselves at odds when the sister announced her second pregnancy. After her first child was born, she took leave but it was never discussed how long she’d be out, the number of hours she’d work when she came back, and what her responsibilities would be. Her brother was frustrated but chose to be passive, as the situation brought up some negative feelings from their past.

I helped open the lines of communication so both of them could manage expectations appropriately and be on the same page. This strategy also helped the brother break an old pattern of taking long vacations but failing to check with others before making plans.

That kind of success story can occur in any family business when family members are willing to deal with each other a little differently, burying the past, so to speak. If that’s not possible, the best course of action is putting conflicts on hold to establish professional protocols, but that’s really just a Band-Aid that doesn’t address the underlying problem.

The Effects of Complex Conflicts on Business

At their very worst, complex conflicts can create a hostile work environment that is likely to undermine anything the business has achieved. A better alternative is to try to clean the slate with regard to relationship history and work toward communicating in a way that benefits the “bigger picture” (the business).

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