From your local “mom and pop shop” to mass-market family corporations, family-run businesses are some of the most successful in the country.
In the United States, family-run businesses have almost a 25-year lifespan, with 40% of companies being passed down to the second generation. While all businesses come with their share of conflicts, family business comes with a unique set of challenges because of the added family dynamic.
Conflict is inevitable, but having a conflict management strategy in place is key to resolving issues within the family business. If you and your family are running a business, there are some effective ways to help resolve and prevent conflict.
Keep reading to find out how to handle business conflicts and maintain strong family ties.
1. Create a Plan to Handle Conflict
One of the most important elements in managing business conflict is having a plan in place before issues arise.
A certain level of conflict can help strengthen the business, but that depends on how efficiently they are resolved. This plan should be established early on, and each family member must be made aware of how the conflict will be handled in the family business.
This means holding people accountable, following through on disciplinary action, and maintaining a level of professionalism regardless of relationship. The conflict plan will be personal to your business and your family, according to your needs.
Every family will have a unique plan in place, but it is important to establish one early on.
2. Distinguish Between Business and Personal Conflicts
It is easy to blur the lines between personal and professional relationships when it comes to a family business. This is generally what makes family companies so successful. It is the family values that set these businesses apart from a corporation with no face.
However, the element of personal relationships within the business can cause more conflict. When work begins to affect the family dynamic or vice versa, the problems become entangled and much more difficult to fix. When issues arise at work that stem from a problem at home, this can quickly create a toxic working environment.
To tackle family business conflict, these issues should be compartmentalized.
3. Keep the Lines of Communication Open
Communication is one of the most important elements in any successful relationship. That includes personal, professional, and familial.
Opening the lines of communication will help family members develop trust and reduce the risk of misunderstandings. Communication is not only a great way to share ideas to build a business but it is also an opportunity to talk about concerns. Creating a strategy to ensure that there is open communication is fundamental.
Ensure that there is a platform to speak about arising issues and create an environment that fosters open communication.
4. Solidify Your Goals and Values as a Family
When creating a family business plan, there should be a set of goals and values around which your business is built. This is a great way to ensure that everyone has the same vision. Have the whole family involved when creating these goals so that there is a group consensus and sense of teamwork.
Strengthening goals and values will also help resolve conflict. This is because the family members can be reminded of their common goal when there is a disagreement. When everyone agrees on what they are trying to achieve, they will be more inclined to compromise when conflict arises.
5. Establish a Code of Conduct
Every business should have a code of conduct, and family businesses are no exception.
A code of conduct outlines the behavior that’s expected from each family member. This will be customized for the needs of each family. It can include managing emotional reactions, how to present yourself on social media, how to speak to customers or investors.
This is a commitment to the business and to the family that there will be a level of respectable behavior. It must be enforced, and there must be disciplinary action for those that deviate from the code of conduct.
6. Prioritize Family Meetings
Consistent family meetings are an important way to check-in with family members. You can share relevant information, discuss upcoming projects, and use it as a platform to discuss issues.
Detecting a problem early allows you to intervene early. Through family meetings, you can let each member voice their concerns and create a plan to resolve them.
This will help prevent the build-up of resentment and help tackle the issue early on.
7. Get an Objective Mediator
Conflict can be difficult to handle, especially between family members. The relationships are more delicate, and sometimes it is difficult to remove your emotions from the situation.
There are cases of favoritism or nepotism, rivalries, and financial disputes. These are serious issues that can destroy a business. Incorporating family conflict management into your business means getting help from a professional.
A third-party mediator can help resolve conflict by offering an objective perspective. They create a safe and productive environment to allow each family member to communicate their grievances. It is a formal process that can help deconstruct the problem and get to the root.
If you want to strengthen your business, family business consulting with Positively People can help. We specialize in mediating family business conflict to help your family thrive professionally and personally.
Effective Conflict Management With These Seven Tips
Conflicts are unavoidable, but with the right conflict management strategy, they can help strengthen your family and your business.
For effective conflict management, be sure to create a plan, know the difference between different types of conflict, establish a code of conduct, and get an expert to help you meditate. Keeping the lines of communication open and having regular family meetings will also help prevent and resolve conflict.
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