How to Handle Family Business Conflict

Did you know that the most common kinds of family business conflicts include father-son rivalries, sibling rivalries, and intrafamily friction?

If you’re part of a family business, it is easy to feel like you are the only people who struggle with family business conflict. The truth is that these sorts of clashes occur all of the time.

This means that there are several tried and true tricks and strategies for resolving family business conflicts and disputes. We’ve written a guide to help you out. Keep reading to find out more.


Understand the Different Levels of Family Business Conflict

The first level of family business conflict is minor disagreements. This type of conflict is extremely common. It tends to be less severe than other kinds of family conflict.

Even if minor disagreements frequently occur between you and your family members, it’s usually the case that these types of conflict will not significantly impact the operations of your business.

Most minor disagreements arise when different family members have conflicting perspectives and objectives.

It might be possible for you and your family members to work through minor disagreements without needing to get outside assistance.

When Minor Disagreements Escalate to Become Major Disagreements

Major disagreements arise when family members who are at odds with one another cannot agree on a resolution.

It is normal for those who have major disagreements to feel disrespected. They also might become aggressive and defensive.

It is possible to resolve major disagreements. But it is important to take action as quickly as possible. Those who are not able to do this will risk severely impacting the running of their business.

Major disagreements often turn into serious conflicts. It is normal for a family that is struggling through serious conflicts to fall into factions. This usually causes businesses to suffer.

In many situations, family members personally attack one another. This might create deep-seated emotional wounds that are difficult to heal from.

Don’t give up on attempting to solve your family business conflict if it becomes serious. It is possible to address these situations if you know how to effectively mediate a dispute.

If you don’t resolve a serious conflict, it might turn into warfare. These types of conflicts have the potential to destroy businesses and break apart families.

It is common for family members who are at war with one another to file lawsuits and try to sabotage one another.

Top Tips for Resolving Family Business Conflicts

Keep in mind that it is normal to have family conflicts if you run a business with your relatives.

If you know how to effectively resolve these conflicts, it is possible to repair your relationships and not let these issues influence the running of your business.

It is still important to know about the best strategies for resolving conflicts if you and your family members are currently at peace. This is why so many people who run family businesses hire family-business consulting services.

Meet with Your Family Members Often

Whenever you hold family business meetings, make sure to invite all family members who are part of your business to join you. This includes spouses, inlaws, and anybody else who has a decision-making influence.

You should try to invite outside professionals to attend these meetings.

For example, a skilled lawyer can help you and your family members get started with family succession planning and executive succession planning.

Family Business Governance: Create a Written Policy

Take time to create a policy that specifies a decision-making process. You should also reach an agreement on things like salary and equity guidelines.

It is good to have lawyers to help you write this policy. But be sure not to rely on them. You and your family members should try to work together to create a policy that you all agree on.

This does not need to be a legal document. It just needs to reflect your family’s shared values and priorities.

Make Use of Performance Evaluations

Even though performance evaluations are essential, they can still hurt people’s feelings and create family conflict.

The best way to prevent this conflict from arising is to create an evaluation process that is formal and structured.

Pay attention to how your family members are performing their jobs instead of drawing attention to their shortcomings and flaws.

Understand What Family Business Mediation Should Look Like

The most important thing about family business mediation is that it should create results that are acceptable for every family member.

Family business mediation tends to be much more cost-effective than litigation.

Your family members will need to recognize that there is a conflict and be willing to seek a solution if you want to hire a family business mediator.

A family business mediator should be unbiased. Their goal should be to help family members come up with a resolution that resolves the conflict.

Family business mediation is an interactive process that involves listening and patience. You should keep in mind that it can take time to resolve conflicts. It is not usually possible to find a solution in one or two meetings.

Take Action to Resolve Your Family Business Conflict

It can be stressful to have a family business conflict. If you cannot find a solution, it is possible that the conflict will irreparably damage relationships and cause your business to suffer.

Do you have any questions about how to resolve a conflict in your family business? If so, don’t hesitate to contact our team at PositivelyPeople for business consultation services and strategic solutions.


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