Category Archives: Communication & Conflict

Back to the Future – of Your Family Enterprise


David Karofsky

A few years back, I worked with a client who was struggling to make strategic decisions for his company.  He had just taken over his family’s business and, as is the case with many family businesses, was dealing with challenging family dynamics set in motion well before he’d come aboard. Even though the defining event – the sudden exit of one of the principles years before – had happened when he was a young adult, the ripple effect of that event was still impacting the family’s direction for the future.  This got me thinking about the paths family businesses choose, leading me to ask myself, “Are family business often forced down a path as a result of past unresolved conflicts in the family?”

As I thought about this, I suddenly remembered the scene in the movie Back to the Future II where Doc Brown is explaining the space/time continuum path to Marty McFly, and how his going back to 1955 in the first movie disrupted the universe: “Our only chance to repair the present is in the past, at the point where the timeline skewed into this tangent. “

You may be asking yourself, “What does this have to do with family business?”

It’s my contention that unresolved conflict in a family business acts very much like Doc Brown’s disruption of the space/time continuum; causing what I call a break in the family/time continuum that influences all subsequent decisions, affecting the direction of the family business going forward – and not always for the best. But if the family can “go back in time” in a sense, to resolve or at least honestly address this past conflict, it provides an opportunity to make strategic decisions based on what is best for the family and the business, rather than having those choices dictated by a conflict in the past, as illustrated below.

What are some of the most common causes of breaks in the Family/Time Continuum?

  • Poor communication: Family members are not able to communicate effectively with each other or to talk through their different perspectives; conversations that should be had are not, yet life and the business still move forward.
  • Family conflict /lack of resolution: Resolution does not mean agreement – but it does mean agreeing to move forward. You’ve got to be able to make good business decisions, in which the past doesn’t dictate the future.
  • Lack of strategic planning: Good strategic planning can help prevent these kinds of family/time continuum events from happening. If, for instance a family doesn’t plan in advance for the death of a family member, it’s possible that the business will shift in a direction that isn’t optimal when the event happens.
  • Unexpected death in the family: A sudden death in the family brings emotional trauma along with other practical repercussions that can easily push the family off course.
  • Poor definitions of roles and responsibilities: When you don’t have structure in an organization, it’s like a bad rowing crew that can’t pull together to win a race. This also contributes to the likelihood of…
  • Mismanaged expectations: When people don’t share a common understanding of their place and power in the family business, or when the leader refuses to share power with his heir apparent, it can lead to hard feelings that damage both the business and the family.
  • Entitlement: We often see cases in which Mom and Dad have effectively given their kids power in the company without having set expectations around what they have to do to earn it. When parents are unwilling to address entitlement issues, they run the risk of creating a break in the family/time continuum; the employees resent the kids, and the kids themselves aren’t capable of taking over when the time comes, risking the future of the business.

As we’ve seen, poor communication is most often the underlying current that drives conflict in a family business.  Before making changes to an intended strategic direction in your business, I encourage you ask yourself “What is causing this shift; is it due to changing market or financial conditions, or is because of unresolved family dynamics?”

If it is the latter, I encourage you to address those family issues before making change in direction that may negatively impact your business down the line. You may still find yourself continuing down the altered path, but at least you be doing it knowing this is what is right for the family and the business.


The Greatest Issue of Destructive Family Dynamics

Deb Houden
Deb Houden

In my last post, I shared the parallels I found between the marriage research of John Gottman, Ph.D. and how it applies to any familial relationship especially those who own/work together. Gottman dubbed the four most detrimental behaviors for a marital relationship as The Four Horsemen: criticism, defensiveness, stonewalling and contempt. (Criticism is discussed here.)

Defensiveness , says Gottman, is a way of blaming the other for the issue and blame has never solved any dispute. By accepting responsibility for at least your own part of the problem goes a long way in having a constructive discussion. Being defensive is like having a rubber wall around a person, never letting in any type of constructive feedback. The defensive person takes feedback and twists it to fling back at the person in order to protect themselves. Communication and problem solving get increasingly difficult with this person because attempts to better a situation are stalled from the beginning and the conflict escalates. Teenagers and young adults need to learn to graciously accept feedback and hone their own ability to change and grow. Defensiveness is an inherited trait.

The third part of The Four Horsemen is stonewalling: when one of the participants of a relationship withdraws from interaction. How many times do we see people go quiet and withdraw when things get difficult? How many times do people get flooded and not know how to manage the situation so they shut down? It happens a lot. People falsely believe that by not interacting in a time on conflict that there will be a better outcome than by confronting the negative, but the research shows that is not the case. It’s a death knell for a relationship.

Being able to talk with someone (or even argue in a constructive way) is better than shutting down. I have worked with more than a few families who have the culture of not “fighting.” The problem is that no one learns to manage conflict effectively. Stonewalling is a fierce form of control over the other person. There is no emotional connectedness with the person who is stonewalling because they have emotionally built an impenetrable wall around their psyche.

Finally, Gottman argues that the greatest predictor of divorce is contempt, and I argue it is the greatest issue of destructive family dynamics. Contempt displays include sarcasm, cynicism, eye-rolling, name-calling, tsk-ing, sneering and hostile humor. (There are more, and you know them when you see them).  Parents don’t understand how their children can act that way towards their siblings yet they demonstrate those same behaviors to their own relatives in the firm.

Contemptible actions are made to discount the thoughts, feelings, and actions of the other in such a way as to inflict incredible damage. To ignore someone who is doing that takes Herculean strength!  I have been the recipient of contempt and it is probably, to me, the absolute worst treatment anyone can do. I feel silly, angry, not valued, and completely turned off.

Imagine if that happens every day when you work someone who is related to you?  I have been in situations where parents do this to children.  What does that teach?  The parent is keeping the child one step below, always on the lower rung. How can we prepare a child to have good relationships, have confidence to take on challenges when they are made to feel inferior?  To me, contempt is akin to hatred. Who needs enemies when family members display contempt?  There is NO PLACE for displays of contempt.

I am not naïve to expect that none of the above will happen in even the most loving, respectful and constructive of relationships. Sometimes emotions take over and we become our worst self – especially with those whom we trust will forgive us. But the preparation of our children is such an important task that we really need to teach them emotional skills that help with relationships. When you find yourself behaving a little subpar (and that might take some reflecting time to let the anger subside), acknowledge your actions and admit that you are not your best self sometimes.

Gottman’s final word of advice to couples is to try to have a ratio of 5:1 in positive to negative interactions (over a long span). By conceding less than stellar behavior and combating it with some positive interaction, you will mitigate the damage from the Four Horseman. We can do that with our next gen, too. Try to remember the golden ratio to keep the Four Horseman of the Relational Death at bay. Then you will have prepared your next gen well.

For more information about next-generation development, read Deb’s article published in The Family Business Advisor: Introducing Teens and Young Adults to the Family Enterprise.


Leading the Next Gen by Example: Constructive Family Relationships

Deb Houden
Deb Houden

I was reading On Wisconsin, the alumni magazine for the University of Wisconsin, when I came across an article highlighting John Gottman, Ph.D., who graduated from Wisconsin in 1972.  I knew of Gottman’s research because I used it often when teaching an undergraduate course at Wisconsin on Interpersonal Communication.

Gottman has devoted his life study to the indicators of what makes a successful marriage. I was in the process of writing an article on preparing teens and young adults for the family enterprise and I thought this is the most important aspect of preparing anyone in a familial relationship, especially those who own/work together. A constructive family relationship is key to continuance of the family firm.

While Gottman is a noted researcher on marriages, I believe his research applies to any familial relationship, especially when preparing the next generation. Parents can teach teens and college kids how to have a constructive, open relationship with family members by treating their own relatives in the business in a healthy manner. Gottman suggests that the four most detrimental behaviors for a marital relationship are criticism, defensiveness, stonewalling and contempt. In fact, his accuracy in predicting divorce (when he sees these behaviors) is at 94%!

Gottman defines criticism differently than a complaint. A complaint focuses on the specific behavior, whereas criticism focuses on the character of a person. When I teach negotiations, I tell the students to separate people from the problem; focus on what the problem is at that time.  Don’t get caught up in the behaviors of the other person because that causes one to lose their most critical leverage piece: their ability to think clearly.

The same is true of familial relationships.  Don’t slay the character of the other family member.  Examples such as “He always needs to be in control” or “She is lazy” is a direct slam at their character. It solves no problems but instead exacerbates the downfall of the relationship. In some of my most conflicted family enterprise work, I see character slams repeatedly happen. The manner of character slamming becomes a habit and is passed down to the next generation.  Children mirror these types of habits and begin to believe that this is how we treat relatives.

Not good preparation for the future!

For more information about next-generation development, read Deb’s article published in The Family Business Advisor: Introducing Teens and Young Adults to the Family Enterprise.


Family Relationships and the Power of Affinity

Michael Fassler
Michael Fassler

It never ceases to amaze me how family members in some family enterprises are able to function with relative ease while communicating and making decisions. Their ability to function this way results in uplifting family relationships along with enterprise growth and continuity. An observation about families with this level of functioning is that they have a high degree of affinity for one another – a natural liking for one another.

A high degree of affinity among family members is often not the case. This may cause family members to function with relative difficulty as they govern their family enterprise. However with deliberate effort the opportunity remains to overcome these difficulties. By family members rallying around some common purpose, they are often able to engage in rewarding family relationships along with growing and continuing their enterprise.

To begin, accept the reality that just because family members share the same genetics and grew up in the same environment, that does not necessarily result in a high degree of affinity. There is going to be diversity in beliefs, behavior, talent and interest among family members. Affinity is a natural occurrence, you cannot mandate or will it into existence. However, the following actions can help what affinity exists to express itself:

  • Maintain an ongoing dialogue to uncover (or discover) some level of shared purpose for working together.
  • Acknowledge one another’s contributions within the family and the enterprise as they are made and express gratitude for the impact they are having.
  • Through assessment and study, develop a basic understanding of your own and other family members’ behavioral tendencies. This understanding can lead to increased acceptance of other family members and can help you manage your own behavior as well.
  • Remind yourself that your family enterprise is a group of people working together. To be effective as a group there are times when self-interest must be secondary to the group’s interest.
  • Add structure to conversations and decision making whether they are in the realm of family, management or ownership. Both informal and ad hoc communication and decision processes can get in the way of productive interactions.
  • As your family and your enterprise evolve, know that evolving your governance process will contribute to rewarding relationships, growth and continuity.

And one final thought: Yes, when there is a low level of affinity productive interactions can be really difficult work. The pay-off is protection of relationships with family members you love.


Intentional Communication

Jennifer Pendergast
Jennifer Pendergast

Too often we fail in our desired communication.  We often believe this is due to failure on the part of the recipient to accept our message.  And, sometimes, we may see failure on our part to deliver the message.

The more intentional we can be about substantial conversations, the more likely we are to achieve our desired outcome.  But, that begs the question – do we always know what our desired outcome is?  When entering into a substantial conversation, how often do we take the time to prepare ourselves?

The importance of intentional communication struck me over the holidays when I had the opportunity to simultaneously spend time with my parents and my teenage children. As I thought through my interactions with both, I realized that each generation was in a part of their lives that colored their communications.

Many teenagers desire in their communication with their peers is to be liked. So, that impacts how they communicate.  On the other end of the age spectrum, elders (parents, superiors at work) often have a desire to educate in their communications, to share the wisdom of their experience and prevent others from making similar mistakes.

While each of these intentions is real and important to the speakers, often they are delivered in a way that doesn’t achieve the desired outcome. Teenagers who desire to be liked are often evasive in their communication, not committing to a point of view or not being honest.  This can backfire, getting them into situations where they can be labeled as dishonest or where they have not been true to themselves and their values.  With elders, the desire to educate can often be perceived as judgement or criticism.  In both cases, speakers have failed at achieved their desired outcome.

As a result of observing this situation, and my frustration at reacting to communications from both generations, I decided to do an experiment for one week. Before I spoke in what I term a “substantial conversation” (meaning one where I sought an intentional outcome), I would stop myself to ensure that I was clear on:

  1. What my intention was in communicating. (Was it really to help someone else or was I venting?)
  2. What the desired outcome was of the conversation. (Did I just want to be heard or did I want something to change?)
  3. What was the likely receptivity of the recipient. (Would they be open to my message, discount it or ignore it?)

It was a very interesting exercise. I found that in the instances where I was able to stop myself to plan my communication (which wasn’t every time, I’m sad to say), my communications had a much better outcome.  I was clearer on what I was trying to accomplish.  My message was better prepared.  And, I set up the communication in a way that the speaker was likely to be more receptive.  In several cases, after thinking it through, I chose not to communicate at all because I realized that nothing good would come of that communication.

Families who are in business together have great needs to communicate effectively – it affects their relationship as well as their success in business.  Yet, they are often the most challenged due to unaddressed baggage or hurt, complex power dynamics and inability to “get away” from each other if needed.  Learning how to communicate intentionally is a process or skill that benefits families greatly on a one-on-one level as well as in planning group interaction. And like any skill, it requires a lot of practice to perfect.

Try your own intentional communication experiment and see how it works for you. (And if you figure out the key to conversing with teenagers, please share it with me!)


Keeping Promises

JoAnne Norton
JoAnne Norton

On a long cross-country flight, I sat next to a woman who was involved in her family’s business and she shared her family’s fascinating story. Working with a consultant, her family had put a lot of time and effort into creating a family constitution as well as policies, procedures, and protocols. She and her husband, his sister and her husband, as well as the eight cousins—who would all one day be owners—got along famously and had great fun designing the documents.

Then sadness crossed her face as she confided, “As wonderful as our agreements were, and you should have seen the celebration we had when they were ratified, the documents were never taken seriously by the senior generation. The new policies were ignored, and the rest of us felt betrayed. We had spent so much time and money on the process, and now my husband doesn’t speak to his sister, and my children no longer get along with their cousins.”

As the plane descended through the clouds the woman said, “When you work with families like mine, please tell them how important it is to honor the agreements they create. It just takes one little snag to unravel the whole thing.” I assured her it wasn’t too late to fix the situation, and I urged her to reconnect with her family business consultant.  I told her she might want to suggest a meeting with the senior generation to discuss how best to handle the breach of trust that had taken place. Her family could also take a second look at the documents to be certain they weren’t too constricting, but most importantly, they needed to start communicating again.

As we walked toward the terminal together, she said she would take my advice if I would take hers: she would call her consultant if I would remind families to keep their promises to each other.  When we write family agreements, we have to be sure they are promises we can keep, so if promises have been broken, we need to keep the channels of communication open.


Handling Inevitable Conflict in Family Business

JoAnne Norton
JoAnne Norton

Even though conflict is 100% predictable, completely unavoidable, and decidedly uncomfortable, many family owners avoid having disagreements at all costs. They don’t realize that smiling sweetly and yet again swallowing bitter bile only causes resentments to grow and unresolved issues to fester. Putting issues on the back burner causes emotion to boil over—probably at the most inopportune time.

An old axiom to remember is: “Choose your battles wisely.” Ask yourself if the conflict is a big deal in the first place and really needs to be addressed. It helps to remember Thomas Jefferson’s advice: “When angry, count to ten before you speak. If very angry, a hundred.” Screaming and yelling when you have a conflict with a family member is guaranteed to make a bad situation worse. Wait until you have calmed down or maybe even slept on it before broaching a sticky subject in your family business.

If the shoe is on the other foot, and your sibling is screaming at you, heed the advice of famed psychologist, Murray Bowen, who recommends in Family Systems Theory: “Don’t attack; don’t defend; don’t go silent; just remain neutral.” Bowen taught that screaming only escalates the fighting, but not saying anything at all could worsen the situation too.

If your cousin begins to lose her cool, agree to talk about the issue later when both of you are not in the heat of the moment. You will have a much better opportunity for successful resolution when you have two calm, composed people who are honestly and openly sharing their concerns. Carefully listening and paraphrasing back to each other what has been heard can be most productive.

In my family, we have a wonderful expression: “No matter how thin the pancake, there are always two sides.” Sometimes the solution is serendipitously obvious when each person is heard and feels understood. Family relationships are some of the most precious sources of happiness in our lives, so learning to deal with conflict constructively and confidently is worth the time and effort.


How Diverse is Your Family?

 Joe Schmieder
Joe Schmieder

Every family contains some level of common background, political and religious persuasions, and perspectives on business and family life. One fourth-generation family business in the Midwest is identified with many shared interests, including Catholicism, Polish heritage, Loyola Family Business Institute, Democratic Party, Chicago White Sox and Pulaski Days!

However, there are some family members who have opted to diversify their views, lifestyles and career pursuits. The more common are family members’ interests, the more homogeneous is the group. The more diverse, the more heterogeneous is the group.

There is no right or wrong answer.

It is only natural that the larger the family grows, the more diverse it becomes.  Spouses (in-laws) help to introduce diversity since they have often lived in different locations and been brought up in different family situations. While we find many family members still living in a rather homogeneous family group, many families are moving towards greater heterogeneity. This can be a healthy factor, but can also create tension that requires greater sensitivity, acceptance and creativity to take advantage of the greater diversity.

Acceptance and understanding of those who choose to pursue other paths can determine whether or not a family business continues for multiple generations. Celebrating diversity and learning how to take advantage of the different skills and perspectives is more likely to produce a harmonious family.


Splitting Roles

Chris Eckrich

We often talk about the many hats each person wears in a family business.  On the business side, one individual may hold the titles of Chairman and CEO, or CEO and COO.  On the family side, one person can serve as both the Family Council Chair and Education Committee Chair.  Individuals that take on leadership in multiple roles in this way are to be greatly appreciated, as with multiple leadership roles come multiple responsibilities.

A challenge develops over time when the “multiple hat”-wearer begins fusing the roles and sees all of the accepted responsibility as “just my job.”  His or her ability to differentiate between the two–or more–roles may become lost over time due to task familiarity.

As succession approaches and it’s time to transition these responsibilities to others, it can be a bit perplexing as to how the various roles should be split.  Without clarity around this question, when a shift is made to allow different individuals to take on the newly split roles, role confusion and frustration are likely to occur.

A quick example:  Arnold had occupied the position of CEO and Chairman.  As Arnold neared the age of transition (in his mid sixties), he determined that the business would be best served by keeping his role as Chairman, while his daughter Alyssa – who had demonstrated much competency over time and earned the position – assumed the role of CEO.  Over the many years of holding both the Chairman and CEO roles, Arnold became quite used to behaving in a certain way. With the new split in roles, he found himself stepping on Alyssa’s toes inadvertently which caused both confusion and conflict.  This caught Arnold by surprise – not a lot of planning went into the role division as they just figured they could work it out over time due to their close relationship.

New approach:  Arnold is suddenly struck by the lack of formality he has given to this situation.  He initiates an exercise whereby each role would be defined clearly in terms of its expectations, responsibilities and reporting relationships.  He includes Alyssa in this process and they work through areas of confusion by asking their Board members for input in the job descriptions they are working on.  Once they have agreed on their positions and reporting relationships, and how they will communicate about the business (frequency, content), the tensions seem to melt away.  This allows each of them to function independently and motivates Arnold to give Alyssa space to be the CEO while he focuses on being the Chairman.

Arnold’s lesson: Just because you are family does not mean you always have to act like it.  Splitting roles, whether they are family or business roles, requires forethought and advance planning.  By approaching the splitting of long standing roles as a professional exercise, Alyssa and Arnold enjoyed a much improved working relationship, which made life easier both at work and at home.


Level the Playing Field: Bring All Voices into Meetings

Anne Hargrave
Anne Hargrave

Have you ever walked out of a meeting thinking that it went very well, only to learn later that many in the group were frustrated and discouraged?

Or, have you worked hard to formulate your thoughts for a meeting and then just couldn’t find an opportunity to voice them?

The differences between extroverts and introverts in planning and decision making processes have a direct impact on how people feel about their roles, their ability to contribute and, ultimately, the success of the endeavor.

Adam Grant of Wharton, Dave Hofmann of the University of North Carolina at Chapel Hill, and Francesca Gino of Harvard conducted a study within 57 locations of a pizza chain to determine the impact on profitability of extroverted leadership when the employees were passive versus proactive.

They found that extroverted leadership was linked to significantly higher profits when employees were passive, but significantly lower profits with employees who were proactive.  In Gino’s Harvard Business Review article about the study, she notes that in stores with passive employees, those led by extroverts achieved 16% higher profits than those led by introverts.  However, in stores with proactive employees, those led by extroverts achieved 14% lower profits. The results suggest that introverts can use their talents more effectively with proactive team members because they are more open to those who champion new visions, promote better strategies and introduce changes.

Understanding and managing the dynamic in a group is essential to being able to have effective discussions. Extroverts have a tendency towards group interaction, talking to think and sharing ideas openly — they gather their energy from the group. Introverts don’t like to be interrupted, often prefer quieter environments and need to think before taking action or speaking. They gather their energy with quiet time, reflection and focus on topics of importance to them.

Structuring family business meetings to take into consideration the differences between introverts and extroverts levels the playing field, and provides a platform for everyone to be heard.

As a new client recently said, “We are listening to each other better, but we need to quiet the talkers so that they can hear the other great ideas!”

What can you put into place to encourage everyone to have a voice?

Here are a few ideas that have worked for other families:

  • Learn about each other’s personal style. Take an assessment like the Myers Briggs and learn about how people gather information, make decisions, gain energy and deal with the outside world.
  • Provide the materials for a meeting well in advance of the meeting.
  • Agree to read meeting materials in advance. Consider providing a “pre-meeting” time on the agenda for those who have a tendency to do it at the last minute.
  • Identify specific questions in an agenda for those who need time to reflect and collect their thoughts.
  • Offer an opportunity for meeting participants to ask questions in advance of the meeting to obtain clarity on a proposal.
  • Open the meeting by asking each person in the room to answer a question, setting a time limit for the answer. Use the opportunity to get to know each other better, share insights and practice listening to each other.
  • Have the group leader or facilitator actively create an opportunity for each person to speak, while encouraging the louder voices to enjoy the listening process.
  • Break into small groups, even twosomes, to bring out the thinking of those who may be less apt to speak up in a group scenario.
  • Offer opportunities for participants to write down their thoughts and have the facilitator read them out anonymously.
  • Have each person speak directly to the facilitator, not each other, if the topic has a lot of emotion attached to it. Invite others to ask a question of the speaker, but direct it to the facilitator.
  • Take breaks frequently to allow time for those who need to gather their energy and process ideas.
  • Focus on creating a valuable discourse, dig deep into insights and allow for thoughtful debate.

Let us know if these ideas work for you and what you have tried to bring everyone into the room effectively!