Understanding conflict in the family business (Part 1)

Otis Baskin
Otis Baskin

Family ownership is unquestionably the most frequent model of business ownership in the world after the initial founder. Yet, it is almost universally feared because of the perceived likelihood of internal conflict. Too often bright young people who grow up in the legacy of a business owning family reject the opportunity offered by their business because they are afraid of conflict with other family members.

I have encountered wonderful family-built enterprises where the parental owners sell their business out of fear that it will be the source of family conflict in the next generation. Some current generation owners attempt to create rules against next generation family members working in the very business they want to pass on as an inheritance.

Is this fear unfounded? Certainly not!

Conflict in a family is only natural and therefore, it is inevitable in a family business. Siblings in every family grow up attempting to distinguish themselves as individual members of the family unit. We don’t want parents, teachers, or friends assuming that we are just a “copy” of our brother or sister. The result is that we, as siblings, grow up emphasizing our differences and our families reinforce that behavior to assure us that we are valued for ourselves.

All good things, since it helps to produce independent and responsible adults. But, when siblings and cousins continue that behavior into their business relationships the results can be disastrous infighting and dysfunctional ownership. The challenge is to understand this behavior and accept conflict as a natural phenomenon. In other words, rather than allowing the fear of conflict to paralyze the future of a great family business we should instead embrace the reality of conflict and learn to manage it in productive ways.

Learn to accept our differences as strengths to support a growing enterprise that needs many different talents and refocus our energies on the common values that are also the legacy of our family.


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