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The uniqueness of family business conflict and an action plan

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By Kathy Goodman, MS, and Karen LaRose, MBA, MS

Conflicts that arise in family businesses are formed by long family histories and patterns of behavior and multiple identities, and are often characterized by communication breakdowns and emotional upheaval. They are costly emotionally, financially and relationally to family members, nonfamily employees and ultimately to the longevity of the business itself. When conflict arises within this context, it is impossible to separate the family relationships from the business relationships.

Because family business disputes can be especially emotional, how can we most effectively engage with this type of conflict? Given the inevitability, complexity and dynamic nature of family businesses, it is critical to put in place a facilitation model that promotes constructive ways of engaging with conflict, preferably before it arises. As Benjamin Franklin said, “An ounce of prevention is worth a pound of cure.”

Conflict is neither good nor bad. Conflict challenges us and presents an opportunity for growth, both individually and as a group. Outside consultants can uniquely act as facilitators offering a safe space where confidentiality can be honored and underlying causes identified, which forms the foundation for collaboratively created sustainable change. The goal of this model is to move from destructive to constructive resolution processes, creating different future interactions. The model includes situation assessment and analysis, individual coaching, communication facilitation and training, mediation and team building, all of which establish a strong foundation for managing family business conflict.

Two neuroscience-based assessments are particularly useful in sorting out family business disputes — the Emotional Intelligence Assessment (EQi2.0) and the Neethling Brain Instrument (NBI). Emotional Intelligence (EQ) “involves the ability to monitor one’s own and other’s feelings and emotions, to discriminate among them and to use this information to guide one’s thinking and actions” (Salovey and Mayer, 1990). The EQi2.0 Assessment measures 15 competencies that influence the way we perceive and express ourselves, develop and maintain social relationships, cope with challenges and use emotional information in an effective and meaningful way, allowing individual strengths and areas for growth to be identified. The Neethling Brain instrument measures the extent to which a person prefers certain types of thinking or mental processes to others. It is not a measure of skills and abilities, but rather of preferences.

Using the EQi2.0 and the NBI in tandem allows us to weave how people feel with how they think. This forms the basis for informed coaching, facilitation of communication and team building, all of which are in service of building a successful family business and family unit. Used together, the EQi2.0 and NBI assessments give a deeper understanding of the dynamics at play in family business disputes. This critical understanding informs strategic next steps.

This topic is near and dear to our hearts. At one time, each of us owned our own family business and experienced this complexity first hand. Simply put, it is difficult to be in a conflict with your brother at work and then face Thanksgiving dinner with family and unresolved conflicts. As a part of studying conflict we have learned that sometimes simply understanding more about ourselves and others, how we feel and think and how they feel and think allows us to gain perspective, recognize what is going on and to be responsive rather than reactive.

Kathy Goodman and Karen LaRose both graduated from Columbia University with an M.S. in Negotiation and Conflict Resolution. LaRose focused her thesis on family business disputes as dynamical systems, while Goodman focused her thesis on the centrality of emotions in conflicts. You can contact them at www.accordconflictresolution.com.

Kathy Goodman                                                     Karen LaRose

Kathy Goodman Headshot                   Karen LaRose Headshot

Copyright 2015, K. Goodman & K. LaRose. Teachers are free to copy these materials for educational use in their courses only, provided that appropriate acknowledgment of the author is made. For permission to use these materials for any other purpose, contact the author.