A primer on tackling sticky issues
Managing Conflict in the Family Business
By Kent Rhodes and David Lansky
Palgrave Macmillan, 2013 ⢠107 pp ⢠$23
The most harmonious enterprising families are those who have learned to manage conflict rather than avoid it. This concise guide, written by two members of the Family Business Consulting Group, offers a menu of conflict management tools based on the authors' knowledge of psychology, management science and corporate governance.
In their introduction, Kent Rhodes and David Lansky refer to Managing Conflict in the Family Business as “a primer” aimed at helping readers to recognize why family business disputes occur, understand why some common ways of coping with conflict are actually counterproductive and develop more effective ways of working through a disagreement.
The authors include tips—conveniently pre-sented as bulleted and numbered lists—for resolving classic family business conflicts, such as those related to compensation, sibling rivalry and entitlement.
In just four chapters (plus an introduction), Rhodes and Lansky cover a host of important topics. For example, using Renato Tagiuri and John Davis's classic “three-circle” model, they explain the challenges of balancing business ownership, family membership and business management. They offer suggestions for how to move from conflict avoidance to open discussion of sensitive issues. They explain why it's better for two people in conflict to discuss the point of contention among themselves rather than complaining to a third person. And they suggest some techniques to improve communication and listening skills.
The book also describes policies, procedures and governance structures—such as family meetings and family councils—that can help families deal with disagreements. “The process of developing these governance structures can in itself help solidify family cohesion,” Rhodes and Lansky write. “If the family works together to successfully create agreements that have broad acceptance, members have an increased sense of accomplishment and a clearer, widely shared vision for themselves and for the business.”
The authors note the importance of a widely shared mission and vision for the family and the business. They also explain that the mission and vision, as well as specific policies, should be considered living documents that must be re-examined and revised as the family and business grow and change. “Policies themselves can be a source of conflict” if they are not revised to reflect new realities or if they are circumvented to accommodate one family member, Rhodes and Lansky caution.
The book ends a bit abruptly, with a note that some conflicts—such as those involving substance abuse—are difficult to resolve. A concluding section, perhaps one suggesting some action steps for the reader, would have made for a stronger ending. Nevertheless, Managing Conflict in the Family Business offers sound advice that has worked for many families. “All conflicts can be managed,” Rhodes and Lansky assert, “even though they may not be quickly or easily resolved.”
Interviews with families yield insight
Entrepreneurship Across Generations
By Eleanor Hamilton
Edward Elgar, 2013 ⢠189 pp ⢠$110
In her study of multigenerational entrepreneurship, Eleanor Hamilton of Lancaster University Management School in the U.K. focuses on interviews rather than data. Entrepreneurship Across Generations details her conversations with the founding and second generations from five business families in northern England, as well as conversations with two additional families before her formal research began.
By concentrating on how family members speak about the family and the business, Hamilton aims to uncover how entrepreneurial identities are formed. One son, for example, recalls a lesson he absorbed as a child: “You could never ever quit, and you could never ‘not do,' ever. So are you going to do it? Yeah. Nothing you can't do, nothing you can't do.” The patriarch of another family describes a reluctance to step back from the business to make room for the next generation as “selfishness.” “Old fellas should be out of the way,” he says.
Hamilton explains that her interest in family enterprise is a personal one, stemming from her husband's construction business, which he founded shortly after the couple met. In discussing the company's challenges during a recession in the 1990s, Hamilton and her husband found themselves wishing they had a senior generation with a business background and wondering what they might have done differently if they had been able to learn from elders' experience.
Hamilton's study emphasizes inter- and intragenerational learning. “In researching succession,” the author notes, “there has been more interest in the management process than in any learning process. I argue that an examination of dimensions of intergenerational entrepreneurial learning, in the sense of learning about entrepreneurial processes and behaviours, is central to understanding family business.”
She also points out the ways in which the family and the business are “entangled together”: “For many of the second generation their childhood was marked by no separation, no boundaries between private and public spaces, the family and the business.” The business provides “safety and solace,” “lifeline and shelter,” but it also puts a strain on family relationships.
The researcher is upfront about her subjectivity. She candidly describes her reaction when she realized that her initial research plan lacked a female perspective. “To my shame I had been captivated by the entrepreneurial discourse which assumes a male norm and an individualistic perspective,” Hamilton writes.
Hamilton describes the journal that she kept during the research phase and her recording of her thoughts before, during and after the interviews. These include a description of the surroundings (“Ushered into the sitting room, large comfy sofas, floral patterns, deep plain carpets, mahogany furniture”), the mood of the interview subjects (“[The son] is much more self-conscious than his father, I sense that he feels I am judging what he says, I have to tell him more about ‘what I want to know about', he is not comfortable until he feels clearer than that. Then he starts to enjoy himself.”), and even mundane details of getting to the subjects' homes (“Good directions, found my way, no problem and there were the green gates.”).
The researcher does not name the families she interviewed, nor does she give the names of their enterprises. She refers to the families as “the Engineers,” “the Grocers,” “the Large Group,” “the Cheese Makers” and “the Insurance Brokers.” The families she interviewed in the two preliminary conversations are called “the Printers” and “the Farmers.”
Hamilton notes that the Engineers, who started their business in their home after the husband was laid off at age 50, were taking a big risk. “What a difference this must have been,” she writes, “for a couple who had spent all their marriage inhabiting entirely separate symbolic and material spaces, to move to a now entirely interwoven space of work and home, the separate spheres utterly disrupted.”
The author observes that nearly all of the senior-generation interviewees required their children to work outside the family business. She refers to the next generation's “entrepreneurial preparedness” and comments that their desire to grow the family business “came from early childhood participation in the business, which influenced participation in subsequent adult work.”
One conclusion Hamilton draws is that there are interconnecting “continuities and discontinuities” in the succession process. The next-generation leaders perpetuate the business, but they also take a different approach from their parents and reinvent—or, as she puts it, transform—products and processes as necessary to respond to changing circumstances. Yet despite their differences in the way they run the company, the author notes, parents and their children tend to tell the family business story in the same way, perhaps “as a vehicle for communicating and retaining something coherent, a form of stability in terms of identity rooted in a past experience.”
A caveat for lay readers: Although it focuses on narratives, Hamilton's book is an academic research study, and most of the text reads that way. The book opens with an extensive review of the academic family business literature, plus the author's rationale for choosing her area of focus and her particular approach. She often uses terminology rooted in previous academic research, like “circles of attachment” and “identities-in-practice.” I found myself wishing that Hamilton had taken a journalistic rather than an academic approach to her reporting and that she had quoted her subjects more extensively.
Because of the small sample size and the fact that the families interviewed were all based in the same geographic area (although the Grocers were an Asian family who emigrated to England from Uganda), it's unclear what broad conclusions can be drawn from this study. But the entrepreneurial family members' comments are interesting. The interview subjects' devotion to their families and their businesses is evident in their comments. This dedication is clearly an important factor in their success.
Copyright 2013 by Family Business Magazine. This article may not be posted online or reproduced in any form, including photocopy, without permssion from the publisher. For reprint information, contact bwenger@familybusinessmagazine.com.