Big deal over little issues

In the life cycle of a family enterprise, contentious issues will arise. These include naming one sibling over others as the future business leader, appointing outsiders to the board, planning to lower family dividends so as to invest in a new business opportunity, and instituting a policy on family employment or prenuptial agreements.

It's inevitable that some family members won't like these decisions, so family business leaders can work in advance with their advisers and board members to frame family discussions in a way that minimizes conflict. (Of course, some business leaders opt to simply ignore these matters—but that's another story.)

Yet even the most proactive planners get can blindsided. When business and family are intertwined, conflict can occur when you least expect it.

I know of a few business families who dealt with dissent that centered on what most objective observers would consider a trivial matter. Oddly enough, in some cases a dispute flared up over an activity that was supposed to be fun, such as a group vacation.

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Spats like these may be a symptom of a larger problem. For whatever reason, one family member, or one branch of the family, feels underappreciated and reacts by picking a fight.

What can you do to avoid this? Here's one suggestion: Don't just communicate—overcommunicate. There are many ways to do this, such as family newsletters, family websites, family meetings, company annual or quarterly reports and group e-mails. It's a good idea to combine several of these methods to be sure everyone gets the message. Send multiple “save the date” reminders before family events. If someone doesn't reply, follow up.

Another way to ensure everyone feels included is to encourage broad participation whenever possible. Rotate membership on planning committees. Be sure all your e-mails contain a request for input. If your company is holding a grand opening or sponsoring a charitable event, invite your extended family to attend.

Requests for participation and input reinforce the message that all family members are valued. While there is some information that must be restricted (shared only with board members, company employees or family members over age 18), it's important to explain why that information is confidential.

Encouraging participation from your extended family gives you a chance to discover someone's hidden or dormant talent, and to learn something about your family that you didn't know before. And it can help prevent inconsequential disagreements from morphing into major disasters.

 

 

 


 

 

 

Copyright 2012 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.

About the Author(s)

Barbara Spector

Barbara Spector is Family Business Magazine's editor-at-large.


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