Friction in the family

It’s not always easy being a family business.

“Being in business together—mixing work and finances with family relationships—can be full of peril,” said Lance Woodbury, a Pinion principal who specializes in coaching family businesses as they work through succession and estate planning issues.

“Being family can sometimes bring out the worst of people in business together,” he said.

Disagreements over day-to-day operations, career frustrations, unfulfilled promises, hurt feelings—all kinds of negative emotions can create simmering conflicts and unresolved anger among family members.

“There are always some scars,” Woodbury said. “But how deep those scars run is within your control as a family.”

Those wounds often appear when a family is trying to determine the future of the family business. Woodbury helps family members understand how constant communication and the ability to resolve conflict are critical to protecting and passing on legacies while ensuring the business’s future success.

Easing the friction

Here are some steps Woodbury has found that can help ease the discord that can hurt both a family and its business:

1.         Recognize all families have some amount of dissension. Conflict might stem from old grudges, divided siblings, substance abuse, stressful marriages or divorce. Resentment may fester over heavy financial liabilities the senior generation may have passed on to the younger one. Tension and conflict breed trouble. It’s not a sign of failure to seek help in improving or minimizing family problems, especially if they impair the business.

2.         Learn how to handle negative emotions. Sometimes a coping mechanism can be as simple as focused breathing or exercise. Some people perform certain rituals to prepare for emotionally taxing circumstances. For example, they might say a prayer, get a pep talk from a trusted friend or write out their hopes, concerns or the benefits of an improved relationship.  Another strategy is to shift your attention away from certain feelings by thinking of positive memories. You can also try reframing how you see a situation and pausing to take a third-person view of your current state.

3.         Get better at sharing information. Conflicts often arise through poor communication. To work well together as partners, it’s important that family members understand key issues affecting the business. Whether your responsibility is grain marketing, finances or equipment, take time to share the basic issues, problems and projections with members of the family business. Doing that, Woodbury said, helps reduce the information gap and builds a shared perspective.

4.         Bring in a neutral third party. Better family interaction doesn’t happen without intentionality and focus. “Just like you take concrete steps to improve yield or reduce expenses, you must have encouragement and embrace discussions that reduce uncertainty and create clarity,” Woodbury said.  “Someone—you, a sibling, a parent or a spouse—has to champion the goal of improving the ‘family’ part of a family business, and their work begins by getting people to talk.

 The facilitator doesn’t have to be the operational leader or have all the answers. He or she just needs to be given the authority to encourage conversations that will lead to making your family business better.

5.       Consider working with someone outside of the family to identify and handle ways to interact with members of the family business. In his work with succession planning, Woodbury helps families tackle difficult discussions, but he also believes other outsiders can inspire the family to better behavior and results.

“The presence of someone who wasn’t raised in the household, doesn’t have a long history of interaction or isn’t dependent on a family relationship can cause family members to interact differently,” he said.

That can include other business owners and friends who have dealt with similar challenges. It might be an important non-family employee. A key adviser to your family business, such as your accountant, lender, attorney, even your crop adviser or veterinarian, can offer a helpful perspective. Not only do these outsiders see other family-owned businesses in the course of their work, but they often are members of professional organizations that address common business issues. Moreover, their presence in a meeting can inspire better behavior among family members.

As you get better at acknowledging and resolving family conflicts—or at least learn how to improve your own interactions—you will begin to improve your relationships inside your family business. Acting sooner rather than later will go a long way toward making better decisions, enriching your family and ultimately elevating your business’s performance.

Editor’s note: Maxson Irsik, a certified public accountant, advises owners of professionally managed agribusinesses and family-owned ranches on ways to achieve their goals. Whether an owner’s goal is to expand and grow the business, discover and leverage core competencies or protect the current owners’ legacy through careful structuring and estate planning, Irsik applies his experience working on and running his own family’s farm to find innovative ways to make it a reality. Contact him at [email protected].