- April 7, 2023
Running a family business can be both wonderful and challenging. But it rarely gets more challenging than during a succession process.
As a family business consultant and psychologist, I’ve seen more than my fair share of issues arise during this process. Here’s an example: I was recently asked to provide leadership consulting and coaching to a family-owned business. The current owner/CEO was structuring a succession plan to include his two nephews, who have worked for the business for a long time. The cousins — now in their late thirties — had grown up together and were very close. They had even gone to college together and were roommates, and later, were in each other’s weddings. The cousins had always expressed great affection and respect for one another. Until the family business got in the way.
Whenever leadership decisions needed to be made regarding the company, the cousins were at odds with each other. Their viewpoints were often diametrically opposed to one another, and their discussions frequently became heated. Both expressed concern over the other’s perspective and behavior. And worst of all, their differences at work were negatively impacting their personal relationships, putting them in a consistent state of extreme conflict. When it came time to begin succession planning, this conflict caused obvious issues.
Conflict in a family business can often be more intense and intractable than in a regular business because of the personal and emotional connections between family members. In short, it’s an identity-based conflict that carries far more emotional heft than a “normal” conflict.
In a family business, the lines between personal and professional relationships can be blurred, and conflicts that arise within the family can quickly spill over into the business, or vice versa. Family members may have deeply ingrained patterns of behavior and communication that can make it difficult to resolve conflicts in a constructive way. Even in the case I explained above, where the cousins were good friends, it doesn’t mean they acted and thought the same way about everything. In some family businesses, family members may have conflicting values, beliefs, and goals that can create tension and disagreement, even in the absence of a specific issue. These dynamics can lead to resentment, power struggles, and a lack of trust, which can make it challenging to work together effectively.
I always recommend families create family governance rules when dealing with succession planning. And it should be done immediately, just in case something happens to the current leader prior to the succession being fully planned out. These rules are essential, but there’s more to it. In the case of the warring cousins, I took the following steps:
Conflict is common in family businesses, but with the right intervention and approach, rifts can be mended — and the business can continue to be successful.