Your guide to minimising conflict in a family business

Posted on 16th March 2016

Over the last 8 years we have worked with many different types of businesses; small, large, private sector and public sector in a variety of industries.  Conflict can and does happen in all businesses but it becomes much more complicated if those involved are not just colleagues; they are related.

Being part of a family business can seem like a dream come true for many people. The opportunity to work alongside your nearest and dearest to pursue your goals and create financial independence is something that can have huge appeal, so it’s no surprise that Harvard Business School has reported that family firms account for two thirds of businesses across the globe.

Regardless of how close your family unit may be though, there are unique challenges that come hand-in-hand with working alongside your relatives. It might sound good on paper, but when you have to line manage your brother and answer to your daughter-in-law, all before 9am, cracks can very easily start to appear.

It’s vital that you lay the right foundations for avoiding unnecessary conflict. Here, we share some of our top tips from our experience.

Utilise official channels of communication

It’s natural to occasionally want to discuss work outside of the office, especially if you’re socialising with people who play an active role in the projects that you’re working on. It’s important to think about the potential consequences though. Imagine that you tell your family members about some big upcoming changes within the business over Sunday dinner.

By the time they get to work the next day, they’ve already digested the information, and they’re eager to discuss the details with their colleagues. Your other members of staff are going to feel out of the loop, and this can only lead to despondency. Schedule meetings where all stakeholders can be present, and stick to other topics of conversation when socialising with family.

Create a succession plan

You might plan on handing your business over to your children when the time comes for you to enjoy your retirement, but making assumptions is never wise. They might have other plans, or they could quite simply be lacking the skills required to take over.

No one wants to think about what will happen when they’re no longer around, but if you want your business to survive and provide opportunities for your family for years to come, then it’s essential that you carefully consider what the management structure will look like in the future.

Ensure everyone knows who they should answer to

Think about the structure of traditional businesses. Employees have line managers, they know who’s in charge, and where they should turn to for guidance and management. Just because the majority of your staff happen to be relatives, it doesn’t mean that you should neglect the creation of an organisational hierarchy.

Of course, this also applies for non-family employees. They need to know who they can go to when they have questions, who they should be taking direction from on a daily basis, and who will be carrying out their important HR-related discussions, such as performance reviews.

Seek out external HR assistance

It can be hard to make impartial, strategic decisions when you’re dealing with family members. As your business grows, it makes sense to bring in some external HR help. This will give you a sounding board for your worries and concerns, you’ll be able to ensure that you’re acting in accordance with the law, and you’ll get guidance on how to handle difficult situations.   They may even be able to mediate when needs be!

Our retainer clients love having the peace of mind that comes with knowing they can just pick up the phone and talk to us about their latest challenges, whether it be a small issue that they want to nip in the bud, or something more complex that they need to get right.

Want to discuss how we could work together, to make sure that you get timely and confidential HR advice? Give us a call today, and we can talk you through your options, without any kind of obligation.  As always our number is 01536 215240.

 

Emma Wynne Character
Written by:
Emma Wynne
Managing Director