Family Biz Conflict and how to handle it

FamBiz: Conflict is NOT an option

Miami: FFI at 30

I am currently in Miami, having just spent the past three days at the Family Firm Institute’s annual conference, during which attendees were continually reminded that the organisation is 30 years old.

I recall that CAFÉ, the Canadian Association of Family Enterprise recently celebrated its 30th anniversary as well.

Also early in its fourth decade is the Three Circle Model (Family, Business, Ownership), co-created by John Davis of Harvard. Davis received what amounts to a lifetime achievement award from FFI at the Gala dinner last night.

I finally got to meet him in person and shake his hand afterward, and gave him a belated thank you for not only allowing me to quote him in my book a couple years back, but mostly for replying to my emailed request for that permission within an hour, which surprised me at the time.

Having now met the man, I am no longer surprised.

 

Conflict comes standard

FFI conferencs are filled with so many people and learnings, and I was reviewing some of my notes last night trying to decide on this week’s blog topic. I settled on Conflict is NOT an option.

But I met yet another experienced practitioner this week who happily noted that he rejects 90% of potential client families who come to him in full blown conflict mode. He doesn’t need the aggravation and much prefers to work with families in preventative ways.

But the potential for conflict in family business situations remains ever present. If this sounds familiar, you may have read something similar in this space a few short weeks ago. (FamBiz Conflict: Resolve it, or manage it)

One breakout session that I attended was moderated by one of the authors of Deconstructing Conflict, mentioned in that blog. She repeated that in any situation where family and business overlap, conflict is NOT optional. It will always be there, by default.

 

Even if you don’t want it

Go back a few decades and think about buying a car. Do you want power windows and power steering? Air conditioning? There were lots of options available that you could choose to add or not, depending on your wants and needs, and your budget.

These days, (almost) all cars come with all of those former options, and many more, as standard features.

And so it is in a family business, conflict comes standard, and you cannot even opt out of it! Recall the days when you could have an unlisted phone number, but that cost extra, to not be listed in the “standard” phone book (these days, what’s a phone book? Ask Grandma…)

So assuming that you accept that conflict is built in, what now? My take is that you acknowledge it and always be on the alert for where disputes might flare up, and try to get out in front of them.

 

Carving a Safe Space: Art vs Science

A common term for mediators and group facilitators is the “safe space”. An independent and neutral outsider comes in and creates a safe space for all parties to be able to share their concerns, wants and needs.

One of the panelists in the conflict session artfully pointed out that his task is always to “hand carve” that safe space. You cannot buy such a space at IKEA and assemble it out of the box.

This carving analogy fits quite nicely with my own assertion, which I made both in that post a few weeks ago and during the FFI session; there is much more art involved in facilitating group process than there is science.

 

Who I Am vs What I Do

Organisations like FFI are great at helping this young industry develop and share the science part of family firms, but the art in mediating conflict often comes down more to the “who I am” of the neutral third party than the “what I do”.

The work that one needs to do to become an effective third party is very personal and “internally driven”.

For me, coaching courses, mediation and facilitation workshops, and even Bowen Family Systems Theory training, have all been integral to my becoming more than simply competent to do this work and conduct these group processes.

They say, “practice makes perfect”, and while perfection seems too lofty a goal, practice certainly does make one “better”.

 

How to stay Calm in Family Business situation

“Calm-Fident” Advice for your Family

Sometimes the right word for something doesn’t exist, so we need to make one up. Okay, we don’t actually need to, but it can be a useful exercise.

On sports radio last week, a commentator was talking about a certain hockey goaltender and how his calm performances had helped his team get their season off to a good start. Right after uttering the word “calm”, he moved on to the fact that the team was quite “confident” playing in front of him.

That was when the “word” calmfidence sort of hit me, and it also fit nicely with some of the personal work that I continue to do, trying to become and even better advisor to legacy families.

(When I Googled “calmfidence”, I learned that while it certainly is not very popular or well known yet, I am not the first one to use it. If you also decide to do this, please say hello to Juneous for me.)

 

Bowen Family Systems Theory

Let’s get back to the idea of calmness as a key ingredient to helping a family. I am now into my third year of studying Bowen Family Systems Theory (BFST), and it has been eye opening to say the least.

I have already vowed to write a book on Bowen Theory as it applies to family business and wealth, because I have yet to find the book that I was hoping to find when I first took an interest in BFST.

That book is still in my plans, but it will be a couple of years away at best.

As any “amateur” Bowenite can tell you, there are eight concepts in BFST, and as some of those will surely note, being “calm” is not one of them.

So where do I think I am going to go with this? I am glad you asked.

 

Anxiety versus Calm

One of the over-riding issues that Bowen talked about throughout the eight concepts is anxiety.

When Bowen spoke of “Differentiation of Self”, which we might more simply call “emotional maturity” today, he regularly noted that those who are more differentiated (i.e. mature) can and do function well, even during times of anxiety.

Those with lower levels of differentiation or maturity will have their everyday functioning impaired during times of high anxiety.

Anyone who is part of a business family will certainly recognize that family discussions can be anxious times, and are often far from calm.

 

Bring an Outsider Inside

Advisors will preach to any family who will listen, that it is important to have an external person at the table to help them with these discussions, especially when important subjects like succession are on the agenda.

Most families prefer to keep things private, not wanting to air their laundry to an outsider, and also often assume that they alone are going through their particular difficult family situation.

They also recognize that an advisor who suggests bringing in an outsider is being self-serving, you know, like the barber who hints that your hair is getting a little long.

 

Bring in some Calm-Fidence

So here is where I want to bring things back to calmfidence.

When an outsider to your family enters the scene, there are two ways to quickly evaluate whether or not they will ultimately be useful to the family. You guessed it, they are “calm” and “confidence”.

This outside resource should bring a calm presence, no matter how much anxiety there is in the room, whether that anxiety is actually on the table, or hidden behind an elephant somewhere.

After a couple of meetings with the advisor/consultant, the family (or at least a significant portion of it) will begin to feel much more confident that they are on the right track.

But what if they are not calm, and the family does NOT feel more confident, you ask? Simple. Get someone else!

 

Too Important to Ignore

You’ve probably heard “the biggest investment most people make in their lives is buying a house.”

Families with a business, wealth, and a legacy to pass on are not “most people” though, and this is the biggest issue that they will ever face.

Inter-generation wealth transfer is not easy, and getting the whole family on board is the toughest part.

Find someone who gives you the CALMFIDENCE to get it done properly. Keep trying until you find them.

 

 

 

How to Choose a Family Business Consultant

There are many factors to consider when you are looking to find the kind of help that many business families eventually require. This usually arrives around the time that the family realizes that their leading generation will someday need to make way for the rising generation.

Most will have an inkling that they will need to do “something, someday”, long before they actually start to act upon those feelings, and that’s only natural.

 

Structural Issues

Often the impetus to act will come from a business advisor of some sort, like an accountant or a lawyer. In any inter-generational transfer, there are plenty of legal and structural issues that will need to be taken care of, for obvious reasons.

What remains less obvious to many, is that the legal and structural “paperwork” is only the beginning. These official documents deal mostly with the “what”, but very rarely get into the crucial details of the “how”.

If this is all news to you, there are dozens of other blog posts on this site that you can read to get my drift. For those who are already on board, I will now segue into the thrust of this post, about how to choose your family business consultant.

 

Don’t Allow Family Issues to Get Lost

Here are my Top 5 things to consider before deciding on who is best suited to helping you with these crucial matters:

 

  1.    Overlap of Business and Family

 Does the person that you are going to engage, to help lead your transition, truly understand that most of the key issues that you will be facing involve both the business AND your family?

A business focus without understanding the family issues is no better than a “family therapist” focus with no understanding of business and wealth.

 

  1. Business > Family       OR       Family > Business?

Do they come from a background where they naturally lean toward business solutions, or from one where family harmony is the driving force?

Which is more important to them, which is more important to you and your family, and is it the same for both? Should it be the same, or should there be a counter-balance? Some semblance of balance should not be overlooked.

There is no right or wrong here, but you need to comprehend this point.

 

  1.    Do they LISTEN, and to WHOM?

So many professionals who work with business families are used to taking orders form one PERSON (the boss) and the rest of the family are merely an afterthought.

When advising a business family, ideally the FAMILY is the client. That is a huge leap, and one that is never easy to make.

Some advisors don’t get this, and some can understand it in theory but find it impossible in practice. Beware the “yes man” advisor.

 

  1. Beware: “I have THE solution for YOU”

Recycling is great for your garbage, not so much for your family legacy. If your consultant arrives with lots of “ready-made” solutions that they have used with others in their experience, please ask LOTS of questions

Buying a suit off the rack is okay, but a plan for YOUR family’s legacy should be custom-made for YOUR family.

 

  1. There is no “Free Lunch”

Good professional advice is not free, and shouldn’t be either. Some providers, usually in the asset management space, will promise to do many things for their wealthy clients “for free”.

There is not necessarily anything wrong with this, IF you understand and accept the terms and conditons that go with that.

Buying based on “low price” is not recommended either, but understanding HOW advisors are compensated should not be overlooked.

 

IFEA “Seal of Approval”

In Canada, over the past several years a few hundred people have been through the multi-disciplinary Family Enterprise Advisor program and a couple of hundred have then gone on to become “FEA” designates.

As one of them, I have a certain bias, and look at the letters “FEA” as kind of a “seal of approval”.

The field is evolving and many professionals are trying to find ways to capitalize on the huge demographic wealth transfer that is now underway.

All FEA designates have been through a thorough program and a rigorous certification process.

Please do your homework, and choose well.

 

Thanksgiving and Who Needs Whom More

Happy Thanksgiving, Canada

Sometimes these blog posts are inspired by the time of year, and so on this Canadian Thanksgiving weekend I will share some thoughts on gratitude.

But a whole post on being thankful is really not my style, so I will also try to tie in another idea that has been ruminating in my head lately.

Last year at this time, I came across a post on Twitter, the contents of which I have shared verbally with a number of people. It was from David Chilton, author of the Wealthy Barber. (If you ever have an opportunity to hear him speak, do yourself a favour and go).

 

Spotlight on Gratitude

He posted something along the lines of “If you are healthy and you live in Canada, every day is Thanksgiving”. Amen to that.

Gratitude is a subject that entire books have been devoted to, and I know many people who need to be reminded of just how good we have it sometimes.

We can easily slip into complaint mode too often, with what could best be described as “first world problems”.

 

Process vs Content, Process vs Event

Last week I wrote about process versus content (FamBiz Conflict: Resolve it or Manage it?) but there is another comparison with process that people in the family business and legacy space like to talk about too, and that’s process versus event. (see Striving for a Succession Non-Event)

My challenge is now to try to tie this in to the Thanksgiving theme in the hopes of adding some coherence to this post. Here goes.

 

Who Needs Whom More?

When you were born, you needed your parents more than they needed you. As you reach the end of your days, you will very likely need your children more than they need you.

There are exceptions of course, but please bear with me here. Life IS a journey, or a process, if you will. Somewhere along the way in life, the answer to the question “Who Needs Whom More” flips.

Your children need you more when they are young, you need your children more when you are old. But when does it flip? And does it “flip” quickly like a coin, or slowly, like turning around the proverbial oceanliner?

I daresay that it is much more of a process than an event.

 

You Reap what You Sow

When we were kids, my sisters and I were thankful for our parents, although I am not certain that we expressed it frequently enough. As they grew older, and we matured, I know that they became more thankful for us.

Ideally, gratitude is something that we learn from our parents, and then teach our children. Parenting, manners, how to behave, how we do things in our family; all are part of the legacy and heritage we pass along to following generations.

As any farmer will tell you, as you sow, so shall you reap.

 

Values versus Valuables

Family wealth succession can be very complex and involve lots of detailed transactions and documents concerning the family’s valuables.

But your true family legacy depends much more on passing on the values of your family.

I hope that gratitude is one of the values that my children have picked up from their parents, I know that I got most of my values from mine.

My kids are teenagers now, but I have been treating them as much as possible as if they are adults for a while now.

Trying not to tell them what to do, trying to make sure that “you’re not the boss of me” is not something that even remotely enters their minds.

 

Equals versus “One Up, One Down”

Am I doing this because I realize that someday I will need them more than they need me? Perhaps, subconsciously.

My point is that the longer it takes to turn around the answer to the “Who Needs Whom More” question, the better.

A relationship of equals, adult to adult, with nobody in the “one up” position, and nobody “one down” either.

 

It really never is “Too Late”

It’s never too late to try to make things better, and the outreach can come from either side.

This week I was reminded about the old saying that “the people you meet on the way up are the same ones you will meet on the way down”. I think it applies here too.

Please remember that, you will be thankful that you did.

 

Family Biz Conflict and how to handle it

FamBiz Conflict: Resolve it or Manage it?

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In any family business, conflict can occur quite naturally, and often does. “Oh crap, now what?” is one of the thoughts that can often go through one’s mind when they first get wind of family members not getting along as hoped.

This subject is potentially huge, and not necessarily something that one can easily tackle in about 700-words, but there are a couple of points that I want to make here, while being far from exhaustive.

Entire books have literally been written on this subject, and one, called Deconstructing Conflict, came out recently and I read it this summer. I even reviewed it (with a five star rating) on Amazon.com, which was a first for me.

One key learning from the book is that because conflict occurs so naturally in family business, we should not try to resolve it, but just manage it.

The idea, as I understood it, is that if you try to resolve it, one of two things will likely occur:

  • You will spend a lifetime trying, and you are bound to be disappointed, or,
  • You will believe that the conflict has been resolved, but you will later learn that it was not truly resolved.

 

Let’s just resolve it

Well, I am not that skeptical, and I think that making an effort to try to resolve conflict is often worth it, and it certainly feels better than just acting as if you can’t ever get rid of it.

This week I attended a course that is part of the Third Party Neutral program in Ottawa at the CICR.

Interestingly, CICR stands for the Canadian Institute for Conflict Resolution. So clearly the people who named this organisation believe in the possiblity of resolution.

And there is also an entire field called ADR, which stands for “Alternative Dispute Resolution”, so there must be some hope of actually resolving conflicts.

Or maybe a “dispute” is just a subset of a conflict, and you can resolve a (minor) dispute, but not a (major) conflict?

Of course we can’t forget that family business situations are often ones in which truly resolving all conflicts can be next to impossible. So now what?

 

Process versus Content

Well conflict management skills and conflict resolution skills are really quite interchangeable, as you might well imagine.

There are a couple of things that I have picked up in my ADR training as well as these TPN courses that have really stuck with me.

The first is that there is a huge difference between Process and Content. Sounds obvious, I know, but something struck me this week that drove it home even further for me, and even scared me a bit too.

The neutrality aspect of facilitation and mediation (i.e. bringing in someone from the outside) was what drew me to this type of training when I entered the advisory side of the family legacy field, because I fully understood that an external, unbiased person was an absolute requirement to tackle any family conflict.

 

Is Process Enough?

I have learned and practised a number of techniques and processes, and filled my toolbox with ideas that I can use in a variety of difficult situations.

There is a lot of “art” to all of this, and the idea of “who I am” in this work, as opposed to “what I do”, is not lost on me either.

Now I want to share the scary part, but let’s just keep it between us, OK?

The scary part is that in order to help a business family work through their conflict(s), it is more important to know about conflict resolution and management processes than it is to know anything about family business.

In fact, there was one roleplay I did this week, in an area in which I had zero knowledge, and it was actually liberating to be ignorant. My lack of understanding of some issues helped me focus on the process only, without getting into the content.

Of course if you just want the conflict resolved or managed, conflict “process” people can help a lot.

If, however, you want to build a strong family base going forward, get someone who does conflict well, AND who understands family legacy.