‘If we talk, we solve’

THE more difficult it is to talk about an issue, the more important it is to talk about it.

In any family conflict, having an effective communication plan may just be the family’s best friend.

In my experience helping family enterprises, the size of a business is immaterial. Whether the business employs a dozen employees or a conglomerate with a hundred thousand workforce spread across Asia, the problems besetting family members are the same and these are:

• Unclear roles, rules, responsibilities

• Differing family member goals and expectations

• Jealousy and perceived unfair treatment

• Undefined in-law participation

• Senior generation control

Any unresolved issue emanating from any of these challenges can escalate into real conflict, magnified many times over by years of indifference, feelings of distrust, selfishness, greed, ego, etc. Consequently, when you mix all of these contemptuous behaviors,

you can expect business operations to slide.

Aggravating the already tense situation is the domineering presence of the business leader cum owner-manager. The degree to which the business depends on one individual substantially affects how well a family business works.

So how do you manage a future conflict that is manifesting signs of a brewing hostility among family members? The best advice is to effectively communicate and apply the most fundamental rule in business—engage family members in an open, fair and honest way.

Good communication becomes a critical component in establishing a wonderful balance between interpersonal relationships on the one hand, and management and operations on the other hand.

It is a fact that improving communication can tilt the balance from continuing conflict to peaceful co-existence, to family unity, and inevitably multi-generational harmony. Communication, therefore, is crucial for a family business to survive.

Using some of the Family Business Consulting Group’s wonderful recommendations and incorporating some of my own experiences as a family advisor, the following approaches can serve as a wonderful guide in getting hostile family members back on track:

• With the help of a family advisor, the family must establish governance councils that encourage the separation of the three main systems (family, management and ownership).

• These forums should set different rules so it can attend and resolve concerns independently. Mixing any of these unique systems without rules is like throwing gasoline to an already burning edifice.

• Follow a disciplined rule in separating ownership and management, where it stresses the function of management in making operational decisions without interference by shareholders/non-working family members.

• Active and non-active family members must collectively meet on an annual basis to discuss the progress of the business and encourage family members, especially the non-working members, to raise issues in the proper forum.

• Extended family members are also encouraged to participate and ask questions during the annual family meeting dedicated to spouses’ concerns.

One of the most important objectives of family businesses is to keep the enterprise alive throughout the succeeding generations. Right from the founding stage, to the sibling partnership and cousin consortium, the family members from each of the generations would have to remain united for the purpose of both maintaining healthy family ties, and pushing for the survival and expansion of the family business through tough times.

Having an environment where healthy communication is encouraged by means of regular family meetings that embraces a culture of open and honest communication and enforces rules without fear or favor is an excellent way to build mutual respect and understanding in a family business.