The emotional impact of having in-laws (part 2)
With the discovery of the daughter-inlaw’s fraudulent and dishonest actions, mounting complaints against her started to reached the founder/father-in-law.
Most of these complaints came from senior non-family executives claiming that she took advantage of her position by demanding commissions from suppliers. Even suppliers showed a cache of evidence and recorded text messages coming from her, demanding commissions with instructions that the money be deposited under her account.
With her power and entitlement, she succumbed to the temptation and became careless.
In-law participation in business is a doubleedged sword
It was also reported that she routinely challenged managers who questioned her method in dealing with suppliers. She even earned the moniker as the “dragon lady” and was tagged as “worse than the real owners.”
When external auditors were summoned to determine culpability, they collectively concluded and pointed to her as the source of several counts of fraudulent activities.
With the assistance of one of the founder’s close friends, the family immediately engaged my consulting firm, Wong+Bernstein Advisory.
Due to the delicate nature of the scandal, the office assigned me to take on the case. After a series of closed-door, tension-filled confrontations marred by denials, accusations and counter accusations, the family decided not to pursue legal charges against her and just terminated her services.
A month after the raucous incident, emotions took a heavy toll on the founder’s health and he was hospitalized. In one of my visits, he confessed that if there was one family decision he could have reversed in his lifetime, it would be the decision to invite his daughter-in-law into the business.
The consequences were too hurtful to bear and he was resigned to the sad reality that he will carry the pain “all the way to his grave.”
Despite the reluctance of the family to slap her with criminal charges, the relationship between the father and daughter-in-law, including the husband and his siblings, became scarred for life.
Removing a non-family executive, bereft of any emotion would have saved the day for the family. Sadly, the founder chose in-law participation translating to fairly cheap labor and blind trust over non family professionals.
When a confused in-law, desperately wanting to fit in, starts becoming cozy in his or her newfound position of power and influence, you can expect more issues transforming into conflicts.
Why do business owners allow these issues to conflagrate into major conflicts?
The answer lies in the fear of disagreements that make families resist change in a bid to avoid conflict. In-law participation in the business is a double-edged sword, as any issue with the latter has a direct correlation with the family member/ spouse. If disagreements with the in-law happens, the offspring (the spouse) may feel caught in between parents and the in-law.
Conflict is part of family life. Whether involved in the business or not, in-laws may view matters differently. The probability and frequency of conflict increases as the family expands.
Conflict is aggravated when the in-law slides into the business system without any rules of entry and exit. From the family system and now all of a sudden, the in-law is thrust into the business, confused as to how to act in a totally new environment that is expected to breed performance and meritocracy.
Recognizing and grappling with conflict is a sign of strength and progress. The family’s skill in dealing with conflict openly and directly affects the impact conflict has on a family business.