Avoiding the Conflict Spiral

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Get ahead of potential problems by creating policies and shock absorbers before you need them.

Even better than knowing how to get out of a conflict that is spiraling downwards is knowing how to avoid it from happening in the first place. If you and your family want to avoid the disastrous spiral of conflict, you should keep an eye open for escalation points. When people disagree, they often think that the best way to address their concerns is to leap into action. And the tricky thing is that this reaction is often rational. If someone in the family is not honoring a written deal, the logical step is to turn to a lawyer. It’s also reasonable that the other party will hire his own lawyer. Taken individually, all these steps make sense. Ironically, such rational actions provoking further rational reactions can send business families down the devastating spiral.

We advise you, therefore, to take a deep breath before allowing yourselves to escalate to the next stage.

Recognize that whenever anyone says, “I think this is the only way to do it,” you’ve taken a step towards escalating conflict in your family business system. Whenever you give up truly trying to communicate, you’re taking a step toward all-out war. Each of the seven stages of conflict is a step that a family member or family branch can take or not – there is a choice.

All-out war is not inevitable. Each family member has many chances to keep the family and the business from self-destructing. That’s a huge opportunity, and a big responsibility.

So, take the time to learn about conflict, both why it is necessary for a healthy family business and how it can spiral out of control. If the situation starts to go south, get everyone on the same page about the potential impact of not coming to consensus. Really understanding the cost of litigation – for example, appreciating how ugly is it, and how much you will regret it later – can go a long way toward avoiding all-out war. We’ve seldom seen a family remain intact after resorting to battling each other in court.

Beyond awareness, get out ahead of the issues that are most likely to cause a family feud. If your family business has been successful for any period of time, you have clearly found the right balance between too much and too little conflict. That has been based on some alignment in how you exercise the five core rights of family owners. But family businesses are dynamic – people die and others join the family, families dissipate and come back together, businesses go through ups and downs. These changes can create shocks that undermine what had worked brilliantly in the past.

Put in place the “shock absorbers” when times are good by carefully considering what changes will be needed to handle the disruptions that are to come. For example, creating a Family Employment Policy long before any next generation family member is considering joining the business will ensure that the decisions about any one person are not personal.

Take the time to revisit how you will exercise the five rights of family ownership in light of these disruptions. It is no criticism of what works today, or has been effective in the past, to recognize that it will not work in the future. By agreeing on the changes required in advance and taking gradual steps towards them, you will significantly increase the odds of staying in the Goldilocks Zone.

Conflict is necessary for any business to survive. When it is well-managed, conflict doesn’t make for good headlines. And when it’s well-handled, conflict can build up a family business rather than tear it apart.

*Adapted from the Harvard Business Review Family Business Handbook by Josh Baron and Rob Lachenauer. Pages 232-234.

 

Summary: It can be easy to get sucked into the conflict spiral without even really knowing that it is happening. Being aware of the stages and the signs that you’re heading into the vortex is the first step toward avoiding it. And most importantly, get ahead of conflict with a few simple steps. Create a system that encourages healthy conflict, with established policies and processes for working through difficult decisions.

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