Conflict as Opportunity for Change

Kenneth Kaye, Ph.D. (adapted from Ken's article in a European family business magazine)

Every business in the world has its share of conflict among employees, or between divisions, or with customers, suppliers, and governments. Who needs to add family conflict? Most of us try to avoid conflict, most of the time. It's uncomfortable, and the financial as well as emotional costs can be enormous. In fact, almost all the reasons one frequently hears for not bringing family members into firms center on the fear of conflict.

However, conflict is part of life. Stepping around it doesn't make it go away. The more we avoid conflict in business relationships, the more destructive it becomes. Business owners need to become so comfortable with their skills for addressing interpersonal problems productively, that they actually welcome the opportunity conflict offers for change. With a good conflict-resolving system, family business relationships become assets rather than liabilities, because they provide additional motivation for shared problem-solving.

Conflict well resolved is the life blood of growth and adaptation to change, in organizations of all kinds. The family business, however, has unique features that make conflict resolution more challenging:

Dual relationships: members can't negotiate in their business roles, without ramifications for their family ties to one another. Furthermore, each one has a different set of family ties. They belong to different, but overlapping constituencies. For example, Joe represents the sales side of the business; the interests of all the in-laws; the males in his generation; his mother-in-law's branch of the family, etc.

Long histories: members' responses to one another are loaded with memories (including unconscious ones) going back to their childhoods and even to historical events two or three generations earlier.

Unspoken agendas: many of the issues are difficult to talk about, for fear of hurting each other's feelings. In some family cultures, a motive like protecting one's inheritance, or an emotion like anger, fear, or envy, would be morally incorrect.

Such factors in a family business only make systematic conflict-resolving skills more essential. For example, in our consulting work we use a kind of road map or flow chart.

A Conflict Resolving System

Plan A: bring together all those who are involved in the conflict or might be involved in its solution, and get them to focus on their goals. The crisis has amplified their differences; sometimes hearing one another articulate shared goals reminds them to look for win/win outcomes together.

Plan B, when Plan A is insufficient: clarify the differences and sort them into different categories. Some are merely misunderstandings, cleared up by active listening. Some are valuable differences of perspective (gender, for example; or generational) which should be turned into an organizational strength rather than a communications obstacle. Some differences are irrelevant to the shared goals, and simply need to be accepted. A few are truly fundamental conflicts that must not be ignored.

A leader—whether of the business or the family—can probably implement Plans A and B without a consultant. Plans C and D, however, may require a third party's perspective and professional aid.

Plan C: members make formal commitments to change behavior, or to take specific responsibilities.

Plan D: analyze chronic patterns of dysfunction. This requires consultation; despite some best efforts, interpersonal problems keep recurring. But not all conflicts are of that type, which is why this five-step system begins with the least intrusive, briefest interventions and only becomes more elaborate if and when necessary.

Resolving chronic conflict within systems of people has nothing in common with settling disputes between unrelated parties (for example, two corporations litigating a breach of contract). The goal of the latter is to end the relationship, whereas the goal within an organization is to improve relationships. Nowhere is this more vital than in a family business. Therefore, even when the conflict is a long-standing one, it is worth going through the travail of Plan D before giving up.

Finally, Plan E: unilateral change on the part of individual members. Any of them can empower him or herself to stop contributing to the problem, to take responsibility for their own actions, to improve communications even when others do their worst to obstruct it.

At each step, before tackling unresolved problems at a deeper level, leaders or facilitators have to gauge whether the relationship is worth the cost and trouble of saving it. Are certain crucial ingredients present, such as respect, affection (do they like each other?), economics (do they add value to each other's work?), and basic trust?

Trust: Impaired and Repaired

The most crucial—and fragile—element required is trust. What do you do when you begin to feel distrustful of someone? It's natural to withdraw from the relationship, put up a wall against further vulnerability, and blame the other person. Such defensive reactions make the problem worse. Instead, you need to assess three different areas of trust: honesty, intentions, or competence. You may be able to use a foundation of good trust in one or two areas, to build mutual trust in the problem area.

Trust is a relative thing. It's not a matter of trusting someone absolutely. It's a process. Experience leads to either more and more trust, or more and more mistrust. It is a reciprocal relationship. If you don't trust me, that in itself is a reason for me to be somewhat less trusting of you—because you're going to be guarded in relation to me. This reciprocity means that we should speak of a trusting/trusted relationship rather than saying that any individual is either trustworthy or not.

Conclusion

A moderate degree of conflict is unavoidable and good for a healthy family business. A conflict-resolving system is essential for any business team, but especially so where family issues and organizational issues intersect.

Members of the family business must recognize when interpersonal problems are important, and must have the skills (and know that they have the skills) to resolve them together.

Trust is an inherent part of teamwork. Assessing trust is crucial to a systematic process of resolving conflicts, because the process makes demands on participants' time, energies, and emotions. Sometimes it just isn't worth it, because something would have to change that is not going to change.

The process of building trust takes time. So does learning to address conflict forthrightly instead of evading it.

The real goal of conflict resolution programs is not just to resolve a particular problem but to change the team's or whole organization's culture. The most effective companies don't just have systematic conflict-resolving skills—they are conflict resolving systems.