"Conflict is different in family businesses. Rules and processes may exist, but most don’t apply to the owners. What’s more, key relationships are grounded in the dynamics of the family itself. And families are governed by power far more than structure. Most families operate on a single rule: parents decide and children obey. No matter how imperious they may be, leaders of non-family businesses are rarely as dominant as matriarchs or patriarchs." -Josh Baron
SO true and a very accurate description highlighted by Josh Baron and Rob Lachenauer in their article “Why Fights Erupt in Family Businesses” published in the Harvard Business Review.
Senior generation control and next generation entitlement
In a family business, escalating conflicts can either come from the patriarchal shadow or from the younger generation’s sense of entitlement. These forms of conflict happen and it is but natural. Like in any other groups of people, the members of the family have their own perceptions, personalities and ways. These differences create divisiveness and lack of peace in the family business.
On the positive note, peace can be made possible if the family members will know what factors determine peace and consider them all the time.
Determinants of peace in the family business
Peace in the family business entails a set of core values, philosophy, common vision and mission, respect, commitment to duty, tolerance, open-mindedness and forgiveness.
Core values and philosophy
Peace is the result of good values. Values are rooted first in the family. It makes sense to think that in a family business, peace can be attained.
Develop a set of core values which the family adheres to in unity. What do you think are the things that are important to your family in terms of character, ethics, service and professionalism? Are these positive qualities that can better shape the relationship within the family and with everybody else working for the company including non-family members?
Come-up with a philosophy that suggests the prevention of problems. Prevention is always better than cure. Incorporate the family values into the philosophy so that it will be the guiding principle of the members of the family in all business dealings.
The core values and philosophy of the company will have to remain in the hearts and minds of the members of the family, so that peace can begin intrinsically and be evidently seen in the business environment.
Common vision and mission
The peace in the family business can be disrupted when the motivations and objectives of the members of the family are not common. Set the vision and mission of the company, before allowing everyone to do their thing. Never assume that everyone in the family already knows the direction of the company. Conduct an orientation about it, especially about why it is so.
Always remind about the short-term and long-term goals of the family business. As time passes by, people tend to forget or change courses, so it is advisable to mention the company’s vision and mission when possible, because this is why you are all together in the business. There may be times when some members of the family will debate about things that are not in line with the vision and mission of the company. Such instances can become the source of resentment, when in fact it should not be part of the operations to make the family business successful.
Respect is giving high regard towards the name and image of the family business, including that of its workers and of the dignity of the family. Family members ought to be mindful of their thoughts, words and actions, because it can affect how the public will view the company and the unity of the members in the family.
Advise the members of the family, that when in a difficult situation, ask questions to themselves as to whether they are at the right place and time, have already reflected about the ideas they have in mind, have wisely chosen their words, and have certainly decided about what to do.
Honoring the family council, reporting to the assigned authorities, listening to the advice of non-family managers and mediators, and abiding with the rules that delineate the boundaries between family concerns and business matters are opportunities to exhibit respect.
Respect results to peaceful interactions. Its practice can be possible when respect is demonstrated and when the members of the family have respectable conduct. Part 2 will be next week.
(Prof. Soriano is an Asean Family Business advisor and chair of the Marketing Cluster of the Ateneo Graduate School of Business. He is a National Agora Awardee and book author of Kite Runner, a book on Family Business Governance and Succession.)