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5 Proven Ways to Deal with Family Business Conflict

Updated: Sep 27, 2019

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Walking the thin line between love and money -- welcome to the fascinating and often tumultuous world of family businesses. Let’s get something straight right off the bat: family businesses are the backbone of the U.S. economy. According to US Bureau of Statistics, family businesses contribute a whopping 64% to the country’s GDP, generate 62% of jobs nationwide, and account for 85% of private sector companies. What’s more -- family businesses create 78% of new jobs every year.

The good thing about family businesses is that they are often robust, well run, and have been around for years, some even centuries. Some of the best family businesses include Bechtel, the world’s most successful construction, engineering, and project management company; Mars, the food distribution giant; SC Johnson & Son, the fifth-gen owned personal care company; and, Gilbane, the national leader in home construction. The list of best family businesses goes on and on.

Family Owned Business Challenges

Conflict is part and parcel of operating a business. However, when the partners, employees or colleagues are also relatives, even minor disputes can take on a new dimension. You see, traditional corporations and non-family-owned businesses have in place conflict resolution guidelines that make the whole process streamlined. Often that means the HR department does all the heavy lifting.

Family owned business challenges usually arise from the fact there’s a thin line between work and family. As such, the business is riddled with workplace issues, family drama, and conflict that can become huge if not tamed early enough.

How to Manage Family Business Conflict: 5 Tried-and-True Ways to Do It

#1. Create Formal (or Legal) Framework to help Resolve Conflict

Most family-owned business challenges come about because they have no formal forum for ironing out issues in the business. Creating formal frameworks such family boards, councils, and forums will do wonders when it comes to mitigating family business conflict. Such formal structures separate the management wing from the business owner.

#2. Give Space to Family Member to Air Their Concerns and Grievances

When family members don’t have a safe avenue for expressing their concerns and needs, there’s bound to be family and business drama.

#3. Draw a Line between Family and Business Time

Most family business challenges and conflict arise when member let business bleed into family time.

#4. Communicate Sooner than Later

Family business conflict should be communicated and ironed out early enough before it can mushroom into a fully-fledged family drama.

#5. Seek Professional Help: Hire a Business Coach

If the conflict and family business challenges cannot be resolved internally, it’s prudent to seek the help of a business coach. This is a professional who is trained and experienced in conflict resolution.