Communication Management Next Generation

50 Common Causes Of Family Business Conflict – #18 Decision Making

In a previous article on Problem-Solving we described how and why poor problem-solving systems and skills are a common cause of conflict in family business, and in business families.

Problem-solving is the front end, mechanical part of a process. For a problem to be solved, there needs to be a decision (agreement about what will be done), AND that decision needs to be implemented (put in place), AND it needs to be fully executed (done). Only then can we say the problem is actually solved.

The decision-making part of this process is often neglected, and thereby becomes another common cause of conflict in family business. The problem is named and shamed, and there’s agreement about what is to be done BUT, despite there being a genuine intent to implement, there’s no effective, or any, execution.

The decision-making process is not complete and, in a very practical sense, the problem remains unresolved.

By definition, most family businesses are substantially owned and led by two or more people, from one or more families. And, although there’s no official role in any credible business org chart for an “owner”, that assumed status often tempts business leaders to short-cut normal best practices, when it comes to problem-solving and decision-making.

Put another way: where there’s a sense of: “the business is mine, so it will live and die by the decisions I make”, it’s inevitable that key staff will feel disempowered, while the business itself is denied the benefits it could and should derive from having more people involved in resolving its significant challenges.

The Golden Rule of family business: “S/he who holds the gold makes the rules” applies: “I’m the owner; I decide”. This is not a good formula for optimising problem-solving, or decision-making, in either the business or the family. Decisions made by one person may come quickly, but they will not always be made wisely.

In another twist that often creates confusion, frustration and eventually, conflict, we see decisions being made according to agreed processes that are subsequently overturned – unilaterally – on a whim of the owner, entirely contrary to formally agreed outcomes.

Family members, managers and employees gradually lose faith in the leader’s integrity – it all seems to be about them maintaining power and control. With no due process, everyone feels disrespected. They either become “appeasers”, who don’t rock the boat, or progressively detach themselves from the leader and the business. Ultimately, all respect for, and trust in the leader leeches away – as do any good staff who have other employment options.

Siblings, and same generation family members either submit, withdraw, depart, or go into battle.  Next generation family members who don’t have good options outside the business stay on as a protected species, hoping the leader (usually a parent) lives forever – because their income and comfort rely on it.

Stronger next generation members will either wait quietly in the business hoping that the parent will get out of the way sometime soon (willingly, or otherwise). More often, those that stay in the business find themselves in constant conflict with the parent – often creating deep rifts amongst employees: loyal to the owner, or willing to support progress?

The strongest leave the business, and quite often go to a competitor, or set up a new business in competition – the ultimate: “F***k you … Dad / Mum.”

None of these outcomes bode well for a strong business, a good business succession, or a happy family.

1. Before the wheels fall off entirely, find out what family members and staff think and feel about the decision-making culture of the business. Often, the leader has no grounded sense of what they’re doing because:

(a) they’ve been doing it for so long and

(b) nobody they’re willing to listen to has ever, or at least recently, pointed out to them what they’re doing. They’re on anaesthetised auto-pilot, which is less than ideal, for anyone’s sake.

2. Feedback from the staff survey will confirm that almost everybody wants the family and the business to have more structured and disciplined problem-solving and decision-making processes, to provide more inclusion and certainty.

3. Knowing what (almost) everyone wants, maintain momentum by organising separate problem-solving and decision-making workshops for the family and the business, to include:

  • Ground Rules for Meetings.
  • Code of Conduct for Meetings.
  • Decision-Making Process (including problem-solving).
  • Voting Rules for Decisions (including enforcement of decisions duly made)

Provided the leader(s) go with the flow, the workshops help to develop a common language and a shared commitment to an agreed process for problem-solving and decision-making. They have a cathartic effect on the family, and on the business, as they demonstrate a desire for greater inclusion; promise more clarity around future decision-making, and offer increased sharing around of future responsibilities.

The whole point of the process is that, once formally adopted, it applies to everyone. Future meetings of the family and the business are more respectful and productive. One or more individuals will probably take it on themselves to be the process police – ensuring that everybody complies with the new regime, and its new rules. The quality of decision-making will also improve – providing clear evidence that something real has been achieved.

Good problem-solving and decision-making are key defences against family, and family business, conflict.

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