CONFLICT IN DIVERSIFICATION


2 min read
16 Apr
16Apr

I'll start by putting a basic premise of Conflict Theory out there; "Conflict is a normal and necessary part of family life". It therefore follows, that if you run a family business these conflicts could become bigger and more brutal. Should this be a reason why a business should not take steps to diversify? 

To answer this, we need to start by asking; is conflict always a bad thing in a family? No. Conflict, if used in the correct way, can be a helpful tool to solving problems and finding new solutions. We need to learn how to deal with conflict in a positive way. In truth, we learn how to deal with conflict poorly throughout our early lives. If you think back to times you have been in conflict, starting with your time at school, or experiences as a child with your parents, you will have experienced people like teachers/parents using their power to win. Even though you were left with negative feelings from the process, you learnt from this experience and learnt to replicate it when dealing with your own conflicts. We therefore need to relearn how to deal with conflict.

Why am I talking about conflict? If a family, (whether a husband and wife, siblings or multi generational groups) begins to create new business together, then it is inevitable that there will be issues and times of conflict. The key drivers behind conflict are often cited as access to resources or the balance of power. 

Creating a new enterprise off the back of an existing business will lead to questions in relation to accessing resources held by the business such as; money, land, time or buildings. How decisions are made on how these resources are used, will lead to power questions in relation to individual roles within the business. 

Take a theoretical farm business, the farming is undertaken by one child in partnership with their father. However, the siblings have an idea of how the resources could be used to create a new diversification business, such as a vineyard. In this scenario, we can quickly see questions arising such as, what land should be used and how capital will be raised for the establishment of the crop and the associated infrastructure. If, in this example the father took the traditional view of avoiding conflict, the new enterprise would never happen. It is also worth thinking about the long-term conflict issues raised in the form of resentment between the siblings if support is not given to the project. 

The alternative approach, would be for the family to accept the potential presence of conflict and to look for practical solutions. Just a few actions can help you and your family through any inevitable conflicts created when you look to create a new diversification business.  

  1. Always try and see the challenge from the other person's point-of-view. How do your plans impact on their ability to do what they are doing? if you are removing resources or power from them, it will potentially help to create a feeling of fear. Can you change how you speak or what you are planning to do to remove these possible fears?  
  2. Make sure that there is constructive communication across the whole family as an idea is developed. Keep this communication formal and structured. Do not mix these discussions and issues with family time. For example have business meetings to discuss issues and solutions as often as needed, but don't do them around the kitchen table.
  3. Use language which will not inflame a situation. Statements such as; "but", "with all due respect" and "you're wrong", will always create conflict. Look to use phrases such as; "explain that to me"," thank you for explaining your point of view let’s look for ways of working around the issues together". Simply by thinking about your language, situations can often be dealt with effectively.
  4. Include non-family members in meetings. Involve an adviser, accountant or other valued expert in discussions, it is often possible to open-up discussions. 
  5. If you are unhappy about a situation, explain why to the family and be open to ideas. 

Remember, that creating a new business will create pressures on you for time, decisions and resources, therefore, there will be conflict, and aim to use this conflict to make a stronger better business.  

If you would like to talk to me about how to reduce conflict and improve your family businesses performance please give me a call.  




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