Like every human being is a story. Every business is a story. There is no solution that fits all. However my experience has led me to believe that yes there are certain traits that are commonly prevalent.
Managing Healthy Confrontation in Family Business Life
From direct experience sitting in boardrooms as an observer or advisor to family businesses, it is surprising how often I feel the presence of the so-called elephant in the room. I refer to those situations where underlying problems, issues and agendas evidently exist (and can be felt), yet never approached, tackled or discussed in order to avoid having to engage in uncomfortable discussions. This is even more accentuated in a context like that of Malta where family members are often much more closely intertwined. Even the most experienced and seasoned business people find it very hard to tackle certain issues head-on when these involve direct family members. The typical “excuses” made when I approach such matters are answers such as ‘I wouldn’t want to open a Pandora’s box’, ‘my children will see to it when I’m no longer here’ or ‘I don’t want conflict with my siblings while my father is still with us’, with the most common one being – “it’s useless, nothing will ever change anyway”. Yet very few accept the fact that there is most often a direct correlation between these problems and underperforming businesses.
The more prevalent ‘Elephant-in-the-room’ examples are:
- Workload imbalance between the various members;
- Intolerance towards weaknesses of others;
- Selfish or even potentially malicious hidden agendas;
- Family members ‘forced’ to work in the family business who would rather be elsewhere;Personal Matters interfering with the running of the Business;
- Discrimination based on gender (how about the famous John Doe & ‘Sons’ Ltd!);
- Diverging expectations, dreams and visions – some have illusions of grandeur, others may simply want a stress-free lifestyle job for life;
- Retired members sporadically showing up at the workplace, interfering in the daily processes;
And so days keep rolling by, reports reach the boardroom table, often containing recommendations that sound more like justifications, yet very little changes and the reason is pretty simple – it’s because the problem is at a personal level! I accept that I may seem over-simplistic at face value. In this series of blog posts I intend to elucidate a few scenarios that I hope may be of benefit for the reader not to underestimate the true consequences of letting personal issues interfere with business.
Confrontation cannot be avoided but it has to be well-managed!
I am very aware that things are much more complicated than they seem and I know how hard it can be when the person’s performance to be addressed is that of your nephew or son of your long-time business partner, but postponing the discussion to any further date most often only makes matters worse.
Every human interaction comes with some degree of conflict. Thus I allow myself to confidently tell the business leader reading this article, that the real successful small businesses are those that do not avoid but have the courage to tackle, solve and put behind the personal issues.
Effective solutions in managing confrontation
But, who said that tackling issues head-on, necessarily brings about conflict? First of all, the point of departure is one important element, namely that confrontation is an intrinsic part of human nature – it cannot be avoided but it has to be managed, so the focus has to be on learning how to manage conflict rather than doing whatever is possible to avoid it. Attempting to delay facing tough issues will only build up the pressure until there is the inevitable burst, which most often will lead to an irreparable fissure to the business relationship of the partners. And to make matters even worse, during such build-ups there is a period which I refer to as the ‘board room blame-game’. We shall be discussing the implication and consequences of this on a separate occasion.
A few simple rules can really improve the effectiveness of the family business as a whole.
- What needs to be said, has to be said BUT in the right forum, i.e. the boardroom, or if there is an impending urgency, in private. There should NEVER be quarrels or rants between family members or partners in front of employees or clients.
- Rules in the boardroom can go a long way,
- Someone has to chair the meeting, if the company does not have a formal chairman, do it by rotation;
- Build an agenda between one board meeting and another allowing for a filtering process to avoid petty matters from reaching board level (these can be sorted out during daily briefings);
- Allowing board members to raise their voice will quickly create a mayhem in the board meeting. So, anyone raising his/her voice should get a time-out;
- Use the talking stick method – you can easily research this method. But in a nutshell it is an effective communication protocol which knows its roots to the Indian tribes in the United States and which focuses on basic key behaviours such as carefully listening to others during meetings, not interrupting others while speaking, respect and supporting your peers and the chairperson. When I chair board meetings, I make sure that there are no subtleties, or distortions to the original meaning of one’s communication, by repeating what was just said in simple yet direct language, and getting a confirmation by the speaker that that was what was intended and meant;
- Once a decision has been made everyone has to respect the direction agreed upon.
In conclusion, involving an external consultant to participate in board meetings as a chairman or observer can bring substantial short term quick results. When I engage in similar roles the focus is on facilitating the thinking process. Thinking brings along informed decisions. Informed decisions in turn lead to action, and action brings results. Here’s why it is a huge misconception for people to think that ailing companies are necessarily led by incompetent people. On the contrary, I can assure you that I have sat on many boards full of knowledgeable and competent people who nonetheless lead their company into severe difficulties. This is because even the smartest of people can lead themselves and the whole team into a dead end scenario where the only things discussed at board level are futile matters whilst the real important decision are swept under the carpet, and often when the alarm bells start ringing they find themselves so far behind that they do not know where to start.
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