Avoiding family wars that ruin businesses

These days I am being invited more frequently to help align family members within their businesses so they can lead the organisations they own more effectively.

I am encouraged by those who reach out to me for such assistance, as it speaks of being realistic about the importance of cohesiveness among them and of feeling optimistic that they can indeed do better.

In my capacity as an adviser — or, as I often label myself, coach — I first listen to each family member involved, getting a sense of their personalities and styles, and of the roles they play in their enterprise.

In a spirit of “appreciative inquiry” I like to start by having them tell me about the achievements they are proudest of and the strengths that explain them, and then asking them to share the challenges they face — including and not least with other family members.

For this to happen I don’t rush into these topics, but begin by building a relaxed, cheerful and trusting relationship with them, getting them to talk more generally about their lives, while revealing something about mine.

Business school

As I was preparing to write this article I caught sight of a book I’d bought some years ago at the London Business School bookshop but had never got round to reading.

Published in 2008, Family Wars is about some of the biggest family-run companies in the world, showing how in-fighting among family members threatened to bring about their downfall.

It covers families such as Ford, Gucci and the Watsons of IBM, using these as examples of different categories of wars, not least between fathers and sons, among siblings, and as a result of marriages between families.

It also provides advice for anyone involved in a family business, offering suggestions on how to avoid such problems.

The book’s authors are London Business School Prof Nigel Nicholson, whose research interests include the psychology of family business, and Grant Gordon, the director-general of the Institute for Family Business and a fifth-generation member and former senior executive of William Grant & Sons, the distillers of Glenfiddich whisky (my favourite).

Despite relating stories of specific family “wars” they are careful to point out that many with family ownership outperform other kinds of organisations, and that some of the world’s oldest companies are those that have remained owned by their founding families.

I related very closely to what I read about both the kinds of challenges that family businesses commonly face, and how to prevent them and handle them if and when they arise.

Not least about the wisdom of “appointing skilled non-family professionals to fill business leadership roles”; “appointing a neutral ‘ombudsman’ as co-mentor of a sibling team”; and “instituting appraisals and regular feedback on work output and mentoring for family members”.

Not surprisingly, Grant and Nicholson refer to the lack of trust as “the real killer”, where one person sees another as unreliable, inconsistent, devious or duplicitous. And – as I do – they advocate for a spirit of forgiving and seeking forgiveness.

To avoid undue conflict, a culture of equity and fairness must prevail, with no cheating and taking of shortcuts. Worst of all is the hiring of lawyers to sue one another, never mind if the dirty linen starts getting washed in public.

Just as insufficient cohesiveness leads family members to either waste energy in fruitless attempts to win battles at the expense of a relative, or to disengage and scatter, so excessive cohesion, where families retreat into their own exclusive world, are also unhealthy.

Consensus builder

The challenge is to nurture an atmosphere where differences can be aired and consensus built, in a spirit of give and take.

Yes, we want the leadership team in family businesses to be diverse — including these days by including the women. We want representation of a spectrum from elders to millennials, and it’s good for members to have varied exposure to education and to other cultures and countries.

Some will have a greater appetite for risk than others. Some will be more focused on longer-term sustainability and on being fair to all key stakeholders and some will be keener than others on professionalising.

The question is how such diversity can be brought together without generating wars, and by whom.

Who in the family is the consensus builder, the mediator? Or does the business, as so many do, require external help to keep the peace and allow each family member to contribute and thrive in their own way?

Influencing upwards for growth despite volatility

In my consulting work, I engage with staff at all levels, from those who occupy the chairperson’s seat in the boardroom to those who work on the shop floor and in the fields. As I converse with them and study them I see a whole spectrum of diameters in their circles of influence — not necessarily related to their seniority.

Some chairs act merely as “traffic police”, guiding who should speak next while not adding significant value; while some of the very young and very junior can be making an impact on their environments that is way beyond what is expected.

Partly it is a function of how active and creative their minds are; much depends on their communication skills; and, a key component is confidence and boldness — the willingness to share what is on one’s mind, imagining that others will be interested in one’s thoughts and be keen to hear them.

We each develop our reputations, some for just quietly getting on with our tasks as narrowly defined in our job descriptions, others for restlessly and relentlessly championing new and better ways of doing things.

The latter may well be inconvenient disrupters, so here the challenge is to make one’s point in ways that others find possible to digest. And this brings me to the specific theme of this article: influencing upwards, often the most difficult direction in which to generate change.

Let me take you back to the time I was facilitating programmes on “Leadership for Influence” as a faculty member of the Aga Khan Graduate School of Media and Communications.

Among them was a series of events for groups of branch managers of a large nationwide organisation, where as I encouraged them to talk about their communications challenges the one that emerged time and again, and so strongly, was being listened to by their seniors.

What I heard was that theirs was a company where strategies and objectives were set at higher levels than theirs, and then communicated downwards. No one was interested in their voices, they felt. I found this quite puzzling, as it was their bosses who had brought me in to help them with their communications skills.

Within the workshops I had them write and perform short plays which began with a problem, either internally with a colleague or externally with a customer and reached a tipping point as a result of which the problem was resolved and a win-win solution emerged.

Many of their playlets featured a dissatisfied client, and I noted that without exception almost immediately on hearing their complaint the script had the client-facing staff take the complainant to their branch manager for them to resolve the issue.

Why were the scripts written this way? Were they not empowered to resolve issues themselves? Did their managers hold back from delegating authority? Did they not trust their people? Were they just timid, unwilling to make what would be perceived as the wrong decision? What could have led to the staff member holding back from such consistent instant escalation?

We discussed all this, and also the question of how the communication between the branch managers and their seniors could be improved. Yet when I proposed that as an output from their sessions with me the participants should seek such dialogue they were hesitant to do so.

Influencing upwards, they felt, was not something that would be appreciated. It was not in the organisational culture.

Through those who had hired me for the workshops, I did suggest that escalation and delegation management was a topic that needed airing, but I never got to know if anything was done as a result of my intervention.

How is it in your organisation? Do you actively seek the views of your juniors? Do you listen to their voices? Do you develop their competence and their confidence to make responsible judgments on behalf of the organisation — providing adequate guidelines and guardrails, and accepting that sometimes your decision might have been different?

Do you trust them to do the right thing? Or do you micro-manage them, making them feel they must delegate upwards, for fear of being hammered for taking a “wrong” approach?

The larger the organisation the more important this issue becomes. Those who will prosper in these uncertain and volatile times are the ones who encourage influencing upwards.