June 17, 2024


Super Art is Almost

Avoiding Conflict Will Only Hurt Your Family Business

Avoiding Conflict Will Only Hurt Your Family Business

One of our clients has a sign up in their headquarters that reads, “As far as everyone knows, we’re a big happy family.” It’s a reminder not only of how they want the world to see them, but how they want to see themselves, no matter what the reality is, a tacit acknowledgement that no family is perfect.

When people think about conflict and family business, they tend to think about the “fireworks” kind of conflict we see on the front pages of the newspaper or depicted in popular television shows. But far more common is the exact opposite, what we call “fake harmony,” in which families are so afraid of conflict that they avoid uncomfortable discussions of any kind.

Why Fake Harmony Is So Destructive

Disagreement in a family business is natural over time. As a family grows, interests diverge and individual family member relationships with the business can change. It’s healthy and expected for individual owners (or future owners) to have different perspectives, and the desire to quash those perspectives, rather than risk rocking the boat with differences of opinion, is often counterproductive.

If your family isn’t discussing any competing ideas, you’re likely avoiding conversations about important issues. In our experience, fake harmony can be far more damaging than fireworks, because it causes families to avoid making difficult, but important, decisions about the business or the family.

Fake harmony can also create resentment in the family. People don’t feel like they can express their interests or opinions for fear of creating conflict. Issues may be unspoken, but that doesn’t mean they’re gone.

Fake harmony also stifles innovation. Families can be cornucopias of great ideas, but when individuals don’t share ideas because they are afraid to “rock the boat,” businesses and family owners miss opportunities to innovate.

Fake harmony also delays generational transitions by limiting cross-generational conversations and collaboration. Absent those conversations, the senior generation may not learn to trust the junior generation and vice versa. And the junior generation may not understand the senior generation’s intentions and approach, growing frustrated with the pace of change.

Perhaps most importantly, fake harmony can lead to what we call a “cliff event” — an unaddressed conflict that builds and builds over time until it erupts into far more serious and complex arguments. Cliff events can tear at the fabric of a family and limit the family’s ability to make important decisions together.

That’s not to say that fake harmony is irrational; most families have long memories. A different opinion received poorly or in the wrong context can explode into harmful conflict. If you disrupt family harmony, your family may hold that against you for the rest of your life.

So even if you recognize that fake harmony is holding your family business back, you need to tread carefully.  You don’t have to wade in with a laundry list of grievances. Strategic avoidance can be a sensible temporary negotiation tactic as you wait until the right time to bring up a tough topic.

Often, the cliff event that triggers outright conflict after a long period of fake harmony is seemingly small on its own. But the months or years of keeping quiet over other disagreements are baked into that moment, too. So, when it explodes, it can be hard to undo the damage. And when that happens, months, years, or even decades of progress as a family and an owner group can be undone. For example, one family owner we know (all identifiable details have been changed) nursed wounds from decisions by the other owners (his siblings) to wind down a favorite R&D effort and hire the “wrong” non-family CEO, but he said nothing for months. His anger “irrationally” (accordingly to his siblings) boiled over during a seemingly innocuous discussion about a board meeting date, leading to conflict that ultimately caused the business to miss out on a lucrative acquisition opportunity as they were rehashing other old wounds.

Of course, what constitutes excessive conflict (as opposed to constructive disagreement) depends on family culture and personal interpretation. Some families can more easily tolerate conflict than others, and the extent to which people will stoically put aside their personal interests to support the common cause also varies. But the signs of fake harmony are common, regardless of your family culture:

Signs of Fake Harmony

  • Opinions aren’t expressed. You have a big group together, you’re having a conversation about an important topic, and everyone sort of demurs. No one is willing to offer a clear perspective on the matter.
  • Constructive feedback is avoided. Sometimes it’s tough to receive challenging feedback, but it’s also very productive and helps you evolve as a family and as a group of owners of a business.
  • Debate is suppressed. A family owner brings a strong opinion on an important issue to your group of owners, and no one wants to express a counter opinion. If everyone else sort of nods their head to everything that’s discussed, you’re likely stifling real discussion and the introduction of new ideas. If everyone defaults to “sounds good,” there’s probably something going on underneath the surface.
  • Back-channel conversations are the norm. Family members appear to agree in a meeting, but afterwards you hear a range of perspectives in one-on-one conversations. If you find that family members only express their “real” opinions privately amongst themselves, rather than bringing their thoughts and concerns to the appropriate forum, you may be unknowingly heading towards your own “cliff event.”

Several tools and approaches can be effective in guarding against fake harmony in a family business. For example, we often bring a metaphoric “candid-o-meter” into meetings. During discussions we refer to the candid-o-meter to determine whether we’re getting to the heart of the matter or just glossing over the surface. And when it feels like we are entering fake harmony, we ask each participant to rate the candor of the conversation from one (low candor) to five (fully open). Perhaps not surprisingly, most people who rate the conversation at or below a three are typically eager to share what is not being said or that they suspect their family members are not being candid. That low rating can trigger a shift in the conversation. While it may seem like a silly tool, most people are glad to not be wasting their time in a “fake meeting” and to be getting to the real issues.

Other helpful tools we’ve used to help families get past fake harmony to constructive conversations:

Tools for Overcoming Fake Harmony

1. Start with easier issues.

If your family is struggling with fake harmony, you don’t have to dive right into the most challenging issues. Start with conversations and decisions that won’t incite highly emotional reactions.

We worked with one family that had an extraordinarily fraught family history, so they had defaulted to a fake harmony as a survival strategy. That left many issues unaddressed. To begin to move away from fake harmony, they started discussing simple business decisions, instead of diving into their list of emotionally charged issues. As a family, they were all on the same page about wanting the business to thrive, so discussing business strategy was a safe place to debate one another. Once they had established that they could disagree with one another respectfully, they were able to begin to work through some of the other family issues.

2. Use surveys to uncover opinions anonymously.

Have family members fill out a quick anonymous survey before and after a key meeting to create a helpful barometer. Set up a simple survey, through a service like Qualtrics, that asks family members what topics they want to address or explores what went well in a meeting and what could be improved (we call these “plus/deltas”). Such surveys can provide an easy, but helpful, opportunity to offer constructive feedback.

3. Consider facilitated conversations.

Bring in an outsider to facilitate a challenging conversation. An outside facilitator can set ground rules and boundaries for the conversation, monitor those boundaries, reset the conversation if things are getting off track, and ensure that everyone has a chance to be heard.

4. Strengthen transparency.

Fake harmony can fester because family members are feeling insecure — afraid that asking questions will make them appear dumb or uninformed — or that it will imply that they are challenging other family members. They don’t want to expose themselves or offend.

But if family leaders make a point of keeping their stakeholders informed about both business issues and key decisions that are being made, people are less likely to feel afraid to ask questions. Sunlight can be the best disinfectant.

5. Set the right standard.

Remind your family members that your goal is to make great decisions together. Fake harmony won’t help you do that. Constructive conversations will.

Both conflict and fake harmony are common in business families all over the world. What they are grappling with is normal. Balancing the two is an important part of making good decisions together, and it isn’t always easy for any family, no matter how much they love each other. Families can get so focused on wanting to present a perfect veneer to the outside world that they build a false one on the inside, too. But there’s no such thing as a perfect family.

Sierra Nevada Brewing Co., a family-owned beer company, revels in that realization. Its tagline, which shows up on every can and bottle, is “Family Owned, Operated & Argued Over.” Ken Grossman, Sierra Nevada’s founder, shared his family’s rationale for the slogan with our colleagues Josh Baron and Rob Lachenauer in the Harvard Business Review Family Business Handbook: “It’s funny, but it’s the truth. We can get together and argue over what’s best for us as a company moving forward, but we all do it in good faith, knowing that everyone wants what’s best overall.”

Can you say something similar about your family business? If not, you may find yourself in a difficult position precisely because you have tried to avoid conflict.