Operations Team

Is there conflict in your family business? It can be good for the business.

We all may know of a family business torn apart by conflict. But a Columbia Business School professor writes in a Harvard Business Review article that, in fact, not enough conflict is also bad for business.

Whether it is too much or two little conflict, “the business can suffer from limited growth, poor decision-making, a loss of competitive advantage, and, in severe cases, the sale or split of the company. Similarly, families tend to break up into factions and suffer poor relationships. The mechanisms are different, but the results are the same,” wrote Josh Baron.

To be sure, he said, the best place to be on the conflict spectrum is in the middle, where issues can be raised and resolved without lasting damage to the family relationships — or the business.

In family businesses with too little conflict, all might seem fine on the outside, but pressure is building underneath. Not only that, but critical issues are swept under the rug because of the fear of conflict.

Does Your Family Business Have the Right Amount of Conflict?

To get the conversation started about whether your family business is employing the appropriate amount of conflict, Baron included this quiz.

  • Is there general satisfaction with the direction of the family enterprise? You may not be happy about every aspect, but if someone asked you if you were “better together than apart,” you would answer with an unequivocal yes.
  • Are decisions about critical issues being made? You may not address every single point of disagreement, but everyone would agree that there is no “elephant in the room.”
  • Are family relationships good enough to work and celebrate together? You don’t have to be best friends to own significant assets together. Instead, you have to be good business partners, which means you are aligned on the big issues and can enjoy each other’s company, at least most of the time.

“Some conflict is actually healthy. It provides a chance to clear the air of lingering resentments, potential issues, and even find a productive process for disagreeing and still making decisions. Good conflict doesn’t have to destroy a family — managed well, it can make the bonds even stronger,” he wrote.

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