How to avoid conflict when assigning family business roles to family members?

Assigning roles in a family business can be one of the most challenging tasks for a family business owner, especially if there are a number of family members. If the process is not handled well, it may result in the deterioration of family relationships and jeopardize the future of the family business. On the other hand, a considered approach can strengthen the bonds between family members and enable the family business to flourish for generations to come. This article offers practical strategies to allocate roles effectively, fostering harmony between family members while ensuring your business runs smoothly.

1. Understand Each Family Member's Strengths and Weaknesses

Before assigning roles, assess each family member’s strengths and weaknesses. Engage them in various activities that highlight their skills. For instance, you might observe their performance in family discussions, collaborative projects, or even during casual family activities.

Some family members are natural leaders and often like to take the lead in family activities. They are generally more vocal in expressing their thoughts and desires. Others may be happy to go with the flow or play a more supporting role.

Recognizing their strengths - like leadership, creativity, or analytical thinking - allows you to match roles to their interests. The assignment of roles should be based on individual skills, interests and experience, and not based on birth order or family tradition. This approach not only increases their engagement but also promotes teamwork and unity among the family members.

2. Define roles, responsibilities and expectations

Communication is essential in family dynamics. Before the roles in the family business are formally announced, discuss your plans with the family members individually, and gather any thoughts or concerns they may have on their proposed roles. Do not assume that your family members share your enthusiasm in their roles.

It would also be helpful for your family members to understand your expectations of them in the roles. Vague expectations often lead to confusion and potential conflicts. It is critical to define clear roles and responsibilities for each family member. Each family member's role should also preferably be in writing to avoid misunderstandings.

3. Facilitate Open Communication

If your family members have been assigned roles in your management team, do host regular management meetings, and give each of them opportunities to express their views.

Where there are family members who are not interested in being part of the day-to-day management team, consider offering them non-operational roles where appropriate (e.g. to sit on the advisory board or perhaps to be a member of the philanthropic committee).

Encourage your family members to share their thoughts and feelings openly. This creates a sense of belonging and helps prevent misunderstandings that could lead to conflicts down the road. By establishing an atmosphere of respect and understanding, you can significantly reduce the likelihood of disputes.

4. Implement Neutrality in Role Allocation

To minimize feelings of resentment, consider implementing a neutral approach to role allocation. If there is more than one family member who may be suitable for particular roles, consider drawing straws to select a member to fill that role initially, and then rotating the roles after a period of time, to maintain a sense of fairness. Research shows that unbiased practices cultivate trust among family members. When your family members feel they have an equal chance for roles, they are less likely to perceive favoritism.

5. Provide Training and Development Opportunities

Investing in training can significantly enhance your family member’s skills and empower them in their respective roles. Each family member may (and often) have different levels of expertise and experience to start with. Do not assume that they know how to perform their roles just because they have watched you in it.

Tailoring development opportunities to their needs not only fosters continuous improvement but also prepares them for future leadership. The engagement of external consultants and professional trainers on topics like accounting, legal, team management or personal development skills like public speaking can further equip them for success.

6. Encourage Collaborative Projects

Instead of isolating your family members in their individual roles, encourage and arrange for them to work together on joint projects both in and outside the business.

Collaborative efforts, such as product development projects or community service initiatives, not only foster unity but also promote understanding of one another’s strengths. For example, when family members collaborate on a new marketing campaign, they pick up negotiation and conflict resolution skills and learn how to work with one another even though they may not necessarily see eye-to-eye with fellow family members all the time.

7. Encourage Feedback and Adaptability

Once roles are established, integrate a feedback mechanism into the process. On an ongoing basis, schedule regular one-on-one sessions with each of your family members to check in on how they are faring in their role, and also to provide feedback on their performance and any areas for improvement.

Encourage your family members to voice concerns and suggestions regularly. If one family member feels overburdened or overlooked, allow space for conversations regarding the tweaking of roles. Being adaptable in role assignments helps to resolve conflicts before they escalate and makes everyone feel valued.

8. Establish Conflict Resolution Mechanisms

Even with careful planning, disagreements may still arise. It is wise to establish a conflict resolution plan to handle issues as they come.

Discussing how conflicts will be managed ahead of time can provide peace of mind, and allows the conflicting parties to understand that there is a clear and agreed process to resolving the conflict. Introducing a neutral mediator (e.g. external consultant or professional mediator) during disagreements can help facilitate discussions and lead to fairer resolutions.

Knowing that there is an established process to address conflicts eliminate ambiguity among your family members and reduce instances where they feel the need to strategise and scheme against one another to protect their interests.

9. Celebrate Achievements Together

Recognizing accomplishments plays a crucial role in fostering a positive atmosphere.

When your family reaches a milestone, such as finishing a project or meeting a sales goal, celebrate together. Whether it is a family dinner or a fun outing, acknowledging everyone’s contributions reinforces the idea that all members play a vital role in the business's success. Celebrations not only boost morale but also strengthen family bonds.

Conclusion

Allocating roles in a family business can be complex but immensely rewarding. By understanding your family members’ unique strengths and encouraging open dialogue, you can create a supportive atmosphere that minimizes conflict.

Incorporating feedback mechanisms, celebrating achievements, and preparing for the future solidifies a strong family dynamic. Taking these steps not only helps your family business thrive but also strengthens the bonds that tie your family together, both in and out of the workplace.