Every family and every business will have problems at some point. So, it’s not surprising that multigenerational family businesses have their own kind of conflict. Conflicts happen when people have different ideas, and these differences can be made worse by gaps between generations and cultures. Conflict leads to mistrust and tension, which in turn make it hard for people to talk to each other.

So, how can multigenerational family businesses deal with disagreements and bring unity, especially when passing leadership and responsibility from one generation to the next? Once a conflict is recognized, it’s important to learn how to build trust, reframe problems, and build a good structure with rules and tools to help.

A new generation brings new ideas and energy, as well as different ways of thinking about risk and how the company should change. This can cause conflict in the company. But most family businesses are set up to avoid conflict instead of dealing with it head-on. So, the company acts as if everything is fine, but it doesn’t realize that some conflict is normal and necessary for a successful family business and that there is a middle ground to be found. Sometimes disagreements are ignored, sometimes they come out as personal conflict, and sometimes they are just hard to talk about.

The first step is to figure out how to recognize and talk about the conflicts, as well as why people don’t bring up tough issues and instead try to avoid deep conversations. There are some questions that can help with this, such as:

What’s stopping me from bringing up my problem?

People often don’t ask questions or dig deeper into problems because they are afraid of making things worse or because they don’t want to hurt other people’s feelings. Understanding these feelings will help you frame the problems and figure out what the conflict is really about. It will take you beyond what you can see on the surface and get you closer to the root of the problem.

Can I change how I feel about conflict?

Accepting that conflict is a dynamic process and being willing to stand up for what you believe and want to stand for requires being brave, saying what you don’t like about the status quo, and being open to the results. This is better than having a “win or lose” mentality.

How can I break down a bigger question into smaller ones that I can share?

Just writing down a problem in a different way, if possible, with the people who are involved in the conflict is enough to help figure out who else is involved, what has been done so far and why it isn’t working, and what the real goal is.

When talking about a conflict, if you ask these questions and think about the worst possible outcome, the problem seems smaller because you feel more capable of dealing with whatever happens. The bigger picture is clearer and helps people understand each other, which is the first step to building trust.

Establishing Trust

How can trust be built or even just put back together after it has been hurt? The first step is to recognize and learn to understand that everyone is different and has different needs at different times. Simple actions can build trust, like keeping promises and doing what was agreed to. Empathy maps (a visualization tool) can help you connect with other family members and talk about things that are getting in the way. Most of the time, people don’t mean to hurt others, and an apology can go a long way towards rebuilding trust. When trust has been broken, it can’t be fixed all at once; it has to be earned and grown step by step.

Other small things you can do to build trust include finding peers in your family business and freely sharing what you know with them. You can also try to figure out how they learn and how you can convey what you have learned to them in a meaningful way. You can also work together with new experts and new ideas, creating shared frameworks and experiences.

Finding common ground and working on new projects together, instead of pointing out differences, can help build a bridge between building trust and finding new ways to look at problems. Shared interests don’t have to be related to work all the time. They could be things like sports, other hobbies, or family dinners that everyone takes part in. These common interests build trust and make it easier to get along with people of all ages, which can help in the boardroom.

For instance, the new generation may want to take the company public, while the previous generation may oppose this, but when the conflict is articulated, both generations want the company to survive and succeed. This common goal during conflict helps the business overcome obstacles and reduce friction.

Reframing Problems

Tradition can be used as a link when reframing problems. On the surface, adding an e-commerce platform to a business may seem new and scary, causing tension and conflict. However, if the change is seen as part of the company’s long-standing tradition of innovation, both the old and the young can support it, tying the new to the old. Tradition isn’t just a tie to the past; it’s also a foundation for the future, and the next generation can do the best job of promoting it.

Building organizational structures

The last step in managing conflicts is to set up the organizational structures, rules, and tools that will support and make possible the needed changes in behavior. Changing the rules and structures of an organization can cause conflict on its own, and technology can make it worse. This is why it is important to handle it carefully. Not only has the pandemic compelled all kinds of businesses to communicate with each other in a time of crisis, but it has also pushed them to use technology to communicate digitally in a time of great uncertainty. But many companies didn’t necessarily choose to use technology to handle communications when they were in conflict. However, being pressured to speed up the use of technology has led to many process changes that help companies handle communications when they are in conflict.

Using technology to resolve conflicts

Multigenerational, geographically dispersed family businesses can now communicate using technology. The need to use technology initially revealed which family members were most involved in the business. The more active family members were given a platform to share weekly or biweekly updates, even if they were only a few lines long, on what decisions had been made and how they shaped their relationship.

The use of technology aided family businesses in holding shareholder meetings. Virtual “rooms” for different types of participation, tracking for document sharing and signing, and teams with rules of engagement were established.

Technology is just a tool, not a conflict resolution solution, but the speed, scalability, and usability of a well-designed and implemented technology platform have helped organizations implement hard-to-implement behavioural changes. Transparency from technology strengthens trust through small actions. It also fosters family trust and increases family business involvement. Organizations can now prepare and equip themselves to engage in healthy conflict in a productive rather than destructive way, supported by tools, for a shared perspective on achieving organizational goals.

Justin Raj

Alpha Research Team