Assessing the Family Factor - Doug Baumoel

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When it comes to business disputes, the addition of familial relations within your business make conflict a lot more difficult for all parties involved. One cannot leave their work issues at work when their work issues follow them home.

However, the upside to family business disputes is that unlike non-family businesses, people are more willing to work through conflict resolution in order to maintain relationships. The stakes are higher because of their connections, but at the same time, their connections can also be a cause for tension.

When a family enterprise is experiencing extreme conflict, they can benefit from a Conflict Manager. The manager is someone who would meet with the stakeholders and guide them to a settlement. Continuity Family Business Consulting has devised guidelines for the Conflict Manager to assess the family’s commitment to one another and to change.

The ‘Family Factor’ is composed of three key components:

1. A SHARED HISTORY

“A family that shares a robust and positive history together is likely to have a high Family Factor. This is, in part, because they have a solid foundation of positive memories and experiences together. This serves to keep them naturally more aligned in their goals and values making poorly-managed conflict less likely. They realize that those fond memories of each other would be at risk and forever tarnished by festering conflicts.

“Having a strong, positive shared history among family members is one of the most important protections against debilitating conflict.

“Sometimes families have difficult histories to contend with. They may have been challenged by substance abuse, bad behavior, messy divorces, bankruptcies, or tragic incidents and simply may not have many happy memories as family. But, to the extent that they have pulled together in adversity, they may have built a strong Family Factor despite these challenges (or maybe because of these challenges).

2. A SHARED VISION OF BEING FAMILY IN THE FUTURE

“Having a shared vision of being family in the future speaks to whether family members believe they will remain connected over time. Sometimes a family enterprise or shared wealth plays a central role in defining how families will preserve the family bond through succeeding generations. When a family business, or their philanthropic commitment serves as a focus for well-articulated family values, it creates a structure for keeping family members connected. They have a concrete vision of what “family” will mean in the future and how important it is to their identity.

“Additionally, when family members share hobbies, core values and reunion traditions, they may simply enjoy being together and make time to continue getting together. Families of musicians, skiers, baseball fans and those who share religious or political beliefs may find camaraderie and true friendships within their families that they want to continue into the future.

3. TRUST

“Trust is a critical component of family relationships, especially when it concerns shared economic or business interests. It is what enables people to make rational decisions beyond their own personal interests. When trust exists, individuals can make decisions intended to further their shared enterprise, or their connected families. When stakeholders don’t fully understand each other’s roles, motivation or concerns in the business, or associated behaviors, their actions can be perceived as unpredictable, unreliable and thus untrustworthy.

“Being stakeholders in an enterprising family forces family members to stay connected — perhaps longer than they might want to otherwise — to keep the enterprise running smoothly. In these situations, the Family Factor is essential and necessary in building strong family relationships and long-term success of the enterprise and the family.”

About Doug Baumoel: Doug is a founding partner at Continuity Family Business Consulting. Having grown up in a family business himself, he is a family enterprise and governance expert. His firm works to manage familial conflicts, and to develop and implement strategies to ensure the success of shared family enterprises while enhancing the important continuing relationships that are at stake. He is a trusted adviser and author, as he co-authored the book ‘Deconstructing Conflict: Understanding Family Business, Shared Wealth, and Power’. In his free time, Doug enjoys playing the guitar.

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