Have you ever known a family that doesn’t have a fight . . . about something? It could be about “who’s hosting Thanksgiving,” “who slighted whom,” or “how to run our business.” In his article, Resolving Disputes in Family Businesses, David Gage points out that:
A family business is really three distinct but intricately related systems: Family, Business, and Ownership. Part of each system is separate from the others and part is bound to the others. Conflicts can occur in a non-intersecting area, e.g., a family conflict unrelated to the business, or a problem in the business concerning non-family employees.
In other words, untangling a family business dispute is like business partnership disputes–only exponentially more complicated. Think of it like 3-D chess: you may know how the pieces tend to move, but there are many more layers to playing the game well.
And it’s so easy to put a foot wrong, when you add family relationships (and resentments) to the mix. Just look at the example Gage gives of giving an equal share in his business to his 3 children. You’d think that fair’s fair, right? Wrong. Another reason to get an outside pair of eyes to give you objective feedback on your succession planning.
Many thanks to Marian Banker for pointing this out to our Successful Business Partnerships LinkedIn group!
You are correct, untangling a family-business dispute comes with its own set of challenges. In a non-family business dispute, the parties may be motivated by rational, economic concerns. In family business disputes, the parties may be driven by complex psychological issues, which until they are recognized and dealt with, make resolving the business dispute much more difficult.
So right, Peter–in fact, it can be the underlying family dynamics and "draaama" that creates more problems than the mere fact of being in business together!
I think that family business disputes tend to combine business issues with family law type problems in such a way as to make the whole much worse than the sum of its parts!