Opinion
It's All Relative

Family Showdown

When encountering a tense situation with a family business, tell the truth with love instead of fear to resolve conflicts.

Family Showdown

Sam’s father-in-law, John, owned a strong construction business built over many years of hard work. While Sam worked alongside John, he enjoyed his own success. He wanted to be an owner and bought the company from John, even though John wanted his own son, Tony, to take over the business. But Tony was not very interested in the company, so he became a co-owner in name only. And that’s where the dilemma began.

When John decided the next generation should prepare to succeed him in the business, Tony gravitated back and began working there. Even though Tony still wasn’t that engaged, he felt it was his birthright to be part of the business.

Clare, Tony’s wife, also lobbied strongly for her husband’s “rights.” She pressed John to include Tony in the operation of the business. For several years during the transition, Sam and Tony had worked together. Sam concluded that Tony was a poor fit because he acted more like an employee than an owner. He wasn’t ambitious and didn’t show the necessary drive to run the business.

What perplexed Sam was how to keep from upsetting family relationships. He was married to Tony’s older sister, Elaine, and worried about her feelings. Clare’s lobbying and Tony’s sense of entitlement added to the tension.

Under these circumstances—yet seeking to maintain family relationships as well as continue a successful business—what would you do?

We began by conducting a family business planning meeting to create the opportunity to understand issues that caused concern. As a result, the family adopted a plan that included a common vision to unite them. They also made a commitment to discuss and clarify what they expected of each other and what they needed from each other to thrive. In addition, we encouraged them to engage in family activities that included the children to build the emotional equity of the family. Finally, we encouraged Sam and Tony to meet once a week for lunch or breakfast, outside the business, as a way to spend more time together and strengthen their relationship.

During the discussions, Sam had made it clear what he wanted and needed from Tony as co-owner of the business. They discussed this periodically over several months. Each time, Tony agreed and made a commitment to fulfill Sam’s expectations. But Tony usually did not follow through. As a result, tensions rose in the family. Clare became even more outspoken in family meetings about her perception that Tony was being treated unfairly.

Elaine was caught in the middle between two people she loved and cared about. She had always been overprotective of her little brother, and the conflict made her feel worse. She also understood her husband Sam’s perception that Tony was not pulling his weight and that his management skills were lacking.

The situation appeared to deadlock. Tensions were high and there had been no movement to correct things, so Sam called a family meeting and laid his cards on the table. He made it clear that Tony’s poor performance was no longer acceptable. Something must be done to show some improvement.

Clare became defensive, made excuses for Tony’s behavior, and said that because Tony was an owner he shouldn’t be required to do the work Sam expected. Tension rose even further; it wasn’t clear what to do next.

Several weeks passed, then Tony and Clare called for another family meeting. Tension skyrocketed. Elaine was nervous, fearing she would lose her relationship with her brother. Sam wondered what Tony and his wife had in mind. John felt his family was falling apart.

At the meeting, Tony and Clare announced they wanted to be bought out and were moving to California. They would use the proceeds from their share of the business so that Tony could open his own construction company. The meeting was tearful all around. But as conflict and fear diminished, Sam took the initiative to say he would contact the lawyers to initiate the sale.

Within months, the transaction was completed, and Tony and Clare moved. By this time, emotions had cooled, and family relationships were saved. Tony and Elaine remain close, with no permanent damage to their relationship. On the business side, Tony started a small construction business that never really got off the ground. Eventually, he went to work for a supplier and is doing well.

Tom Hubler (tomh@thehublergroup.com) is president of Hubler for Business Families, a family business consulting firm.

Comments



Leave message