An expert in executive and operations in family firms, Doug Baumoel has witnessed every scenario you can imagine. Working with family may seem like it would go smooth, but families and businesses often have a lot of conflict. Navigating such conflict is crucial for family businesses to succeed. Doug has characterized the two types of conflict which most commonly occur in family businesses, and how the two are interrelated.
“When we talk about conflict in a family business, we’re really talking about two distinct types of conflict: active conflict and passive conflict. Active conflict we witness when we see that stakeholders are in active disagreement over specific outcomes or behavior.
“There is a more insidious type of conflict, passive conflict, that is often lying just beneath the surface of an outwardly functional looking company which leads families to get stuck. It usually stems from a fear of active conflict, so if stakeholders know that they have very different goals, or if they know that they have values that are at odds with each other: their risk tolerance, their work ethic or other sort of values that define them, they silo up.
“So this could be one brother in charge of production, a sister in charge of accounting and the back office another sibling or a cousin in charge of marketing. So family members will silo up and purposefully have little interaction because they know once they start to interact the underlying issues that are at play will boil over into active conflict.
“So, this passive conflict can exist when outwardly family businesses seem fun but what really is going on is that stakeholders are not communicating. They’re not engaged with each other, they’re siloed up and it’s that fear of conflict that really prevents succession planning and prevents family businesses from truly excelling.”
Doug Baumoel - Signitt
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