Mediation and The Family Business

It is not uncommon for family businesses and their managing families to be in conflict.  There are the “everyday” conflicts of running the operating company.  These can include debates on machinery acquisitions, pricing policies, supplier relationships, customer relationships, etc.  For some instinctive survivalist reasoning, these conflicts general get solved one way or another as they are purely about the business at hand.  Someone loses an argument here but may win one over there.  The expression “pick you battles” must have originated in this playing field.  They get solved! The business must continue to move forward.

What about the conflicts that don’t get so easily resolved? It is not a pricing issue, a supplier issues, or a receivable issue.  It is a fundamental disagreement about something much greater.  It can be a conflict like, where is our next level of growth coming from? How come our younger brother/sister, never shows up at the office until pay day? With Mom and Dad spending winters away, how come they still hold all of the purse strings?   How do my kids get involved or should they?  These conflicts usually spend a great deal of time simmering before they NEED to be resolved.  So, these are clearly family business issues but what do they have to do with Mediation?

Mediation skills and tactics help family businesses in so many ways.  Firstly, they begin to set the table for improved communications.  Communication in family businesses is usually poor or nonexistent.  Developing an agenda of specific items that need to be discussed is one of the first steps.  In working with family businesses, the initial intake work done often will provide valuable feedback on the type of communication within the family both personally and corporately.  

Secondly, with the Mediator skills of drilling deep inside the issues, this individual intake will uncover many of the areas of simmering conflict within the family.  By understanding the nature of those conflicts from everyone perspective allows them to be brought up in a safe, inclusive manner.  By maintaining control as one would in a formal Mediation, these subjects can be brought forward, thoroughly discussed and ideally resolved one at a time. 

As in Mediation, unresolved issues often must be “parked” for a future meeting.  Sometimes that can be frustrating, but in a family business context, isn’t that really a great way to plan the next meeting?  This begins the process of having a more formal structure to family business communication.  As the Mediator/Facilitator, control is maintained, all voices are heard and most importantly, there are multiple hands crafting any resolutions required.  By putting items in a “parking lot” for the next meeting, the participants are charged with working on clarifying their understanding and position with regards to the issues.  They may be encouraged to try and have less formal discussions with those with whom they have the conflict.  But they do know it will be coming up at the next meeting and a resolution will be the focus. 

This Mediation inspired approach has often led to entirely new ways of dealing with conflicts within the day to day dealings inside the operating company.  Rather than some hierarchical declaration (decision) made from one’s perch on a corporate organizational chart, the concept of collaboration begins to find its way into this decision-making process as well.  Perhaps some more input is sought, more ideas are discussed, and the team has a safer environment in which to contribute their thoughts. 

Phil Kriszenfeld is a Family Business Advisor and Mediator, BA in Economics from University of Western Ontario, Q.Med (Qualified Mediator) and FEA (Family Enterprise Advisor) graduate from the UBC Sauder School of Business. Transitions Mediation and Consulting Group focuses on improving communication for family enterprises in transition and mentoring the next generation to determine optimal outcomes for the family and the family business. His practice also includes Mediations done for corporations, shareholders disputes, labour disputes and estate disputes.