How to Handle Family Business Conflicts


As one generation trains the next to run the farm, communication is key

Family business management is enticing yet daunting. You work with loved ones each day and enjoy lunch together, yet you also must wear the supervisor hat.

To limit conflict, family business advisers Carl Sohn and Michael Stolp of Northwest Farm Credit Services recommend adopting some proven practices to ensure intergenerational cooperation and smooth succession from one management team to the next.

When a problem surfaces, it’s helpful to treat communication as you would a flat tire. 

“Think of driving down the road in a bus,” Sohn says. “You hear a flat tire, and you pull over immediately to fix it. In family businesses, we brush it under the table and hope it gets better on its own.”

As more generations are added to the business, communication gets harder. Without communication, the
flat tire is less likely to get fixed.

Plan With Perspective. Achieve understanding by listening to the other person’s perspective and then restating it to them.

“This is the secret sauce to mutual respect,” Sohn says, “because now I have to reciprocate and truly listen to that you are saying and seek to understand your perspective.”

After listening to each other’s perspectives, both parties can reach a third alternative that likely is better than what either person would have suggested on his or her own.

It’s also important to develop family and business objectives, adds Kelvin Kleibold, a farm management extension specialist at Iowa State University. Written goals can be referenced as team members settle disagreements. They provide a record of goals the operation has set as well as objectives the family holds.

Take time to create an action plan, which states how team members will put goals to work. Too many times, families develop plans but don’t hold people to them, Sohn says.

“Great plans can fall flat on their faces when we don’t have a plan to drive accountability,” Sohn explains.

Operational and strategic meetings might not sound enjoyable, but they are necessary to review and update  arm business plans over time. Use operational meetings to set priorities each week. Strategic meetings can occur less frequently and should help develop strategies to reach long-term goals.

Hold Purposeful Meetings. At each of these meetings, equip team members with the resources they will need to achieve the goals, review any obstacles they might face and adjust plans as needed.

“Not having meetings is a little like planting a crop and not checking on it until it’s time for harvest,” Stolp points out. “It’s awfully hard to expect you’re going to get a great outcome then.”

Throughout the growing season and into harvest this year, remind your team of these strategies and continue to implement them. Efficient communication between generations will keep problems from getting bigger while fostering peace of mind and adding stability to your operation’s bottom line.

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