October 16th, 2017

What Do You Do When Family Business Negotiations Go Bad?

What Do You Do When Family Business Negotiations Go Bad?

October 16, 2017

Photo: Family by Lukrecja1000 swans-2756538_1920 at Pixabay

Working as a mediator and negotiator I specialize in resolving conflicts with the IRS, business to business and within businesses. This article focuses on preventing conflicts within businesses and what to do when negotiations go bad with family members.

There are three types of mediation. These are transformative, facilitative and evaluative. Transformative mediators focus on relationships and transforming the relationship between the parties. Transformative mediators do not focus on the specific issue such as the negotiation. Facilitative mediators focus on the issue, which in this case is the family business negotiation. Evaluative mediators have legal expertise and offer opinions as to what they think would happen should this case proceed to court. I am focusing on facilitative mediation regarding a family business negotiation that went bad. The parties may also need transformative mediation or counseling regarding family relationships. That is for someone that has the right skill set for those types of matters as presented below.  This is beyond my skill set.

People who are close to one another tend to cooperate with one another. Typically trust has been developed over the years creating strong positive bonds. Along with this trust it is quite possible that the parties avoid conflict. They know where they differ related to politics, religion and other family matters for example and they tend to stay clear of issues that may bring rise to conflict. Since this can very well create an issue in the family business many family businesses actually sit down and discuss what will and will not be discussed at work.

Set norms to be proactive

To head off a conflict it is important to discuss with family members and especially with a new family member entering the business or working with the business regarding norms, policies, processes and standards expected not only as an employee, partner or contractor, but also as a family member. It is very important to manage expectations early to help avoid a conflict later.[i]

Address feelings

As a mediator I teach that Facts, Issues, Feelings and Interests (FIFI) need to be addressed before working on a solution. When I say feelings I don’t mean that you think of the other side as a SOB, I mean what are your feelings related to an issue. How strongly do you feel about it and why.

Bringing this into a family business, when there are disappointments it is important to air these as soon as possible to avoid the incident simmering for a long period of time before it blows up into a mountain of negative feelings. The SCARF model by David Rock indicated the more the parties have equalized the five areas of Status, Certainty, Autonomy, Relatedness and Fairness (SCARF), the more likely they are to have a stronger relationship. Feelings enter into all five areas. The model of:

When you…

I think…

I feel…

Goes a long way towards ensuring the other party knows how you are feeling based on what has or may  happen. This can be very helpful in addressing feelings. This is elaborated in in Peaceful Resolutions.  The key is to provide an avenue to share feelings.

Get some help

When there are business related conflicts with friends or family an outside party with a background in this issue area may be very helpful. A family therapist may be the right answer. A trained, qualified mediator that focuses on business related issues may be the right answer to address a specific issue such as succession planning or management issues. Involving the right set of experts ahead of time may be the right answer. We all know that at times our emotions can cloud us from thinking as rationally as we should. By sharing concerns with a confidential trusted party that is neutral to the situation and that knows how to listen and can help, goes a long way towards addressing these types of concerns.

Michael Gregory, NSA, ASA, CVA, MBA, Qualified Mediator with the Minnesota Supreme Court is an international speaker that helps organizations resolve conflict and negotiate winning solutions, client to IRS, business to business and within businesses. On point resources are available online at www.mikegreg.com and check out the blog. Mike may be contacted directly at mg@mikegreg.com or at (651) 633-5311. 

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