Family feuds – five tips for conflict resolution in family business

This post is by Giles Ellis, an experienced business coach and Director at GECA Chartered Accountants. GECA offer Business Planning and other Business Advisory Services.

In any business with more than one employee, it’s inevitable that conflicts will arise. Family-run businesses are no different. In fact, they can be even more prone to conflict and complications. When family members work together, they bring their roles and expectations from their home relationships into the business – which can cause complex and emotion-laden problems.

That’s not to say that conflict is always a bad thing. Managed correctly, a healthy amount of conflict can lead to stronger leadership, a wider range of opinions and ideas being accepted, and eventually a stronger business. The key is managing disputes well, and never letting them fester.

At GECA, we have years of experience in resolving family-business conflict. Here are our top five strategies:

1: Plan for problems

Some people go into business with family members with an overly rosy outlook. They think working with family members means everything will run smoothly, without much effort. Unfortunately, this is not always the case.

Starting with the assumption that you’ll have problems sounds negative, but it could end up being a positive in the long run. If you plan for conflict, it’s less of a shock when it does happen, and you’ll have a strategy in place to resolve it.

2: Set formal structures

Planning for conflict means putting formal structures and rules in place before anything goes wrong. Avoid taking a casual, ad hoc approach simply because you’re working with family, and set up your business like any other. That means having formal contracts and appropriate compensation, processes around management and review, and systems for recruitment and staff leaving.

These structures don’t just help if conflict arises, they can also help avoid it. Formal structures make your organisation feel more like a business and less like a family, which helps staff leave their relationship issues at the door.

3: Create a formal family council

When you work with family, it’s tempting to talk about the business at home, at work, and at every family gathering. But this isn’t necessarily the best idea for your business – or your relationships.

Setting up a regular ‘family council meeting’ gives family members a formalised way to raise issues and discuss conflicts – without the business intruding on family life. It can also help catch and resolve conflicts quickly, rather than letting them fester. Even if your business is extremely busy, it’s worth taking the time.

4: Catch conflicts quickly

Avoiding conflict is a reasonable goal, but avoiding dealing with existing conflict is not. When problems arise between individuals or groups in the business, it’s best to identify and work to resolve them as quickly as possible. Leaving problems to worsen can make them much more difficult to sort out amicably.

Having a way to raise issues and talk about concerns makes you more likely to catch problems early. If left to fester, small problems can loom large in people’s minds, and can even start to affect the way the business is working.

5: Get guidance

When you work with the same people in the same business every single day, it’s easy to lose perspective. Sometimes an impartial outsider can see things more clearly.

Bringing in an expert mediator or business advisor can be an effective way to resolve issues without damaging relationships. This person can act as a neutral sounding board, give expert opinions without being influenced by family relationships, and help steer meetings towards solutions.

An advisor is essential for long-running conflicts, but can also be helpful for smaller issues. In fact, a good mediator can help you establish conflict resolution strategies that you’ll be able to use in the future.


Need help resolving conflict in your business? Talk to the GECA team now