Family businesses: some conflict can be healthy
“If there’s one thing that was loud and clear from the KPMG Enterprise and Family Business Australia (FBA) 2017/18survey of family businesses in Australia, it was that good communication, and even healthy conflict, between family members is vital to boost the sustainability of the business and wellbeing of the family.”
The joint survey and subsequent report written by KPMG Enterprise, Family Business Australia and the University of Adelaide’s ‘Family Business Education and Research Group (FBERG) is a very engaging and interesting read. Establishing that Socioemotional wealth (SEW) is key to both long and short term success for the prosperity and longevity of family businesses. Mr Bill Noye, Partner, KPMG Enterprises says that “Introducing families to the concept of SEW and how to develop it is a foundational issue that is key for the long-term success of the family business”.
In the context of family business success, the survey found that the top SEW objectives included:
The report goes on to identify that communication in a business environment “involves some level of conflict”.
- Emotional attachment between family members
- Family control and influence
- The renewal of family bonds through dynastic succession.
Michelle De Lucia, Director, KPMG Enterprise suggested that family business colleagues should “not be afraid of some conflict as it can lead to better outcomes.
“If we can get everyone to acknowledge different styles, and we can get a good healthy debate around the table, then you’re halfway there on the communication piece,” she said.
I have certainly witnessed many family conflicts in my career as a bookkeeper, mainly working with mum and dad businesses. In fact, I have often thought a qualification in counselling is not a bad consideration for a bookkeeper!
One of the outstanding suggestions, in my view, from the consortiums report is that of a ‘family council’. Mr Noye says, “a family council is focused on the family and how it interacts with the business and it helps in getting the balance. The caveat is to make sure the same person is not running the business board and the family council. Keep the roles and perspectives quite separate.”
Source: ‘Family business – the balance for success’; KPMG Enterprise, Family Business Australia and The University of Adelaide