Financial Poise
Fur Balls

Family Business Conflicts: Are You Choking on Family Fur Balls?

How to Approach Sensitive Topics and Implement Conflict Resolution in Family Business

Every cat owner knows the sounds. The deep retching and heaving. The cough that sounds like your cat just may turn himself inside out to eliminate a fur ball. Next may come a few backwards hops, as if to distance himself from the mess he just created. Turns out, sensitive subjects can cause the same problem in family business.

During a recent planning session with five members of a multi-generational family business, the CEO of the company did the most accurate reproduction of a cat’s fur ball struggle that I had ever heard. When the laughter stopped, he said, “You just hit on one of our family fur balls.”

Avoiding Uncomfortable Conversations

A “family fur ball” is a topic that gets caught in the throat. Nobody wants to talk about it, and when it’s brought up, everybody takes a few steps backwards to distance themselves from a potential family business conflict.

In this case, the family fur ball was the spouses’ role in decision-making in the family firm. Although spouses were not considered shareholders, they were frequently told that their opinions mattered. Still, they felt marginalized and ignored. What the shareholders didn’t want to say was that the spouses’ opinions really didn’t influence decisions in the business anyway.

The spouses were not employed in the business, and they were not familiar with the day-to-day challenges. The shareholders were hesitant to address the sensitive family business topics inherent in the different roles and responsibilities of family members, business owners and business leaders, but it was clear something needed to be said.

How Should You Navigate Sensitive Topics?

Every family that’s in business together has fur balls. Ignoring them can lead to deep-rooted friction that can erode trust within the family and the family firm’s leadership. Addressing the fur balls takes courage, but here are some steps to take towards conflict resolution in family business:

  • Recognize that you have a fur ball. Call it out, define it and state what you don’t want to talk about.
  • Ask why this particular issue has become a fur ball. What outcomes were you trying to avoid?
  • Consider the impact. Examine both the positive and negative possibilities if you do address the fur ball. Consider both positive and negative possibilities if you don’t address the fur ball.
  • Prioritize. Select the circumstances that need to be put in place to start the conversation. Define the who, when, where and what.
  • Do it. Cough up that fur ball. Have the conversation.
  • Say good-bye. Acknowledge that the fur ball is gone and don’t let this one come back. Don’t reverse position or apologize for the conversation.

Addressing the fur balls builds family strength and supports the sustainability of the business.

A Case Study in Alleviating Family Business Conflicts

The aforementioned multigenerational family business successfully addressed their fur ball. They named it.

  • “We want the spouses to feel engaged and supportive of the business, but they are not knowledgeable enough to influence decisions.”
  • “We don’t want them to disengage or have their feelings hurt.”
  • “If we address it, we can discuss how the spouses can influence decisions and become more knowledgeable, if that is what they want to do.”
  • “If we don’t address it, they will think we are liars, and that will affect trust.”

They set up a family meeting to discuss roles and responsibilities of the family, the shareholders and the business leadership. They differentiated between influencing a decision and making a decision.

They developed a vocabulary around the roles and use it to maintain clarity.

Going through this exercise opened the conversation to address other sensitive fur balls that can lead to family business conflicts. They are on a journey to improved family and business transparency.

Every family in business together has fur balls. What are yours? How are you holding back the family and the business by not addressing them? What would it take to start the conversation about just one family fur ball?

Once you’ve addressed these questions, set a date and make it happen. There’s no point in waiting; it will only cause the fur ball to grow in size—until it becomes the elephant in the room.

[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinar: Common Issues and Strategies in Business Breakups. This is an updated version of an article originally published on March 27, 2018.]

©All Rights Reserved. April, 2021.  DailyDACTM, LLC d/b/a/ Financial PoiseTM

About Stephanie Olexa

Stephanie Olexa is an independent director and a governance professional with experience as a board chair and on audit and finance, strategy, compensation, risk management, and nominating/governance committees. As a business advisor, she has helped family-owned businesses build stewardship for sustainability. Stephanie is the Founder and President of Lead to the Future, LLC. In addition…

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