Family businesses are the backbone of many economies, accounting for around 98 per cent of all businesses in Australia and 67 per cent of them being family-owned. However, running a family business is not always easy, especially when it comes to planning for succession. Many family businesses face conflicts and disputes over who will take over the business, how to manage the transition, and how to deal with the emotional and relational aspects of working with family members.
Succession or success?
One of the popular TV shows that depicts the challenges of family business succession is Succession, a drama series that follows the dysfunctional Roy family as they fight for control over their global media empire. The show portrays the dark side of family business, where sibling rivalries, power struggles, manipulation, and betrayal are common. While Succession is an extreme example of what can go wrong in a family business, it also reveals some of the common pitfalls and problems that can affect family-owned and operated businesses.
Some of the key reasons why disputes arise in family businesses are the same reasons why family businesses can be successful. Family members know each other well, have strong loyalty and trust, and share a common vision and values. However, these factors can also create tensions and conflicts, as family members may have different opinions, expectations, and interests. They may also have unresolved issues, personal rivalries, or emotional attachments that interfere with their professional judgment. Moreover, family businesses often face generational gaps, where the founder or the current leader may have a different style or vision than the next generation.
The role of mediation
To avoid these problems and ensure a smooth succession, family businesses need to plan ahead and communicate clearly. They also need to involve external experts who can help them navigate the complex issues and emotions that come with succession planning. One of the ways to do this is to engage a mediator who can facilitate constructive dialogue and agreement among family members.
A mediator is a neutral third party who can help family members to explore options, discuss concerns, and reach consensus on important matters related to succession. A mediator can also help to resolve any conflicts or disputes that may arise during the process. A mediator does not impose any decisions or solutions, but rather helps the parties to find their own mutually acceptable outcomes.
There are many benefits of using mediation for succession planning in family businesses. Mediation can help to:
- Preserve family relationships and harmony
- Enhance trust and communication among family members
- Reduce costs and time compared to litigation or arbitration
- Increase flexibility and creativity in finding solutions
- Ensure confidentiality and privacy of sensitive information
- Improve commitment and satisfaction with the outcomes
How to choose a mediator
Choosing the right mediator for your family business is crucial for the success of the mediation process. There are some factors that you should consider when selecting a mediator, such as:
- Experience and expertise: The mediator should have relevant knowledge and skills in family business matters, such as governance, finance, legal issues, tax implications, etc. The mediator should also have experience in dealing with different types of family businesses, such as retail, agriculture, manufacturing, etc.
- Style and approach: The mediator should have a style and approach that suits your needs and preferences. For example, some mediators may be more directive or facilitative than others. Some mediators may use more formal or informal methods than others. You should ask the mediator about their style and approach before hiring them.
- Rapport and trust: The mediator should be able to establish rapport and trust with all the parties involved in the mediation. The mediator should be respectful, empathetic, impartial, and professional. You should feel comfortable and confident with the mediator you choose.
Succession planning is one of the most important and challenging tasks for any family business. It can make or break the future of the business and the family. To avoid drama and ensure success, family businesses should start planning early, communicate clearly, and seek external help from mediators who can assist them in finding win-win solutions.
