family office winter forum

Not only is Ken Kaye a specialist in the field of conflict resolution, but he was also one of the first to examine the complex interpersonal dynamics that define family businesses. When he began specialising his practice in the mid-90s, he was struck with how different those familial relationships are in a family business, especially when fraught. As such, repairing the damage and resolving conflict – a critical task when considering the mental health of family business members – requires a different approach.

In his book, The Dynamics of Family Business: Building Trust and Resolving Conflict, Ken Kaye asserts that family businesses most commonly argue about the benefits of the business: who gets compensated and for how much. There is no sure solution, and sometimes, resolving conflict, re-establishing the equilibrium and continuing to work together do not correspond, despite best intentions. That said, addressing conflict with honest communication while differentiating between family benefits and work benefits is a good place to start when considering mental health in the family business.

Conflict Resolution and Mental Health in the Family Business
Image courtesy of Ken Kaye

What makes mental health in the family business different?

There is added pressure, and pressure plays a significant role in mental health. Working with family raises the stakes on expectations to perform as an individual and contribute to success in a competitive environment. Competitiveness – not only with other businesses but also within the family – tends to raise the stakes as well as the corresponding stress level even higher.

Family business can be emotional, and a big part of mental health is how we handle our emotions and our ability to resolve conflicts.

In a family business context, looking after mental health means working on those relationships, and one of the most effective ways to do this is by communicating honestly – with ourselves as well as others.

How often is mental health a priority for family businesses?

I have never encountered a family business that prioritises mental health. Generally, I see a hierarchy of priorities with profit at the top, followed by maintaining and upholding consistency with family values. The third priority often revolves around giving employment opportunities to family members, which isn’t necessarily in everybody’s best interest and can, therefore, have a negative impact on mental health.

However, I have seen some families that strive towards honesty, openness and rational decision-making in their business – mechanisms to explore fairness and differences of opinion. These family businesses have policies that promote mental health without explicitly targeting it.

I have never encountered a family business that prioritises mental health. Generally, I see a hierarchy of priorities with profit at the top, followed by maintaining and upholding consistency with family values.

What are some of the reasons that conflict occurs in a family business?

I discovered early on that families most typically argue about the benefits of the business: who is entitled to what regarding compensation and promotion. Conflict often occurs when a younger family member is promoted over someone older.

Similarly, conflict can also occur when a family member feels they are working harder than others, yet everyone benefits regardless of how much they participate in the business.

Most of the time, the families do not understand that there is a difference between the benefits accrued simply by being a family member and the benefits that result from direct contributions to profitability.

For example, trusts are set up to give family members a share in the business profits because they’re loved ones, not because they necessarily contribute to the business. In fact, in many cases, parents don’t feel that their children’s skills are well-suited to the family business and would prefer they found a different career path but still include them in the family trust. As long as there is honesty around this separation, conflict is unlikely.

Unfortunately, many families don’t see the separation between the two concepts. Instead, they place a higher value on perceived effort than results. Once a family starts to understand these distinctions, they can begin resolving much of the related conflict.