Two brothers sharing ownership in a fourth-generation concrete business had a bitter falling out over an unlikely issue: a sailboat. The older sibling accused the younger of dipping into the till to support his racing habit. The younger brother struck back by issuing an ultimatum: buy out my share of the company, or sell me yours. An ugly fight ensued, affecting the business, the family, the employees, and the customers. The rift between these two men never healed. Both men went to their graves without speaking another word to one another; their children grew up as strangers instead of cousins. It's one of life's sad ironies that folks who love one another can end up having far more acrimonious business relations than people who are unrelated. And yet in our experience, conflict actually occurs less frequently in family businesses than non-family businesses. It's just that when it does break out, the fighting tends to be more intense. Why is that? The answer is devilishly simple. Fights in family businesses break out because they can. In non-family businesses, there are barriers to keep things from escalating. Owning the business removes many of these barriers. Once a conflict starts, it can easily spiral out of control. It isn't that the causes of conflict are any different in family and non-family businesses. In all types of companies, people disagree about issues related to strategy, money, status, and authority. No organization is immune to narcissistic leaders or difficult relationships between employees. But there is a fundamental difference in the two types of companies in what stops conflicts. The difference, in a word, is boundaries
