How to handle difficult conversations in family businesses…The conflict between 2 generations.

In India, family businesses often carry emotional weight, as personal relationships intertwine with professional ones. Indian family businesses, like family businesses anywhere, often face complex relationships. There might be sibling rivalry, generational power struggles, or feelings of favouritism. This makes it even harder to separate personal ties from business decisions. Such conversations are crucial, though, because unresolved tensions can affect not just family dynamics but the success of the business itself.

Before having these conversations, it’s important to first understand the real issue. Are we dealing with a surface-level conflict, like different expectations around roles or is there a deeper issue at play? For example, a younger sibling may feel they’re not being treated as an equal or an elder family member might struggle with passing control to the next generation. In either case, the goal should always be to focus on the behaviour, not the person. Clearly articulate your needs and expectations, and explain what changes would help improve the work environment.

In a non-family business, employees usually have the advantage of leaving work behind when they go home. But in family businesses, work and family life often merge. If boundaries aren’t clearly set, conflicts can spill over into both areas, creating tension during a family dinner or a boardroom meeting.

Sometimes it could be some past issues on how the elder had treated the younger generation during their childhood days or the validation that the younger generation seeks from the elder generation.

It also depends on the type of family business. In India, many family-run businesses follow one of three models. In a family-first business, decisions prioritize family members’ needs, often at the cost of the business’s financial success. On the other end is the business-first model, where business interests come before family concerns, which can create personal tensions. The ideal model is the family business enterprise, where you balance both family and business needs. This means running the business professionally while maintaining the warmth and trust of family relationships. Ideal situation would be, “Feel like a family, run like a business.”

If you notice that certain family members aren’t pulling their weight but are still kept in key roles, or that business decisions are often compromised for family harmony, you’re probably in a family-first model. Conversely, if family members struggle to maintain personal relationships due to business pressures, you’re likely in a business-first model. Most family businesses start off as family-first, especially when they’re in the entrepreneurial phase, but eventually need to strike a balance.

To be in a workable model, setting up governance rules from the start is key. If you establish guidelines around things like hiring family members, role expectations, and compensation, you’ll avoid conflicts later on. That way, when difficult conversations arise, you have a clear framework to refer to. It’s much easier to discuss sensitive topics when everyone knows what’s expected of them from the beginning.

What if the difficult conversation doesn’t go well? How should the family proceed from there? You should always be prepared for the conversation not to go as planned. Have next steps in place. If emotions run high, it might be time to bring in a family business consultant or even a family therapist, depending on whether the conflict is more business or personally related. Sometimes just having a neutral third party could make the difference between a productive conversation and an emotional outburst.

In India where family ties and responsibilities are often deeply ingrained in business. The key is to focus on the health of both the family and the business.

?