New Book from BCG Helps Family Businesses Work Through Inevitable Conflict

MUMBAI—Family businesses are uniquely at risk because of likely disputes among family members. But that doesn’t have to be the case. Conflict can be identified, addressed, and mitigated so it does not disrupt operations or diminish business value, according to a new book from Boston Consulting Group (BCG) being published today.

In Untangling Conflict: An Introspective Guide for Families in Business, authors Janmejaya Sinha, Carol Liao, Ryoji Kimura, and Brittany Montgomery draw on their longtime experience working in corporate strategy and with family business dynamics to provide an invaluable reference manual for all family business leaders who seek better ways to deal with intra-family clashes.

Says Sinha, lead author and chairman of BCG India, “Mahatma Gandhi said, ‘Peace is not the absence of conflict, but the ability to cope with it.’ My coauthors and I want to enable families to discover the answers for themselves by posing questions that get past their deeply held assumptions and provoke the uncomfortable conversations they must have before conflicts arise–or get worse.”

The book begins with thoughtful guidance that helps family business leaders reflect deeply on the defining attributes of their family and their relationship with the business. It then untangles the messy threads of conflict within family businesses by examining issues fraught with emotion, those related to the rights, benefits, and restrictions of ownership, and issues of business strategy.

“By exploring those three threads of conflict, our intention is to help families understand, prevent, and respond to disagreements without disrupting the business,” says Liao, a senior partner and chair of BCG in Greater China.

The issues addressed in Untangling Conflict are many. There are intergenerational disputes–between “elder statemen” founders and their sons and daughters educated abroad, for instance. In family-run businesses, fights often fester over roles for in-laws and nonfamily members. Among the most serious of all clashes are those over values–for example, between a profit-minded leader and a family member who places a premium on environmental causes.

“It’s essential for the long-term health of any family business to identify the most damaging patterns of contention so those conflicts can be addressed openly,” says Kimura, senior partner and global leader of BCG’s Corporate Finance & Strategy practice.

The book cites data from the International Finance Corporation (IFC) estimating that 80% of businesses globally are family owned. In emerging markets, notes the IFC, family businesses represent the largest source of private sector job creation and the majority of micro-, small-, and medium- sized enterprises. About 300 of the top 500 revenue-generating businesses in India and South Korea belong to families, whereas in the US and the UK, only about 7% of the top 500 businesses are family owned.

The book closes by offering tools to align expectations and reduce friction among families, nonfamily employees, and the partners of family-owned businesses.

Untangling Conflict is published by Penguin Enterprise, an imprint of Penguin Random House. Printed copies can be purchased at: https://www.amazon.in/Untangling-Conflict-Introspective-Families-Business-Hardcover/dp/0670096954.

For more information, go to: https://www.bcg.com/capabilities/corporate-finance-strategy/family-business.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.