Family Conflicts, How to Anticipate Them

Anticipation, as well as planning, is one of the keys to success for a family business, company, or organization. However, limiting these tools to economic or administrative aspects becomes insufficient when excluding family governance and its fabric composed of family members. This is not necessarily foreseen in the strategies of organizations.

It is clear that some members will be more active than others within the company; organically, they will gradually join over time. But what about those who don't? Well, for those members who do not plan to be part of the organization, it is very possible that they may demand liquidity for their participation.

In the face of this, two possible scenarios arise:

I) Division and sale of the heritage by mutual agreement for an equal distribution of assets: This nullifies the legacy, creating distance between members, as well as the intangible loss of capitals that build family wealth. II) Purchase of the share to be liquidated by other family members, which represents a crisis for the group due to the temporary economic imbalance caused by urgency, affecting interpersonal relationships.

"Those members who do not plan to be part of the organization are very likely to demand liquidity for their participation."

SHANE DOE

Anticipating these scenarios is developed through a planning method that allows families to prepare for atypical and unexpected scenarios that will support eventual crises. At IR Foundation, we want to share valuable tools to implement these strategies:

1. Communication: The absence of this guarantees misunderstandings. Implementation, instead, in secure environments where sensitive, difficult, or hot topics are shared will prevent personal distancing between family members.
2. Reserves: A liquid reserve will allow facing crises with closeness among family members, using strategies that allow for further progress and development.
3. Vision: Making family agreements regarding heritage, socializing them with family members, and receiving their acceptance will unify both values and established principles. This will not only help keep the heritage together but also allow its transcendence over several generations.
4. Family climate: Maintaining a suitable family climate helps preserve socioemotional wealth — as mentioned by Cabrera-Suárez and collaborators in their study published in the journal Entrepreneurship and International Business — providing an identity to its members, allowing them to identify as members of the group, as well as a business family.

Finally, family conflicts, although they cannot be predicted, can be anticipated. As Serebrenik mentions in his book "Dinastías Empresariales," long-term planning is not thinking about future decisions but planning the future by making decisions in the present that allow anticipating circumstances, events, or occurrences to mitigate their impact, with clarity about the steps to be followed.