Conventional wisdom warns us against doing business with family members. Negotiations between people linked by close ties can result in hurt feelings, damaged relationships, or simply the nagging feeling that a better deal was within reach.
Yet circumstances sometimes require us to negotiate financial matters with a relative. In other situations, someone close to you may appear to be a worthwhile negotiating partner. Whether you view negotiations with a family member as a duty or an opportunity, these three guidelines can help you navigate family conflict that arises from business negotiations and engage in successful conflict management.
1. Anticipate Complications.
Through shared experiences, relatives accumulate knowledge about one another that can enhance their negotiations. Negotiators with close ties tend to cooperate rather than compete with each other, a preference that lays the foundation for working together to unlock hidden value.
Relatives who do business together often have a solid basis of trust and understanding to build on, but there’s a flip side: family members often tend to avoid conflict rather than confront it.
Because it can be so difficult to manage family conflict once it arises, Harvard Law School professors Frank E.A. Sander and Robert C. Bordone encourage family members to consider and analyze the difficulties that may arise before they negotiate.
To head off conflict, they advise you to take time to agree on the norms, standards, principles, and processes that will guide your interactions. For example, if you are hiring a sibling to design your website, sit down for a formal meeting, if possible (rather than just discussing over the phone or via email or text). Set clear expectations, work on managing expectations, and set deadlines and time to talk for each stage of the project.
Also be sure to discuss how you will handle differences in opinion or taste as your sibling designs the site. Make an explicit commitment to discuss any differences or conflicts that emerge confidentially between the two of you—to keep other relatives from becoming involved and escalating any family conflict that might emerge.
2. Allow Feelings to Surface.
In talks with relatives, the temptation to sweep negative emotions under the rug can be overwhelming.
Suppose, for instance, that Joe puts his vacation home up for sale, and his sister and brother-in-law, Judy and Mario, make a low offer. Soon after, Joe receives a significantly higher bid through a real-estate agent. He offers Judy and Mario the chance to match the bid, but they decline. Joe accepts the higher bid and informs his family members of this fact in an e-mail message. When he sees them at a family party soon after, they seem distant.
Joe feels guilty about declining their offer on his house, but also nervous about confronting their apparent disappointment directly. Eventually, the unexpressed feelings and varying conflict styles escalate into a family conflict.
In their book Beyond Reason: Using Emotions as You Negotiate (Penguin, 2005), Roger Fisher and Daniel Shapiro write that negotiators can use emotions to improve their relationships and satisfy interests creatively. The authors urge us to address five “core concerns” that provoke many emotions: appreciation (having our thoughts, feelings, and behaviors acknowledged); affiliation (the desire for closeness); autonomy (the need to act freely); status (having one’s standing recognized); and role (achieving a fulfilling role and responsibilities).
To express appreciation for Judy and Mario’s feelings, Joe might open up a discussion about the issues most important to all of them. Suppose that they reveal that they thought Joe wouldn’t suffer financially from accepting their lower bid. Joe could express understanding of their point of view while correcting their false impression of his finances and sharing his own perceptions of the situation.
3. Seek Outside Help.
If business negotiations with friends and relatives threaten to become contentious, Sander and Bordone recommend that you propose consulting a neutral third party, such as a mediator, family therapist, trusted friend, or expert, for help in family conflict resolution.
Involving experts ahead of time can also help you avoid family conflict. As for Joe, before negotiating, he and family members might have agreed to seek an appraisal of the home for a fixed fee. The appraisal of a neutral expert might have steered Judy and Mario toward a more appropriate bid while avoiding the need to involve a real-estate agent.
As we all know, deep feelings, both positive and negative, suffuse close relationships. Sometimes the smartest option is to recognize the difficulty of negotiating rationally and to turn over some degree of control to an outside party.
What advice have you learned from resolving family conflict after a business dispute?