Good communication and interpersonal relationships are imperative to overall business performance and sustainability. Yet their importance tends to be neglected. Peter Drucker, the father of modern management, once said that 60% of all management problems are the result of poor communication.

While poor business decisions can cause ultimate failure of a business, I have witnessed many closely held businesses become torn apart and fail because of communication and relationship problems. Here are five very common perils that threaten to destroy business relations.

Dictatorship, or as Don Jonovic, president of Family Business Management Services, describes it, the “der Fuehrer or el Heffe” management model. Everyone knows the management style I'm describing: “This is mine and if you want to work here or inherit your share when I'm gone, just do what I tell you. If I want your opinion, I'll ask for it.”

If someone does own it all, that's obviously their prerogative; but it's a management style best suited to a business in its last generation, because it is extremely dysfunctional in developing capable successors.

Unfortunately, a more open, participatory management style goes against the basic nature of those who like being the boss and telling others what to do. Being in charge and having the final say is one thing, but some people seem to have a need to force their will on others just to prove they can, and to make sure that no one forgets it.

On a personal note, when I was growing up my dad used to kid my brothers and me any time we would say, “I think.” His response would be, “How do you know what you think? I haven't told you yet.” Fortunately for us, he wasn't serious.

While we all knew the final decision was his, he always encouraged us to use our heads and come up with new ideas. When we did, he would talk them over with us and make us explain our reasoning, think about what the consequences might be and realize what, if any, alternatives were considered.

Secrecy

One of the biggest roadblocks to progress in any organization is secrecy. Jonovic says that most family businesses aren't just closely held, they're hermetically sealed. He describes making a presentation in which he discussed how information is passed from one generation to the next. After the presentation, a woman came up to him and said he'd missed the method her husband used with their son: “Read my mind.” Since then he's included it in every management succession seminar.

Far too many owners and senior managers share information only on a need-to-know basis. Successors need to be able to share in the accumulated wisdom and experience of their elders. They shouldn't have to learn by osmosis or only their own experience. Key employees and family members want and need to know the answers to the following questions:

  • What are we expected to do?
  • Why are we doing it?
  • How are we doing?
  • How can we improve?
  • What is our role?
  • What's in it for us?
  • Where is the business headed?
  • What is the plan to get there?

Admitting you're wrong

The third behavior I see all too often is people not admitting they're wrong. It's just as often true of the junior members of the management team as it is of those in senior positions. They frequently resort to turning a difference of opinion into an argument. The result is that this tends to escalate the disagreement to the point where it becomes an emotional exchange rather than a pursuit of a rational discussion. This behavior generally produces one of three outcomes:

  • The person in charge crushes the challenge to his/her authority.
  • Both parties revert to childish behavior, which only breeds embarrassment and/or resentment.
  • Knowing the behavior that differences of opinion create, others simply give up challenging the person's ideas or assertions, and much-needed constructive discussion of issues, logic and decisions never occurs.

Unresolved conflict

These problems are like an insidious cancer that eats away from inside the business. If not addressed and resolved, they not only have an adverse effect on business performance, they can undermine a successful transition of the business to the next generation. Fortunately, most states have some type of mediation program - if people will take advantage of their services.

Next Page: Inability to fight fair

It's important to recognize that disagreement is normal and inevitable. In fact, if the business is going to change and grow, it's essential. Henry Ford once said, “If two people in a business agree on everything, then one of them is superfluous.”

The problem occurs when a disagreement grows into conflict. All other issues may become secondary and the conflict could become the business' Achilles' heel. Unfortunately, conflicts are often never properly addressed.

Under an authoritarian leader, problems often don't erupt until the leader dies or turns over the reins. By then, the differences between the heirs are often irreconcilable except through the legal system, where the only winners are attorneys.

Inability to fight fair

To learn to fight fair, people need to focus on developing both emotional maturity and interpersonal skills. At a minimum, there are five basic ground rules: avoid personal attacks; don't drag others into taking sides; don't use subversion, focus on the issue at hand (i.e., don't dredge up old issues); and keep heated discussions private. Bullying or childish behavior may win battles, but the result may be that family relationships and/or businesses lose the war.

When it comes to working with people, those who do it best tend to follow two basic rules: the golden rule, which is to treat others like you would like to be treated; and the platinum rule, which is to treat others as they would like to be treated. The platinum rule basically recognizes that everyone is different and reflects two of the habits Stephen Covey describes in his book, 7 Habits of Highly Effective People: “Seek first to understand, then to be understood” and “Think win-win.”

I think the first is self-explan-atory. It can help, though, if the parties involved have some understanding of personality style and generational differences; many state Extension programs offer workshops on these topics.

The win-win idea, however, is often misunderstood. It isn't based on compromise, but on fostering an attitude committed to finding solutions that will truly benefit both sides of a dispute. Solutions do not exist in themselves — they must be created.

Editor's note: Danny Klinefelter is a professor and Extension specialist at Texas A&M University and director of The Executive Program for Agricultural Producers. He may be reached at 979-845-7171 or at dklinefe@agtamu.edu.