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