I am fortunate to be part of Milestone Business Advisors, helping family businesses grow as a business while supporting its members. At Milestone I am surrounded by great professionals like George Bukuras, Emily Abrams, Beth Masterman, John Brzezenski, Glen Secor, Adam Narva, Louis Turchetta, and Ira Tatelbaum. This month in the Milestone newsletter, Owl’s Nest, is focused on a resource for families struggling with emotionally charged business issues that have seemed insurmountable.
https://www.milestoneba.com/making-peace-in-the-family-business
Many struggle, for example, with allocating profits or other owner compensation disputes. These are decisions a board of directors or advisors can typically be relied upon to help resolve. However, for family businesses that have not yet established effective governance, where else can they turn?
As George Bukuras writes, as a Milestone Senior Advisor, Connie Rakowsky, offers her perspective on how mediators help family members or business partners reach agreement when, despite their best efforts, all other attempts have failed. With decades of experience as a business and bankruptcy attorney, she knows how businesses are put together and how they fall apart.
As a mediator, Connie knows how mediation can be effective in bringing resolution to business conflicts that have risen to an orbit beyond the family’s ability to resolve.
The Mediator’s Toolbox
by Connie Rakowsky, Esq.
My siblings and I grew up in a family business founded by my immigrant grandfather. That early experience fortified me with a profound understanding of the benefits of working with family members as well as the complex, emotional, and often messy challenges families face daily as they make business decisions of all sizes.
Even with shared family history and values, perspectives often differ and cause disagreements tinged with emotion. Avoiding conflict is NOT the solution. That just sends issues underground, only to spring back in yet another context.
When families try and try again but fail to manage their painful disagreements—even doing their best to use compassion, kindness, and an open mind—many turn to a skilled mediator to return their conflict-laden relationships to normalcy.
Mediation is NOT arbitration.
Mediation is a non-binding negotiation between disputing parties assisted by a neutral, independent person—usually a lawyer trained in the process—referred to as a mediator. Unlike an arbitrator, a mediator does not impose a decision on the parties. Rather, the negotiated settlement achieved is always consensual between the disputing parties.
Core qualities of mediation.
Neutrality. Mediators represent neither party. They serve simply as facilitators and typically conduct private, individual sessions with each of the disputing parties in order to understand perspectives. They explore whether there may be common ground for mutually agreeable resolution and allow people to openly air grievances and work toward solutions in a trusted place.
Privacy. What is discussed in private with the mediator remains confidential unless the mediator is given permission to share certain information with the opposing party in the interest of settlement. This quality of confidentiality is recited in the Mediation Agreement and bolstered by statutory protections afforded mediators and mediating parties.
Why it works.
It’s often easier to share our honest thoughts with a mediator. Moreover, the mediator can deliver the same message as the party in conflict and that message is often heard, while the identical message from the person in conflict may fall on deaf ears.
Mediators can teach better listening. NOT being listened to is often the cause of misunderstandings. A mediator can help family members listen to one another so that everyone feels empowered and treated fairly. A mediator may also give voice to a family member whose input is rarely solicited, or whose voice may be dismissed.
Mediators bring curiosity to the table. When we are entrenched in conflict, it’s hard to synthesize ideas. Thinking of ways out of the conflict box, we keep returning to the cause of the conflict (the other person!). We tend to stop listening because we are preparing our counterargument, our defense. We adopt objectives. We often fail to be curious and interested in understanding the other’s position. The process of educating the mediator is in itself affirming of the participants.
The mediator’s toolbox. Mediators are practiced at changing the way disputing parties think about their conflict. Their toolboxes are filled with a variety of techniques for problem solving, defusing volatile emotions, creating workable solutions, and teasing out options for family members in business to consider.
Mediation can be particularly effective when a mediator becomes involved early on in the process of escalating conflict—before tensions rise to the point of burdening relationships. Here the mediator may bring real value by guiding disputing family members through this confidential, non-combative process designed for peaceful resolution.
Finally, mediation allows for the possibility of a continued relationship between disputing parties. This is especially invaluable for family members in business together.