How Family Business C-Level Executives Resolve Role Conflict and Maintain Friendship

Situation:

“Stefan” the president of a USD 50 million European biotechnical company hired his friend “Lukas” as the organization’s chief executive officer (CEO). The company leadership included many well-educated family members, including Stefan who held a PhD in Chemistry and Biology. But, their focus on technology rather than interpersonal skills made it difficult for them to see how to change the company’s leadership dynamics.

Lukas, as the company CEO for five years, brought in new strategies and stricter organizational processes. Although this allowed the company to survive and continue to thrive, the family thought his leadership style too rigid and his actions too dominant. Stefan wanted to run the business from a “big picture” standpoint, rather than Lukas’ detail-oriented style.

The president also surrounded himself with a core group of family members and employees, which made it more difficult for Lukas to run the business his way. This caused personal issues between the two friends and they decided to hire outside help to explore how to continue working together.

Solution:

I was brought in to help the two C-level executives decide if they could restore their relationship, or whether they needed to discontinue working together.

Our proprietary processes, quickly determining root cause to identify the best solution, revealed some interesting dynamics between Stefan and Lukas.

For example, during meetings with Stefan, Lukas, and their three top executives, I observed counterproductive behaviors and pointed them out. More specifically, Stefan talked when angry and blurted things he should not say, while Lukas bragged about his abilities.

Stefan appreciated my comments and what he learned from them. He invited me to a follow-up meeting to gain a better understanding of the assessment results. Through our conversations, we uncovered the crux of the company’s dilemma: If they fired Lukas, the company must pay out a substantial severance package, but not if he quit. That meant Lukas was unlikely to quit and, if he stayed, the company was not likely to get his best performance because of the leadership role conflict. We identified what it would cost the family business to keep Lukas as CEO versus the severance package cost. I also shared some ideas with Stefan on communicating with Lukas about the situation.

In turn, Lukas asked to meet with me to discuss best possible outcomes for him, the organization, and his waning friendship. Focusing on his situation, our conversations helped him figure out how to talk with Stefan.

The C-level executives met to talk through the situation, and hammered out a win-win solution that fit both parties. They decided they could not work together and agreed a severance package would cost the company less in the long run.

Successes:

I helped Stefan and Lukas resolve their situation within a couple of months, from initial data to final decision. They split in a friendly manner and stayed friends afterwards. The organization got back on track operationally and focused on growing in new ways.

They also learned that Lukas’ rigid structure was not as important to Stefan and that loosening up, without losing control, could actually help the company grow faster.

The solution became clear the more I learned about the leadership dynamics. I knew they each trusted me because of my experience, so I paid careful attention not to get in the middle and play them off one other. I simply asked pertinent questions, so they could come to best possible solution—going their separate ways professionally.

What makes your professional relationships difficult and how will you resolve them? If you have questions, contact us.