ILMA Compoundings August 2017 - 33

showing up as a crisis. In families with
long or multigenerational histories and
with strong emotional ties, recognizing
and managing conflict is more difficult
and more challenging than for nonfamily managers.
As experts in family business,
we understand that tried-and-true
approaches of conflict resolution have
their roots primarily in the legal and
family counseling fields, and as such
tend to present overly simplistic ways
to "resolve" conflicts that might not be
effective in addressing the complexities
of relationship that are common to
families in business together. In order
to figure out a realistic approach to
these unique challenges, we recommend asking five key questions:
* Accurately defining the various
components of a conflict can be
helpful. Can we clearly describe

the conflict in such a way that all
family members believe their perspective or interest has been heard?
* Effectively managing a conflict
often means being creative and
flexible. Are we willing to explore
every possible option to help
address a conflict?
* Longer-term solutions to conflict
take time, commitment and energy.
How might we think about longterm solutions versus "quick fixes"?
* Sometimes conflicts can fester longer
because it is difficult to talk about
them. What is it that we either
"can't" or "won't" talk about that
might be keeping a conflict in place?
* Lessons from past family conflicts
can inform current ones. What
can we learn from past generations to avoid repeating mistakes
made in past conflicts?

long-run fiscal projections are subject to a wide margin of error
because, in addition to potential legislative changes, they are
sensitive to assumptions about economic growth, inflation and
interest rates.
The bottom line is that government deficits and debt do
matter, but it is virtually impossible to predict when financing
problems might occur. There is no particular level of the debtto-GDP ratio that will trigger a crisis, because much depends on
the domestic and global economic and financial environment.
While it seems likely that federal deficits will head higher over
the next few years, the prospects for U.S. growth to be higher
this year than last and for pro-growth fiscal initiatives to be
legislated - which should augment the already positive fundamental backdrop - are encouraging. Both would serve to retard
increases to the present deficit, if not begin to whittle away at its
future balance.
At the moment, and likely for the foreseeable future, the outlook for economic activity is positive, driven mainly by consumer
spending but augmented by a return to capital expenditures from
the increasingly sanguine business community. That should con-

The bottom line is that true conflicts in family businesses tend to not
only be complex but also the result of
long-term, developing processes rather
than one-time events. Finding ways to
address these questions can give families a firmer foundation from which to
address conflicts rather than becoming
bogged down by them.
De Dreu, Harinck, & Van Vianen, (1999). Conflict
and performance in groups and organizations. In
Cooper & Robertson (Eds.), International Review
of Industrial and Organizational Psychology (Vol
14, pp. 369-414). Chichester, UK: Wiley.
1

Rhodes is a senior consultant
with the Family Business
Consulting Group and serves
as core faculty with Pepperdine
University's Graduate Programs in Organization
Leadership and Change in Malibu, California.
He can be reached at 949-422-3762 or
rhodes@thefbcg.com.

tinue to support the reinforcing cycle of sturdy economic growth
and better corporate profits.
As for investors, we continue to believe stocks will deliver
better returns over the year's balance than bonds or cash. While
a correction is overdue, and there are geopolitical risks lurking
in the wings, including North Korea, European elections and
Middle Eastern military confrontations, the stock market's longterm advance should not be derailed if something erupts. The
economy is sound, global activity is in a synchronized upswing
and corporate profits are growing smartly. These are conditions for risk-based capital to be treated favorably. Our favored
domestic sectors include financials, housing-related industries,
health care and energy. We also continue to advocate European
equities and are pleased to see the year-to-date returns generated from many bourses within the Euro zone well exceed those
generated in the U.S.
Portions of this article were prepared by Broadridge Investor
Communication Solutions Inc. and Mark Luschini, chief
investment strategist, Janney Montgomery Scott LLC.
Member: FINRA, NYSE, SIPC.

ILMA Compoundings August 2017

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