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This week, Walid Chiniara, a partner who leads the Family Enterprise Consulting practice in Deloitte in the Middle East, discusses the delicate act of communication in family businesses.

As a family business advisor, I have observed numerous interactions between family members as owners and employees of their family business.

Among them, these individuals have navigated myriad obstacles and challenges, whilst in the majority of cases displaying an admirable amount of love, courteousness and respect for one another.

However, a common pitfall that I have witnessed time and time again is the misconception that diplomacy is the avoidance of the truth.

Being diplomatic is not the same as avoiding the truth, and the two are not mutually exclusive.

Diplomacy is the art of creating and managing relationships, and of managing the communication between different parties, often with differing interests or viewpoints.

As we no doubt know, differing interests and viewpoints are a common occurrence in any walk of life, including family businesses, but such matters should not be swept under the carpet but dealt with head on.

That is not to say diplomacy or tact is redundant. Of course the manner in which messages ought to be delivered differ depending on the circumstances at hand and the individuals involved.

However, all relationships demand a measure of honesty, and communication is an important factor that goes into making any successful relationship.

Successful communication and the art of diplomacy hinge on the ability to know what to say, when to say it, and how to say it.

This is the balancing act between diplomacy and honesty.

For example, consider the following scenario:

Karim is currently a Director in the Family Business, and is resentful of his brother Khaled, who is currently the Group CEO and monopolises operations, whilst not communicating or consulting effectively with the shareholders or Executives in the Business.

Karim is of course frustrated, and Khaled has sensed this frustration and has approached him to ask if there is a problem. There are a number of ways that Karim can respond:

  • “Everything is fine”
  • “Well, I’m feeling a bit out of the loop with what’s going on in the Business - I’d have liked to have known about the latest acquisition before I read about it in the news this morning.”
  • “No, you’re taking control of the Business. Even though you’re CEO, you’re still an employee, that is not your decision to take. As shareholders we have a right to be consulted on what’s going on.”
  • “You’re an absolute power and control freak, I’m tired of your behaviour.”

Of course these are exaggerated reactions, and not an exhaustive list of the options available to Karim, but what is important is the message that is being conveyed.

Demonstrated above is the fine line between avoiding the truth, brutal honesty and diplomacy.

You’re probably thinking, “Well, which is the right response?

In the above scenario, we have no context, no awareness of the personalities of the individuals or the history of the relationship.

But what we do know is that transparency and communication is key. Based on that, I can tell you that answer one is most definitely not the right answer.

This leads us onto the topic of negotiation, perhaps the subject for my next post.

There is a certain skill to diplomacy and it is founded on the principle of negotiation.

You yourself as a member of a family business are a ‘negotiator’.

In this capacity there is a need for continual negotiation between you and your counterparts and any other party related to the family business, and you have a duty to harmonise the interests of all parties concerned.

Focusing on doing so allows you to build relationships based on trust and transparency, which in turn stands you in good stead to face any hurdles that the family business may throw at you.

 

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Walid Chiniara – Deloitte Middle East

Walid heads the Deloitte Middle East Family Enterprise Consulting practice, serving over 15 countries across the region. He is a leading expert in the area of family governance in the GCC and the MENA region. In 2017, Walid celebrates 35 years of professional experience working across the 5 continents, of which 20 years in his capacity as a family business advisor, serving elite business families in the region. He is among the first to have advocated the need to introduce family governance to the Middle East as a means to manage risk and preserve and secure family wealth in the long term.

Walid is also an international corporate finance Lawyer, and an accredited mediator specialised in managing intergenerational conflicts, and has worked with over 100 prominent business families in the region, devising multi-generational succession plans and governance systems.

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Alexandra Sharpe – Deloitte UK

Alex is a partner who leads the Deloitte UK Family Enterprise Consulting team and works with all types of enterprising families: those who own businesses, hold investments, and/or engage in philanthropy together. Working with families across the globe, her main focus is supporting and advising on generational transitions and governance issues. She helps families define their goals and establish the structures, processes and relationships that enable them to achieve success. With a background as a Chartered Accountant and a Masters in Organisational and Social Psychology, Alex seamlessly addresses the multifaceted business and relationship challenges that entrepreneurial families often face.

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