Most business owners know not to bring personal issues to work, but how do you do that when your ex-spouse is your business partner, co-owner or employee? Although it does not happen often, divorced spouses have been able to continue operating a family business successfully together. How do they do it?
Maintaining Mutual Respect and Trust
In any business relationship it is crucial that the parties have professional respect and trust for one another. A lack of respect and trust undermines the authority of a business partner and sets the tone of behaviour for the entire company towards that partner. A negative culture develops and divided camps can form further undermining authority, decisions and paralyze the organization. A mature attitude is required where each party’s strengths are valued.
The divorced spouses would need to leave behind the “cause” for the marital breakdown and treat their relationship as “third party”. I recommend personal executive coaching for each party especially in the first year post divorce. As a neutral executive coach I can be a sounding board for the parties when they don’t see eye to eye, when their personal past and emotions creep in, or to just vet their business decisions and communication strategies to their former spouse as well as provide conflict management tools. Critical to the success of working together post divorce is having a well thought out transition plan moving you from married and in business together to ex-spouses and in business together. Adding professional counselling will help with personal, emotional and psychological healing.
Establish Clear Roles and Responsibilities
Small or family businesses are very entrepreneurial by nature where everyone roles up their sleeves and pitches in to help and do whatever is needed whenever it is needed. That may have worked better when there was marital bliss, but after divorce a key to a positive work relationship is to clearly define who does what including demarcating reporting lines. There can be only one boss who may at times have to make the final decision. Conflict can erupt and blame follows without it. Salaries can then be matched to the job responsibilities and effort based on current industry and market standards. This helps diffuse common beliefs that one party is incompetent, not doing their job or is overpaid for their effort.
Set A Communication Protocol
A lack of communication during marriage is a primary factor for marital breakdowns. To overcome what did not exist or was done poorly, the parties need to establish a communication protocol that allows each party to respectfully be heard and to voice their point of view. This can be accomplished by setting ground rules for communication, setting specific times for meetings, agendas and methods of communication. A conscious effort needs to be made to only discuss business at work and family matters regarding children outside of working hours, emergencies excepted. Having clear roles and responsibilities will also limit the times the parties need to “see” each other.
Talk to Management and Employees
When family business owners divorce, the management and employees, not unlike children in a divorce, need to know and understand how this will impact them. They need to know if they will have job security, that the company is stable, and because a business is a family – that they will be nurtured and cared for. As I do with the couple as parents, I help parties frame what information needs to be communicated to staff from announcing their decision to divorce yet remain operating the business together, to how staff can actively participate in making the business a continued success. I develop a communication strategy and help the parties rehearse their delivery which I emphasize is crucial to be done together. The behaviour of the parties is more important than the words they say. Setting their minds at ease will reduce their fears and mitigate the risk of losing those key staff.
Create an Agreement
Yes you may have just signed a separation agreement but it is important to execute a shareholder’s agreement to establish what would happen if either party wants to sell their share in the future. Most businesses sign shareholder agreements but married business owners often do not which is a fundamental reason divorces and family businesses end up in court. This is an ideal time to have a neutral mediator guide the parties through a process that will allow for a peaceful parting in the future and to avoid another “divorce” because it is unlikely the business could survive another.
So if you have decided keep and operate the family business together after your divorce you can be successful if these key factors are carefully considered and followed. But remember you don’t have to do it alone; it will be hard work and most importantly “Its business not personal.”
Mary Krauel, Senior Negotiator/Mediator – PRM Mediation –
Divorce, Corporate, and Elder Care Issues – Serving Southwestern Ontario from Mississauga and London.