Top Seven Steps to Successful Succession Planning

  1. Start Early. Most families don’t talk about a plan for the continuance of the family business. Even fewer complete a plan that can be successfully carried out. Developing a good plan takes time, often years. The sooner you start with succession planning the better. Begin discussing the issues before a crisis.
  2. Communication. Ground rules need to be established and the best way to do this is to involve a skilled non-family facilitator or mediator who can lead the necessary discussions. Potentially high emotions will need to be kept under control, the conversations kept on topic and various relationships respected. It is almost impossible for anyone personally involved in the succession planning issues to manage all these elements in a safe and neutral manner.
  3. Involve all stakeholders. Successful planning includes all family members in the discussion. Make sure attention is paid to the personal feelings, ambitions and goals of everyone concerned and do not let your expectations override their needs. Treat all family members as individuals and do not assume they want the same things as you do or as each other.
  4. Seek the advice of outside experts. Your lawyer and financial adviser can help you put together a succession plan. However, don’t ignore the emotions and family conflicts that play critical roles in the success of your family business succession plan. Silence, not talking about succession, ignoring the emotions and conflicts in the family, these are the main reasons why family business succession planning often fails.
  5. Document values, wishes and goals. Having these included is a much better way to flesh out the intention behind legal documents which can be dry. And besides people will more easily remember family mantras like “Whatever you do, don’t fight” than a clause in a document about dispute resolution.
  6. Implement the plan. Start implementing the plan as soon as possible so any unforseen consequences can be dealt with in a timely fashion and whilst those in control still have the power to change it. It is always going to be far better dealing with these issues in a productive manner around the boardroom table than in the morgue or the divorce courts.
  7. Review the plan. Things always change. The law and relationships certainly do. Plans put in place several years ago should be reviewed to ensure they can achieve what they aim for in light of the positions of the stakeholders and the law.

Notes from Bernie’s radio interview with Tony Delroy’s Nightlife on ABC Radio 702 on Tuesday 10 March.

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Introduction

What is it about succession planning that strikes fear into the hearts of the most resilient of human beings? Why is it that too many farmers and family business owners let death, divorce or illness make their succession planning decisions for them?  Tonight we are joined by psychotherapist and mediator, Bernie Bolger and Estate Planning Lawyer and qualified Financial Planner, Donal Griffin, as we explore exactly what is it about succession planning that sees it top the list, year in year out, for the task most avoided by family business owners and farmers alike.

Question

As the cliché goes, there are only two things we can be sure of in this world – death and taxes! Surely succession planning would make the inevitability of these events less painful?

Spoken like a true homo economicus!  That assumes that we are all rational human beings and history has shown us time and time again that we are not!  Only 30% of family businesses make it to a second generation and only 12% to a third. Why is that? Succession planning done well is messy – it involves emotions and conversations and conflict and egos – it is much easier to just have a beer at the end of the day and discuss the footy!

Question

Emotions and Conversations between whom? Are you suggesting succession planning involves more than the will being read out about a week after the demise of the head of the family?

That might have worked in days gone by when the eldest son was the automatic heir. However nowadays with a higher level of education available to all family members, increased job opportunities outside the business and the recognition that the women in the family might actually be better qualified to take over the reins into the future, inheritances have become an awful lot more complicated.  And this is before we have even spoken about the ‘in-law factor’…

Question

But surely a decent lawyer and financial adviser working together can draw up a water tight document which will make sure the wishes of the patriarch are followed and to hell with non-believers?

Therein lies the problem.  Succession planning is not just about taking into account the wishes of the owner– a good succession plan must also take into account the expectations and needs of all the relevant family members and ultimately get the buy-in of all the stakeholders.

Most families think of succession planning as three issues: management, ownership, and financial. Left out of the discussion is the reality that all succession planning is fundamentally emotional. There is absolutely no point in a farm or business being left to one family member if that is going to cause irreparable family rifts, turning brother against brother and mother against daughter.  Even though the will supporting this scenario might be clear, that to me would be abject failure.

Not only is there no success in that particular succession, the law in Australia gives most disappointed family members the right to challenge a Will. This means that the parties can communicate through lawyers which rarely helps and usually makes things worse.

Question

It all just seems too hard.  We all know you can never please everyone so what can we possibly do to get this right?

It all starts with communication.  Which sounds easy but is actually what stops the process getting started in the first place.  People find it extremely hard to talk about money and wealth at the best of times but layer it into a mix of family – both in-laws and out-laws – differing expectations and understandings around contributions to the business, fears of being judged as being too greedy, fears around what will happen if you don’t want to be part of the business, fears that all will not be equal amongst equals and it is easy to understand why families falter at the first hurdle. Even easier to understand why the beer and footie conversation is a very attractive option!  So in order to make sure the important conversations occur in a productive manner – families need to realise that this conversation is probably one of the most important they will ever have and set aside the time and space to have it properly. All the research shows that investing in the skills of a good facilitator is going to increase exponentially a family’s chances of doing this well.  Someone who can speak to all stakeholders in a safe manner and understand the values, needs and goals of each person separately and as a family.

Question

So what can a facilitator do that a selected member of the family can’t?

The big difference is neutrality.  A facilitator comes in without an agenda or a bias towards any particular outcome. Family dynamics and politics are always difficult and what we are trying to do with succession planning it to get honest answers from all stakeholders.  Assumed expectations are a killer.  Perhaps a business has been in a family for generations – think how hard and scary it might be for the fourth generation to actually say ‘I really don’t want to have anything to do with it’.  Think about the guilt, the pressure to carry on the family tradition and in many cases it’s easier to just conform and get on with it – condemning oneself to a life without passion.  And there is the other side of the puzzle.  Perhaps the current owner recognises that his son / daughter does not have the tools to run the business and an outsider would do a better job.  But he doesn’t know how to say this in case it’s taken in the wrong way and so he says nothing.  And even if a formal meeting is convened but is run by a family member – these issues are still unlikely to be addressed.

Question

Where do you see the place of professional advisers in this? 

It is really important to brief the professional advisers as soon as possible in the process, whether that be an initial consultation to just to let them know this is what you want to do and possibly also to introduce them to the facilitator. The more collaborative everyone is, the higher the probability of a positive outcome. Often a person who runs a business or a farm is a strong personality and is used to doing things their way. When choosing a professional adviser, it is important to select someone who will challenge the person so that they make informed decisions, with an eye on how those decisions are likely to be received. I see lots of Wills which are most likely written by the client with the lawyer simply as an enabler or allowing the use of their firm’s name on the back page.

Understanding the drivers and values behind different stakeholders’ needs and goals can help advisers also adopt less of a zero sum or win/lose approach and put more effort into creative problem solving.

Whether you own a business or farm, time is either your ally or your enemy. You can spend time planning for succession during your active business or farming lifetime, or postpone planning and wait until the more chaotic, uncertain and expensive succession planning occurs post-mortem, when the choice is no longer yours.

The lesson? Start early. Select your successor(s), and work with a financial and legal professional to develop a succession plan before it’s an issue.

Question

I’m still not convinced that everyone’s needs can be met.  What happens if after speaking with a facilitator it is obvious that e.g. three out of four siblings want to take over the business?  We all know that sometimes decisions have to be made and having too many chiefs at the helm will interfere with this process.

At the end of the day hard decisions need to be made but it is still better for these to be made while the owner is alive and conversations are still possible.  It is also important to understand that managing and owning a business are not necessarily the same thing and getting paid market rates for jobs done irrespective of ownership is an important key. Lowering expectations early in the day and being clear and transparent about the succession plan enables people to make informed choices e.g. if the major asset is the farm with little liquidity, it is better understanding upfront rather than finding out after 20 years on minimum wage that it does not make financial sense to start subdividing the farm to support the lives of all the siblings and their dependents.  Decisions about staying or going can be made at the start of working lives rather than half way through.

Question

Staying with the farm issue, is it possible to set up structures so that all family members can be looked after even in the absence of liquid assets?

The best structure to look after more than one family member is a trust. It establishes the difference between decision makers (the trustee) and the people to be looked after (the beneficiaries).

In a very simplified way, the trustee’s role is to consider the needs of all of the beneficiaries and distribute the income and capital from the trust when the trust deed and the circumstances (cashflow).

Even creative lawyers cannot magic cash out of a trust if there is none there and the assets are illiquid and cannot easily be converted to cash. However, a trustee could refinance the illiquid assets and get a mortgage or overdraft to either pay money to the beneficiaries from time to time or invest a separate amount of capital into a separate trust or sub fund which is invested in liquid investments which do produce cash.

One issue with farms is that they are dependent on crop yields or markets and they may have several bad years in a row, with not much cash flow. Asset rich but cash flow poor.

It may be that the trustee is directed by the patriarch or matriarch to borrow money themselves in order to have that money given to the other family members. This can be the price for them to be the trustee and not be under pressure to find resources to distribute to other family members.

Alternatively, the patriarch or matriarch may allocate separate assets for the family members who are not living with the trustee. These assets could come from life insurance policies.

Question

And what about the dreaded D word?  How do we protect the family business and assets from those pesky, money-grabbing in-laws?

Every person who sets up a trust has to set out the beneficiaries. In some trusts which are bought off-the shelf the list of beneficiaries is very broad and includes spouses of all of the beneficiaries. The first thing that should be done to protect against spouses is for them not to be beneficiaries. It is best that this is done at the start of the trust as changing beneficiaries later can have negative tax consequences.

However, in Family Law proceedings the Court has jurisdiction to look at trusts and may determine that they are in effect property of the family or a resource of one of the parties to a marriage. This is a very complicated area but, at Legacy Law, we can advise clients how to do this.

One other way is to ensure that any family money given to a household in which there is an in-law in residence is given by way of a loan, rather than a gift. Again, at Legacy Law, we have written an article on this and invite your listeners to get in contact with us if they would like to get a copy of that.

 Question

Given that so much of our identity is wrapped up in our work, how hard is it emotionally for a successful business owner to just hand over control?  How hard is it for them derive meaning and purpose from other aspects of life?

And once again we can explode a myth.  The beauty of a well-executed succession plan is that it is not an all or nothing scenario.  It is exactly what is says it is – a plan with milestones and timeframes. Implementing a plan over time gives the various stakeholders a chance to get used to the idea of change.  It gives the successor a chance to take on more responsibility in a structured fashion and make mistakes along the way. At the other end of the spectrum it gives the owner a chance to develop other interests and ways of creating a legacy.

Question

Is thinking carefully about succession important even if there is no family business or family farm?

The short answer is yes.

Even if there is not a business or a farm, there may be a family trust which holds family wealth. In our experience, very little thought is given as to how to transfer control of these structures to the next generation. Without careful consideration, it may be that one only of the siblings gets total control of the trust and, people are disappointed to discover that neither the law nor a Will can bind them to act in a particular way.

There have been several cases recently reinforcing that the trustees of discretionary trusts and superannuation funds have very broad discretionary powers and even though there are clear conflicts of interest, the person in control can quite legally act in a way which results in them getting all of the trust assets.

We all learn from experience and are lucky to see the different experiences of many families. It is often universal and learnings from different parts of the world are often very relevant here.

We curate ideas and we are bringing together some thought leaders including a man called Alan Crosbie who has written a book called “Don’t Leave it to the Children” at a conference in London in October this year (yes, just before the Rugby World Cup semi-finals) if any of your listeners would like to hear how people in the rest of the world manage these difficult issues.

Alan points out that we are unreliable judges of our children’s skills, particularly not only when running a business, but also when running a trust. Their financial needs, motivations and abilities may be very different from each other. Unaddressed,that usually ends in irreversible family conflict which is not the legacy most people would want.

 

 

 

 

How to Separate Well

 

Listen to the Podcast of Bernie Bolger and Jackie Jones speaking on Tony Delroy’s ABC 702 Nightlife

How to Separate Well

With one in three marriages ending in divorce and a three year waiting time for the courts to sort out who owns what, including the kids, there has to be a better way for separating families to draw a line in the sand and move on with their lives.

In this hour we’re talking with Bernie Bolger relationship counsellor, family mediator and Collaborative Practitioner and Jackie Jones Accredited Family law specialist, UTS clinical practitioner and Collaborative Practitioner about the alternative, less conflictual paths which families can take to end their relationship as it is and move on – as totally separate individuals or as co-parents if there are children involved.

When a relationship runs into trouble, what do you see are the first things that a couple would normally do?

I think most people would assume that marriage counselling is the ‘normal’ first step for couples to take when their relationship starts going awry. However research says that less than 5% of couples actually seek professional help when cracks start to show. And of those 5%, most of them wait six years before they do so. Given that half of marriage break downs occur within the first seven years, the earlier couples seek outside help the greater the chances that the relationship can be saved. The most devastating financial and emotional event to happen to a couple and family is the breakdown of a marriage / long term relationship and so I would urge everyone to consider counselling before moving on to the next steps. Of course there are certain abusive relationships which are toxic – be it emotional, physical or financial – and in these cases it may be better for everyone involved and especially for the children, that the adults involved separate.

So if the relationship is irreparable, what do you see are the next steps – is it straight to court all guns blazing?

That is such an important question and what a couple does next can set the tone for the next 20 or more years of their lives. I cannot stress enough how important it is that everyone gets proper legal, financial and emotional advice. One of the most common mistakes a couple makes is to try and get their relationship counsellor to mediate an arrangement for them. Unless the counsellor is an accredited Family Dispute Resolution Practitioner (FDRP), this is akin to getting your doctor to give you a filling. He’ll probably be able to do it but the result is going to be a hell of a lot more clumsy and the process a lot more painful than if you had gone to a dentist in the first place.
So in the first place I would suggest that a couple try Family Dispute Resolution or Mediation. It is very different from counselling and the skills involved are quite separate.

So what exactly is Family Dispute Resolution?

The Federal Government is committed to increasing the awareness and provision of alternatives to litigation, especially for family law disputes. For many families, post-separation is a life crisis that requires a holistic approach from service providers.

Family dispute resolution (FDR) is the term used in Part II of the Family Law Act 1975 to describe a process in which a family dispute resolution practitioner assists people affected, or likely to be affected, by separation or divorce to resolve some or all of their disputes with each other. Before filing an application in court for parenting orders, it is a requirement to attempt FDR in parenting matters unless an exception applies e.g. family violence or child abuse.
Family dispute resolution allows couples or families to have difficult conversations in a safe, calm and controlled environment. It enables separated couples to discuss and then make their own decisions about how they would like to resolve their post separation issues whether it be in relation to their children or in reaching an agreement in regards to property & financial settlement. It is a future focussed, impartial and non-judgemental process.

A mediator’s job is about finding common ground and reopening communication channels, even when this may seem like an impossible task. And the best thing about mediation is that it is totally confidential and should a couple be unable to come to a resolution, any of the discussions or offers made during the process cannot be used against them should their case end up in court. Case notes from a mediation, unlike counselling, cannot be subpoenaed.
But the breakdown of a relationship doesn’t just involve adults. In fact over 30,000 families with children are affected by divorce every year. How can we make sure that their needs are heard?

It is really important that the children in a separating family are looked after. When parents are in conflict, they can easily, though often not intentionally, lose focus on the children – particularly when they are emersed in the disagreements of the breakdown with the hurt and anger guiding their decisions. . Obviously the best case scenario is when the parents can agree about arrangements for the children with an absence of conflict. – this includes agreeing about living arrangements, choices of school, extracurricular activities, pocket money, communication and introduction of new partners to name just a few. Unfortunately in a number of cases the focus is not on the ‘best interests of the child” with children caught up in the conflict sometimes pawns or just leverage of one parties needs over the others.

An important consideration is “the voice of the child”. How can a child be heard in a family breakdown?

One of the best ways to address the impact of the family conflict on children and to take the emotions out of the decisions is to use a Child Inclusive Practitioner (or CIP) in the process.

That sound interesting – can you tell me how it works?

Child Inclusive Practice provides an opportunity for children to talk independently with a trained Child Consultant in a safe, supportive and comfortable environment.

Child Inclusive Practice can be integrated into a family breakdown prior to the commencement of any court proceedings.

The Less Adversarial Trial process in the Family Court also has provision for CIP.

During the session, the Child Consultant facilitates a conversation with the child and encourages them to talk about the separation, domestic arrangements and other related topics. Depending on the age of the child, the Child Consultant may use play therapy during the session. The Child Consultant is not judgmental, suggestive or adversarial in tone. The purpose of the session is to gain insights into how the child is feeling and provide a forum in which they can comfortably express themselves.

After the session, the Child Consultant provides feedback and recommendations to both parents in a one hour session. This feedback is then used as a guide and reference throughout the Family Dispute Resolution process.
Generally speaking, Child Inclusive Practice is relevant for school age children, from 5 to 15.

But even with all these interventions, sometimes mediation still breaks down. Are there any other alternatives to litigation where some people end up spending 100s of 1000s of dollars and who knows how many hours of emotional toil just to prove that they are right and their ex-partner is wrong?

Fortunately in the last few years an alternative has become available in Australia. It has been used in the US and the UK for a number of years but it is definitely gaining momentum here and it is known as Collaborative Practice.
I found this definition on the Law Society of New South Wales Website and I think it encapsulates the spirit of it extremely well. ‘Collaborative Practice is law without litigation, and mediation with advice.’ It is a dispute resolution process in which the parties, their lawyers and a neutral coach (for an interdisciplinary model) enter into a contract (the Participation Agreement) to resolve a dispute without resorting to litigation.
Interdisciplinary Collaborative Practice is a unique dispute process as it offers a ‘team’ (lawyers, a neutral coach, a child consultant (if appropriate) a financial expert or any other professional that may be appropriate) to guide, advise, and support parties achieve an outcome.

How does this work? A lawyer not wanting to litigate??

The first point to remember is the lawyers, the neutral coach and the parties enter the collaborative process with a commitment to achieve an outcome.

The parties and all collaborative practitioners who sign the participation agreement, commit to an open, honest and transparent process. It is an integrated problem solving approach using interest based negotiation – a focus on the interests and needs of the parties. All of the negotiations are conducted in meetings (the number of meetings depends on the complexity of the matter – the issues that arise or exist between the parties).

The Participation Agreement provides that the lawyers will no longer act for the party if the collaborative process breaks down. This provision has the effect of focussing all of the participants to the negotiation on reaching a resolution. It removes the temptation for the parties and their lawyers to posture and/or commence litigation when an impasse arises. Instead, the parties, their lawyers and the neutral coach must focus on working together to overcome the impasse. It can be a challenging process especially when parties are working on outcomes

The agenda for each meeting is pre-determined by the parties and the collaborative practitioners. Between meetings the parties, their lawyers and other professionals work together with their clients to ensure that all of the information relevant to the agenda is available in advance of the meeting. Similarly, the collaborative practitioners consult with each other before the meeting and debrief afterwards.

An important aspect is the use of the neutral coach. In family law matters it is often the non legal issues which are driving or causing the problems. A good example is school holiday times – how it is to be shared or even pick up times. Rather than lawyers being involved in every aspect the parties can speak with / meet the neutral coach to discuss parties concerns, needs and desired outcomes.

This has a financial benefit to parties as the lawyers do not need to be involved in all aspects and allows the neutral coach (mental health professional) to assist the parties with what is essentially a non legal issue.

But doesn’t this cost a fortune – having two lawyers and a neutral coach at every meeting?

Granted, it is more expensive than mediation (depends on the number of meetings) but it is a lot less expensive than going to court and a lot less emotionally destructive. Ending a relationship is not just about a division of assets – it is also about dealing with the emotional fallout that comes with the demise of a relationship. Collaborative Practice, especially when a professionally trained neutral coach is included, allows for the rebuilding of empathy between ex partners. When this occurs it is no longer a zero sum game. Each person gains an insight into the other person’s needs and desires and works towards gaining the best outcome for the family as a whole. When all parties work together, it inevitably becomes a much quicker process and therefore lawyers’ hours are reduced. Decreased hours equals decreased costs!

It is a forward focused process – assisting parties with a team approach.

What in your mind is worst case scenario for separating families?

The breakdown of any relationship is difficult.

The court system is the last resort for separating families. Parties will experience
• extensive delays,
• increased costs – legal fees, experts whether in parenting or financial matters
• uncertainty of outcome

Whilst the majority of matters will resolve by agreement in the time between filing an application with the court and a court allocated final hearing date, the impact on their own life, their relationship with each other, their children and other third parties (extended family members, new relationships) is not a positive one.

I am sure many of our listeners are going through this process as we speak. What would be your Top Five Strategies to Separating Well?

  1. In the first place, make sure your relationship cannot be repaired. Don’t kid yourself – divorce is hard and no-one comes through it without any lasting emotional and financial scars.
  2. Choose your lawyer well. If you want to have an amicable separation, make sure you don’t choose a lawyer who has their own agenda and that is about destroying your ex-partner and running up as many billable hours as possible. It is imperative you get good legal and financial advice because you can’t run a proper negotiation unless you are properly informed.
  3. Explore FDR as your first option, especially if there are children involved. All the research shows that mediated agreements are more sustainable and longer lasting because they are your agreements and have not been imposed on you by an overworked Judge in a very busy Family Court.
  4. If you feel that you need to involve Lawyers – look at Collaborative Practice. Just like FDR, you have a part in working out these agreements and therefore are more likely to be happy with them long term.
  5. Never forget the children and what is in their best interests. Don’t fall into the trap of using them as pawns in your War. Children whose parents have separated with minimal conflict show no behavioural, emotional or academic disadvantages when compared with children of a low conflict intact marriage.

Resources

Collaborative Professionals NSW www.collabprofessionalsnsw.org.au

Central Sydney Collaborative Forum www.sydneycollablaw.com.au

Notes from Bernie Bolger & Valerie Norton talking about ‘Hard Conversations’ on Tony Delroy’s Nightlife ABC 702 Monday 12 August

Have you ever been in a situation where someone you know is continually doing something that really bugs you?  Perhaps your girlfriend NEVER offers to pay for dinner.  Or your immediate boss always takes the credit for your hard work when he is talking to senior management.  Or the worst one of all – one of your colleagues at work doesn’t use deodorant and reeks of BO.  You know you should address the issue but every time you get a chance, you chicken out. And then you get annoyed with yourself and become bad tempered.  But instead of taking that as a cue to actually do something about the real problem, you take your bad humour out on some poor innocent victim who just happens to be walking by at the wrong time – like the family dog or the sweet little junior temp who was just saying hello.

Tonight we have Bernie Bolger and Valerie Norton from Collaborative Mediation Practice with us to talk about how to initiate the hard conversations up front in order to avoid a lot of angst and pain down the track

Q. So why is it that some conversations are harder to have than others?
Perhaps a more interesting way of looking at this would be why is it that some conversations are hard for one person and seemingly easy for the next? I think for a conversation to be difficult, it must have the following three elements.

  • Opposing opinions
  • Strong personal emotions
  • High stakes – professionally and / or personally

Obviously these three criteria will mean different things to different people.  So despite the importance of a particular conversation, we often back away from them because we fear we will make the situation worse.  This can be exacerbated if we already suffer from some form of insecurity where we are afraid we won’t be ‘popular’ or ‘loved’ if we speak out.  We become Masters of Avoidance but clearly the issues don’t go away – they are just manifest in other areas of our lives and eventually ‘explode’ out of us – usually in a destructive, angry manner.

Q. So what do you think of the idea that the closer the relationship the harder it is to have these conversations?
Again that is related to the previous point.  On the surface it could appear that the more intimate the relationship the more likely it is that there will be strong personal emotions and the harder it is to keep the conversation on track.  However power imbalance also plays a vital role in having the ability to have the conversation.  And the problem with power imbalance is that it can often be covert such as in a long term relationship between spouses (Despite numerous denials there always is a boss).  Obviously the more overt examples are in professional relationships between employers and employees, parents and kids, teachers and pupils.

Q. So if you were to name a few of the most common ‘hardest conversations’, what would they be?
Hard conversations are literally everywhere e.g.

  • Talking about money in a relationship
  • Ending a relationship
  • Asking your partner if they are having an affair
  • Talking to a co-worker who smells
  • Asking a friend to repay a loan
  • Asking a roommate to move out
  • Asking the in-laws to stop interfering

Q.  And how do we normally deal with them?
Very often in one of three ways

  1. Avoid them altogether and hope they’ll go away
  2. Address them but  handle them badly
  3. Face them and address them well.

Unfortunately No. 3 doesn’t get a huge look in too often

In fact there is a psychologist from Harvard called Daniel Gilbert. In his book ’Stumbling on Happiness’ he asks why will partners fight loud and often about the dirty dishes left in the sink and never address infidelity? This is a great question which can be answered using the framework mentioned previously.  There is definitely more at stake by bringing up the affair than yelling about the dishes.  One would also think there would be stronger emotions and opposing opinions at play.  Much less confronting to deal with the dishes.  As we have seen in our years of psychotherapy and mediation practice – ‘the issue is never the issue’

Q. But surely there are many situations when you just are never going to agree? When you are well and truly gridlocked?
That is so true.  And one of the most liberating things to realise is that it is actually ok not to agree with your friends and family on everything.  How you manifest this non-agreement and deal with it in everyday life is the key.  John and Julie Gottman, who are probably recognised as the modern day gurus of relationship therapy say it is important to build up a reservoir of goodwill within the relationship.  They have even put a number on it.  For every negative thing that is said, five positive comments are needed to balance it.  This means when a hard conversation is necessary, both parties will be more ready to listen because historically the interaction between them has not been overwhelmingly negative.  And when you realise that nearly 69% of all conflicts are perpetual, i.e. they tend to reoccur, then it is even more important to have the skills to be able to discuss the topic rationally, respectfully and perhaps even gently.

Similar research has been done in the workplace. Sean Achor, a psychologist in Harvard has come up with a similar idea around positive feedback.  The ratio in the workplace in 3:1 positive to negative comments in order for teams to be able to work productively together.

Q. So are you saying that the aim of the conversation may not necessarily be to end up agreeing with each other but rather to understand each other’s point of view and be able to respect that?
Exactly.  When people are gridlocked over an issue, they basically feel betrayed, disrespected, hurt, and frustrated. And these feelings can cascade down a path of anger, loneliness, distance and disengagement. So rather than let this occur, a central part of navigating conflict is to uncover and understand the meaning of each person’s position in the conflict.  If we understand that even seemingly trivial gridlocked issues have symbolic value we can modify our tone and language to reflect this greater understanding.  Criticism, Defensiveness, Contempt and Stonewalling have no place in a hard conversation

Q.  So if you were to list the attributes of a hard conversation handled well, what would they be?
And that is the multi-million dollar question.  I think the best way to do that is with an example e.g.   Tony, can you think of a current situation that is testing your resilience.

Ask yourself the following questions

(i) ‘What can I control in the situation?’

(ii) ‘What can I do to influence this situation?’

(iii) ‘What do I have to accept here?’

And then have a conversation using the following guidelines

  1. Listen. The Number One most important element of having a conversation is not about talking – even though that is what we all like to do.  It is actually having the ability to shut up, listen and be present.  It certainly helps not to have any of the normal distractions like electronic devices going off.  So always make sure you give the other person and the topic the space and time they deserve.
  2. Mutual Respectful Understanding. Another word for this is empathy or being able to walk in the other person’s shoes.  This is normally incredibly hard for us to do because in the 21st century it tends to be all about us.   You don’t have to agree but it certainly helps when you understand.
  3. Path to Collaboration. This means coming to the table with the right motives and not with the intention of proving the other person wrong or changing them. It means asking the 4 mindful questions of yourself and then answering them honestly
    • What do I want for me?
    • What do I want for others?
    • What do I want for the relationship?
    • How would I behave if I really wanted these results?

    It involves using ‘I’ rather than ‘You’ statements, staying focussed on your needs and explaining clearly your objectives.  It means not getting distracted by buttons being pushed and needing to score small points.  DO NOT GET DISTRACTED FROM THE CONVERSATION BY EMOTIONS

  4. Win/Win. The outcome doesn’t have to be an ‘either/or’ solution.  The best collaborative solutions often involve ‘and’.  This is about generating options not just it’s my road or the high road mindset. Think about the orange scenario
  5. Help. If you find you just can’t get a constructive conversation going and the subject is very important to you – don’t be afraid to seek outside help.  Sometimes when bad habits have set in over a long period of time, a neutral third party facilitator or mediator is the only way set change in motion.    Do yourself a favour and save yourself some serious angst in the long term by getting help early.