The Real Cause of Conflict Isn’t What You Think
Understanding the human dynamics beneath conflict — vices, emotions and behavior —helps clarify why fracture occurs. Economics and governance determine how much damage it does.
By Amy Hatfield
When conflict threatens the life of a family enterprise, the matriarch is often the family member who expresses the most grief. She is the mother and nurturer, and above all else, she has her eye on a peaceful and loving family. For her, success is rarely defined by generational wealth or a favorable P&L report.
As a family CFO office and private asset manager, the work i3 does – led by founder and principal Kevin Heaton — puts the firm in the room with many families in business. Over the years, those meetings have presented a clear pattern of not only grief, but a mother’s disillusionment.
One such mother, after a particularly painful family break, said, “I cannot believe how utterly useless and divisive this business and all of its money have turned out to be.” She and her husband, the enterprise founders, had spent the better part of their lives working unforgiving hours, under unrelenting pressures. Despite years of near financial collapse, they had come out on the other side, having succeeded beyond their own expectations. And their reward?
A family home in the shadows of conflict, disorder and fracture. A dining room where holiday meals are endured not cherished. What’s worse is the divide between the idea of a successful family business verses the reality of what it sometimes turns out to be. If you were to look through an outside window, unnoticed, these gatherings look like love, a real Norman Rockwell work of art: A table set with fine China and place cards written in an elegant hand, a beautiful centerpiece and pressed linen napkins. Christmas dinner is $400’s worth of beef tenderloin. All the fixings are perfect, and ... everyone at the table wishes to hell they were somewhere else.
It’s all so messed up. Because these are people who love each other. An aging mom and dad, grown children, their spouses, the grandchildren, all situated dangerously close to the edge of so many layers of anger and emotion that, in an instance, one or more loved ones might fall into prolonged estrangement. So be it.
But, yet, is that what the members of this family really want? Because there’s the pull of what’s familiar. These people know each other so deeply: their kinship, shared history, successes and failures, the long memories: Stuff these siblings or cousins did together as kids — childhood ramblings that were equal parts hilarious, innocent, dangerous, pure, irresponsible, exhilarating.
But by the time they're all seated at that holiday table as adults, there’s something else: mistrust or doubt, unfair mistreatment of one sibling, biased favoritism of another, a meddling in-law, an entitled cousin. It’s a family dinner where even the blessing has devolved into propaganda, a bit of message to make a poorly veiled point, by a father who simply does not have the language or the know-how to say the things that must be said.
And as each family member stands around the table, heads bowed, with so much distance between them, they share a collective thought, “how long of a visit is long enough on Christmas Day?”
Fractures Are Not Failures
It does not matter how honorable or wealthy or Christian your family is, family relationships are too complex for fractures to be avoided entirely.
Yet, there are two things we must understand before families can take hold of the key that turns the lock, the approach that allow a family enterprise to find a way through fracture. We’ve already mentioned the first: acceptance. As Southern writer and novelist Flannery O’Connor once wrote, “The truth does not change according to our ability to stomach it.” Yes, we must accept that fractures are inevitable, and yes, we must accept that the cause of such fractures is at once simple and complex.
Simple because human relationships are covered up with discord, an assertion that bears out, time and time again, through the ages. So this tendency is well-founded. There’s a clear pattern that should, theoretically, take away the element of surprise. Our better angles do not always win out. Still, it’s also complicated and seemingly impossible because how does one solve the condition of the human heart?
But that’s the point; and it’s the second thing we must understand. Families are not meant to solve the condition of the human heart. Nor are they meant to avoid the inevitable fractures within a family enterprise.
Instead, families must start with the adoption of a single belief:
The path forward exists not in spite of the darker angels of the human heart, but because we are willing to accept and address them without shame, pretense, positioning or posture.
When we successfully adopt this belief, the behaviors that block relational harmony fall away and a clear path emerges.
Fractures Are Not Single Events
A fracture point is not a single argument, decision or event.
“I think most families look at their unique conflict and say, ‘Well, it was the family farm that caused the fracture,’ or ‘It’s the drug habit of a nephew who has a significant role with the enterprise,’” said Heaton. “It’s things like that, specific moments that shoulder the blame for the fracture. But it’s the response to those events that cause the fracture, not the events themselves.”
Right away, this focus on a single argument or event distracts from acceptance, which delays the important work of addressing the fracture’s root cause. Once a family put its focus on the event — the argument, the drug problem, the tangible thing that offers a straight-forward solution — the underlying cause never gets the attention it needs, and productive dialogue never happens.
“Families tend to call us when there’s been a major change or transition. Early in our relationship with a family, these fracture points often become an area of focus,” Heaton said. “Typically, there are three stages: first, identifying the chaos; second, working through the response based on the desired end state; and third, developing an action plan.”
Within the chaotic environments that typically emerge following significant or unexpected change, toxic emotions (usually prompted by vices like envy, entitlement or pride) can fester. It’s at this point that family members will begin to position and posture.
“What is positioning; what is posturing,” Heaton asks. “Those are defensive moves. And defense pushes against progress.”
It’s at this stage that families typically stall. They don’t know what else to do, and there is no “next move.” The enterprise founder or leadership group is looking for an objective voice in the room, a third party capable of bringing the temperature down.
Heaton says he works with families to consider the opportunities that fracture points create. However, not all opportunities offer good outcomes for everyone.
“We don’t go in and put a lot of focus on different communication styles and what style works best in what situation,” he said. “Instead, we’re looking for useful answers to determine why or for what reason a family member is positioning or posturing and to what end,” he said.
In most cases, families will make progress and find a path forward by working through their preferred end state. It captures the essence of the idiom, “Shoot for the moon. Even if you miss, you’ll land among the stars.”
“My job is to help families envision what they ultimately want, then wrap it in a governance framework that allows them to get there,” he said.
Pure Causes
The condition of the human heart can be understood by what Heaton classifies as “pure causes” — greed, pride, envy, wrath, sloth, lust and gluttony. These traits are also known as “capital vices,” or you may recognize them as the Seven Deadly Sins. In the words of Lars Brownsworth, historian, podcaster and author, "You won't learn the appropriate lesson if you misdiagnose human nature.”
If you prefer a framing that draws from the principles of psychology instead, there’s also Carl Jung, whose work shaped modern psychology of the unconscious. He framed the duality of human nature this way: “Everyone carries a shadow, and the less it is embodied in the individual’s conscious life, the blacker and denser it is.”
Essentially, suppression intensifies harm.
And Christian apologist and novelist C.S. Lewis offers this, “What is wrong with the world is not first its systems, but its people.” After all, people are people. And family relationships bare out the flaws of the human condition as well and as often as any other human relationship.
There’s the biblical, one-sided rivalry of Cain toward his brother Abel, fueled by comparison and resentment; and the truer rivalry — a two-sided dispute — between Isaac and Esau. Quickly fast-forward to the 20th Century, and we’re soon reminded that even our fiction is colored by our lived experiences and the fractures of family enterprise. Many of us found ourselves spending Friday nights in the 1980s with J.R. Ewing and the hit television series Dallas. Ewing, just like the biblical figures before him, suffered from the same tried-and-true human failings that often stand in the way of relational and financial harmony: pride, greed, deceit, envy. He relied on manipulation and half-truths, both closely related to the posturing and positioning Heaton cited as early signs of fracture.
For real-life, more-recent examples, we give you the Barclays (commercial espionage), the Guccis (tax evasion traps) and the Schottensteins (elder financial abuse). If you’ve read this far because you’re torn up about your own family’s fractures and impasses, there’s nothing like the salve of seeing others flounder in bigger and more perverse ways than you’ve ever even imagined. Each of these three families really leaned into their fracture points with instances of double-crossing, secretly bugging family members' conversations, reporting relatives to the IRS and creating sham companies to steal assets, frequently fueled by sibling rivalry, succession disputes and greed.
Predictors: Reframing Fractures as Useful Signals
Now, if you can begin to accept the inevitability of the human condition rather than dismissing it as phycological or spiritual fluff, its resulting emotions and behaviors will serve as useful signals.
This mindset boils down to seeing things less emotionally, more clinically.
“It becomes more about, ‘hey, where are these things going to raise their heads,” Heaton said. “Not if things are going to raise their heads. And also, if we understand we’re dealing with pure causes that aren’t unique to any one family, then we skip right over the part where a family feels guilt or shame for allowing a dispute or fracture to happen or causing it to happen. Once that’s all out of the way, the focus lands where it should, making sure a family is prepared for how to respond.”
What matters is not a fracture’s novelty, but the predictability of it. Before families experience fracture openly, they adapt quietly through observable behaviors or signals. There are countless examples, but here are a few:
Any type of change or transition is a reliable predictor of fractures. These might include changes in financial condition or aging family members.
A family might notice the recurrence of the same issue without resolution. Decisions appear to be made, but the underlying disagreement resurfaces in different forms. Over time, this repetition erodes confidence, and family members begin to doubt that discussion will lead to anything productive;
Another signal is triangulation — when concerns are voiced indirectly through spouses, siblings or advisors instead of directly addressing the person or people involved. Side conversations begin to replace shared ones, often in the name of keeping the peace.
Family members may also notice subtle changes in tone during otherwise routine decisions. Discussions become sharper, more guarded or unusually formal. What once felt collaborative begins to feel positional, even when the subject matter hasn't changed.
Avoidance is another indicator. Certain topics, individuals or decisions are quietly taken off the table. The absence of discussion is often interpreted as stability, when in fact it reflects narrowing tolerance for disagreement.
Governance and enterprise-related signals might include: A preference for informal agreements over clear processes; family issues that are “handled privately,” even as they affect business outcomes; a widening gap between what’s said publicly and what’s believed privately.
These signals aren’t meant to suggest a family enterprise is eroding. They’re just indicators of tension. View them like a pitcher who’s tipping his pitches. The tip gives you a reliable clue about what’s coming around the bend and can serve as a reminder that the choices made next will matter.
When recognized early, these indicators expand the range of constructive responses available.
“The families who do this well know how to respond because each family member shares the same end-state goal. Without a common vision, then all things perish,” Heaton said.
He’s also found that those families who are grounded in their faith tend to navigate fractures well, along with families who project an easy sense of self, and a less-emotional disposition. “These traits are constructive because they allow families to recognize and address predictors and patterns in a straight-forward way that’s without defensiveness or judgement.”
Shame Is a Trap
A vice creates negative emotions, and each emotion can ignite unwanted behaviors. Emotions that are frequently at play when families are experiencing fracture might include fear, resentment, insecurity, contempt or entitlement. Then there’s shame. And shame warrants special attention.
Shame does not announce itself. It never enters through the front door, always opting to slip in through the back. So even as many families in business are intuitive people who readily recognize when something is wrong, shame can go unnoticed. And in spite wonderful educations and above-average command of the English language, family members often lack a shared and usable language for naming it and dealing with it openly. Or, worse, family members will be perceptive enough to recognize shame as the instigator of chaos and disorder within the enterprise but will actively skirt naming it or talking about it in a productive way.
Why? Because that’s what shame does — it blocks progress by drawing you into a trap of silence. It masks and covers.
“When shame is involved or there’s embarrassment at play, other bad decisions almost always follow,” Heaton said. “But when you have families who understand how to lead with respectful candor, they can address fracture, even when it’s fueled by deeper more challenging emotions like shame, and they move forward.”
When addressing shame, family members are often caught between being overly cautious and failing to say what they actually mean or, conversely, they’re too sharp‑tongued and abrasive, aiming to “get it over with,” instead of balancing honesty with empathy. The available options for speaking honestly feel artificially narrow to most people. When those two options are perceived as the only choices, most will continue to default to the safer of the two: careful silence. The result is a slow erosion of clarity and a compromised flow of information.
Once respectful candor is used to disarm emotions like shame, progress is no longer blocked, vices can be named and resulting wounds healed. From there, manageable questions of assets, control and timing can be addressed with greater clarity.
Designing Governance to Limit the Damage
Understanding the human dynamics beneath conflict — vices, emotions and behavior —helps clarify why fracture occurs. Economics and governance determine how much damage it does.
“There’s the control side and the economic side,” Heaton said.” The control side is a family’s governance and, of course, the economic side is money, the family’s finances. Firms like ours often focus on the financial side. It’s easier, cleaner and — especially for people in our industry — it’s the area we are trained to address through our educations and professional experiences. But, honestly, you learn quickly, you can’t really help families in business unless you help the families themselves by strengthening the relationships these businesses are built on.”
Fracture points often intensify where economics and control intersect. After all, assets carry more than financial value. They confer authority, permission and influence. As a result, friction flashes when that relationship is unclear, unevenly understood or quietly contested.
These fractures and frictions can be minimized through sound governance.
"Well-designed policies and processes reduce confusion and provide steadier footing when pressure rises,” Heaton said. “This is where economics and control matter most — not as solutions to human vices, but as guardrails that shape how those imperfections express themselves inside a family enterprise.”
Wealth Creates New Challenges
As families accumulate wealth, greater complexities can follow. Free cash flow is often reinvested into filing cabinet assets: commercial real estate, undeveloped land, agricultural acreage, operating businesses, private investments or shared-use properties. Over time, these assets multiply entities and compound decision points and expectations.
While this growth signals success, it also complicates generational tax planning and invites the expanding involvement of family members. These periods of expansion and success tend to out-pace an enterprise’s governance and operational systems and processes. A lack of clarity is one common result, largely due to internal communications that haven’t adapted to support free flow of information and a clear understanding of expectations across family members.
Many family enterprises experience this strain most acutely as they move from Generation 1 to Generation 2. Authority diffuses and assumptions harden. Questions that once lacked urgency are now sitting right in front of you, blocking a clear path forward. Who decides? Who benefits? Who bears responsibility?
Bringing Order Out of Chaos
When questions like these are left unanswered, frictions go unchecked like wild vegetation in a fallow field. Without order, chaos is the result. Vices thrive and fractures follow. Take that same field, overlay the land with a balanced ecosystem, and disorder and chaos give way to order and peace.
An ecosystem is symbiotic, an environment that features independent organisms, but they’re grouped as clusters. Within each cluster is a high degree of mutual dependence across individuals. The result is a thriving collective born of sustained harmony.
“A family ecosystem does not promise harmony, but it does make room for enough harmony that families can remain intact and effectively address the financial challenges and interpersonal conflict that threaten long-term wealth preservation and growth,” Heaton said.
Heaton and his team at i3 believe effective governance aligns economics and control in a way that frees families from the strain of improvising under pressure. At its core, this approach treats the three “i’s” — information, infrastructure and investment — as interdependent, symbiotic units, rather than separate, independent pillars.
The free flow of information, frequency and repetition make this alignment effective. A monthly cadence where economics and controls are reviewed together allows families to surface frictions early, before fractures surface. Questions about distributions, asset performance or operational pain points are addressed within a defined framework rather than through informal negotiation.
Decision-making, which often manifests disagreements and discord, is less likely to do so when families rely on clear definitions of who has authority and what decisions belong where. Because family enterprises often have complex ownership structures, it’s common for i3 to work with families to define how leadership roles vary and change as they cascade across trusts, entities and other operating companies and partnerships.
Governance should work like an ecosystem, but used like a playbook. And the more plays you have in the book, the more situations you’ll have a response for when things are moving quickly and pressures are peaking. Clear decision rights and accountability reduces confusion, prevent misalignment and create a durable operating rhythm.
And while this kind of preparation does not prevent fracture points, it changes their trajectory. It limits how much damage they can do, and most importantly, keeps fractures at the office where they belong. The alternative happens when fractures are neglected, and tensions escalate into a full break. It’s then that disorder creeps beyond the office and into the home, robbing family members of their homeplace and a mother of her family.