By JoAnne Norton, Family Business Advisor, FBCG, Feb 2013.

When we hear the term “bullying,” we frequently think of the bullies we knew on the playground, but workplace bullying is occurring in the U.S. at an alarming rate. Bullying often goes unreported because there are no laws to protect the targets and trends indicate it could be getting even worse in the foreseeable future. In an article in the Jan. 14, 2013, issue of the Orange County Register, Teryl Zarnow writes bullying in schools is now at “epidemic” proportions. Of course, these bullies grow up and go to work.

What is bullying, and what are the effects in the workplace?

Evelyn M. Field, a practicing psychologist who wrote “Strategies for Surviving Bullying at Work,” says, “workplace bullying involves the repetitive, prolonged abuse of power. Unwelcome, unreasonable, escalating behaviors that are aggressively directed at one or more workers and cause humiliation, offense, intimidation and distress.” She writes it is detrimental to those being bullied because it risks their health and well-being, as well as their safety and careers. No one is safe from bullying. “Workplace bullying can attack anyone, in any career, at any level, within any organization, at any time,” says Field. In my experience, even family businesses, their Boards of Directors and their family councils are not immune to bullying, and the consequences are costly.

Dr. Gary Namie, a social psychologist widely regarded as the foremost authority on workplace bullying, is the director of the Workplace Bullying Institute. He says bullying in a business is expensive because it affects the health of the organization. He says bullying causes increased absenteeism, stress and risk for accidents as well as decreased productivity and morale, reduced corporate image and poor customer service. In Namie’s study, he learned that in the workplace women were the bullies 63 percent of the time, and women bully other women in 89 percent of cases. Men bullies picked on women in 63 percent of cases, so women were 79 percent of all targets. This definitely contradicts the stereotype of two boys duking it out on the playground.

Since 60 percent of employees in the United States work in family businesses, I would assume bullying is affecting them at the same rate. The consequences for family businesses experiencing bullying, however, could be much more destructive. In a 2012 study of 1,600 workers Namie found 77.7 percent of the targets of bullying were no longer employed where they had been bullied because they had quit, been fired or been forced out. Consider that while leaving a job can be traumatic, the effects of being bullied in a family can be devastating to the business, as well as the family, if a family member must leave as a result.

How is Bullying Different in a Family Business?

One of the most famous cases of bullying in a family business is Henry Ford’s treatment of his only child, Edsel. Henry’s chastisement of Edsel is legendary, and even when Edsel was the president of Ford, his father would sometimes humiliate him publicly. Edsel died at the age of 49 from stomach cancer, lending credence to the theory that those who are bullied are more likely to suffer from physical affects.

According to Dr. Namie’s research, 75 percent of the time bullying is done by people of a higher rank. In a family business there are natural hierarchies that could complicate the issue. There are parents and older siblings, all who might have been bullies even before entering the family business. In some families, the tendency to bully to get one’s way is passed from one generation to the next and the abuse of power can be felt in the business as well as in the boardroom. If the family Chairman of the Board of Directors humiliates another family director in front of the board, withholds important information to ensure the vote goes his way or continually creates an agenda so there is never enough time to vote on a particular issue, this could either be a chairman with bad judgment or a bully. The difference is subtle but serious.

When bullying goes on for a long time other family members feel justified in retaliating by bullying the bully, and this strategy creates a vicious circle. Even if it is effective in the short term, bullies always lose in the long term, and the collateral damage can be the family and the business. Zero tolerance of bullying is crucial in both systems.

What can you do about bullying in your business?

Dr. Gary Namie (WBI) and Dr. Ruth Namie are co-authors of “The Bully at Work: What you Can Do to Stop the Hurt and Reclaim Your Dignity on the Job.” They suggest:

ENCOURAGE everyone at the workplace to act towards others in a respectful and professional manner;

HAVE a workplace policy in place that includes a reporting system;

EDUCATE everyone that bullying is a serious matter;

TRY TO WORK OUT solutions before the situation gets serious or “out of control”;

EDUCATE everyone about what is considered bullying, and to whom they can go for help;

TREAT all complaints seriously and deal with complaints promptly and confidentially;

TRAIN supervisors and managers in how to deal with complaints and potential situations. Encourage them to address issues promptly whether or not a formal complaint has been filed;

HAVE an impartial third party help with the resolution, if necessary;

DO NOT IGNORE any potential problems;

DO NOT DELAY resolution. Act as soon as possible.

What can you do about bullying in your family?

Dr. Ronald E. Riggio in his book, “Cutting-Edge Leadership,” writes that while 37 percent of all employees have been bullied, only 12 percent reported they had witnessed bullying. Bystanders don’t realize they’ve been witnessing bullying because they mistakenly think it is just “teasing.” Riggio writes: “Often, the more observers, the less helpful because of what’s known as ‘the diffusion of responsibility.’ (‘Someone else will help. It’s not my responsibility.’).” Riggio says the first step in overcoming the “bystander effect” is acknowledging there is a problem if indeed there is one. Second, he says bystanders have to believe they have the power to help. Further, they need to be supported when they report bullying behavior.

In a family business, family members cannot afford to be silent bystanders because they have too much to lose. If they see bullying in the business or in the boardroom they must report it and make sure steps are being taken to stop it. Bullying is a governance issue because it is up to the Board of Directors to ensure it does not go on in the business, and it is up to the family to make certain it is not part of the culture of the family or the business.

Dr. Namie says it is workplace culture and regulations that enable bullying in any organization, and he says it is necessary to “create, and enforce, a code of conduct that says the behavior that got the bully this far is no longer allowed.” When it comes to culture, family owners have a direct influence on the culture of their business and their own governance groups, boards of directors and family councils. Family owners are responsible for establishing and maintaining a healthy culture free of bullying and abuse of power. As family business advisors we have long prescribed having codes of conduct, a critical first step in good family governance. Codifying a no bullying rule for the family is essential whether a family council is in place or not.

Having a family council, however, would be the best way to ensure that education regarding what bullying is and how it should be handled is ongoing. Riggio writes when victims do complain, they are often seen as being “too sensitive-a complainer.” Families who are well educated would have the wisdom to know the difference between bullying and bad behavior. They would know what steps the family has agreed to take, and they would have the confidence to do what is right for the family and the business. Teaching family members good communication skills is also necessary, perhaps with assertiveness training for the next generation.

In summary:

ACKNOWLEDGE there is a problem;

BELIEVE in the power of bystanders to help;

REPORT bullying in the boardroom or in the family to the Family Council;

CREATE a Code of Conduct;

MAINTAIN a healthy culture in the family;

ESTABLISH a family council if one is not in place;

EDUCATE family members about what bullying is and its harmful effects;

TEACH good communication skills;

TRAIN how to be assertive.

Knowledge is power, and power gives families confidence. Zarnow writes: “If bullying is an infection, confidence is the inoculation.”