I recently read the following quote from an article by Vinod Khosla, tweeted by Vala Afshar: “For entrepreneurs, the toughest thing is knowing whose advice to take and whose not to”. Agreed.
In the family business realm, the head of the company may not consider themselves an entrepreneur anymore, but the question of whose advice to follow is just as difficult.
On my website [fbo7624.com], I recently added a section called “Articles”, where I have begun to post links to some of the more interesting things that I come across. I added a link to the audio of an interview with Tom Deans, author of the best-seller Every Family’s Business, discussing his new book, Willing Wisdom.
Deans mentioned something that I found interesting about the differences between Canadians and our American counterparts, when it comes to whom they consider their “Most Trusted Advisor”.
For Americans, it is most often their lawyer, yet for Canadians it is their accountant. When you think about it, it is not that surprising, what with the relative number of lawyers in each country.
Because family businesses are more complex than others, the advice required often emanates from areas of overlap between “family” matters and “business” matters. Many advisors, both accountants and lawyers, feel more comfortable when they concentrate on their area of specialty, and it isn’t usually the family part.
So what do you do when your lawyer tells you one thing, and your accountant tells you something else? Thankfully, there is a growing field of multi-disciplinary advisors, coming through various programs, like IFEA in Canada, and FFI in the USA.
It is not difficult to understand that when the advisors understand each other and their respective roles, AND they learn how to work together to help their clients, better solutions are almost always developed, compared to each working individually.
But it is not always easy, because there are so many variables in a family business. I believe that most professional advisors are well-meaning and honestly want to provide quality advice to all their clients. I do not, however, believe that they are all successful in achieving that goal.
Too often things are done in a hurry, before everyone has taken the time to understand the situation and ensure that a coherent plan is developed. This could be because the client has serious “fee aversion” and expects to get quality work done at a low price. Or it could be the busy professional making assumptions about the client’s situation and proposing a “cookie-cutter” solution that had worked for others before.
So what is my advice? I wish you wouldn’t ask me that, because I don’t like to think of myself as an “advisor”. In the end, the client must make up his own mind about what advice to follow. You shouldn’t decide until you are confident that you understand your options, having examined the pros and cons of all your alternatives.
Sometimes people need help understanding all the options and all the advice their have received. What I believe they could use at times like those, is not another “advisor”, but more of a “confidant”.
Multi-disciplinary advisors are well positioned to take on the “most trusted advisor” role, because they have the ability to relate to and understand the other key professionals too. If the advisors can’t properly explain their advice in laymen’s terms, they may not be the right ones to use.
Like so many other things, it is not really the advice you get, but what you do with it, that counts. I prefer to offer my help in understanding all the advice, rather than offering more advice, because that would just make things more confusing.