The professionals who provide services to family businesses come from a variety of fields, but even so, most of them have a lot in common. Whether they are accountants, lawyers, tax specialists, wealth managers or insurance specialists, they typically deal with business and financial issues.
If we are talking about family businesses, why aren’t there any who deal with the family? The truth is that there are some people who specialize in the family circle, but not nearly as many professionals who advise the business and ownership circles.
The field of family business advising as a sub-specialty of business advising is relatively new, but it is growing and slowly being recognized as an important area. Most people can quickly see that there are lots of business issues that affect the family, but fewer have actually thought about the fact that there are family issues that affect the business too.
The people whose serve the family side of things more than the business side have a number of obstacles to overcome; let’s look at some of them, in no particular order.
Content vs Process
A lawyer will prepare a shareholders agreement, an accountant will prepare a set of financial statements and a wealth manager will make an investment for you. They are all discrete transactions, all of them are tangible; each is one piece of content.
Facilitating family meetings, mediating a dispute between siblings, or helping bring a family together to work on their values, vision and goals, for their part, are more process related. These functions can be very important for long-term family business success, and as such, they are often longer term in nature.
Transaction vs Relationship
The content pieces I mentioned above are typically done as separate transactions. Yes, relationships are also important to work on for accountants and lawyers, but in the family realm, it is almost all about the relationship, and the advisor needs to develop a good working relationship with everyone, not just the person who signs the cheques.
Soft vs Hard
Some people like to talk about hard skills versus soft skills, and I suppose that is one way of looking at it, but let’s not forget that the “soft” stuff is often actually much HARDER to deal with. Few of those who work on the transactions are trained to deal with these soft issues, and many families don’t want to talk about their family problems with those who charge them several hundred dollars an hour.
Business is about $$$ vs Family is about Love
Business is usually very much about making money and creating wealth, while family is all about love. It is the head versus the heart, and they do not necessarily always agree.
The advisor who can show you how his tax strategy can save you $XX,000.00 has an easier sale than the one who tells you that he can help make sure that your family has conflict-free Thanksgiving dinners in the future. How much is that worth?
Art vs Science
What it comes down to in many ways is that it is an art to deal with the family, while dealing with the business is more of a science. To be a good family business advisor, you need to be able to bridge both of these, art AND science.
There are some family therapists who help families deal with conflict, but very few of them understand anything about business, so it is hard for them to provide that bridge.
I have come up with an analogy, but I am not sure how good it is, but here goes.
When I was a kid, I did a few paint by numbers, and while it felt like I was an artist, I was just filling in spaces with pre-decided colours of paint, which is more like science.
We need to be able to show our client families the canvas with the outlines of what we can do, and tell them what colour we can help them put in which spaces. This way, they will better understand what we can do for them, in a way that helps them see the value we can bring.