Goldilocks Advises a Family Business (Part I)

What Could Go Wrong?

Metaphors have always been one of my favourite ways to explain things, but sometimes, admittedly, I can twist things a bit too far.

I hope this won’t be one of those occasions; apologies in advance if it is.

So be forewarned that this is not actually a story about a young blonde girl who advises a family business (or a family of bears).

 

Insiders, Outsiders, Goldilocks?

The genesis of this post is actually an introduction I heard on TV about an upcoming guest on a show I happened to be watching.

It was an American show, and the guest was an Irishman who spends half his time in the USA, and half his time in Ireland.

The host proclaimed that this gives the man, 

   “The knowledge of an insider, and the perspective of an outsider”

Bang, there it was. I actually paused the TV, rewound, and made sure I had the quote right.

 

Finding the Right Balance

I instantly thought about situations where a family business, or more specifically, a business family, calls in someone from outside the family to work with them.

Of course that’s because this is exactly the kind of work I love to do, when I’m not writing about fairy tales.

Many families are loath to bring in anyone from the outside, preferring to keep everything in-house, within the family, for fear that outsiders cannot be trusted, or believing that nobody else could ever understand “our family”.

They’re wrong on both counts, and we’ll get to the reasons why, but for now, let’s look at this “insider / outsider” dynamic.

Perspective of an Outsider

We’ll start with the perspective piece, because this is truly the biggest reason to enlist the services of an outside family business consultant.

Any person who is not a part of the family is also not part of the “family system” as those who use a systems theory lens would say.

The family system is called that because of the interdependent nature of the relationships that the different members have on one another, thanks their many common goals, and to the way that they interact on a long-term, repetitive basis.

An outsider, especially one trained in this kind of work, can instantly offer that family system the benefit of their outsider’s perspective, precisely because of what they are able to see, thanks to the fact that they are not part of the system.

When I peer into my aquarium, I see that the fish are all swimming in the tank.  I’m pretty sure that the fish don’t see things the same way.

 

Knowledge of an Insider

Naturally the person who isn’t a part of the family won’t have the knowledge of an insider who’s been a part of the family their whole life.

But that doesn’t mean that, with time, they can’t come to know the individual members of the family, and how they work together, pretty well, all the while maintaining their outsider’s perspective, which is so valuable.

In fact, a good outsider knows the limits of how far inside they want to go, knowing that if they ever lose their outsider’s perspective, they suddenly become a less valuable resource to the family.

Special Case: In-Laws!

We’ll get back to this Insider / Outsider stuff next week in Part II, but we need to acknowledge a special category of people who happen to exist somewhere in most business families, and who somehow live long periods of their lives in this “twilight zone”, in between insiders and outsiders.

Often the in-laws try desperately to be included among the insiders of the family, with varying degrees of success.  Somehow many of them are never truly accepted as insiders, and sometimes for good reason.

It also occurs that the efforts made to become insiders can negate any outsider advantages they might have had to begin with!

In-laws each have their own reality to face, and some learn to live with the cards they’ve been dealt better than others. 

 

Looking Ahead

Next week, in Part II, we’ll look at what percentage of business families actually hire outside consultants, as well as things that outside advisors need to be aware of, as they are welcomed into the sacred world of a business family’s inside workings.

As Goldilocks taught us, not all situations are “just right”.