Three Keys To Selecting Family Business Consultants
Family businesses are just not the same. Not only does a family business need to have all the functionality of a “normal” business, including attending to profits, taxes, operations, sales & marketing, human resources, benefits, etc., but a family business also needs to manage family relationships. For example, conflict resolution in a family owned and operated business is much different than a non-family owned business, and the consequences of failure go well beyond somebody getting demoted, moved to another position within the company or fired altogether. The consequences of failure become greater still when you are considering succession plans and start considering which family member can do what when the patriarch or matriarch CEO is ready to step down.
So how do you select an consultant for your family business? This is not as easy with a family owned and operated business as it is with a non-family owned and operated one. Just picking the most qualified advisor based on what friends or associates tell you or what you see on the Internet may solve the business problem, but if the consultant has never worked with a family business before, they will undoubtedly open up a can of worms in the family relationships. One step forward, three steps back. Then what?
Here are three keys to picking a family business consultant:
- Choose experience. A family business advisor needs to be tuned into the sometimes hidden dissonance that is common to family owned and operated businesses. It’s not only hard to get to the root cause of the dissonance if you’ve never had to do it before, it is sometimes hard to even identify its existence. You may not need all your advisors to have prior experience in helping family businesses, but your key advisors really should be seasoned pros with a track record of meeting complex family business challenges.
- Choose wisdomHow well can the advisor get past the pure business issues and get into the culture and relationships of the family? Harmony between the family members isn’t neccessary, but having a pretty good idea of how all the different relationships work together inside and outside the family business is. Especially when you are working on complex projects like crafting or executing a succession plan, getting to the nuts and bolts of the family member’s relationships with one another is important so the conversations can be direct and clear.
- Choose credibilityDoes the key advisor have enough credibility in the marketplace and among the family members to have a positive impact for the family business as a whole? For the key advisor, this means tough love even for the person that is siging his or her paycheck. Poor decisions and business dysfunction often start at the top.
Choosing advisors poorly has far more negative consequences for a family owned and operated business than a “normal” business. Keeping these three keys in mind as you make your selection will greatly increase the likelihood that you will choose well.