Working in a family business is tricky as it combines two virtually opposite but essential life elements: relationships and money. Good relationships are about unconditional love and support, and money, or our means to subsist, comes from work. The requirements to build strong relationships and the requirements to effectively do not naturally go together.
To make matters more complicated, these two opposing elements will ultimately get smashed together in a family business when the business leadership begins to change from one generation to the next. In a family business succession awkward questions start to get asked:
- Who is qualified and interested in taking over the business?
- How can the next generation be groomed?
- How do all family members and employees feel about this?
- Who gets what ownership?
- When and how will the current family business leader step back?
The overarching question however is how do we ensure that the business continues to perform well, effectively generate means, AND ensure that all family relationships are happy and healthy?
Asking these questions and getting the answers risk stepping on relationships. Not asking them and not getting answers risks a decline in the business. Getting this right may be one of the most important things a family business will do as failure could very well result in damaging the business, decreasing wealth, and permanently fractured relationships. This is where a good family business consultant comes in.
A good family business consult is actually a rare breed. The consultant needs to have deep knowledge and experience in two diametrically opposed areas: 1) how to build, maintain, and restore relationships, and 2) how to effectively manage and grow a business. However, the true art is in their ability to blend to two together.
A good family business consultant helps family businesses put processes in place, sheds light on behaviors and attitudes, and improves communication such that effective work can be performed while maintaining healthy family relationships. Moreover, they can guide the family business through the succession process such that wealth is maintained, or even enhanced, while ensuring that family and important non-family relationships are kept positive
A good family business consultant should have a strong education in business and psychology, and real business experience with breadth and depth. Have they worked in a variety of functions in a leadership capacity for example. And while rare, it would be optimal if they actually worked in their own family business. Tinkering with you family and business is very personal and important, knowing they have personally experienced the same thing gives confidence that they care and that they will be careful.
Finally, a good family business consultant does not split up the work with other consultants. Large straight business consulting firms such as McKinsey will bring in a team of experts to research the business, provide recommendations, and implement a plan. However, the answer for any family business is unique to that particular family business and each member’s life situation and goals. As such, in order to help a family business, it is fundamental that a good personal and professional relationship exists between all family business stakeholders and one consultant. Family business matters are personal and very important. Spreading information and relationships out among multiple consultants erodes group trust, while centralizing on one qualified, experienced, and caring consultant fosters trust and aids in developing the best answer for your family business.