This article is a natural follow on from my most recent one regarding “specialists”. PLUS it is a timely follow on from the events TCB Solutions initiated and funded in May 2016 when I bought my learned colleague Peter Crow, over from New Zealand.
Firstly, let’s explore what a “stakeholder” to your family business really is. We have the “four pillars” of Accountant, Lawyer, Financier and Financial Services (wealth planner, insurance broker etc) however these have never been sufficient and in today’s disruptive business environment the family business demands more from a wider range of “stakeholders”. Other “stakeholders” can include your Management Consultant, Business Coach, IT Services, HRM / IR Professional, Bookkeeper, Website / Digital Presence Manager or Marketing Professional.
Secondly, let’s explore that very “hard to measure” think called value. Yes it is about the bottom line and all “stakeholders” MUST add additional profit to the bottom line. However it is also about risk mitigation, reputation enhancement, workforce harmony, productivity and stability, product / service development and improvement, market position improvement and overall business improvement. YET, in a family business, this is still not enough.
WHY, well because the current circumstances of the family business is the culmination of the previous generations’, values (not negotiables), effort, emotional input and the evolution of the family’s legacy. Accompanying this is the focus of the current family members on ensuring the business continues for the next and future generations.
This brings us to understanding, to a small degree, what a family business would see as value. It all starts with any “stakeholder” aligning their services (or products) to the “WHY” the family business really exists, which is certainly to make profit HOWEVER that is for the benefit of all living family members NOT just the shareholders. In addition, the family business has many dimensions to “service or satisfy”, which make them far more dynamic and demanding of the value proposition.
These dynamics include, but are not limited to, the direct shareholders, the retired / exited generations and / or family members, the non-shareholder family members, the next and future generations, the workforce, the supply chain relationships, the family’s and the businesses reputation and the family’s standing in the community.
Now I am not for one second saying that, to add value to the family business you have to have a deep understanding of ALL of these dynamics. Rather, I am saying that, as a supplier of services or products to the family business as a “stakeholder” you need to be aware of the wide range of “prisms” the family business will perceive your value proposition. If you don’t strive to be aware of this then DO NOT EXPECT to become a “trusted stakeholder” within the family business.
How can a “stakeholder” assist the family business and add value to this family business from the “prisms” of the family.
One area is to understand just where the family wants to position itself in the market and the community (its family and public communities). This will give you an understanding of their real core values (not negotiables), their legacy and what their purpose really is.
A second area is to be engaged BUT not become involved with the wider family so you become more aware of the dynamics involved in the business decision making process. Remember the family business client is the core planet and “stakeholders” are just the “moons” of the planet
The third area where you can add value is to understand where you true competencies start and finish. By this I mean your skills and services being specifically targeted to the core solution driver so not to have “engagement or competency creep” by attempting to be all things to all businesses at all times.
Finally, the fourth area is to have a network of like-minded professionals who understand the relationship you have with your family business clients and they respect this relationship at all times. This network can be accessed by you family business client when and if they have the strategic requirement for their services or products. This “plug and play” model is extremely beneficial to the family business and the supplier.
In conclusion, for a “stakeholder” to add value to the family business there are a few critical “rules” to follow;
- Understand the “why and how” of the family business through their “prisms” and not you own
- The family business has a dynamic “purpose” that on other style or type of business has therefore accept this and move on
- Stick to your real core competencies NOT what you think you can do AND be solutions orientated NOT “billable hours” orientated
- Have a trusted network that the family business can “plug in, play with then un-plug” when strategically warranted
Good luck and I look forward to hearing that more service professionals are adding value to family businesses.
Lloyd Russell is a 4th generation family business member and an accredited family business advisor who is based in Brisbane while servicing clients throughout Australia and internationally. Lloyd is a specialist in family business strategy and governance with a particular focus on inter-generational transfer. He has more than 30 years’ experience in senior management and is an accredited neuroscience practitioner.
Contact Lloyd on 0413 549 748 or firstname.lastname@example.org
Website – www.tcbsolutions.com.au