Over the past year or so I have been asked numerous times by family business owners and their executive teams a simple yet very critical question;
“How do I select a specialist to add value to my business when just about everyone calls themselves a specialist?”
This question made me stop and think because I am one of these guilty parties as are an increasing number of individuals, small companies and large firms. Initial thoughts were the answer was simple however the critical words were “add value to my business”. This in conjunction with “just about everyone…” highlighted to me that as consultants to family businesses we are actually confusing the market with our jargon and professional speak when all the family business really wants is access to people who understand them as people as well as being able to add value to their business.
There is no doubt the service providers to family and private business operate in a fragmented business environment. This is valid because of the numerous functions within a business ranging from the corporate regulatory frameworks to the most operational aspects of people management and administration. In addition to this we have an ever increasing complexity within the supply chain that is exacerbated by the digital economy and the Internet of Things.
To the business owner and / or managing executive their time is the most valuable asset yet when seeking external input into their business they are getting increasingly frustrated with the disjointed service industry that is “sucking away” this time. Some interesting points that came out of my probing this question include;
- The language used by professionals is very similar and full of jargon
- A family business speaks to a service professional and promptly get the responses of
- “yes we do all of that and we can make your business grow”
- “this product will improve your business and reduce the potential of regulatory penalties”
- “you need to get the legal and accounting bits right then your governance will make the business more profitable”
- I was a senior executive so I can do everything that your business needs to turn around”
- “my / our systems have been developed specifically for family business therefore we can take you to the next level”
- Consultants or Advisers seem to want to “own” the business as their client yet can only provide certain services or expertise
- Once inside a professional service firm you only seem to be referred to other professional service providers (accounting, legal, finance, financial services and insurance)
- Individual consultants or small firms providing specific services (HR / IR or WHS) seem hesitant to bring other consultants in to assist them or they just want to pass you over to the principle professional services
- I have contacted a consultant who indicated they could do change management yet in the end all they wanted to do was staff training in HR and WHS
- So many consultants state they are strategic advisers yet when they commence work they want to do business plans, training and marketing / sales programs
- Service providers talk up their networks YET very few of them introduce this network to the business.
- There is an increasing number of consultants and advisers requesting retainer or fixed term fees before they understand the business, the family dynamics or have built a relationship
So what to do about this?
First we need to unpack why Consultants, Advisers and Professional Services all use the word “specialist” while appearing to be competing in the market as “all things to all people”. This is a common paradigm in the service industry because the actual output is not something “physical” that can be readily observed such as a house or car. What this group of professionals provide is knowledge, skills and experience to provide the solution to a real or perceived problem. This is best done in a robust manner without fear or favour to ensure the family business client has the appropriate information to make their decision.
So why attempt to be all things to all people or the entire solution, when in reality no one can possibly achieve this. Part of the answer is found in one of three areas;
- The service provider wants to secure the client quickly therefore take the enquiry at face value without scoping the real family business issues
- The service provider commences the engagement based on their expertise however find additional work inside the client’s business therefore keeps the focus on those areas instead of the real strategic issues of the business
- Larger firms adopt an “everything in-house” business model based on their paradigms however consider that this is in the best interests of their clients
I am fully cognisant the above have a negative connotation and a very general however that is deliberate to get service providers and family businesses thinking of their own behaviours and / or experiences
Secondly, as Consultants, Advisers and Professional Services we need to become more aware of our family businesses strategic needs and understand that as individual’s and individual firms we cannot add real value in isolation or selective referring. Yes every business has the need for advice from what I call the four pillars (Accounting, Legal, Financial and Financial Services including Insurance) however these are generally structural, regulatory, risk management and enablers that are strategic implementation functions. More importantly, and unique to family business is the group dynamics within the family (including the extended family), the supply chain and the workforce.
To become more acutely aware it is recommended that Consultants, Advisers and Professional Services focus on the purpose of the family business and have robust interactions accordingly. This is not a simple process nor is it easy to achieve because all Professional Service providers have very strict regulatory guidelines to operate within. While this is acknowledged it is also critical for these professionals to be able to advise their clients that the strategic issue may require the input from another type of specialist.
Again, I am acutely aware the above depicts a specific set of scenarios however it is written to challenge thought to improve.
Now we have those two out of the way it is time to unpack the word “specialist”. According to the Macquarie Dictionary a specialist is
“Someone who is devoted to one subject, or to one particular branch of a subject one pursuit”
It goes on to describe a speciality as being;
- “Special or particular character”
- “Special or distinctive quality or characteristic; a peculiarity”
- “An article of unusual or superior design or quality”
- “A novelty; a new article”
- “An article with such strong consumer demand that it is at least partially removed from price competition”
Up until this point it would be fair for the reader to say “how does all of this fit with the headline of this article?” Good question so we will now pull this together for service providers and family business owners.
The fact is the vast majority of Consultants, Advisers and Professional Services engaged with family business are specialists from the family business perspective therefore it is incumbent upon these Consultants, Advisers and Professional Services to scope engagements correctly to find if they really are the right fit for the client or if the strategic need for their services is at some time in the future. Alternatively, and this occurs frequently, the strategic need is for a range of specialist services however the solution is how this can be done effectively and efficiently to add significant value to the family and the business.
A true specialist is best described as follows;
A brain surgeon, while potentially competent in other types of surgery will never be distracted from their core professional competency. If and when they diagnose or observe the need for another form of surgery they have a trusted network that they can refer to ensuring the patient comes first. This surgeon does not let ego or anything else get in the way of the real outcome for the patient.
As a family business Consultants, Advisers and Professional Services it is critical that we understand the family values and legacy along with the technical functions of the business. From there we need to align our services with this so we can truly add value to the family and the business regardless of who the client is.
So, not forsaking the technical competencies, what are the other traits we need to look out for to identify a true specialist that will add value to the family business. Here are a few and I invite you to add more if you feel so inclined;
- They need to have strength of conviction, confidence and empathy to accompany their field of expertise
- Possess the ability to listen and probe first to ensure they have a real understanding of the strategic drivers of the family business
- Understand the current state of readiness for change within the family business members
- Have a trusted network that is aligned with their profession and also includes those professionals that may be considered counter-intuitive to the needs of the family business
- g. An organisational Psychologist or a Counselling Mediator
- Have clearly defined boundaries of where their advice and skills add value and when it is critical to ensure the family business client engages and extracts value out of other Consultants, Advisers and Professional Services
- Understand that the Consultants, Advisers and Professional Services is NOT IMPORTANT to the family business however they are CRITICAL as specific points in time when the client requires a solution
- Strive to add to the family business legacy and as such keep the ego out of the relationship
We are in an era where people can search for a Consultants, Advisers and Professional Services quickly and if you don’t add the value the family business is seeking then it is an acceptable eventuality you will be “un-plugged” and replaced.
Yes specialists in family business are in demand therefore be part of the family businesses solution NOT a rent seeker disguised as a specialist. Build your network and ensure it is diverse, trusted and aligned with the value adding solutions orientated ethos of family business.
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 email@example.com
Website – www.tcbsolutions.com.au