I’ve always been careful about using my blog and newsletter to support the engagement of family-business advisors, because, while in the many situations the outside expert will provide tremendous benefit, I’ve been concerned that doing so would be perceived as self-promotion rather than honest advice.
Putting that aside, in my experience most successful family businesses, large or small, work with family-business advisors to align goals for the family, the shareholders and the business and future-proof the business against challenges that will be faced by emerging generations.
In looking for professional advisors for your family business it’s important to recognize that family businesses are complex and the expertise needed for a well-run family business is multi-disciplinary. Each area of expertise addresses one of the business’ three primary subsystems: ownership, management and the family itself.
As humans we have a tendency to seek advice from those we know and trust. But as I wouldn’t have my CPA do a root canal for me, I should not ask my business attorney to draw-up my will, or ‘have a talk’ with my children who are playing out their rivalries in the office. Equally, I would be wary of the advisor who does not recognize the multiple disciplines that make up a family enterprise or see a need for expertise beyond their own.
Unfortunately, it’s not uncommon to encounter resistance within a family against hiring outside expertise. In her January 29, 2019, Next Avenue article, Hiring an Outside Expert for Your Family Business*, entrepreneurship and personal finance expert Kerry Hannon brings up the psychological or ego issues around hiring professional expertise for a family business. She suggests that when a family believes they are smarter than an outside person or that they don’t need outside perspective, it’s a sign that they do need to bring in outside people.
There’s a reason 125-year-old family businesses are 125 years old. These families have been studied, and it’s not accidental. Hiring outside professional expertise to teach and implement best practices is vital to the multi-generational success of every family enterprise.