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BUSINESS Skills research

“Selling is about a dialogue, with the seller probably asking more questions than making statements”

In addition to emotional intelligence, advisors can bring other non-technical skills to their family business practices. To facilitate engagement, advisors can learn techniques from other professions. One advisor describes how ‘thought leadership improves the quality of his engagement and expands his intellectual capital’. Another advisor borrows engagement techniques from educational fields because ‘engaging the next generation and anticipating future risks starts with education’. In all these initiatives, it is critical to follow a tried and tested process, because: ‘If you haven’t got a process then there’s no way you’re going to get to the big decisions’. Once a family is prepared to take advice, the two most common areas to tackle are governance and succession planning, but in both, people issues feature larger than technical issues. Trust must be built up because business structures and succession decisions are rarely congruent with family dynamics. As one family business owner said: ‘If succession is to be effective, it requires rigorous objective standards to be applied because, after all, this is about people’. Advisors, too, observe that they are more effective when they have ‘a clear structure which creates clarity for everybody understanding what their roles and responsibilities are’. In the core activities of governance and succession planning advisors may feel in their comfort zone with technical skills carrying the day. But there are other, equally important services that the advisor can bring, based on a completely different set of business practices. These include activities such as engendering trust, appraising people’s strengths and weaknesses, and highlighting dysfunctional family dynamics. In each of these examples, experience with counselling, human resources and organisational psychology will enhance effectiveness. The added value of this new approach was summed up by one advisor as ‘providing insights into the qualities and calibres of the people to come up with hard truths; to hold up a mirror to the people and the family psychological system.’

Adopting new business practices There are lots of suggestions from the research that describe new business practices that successful family business advisors employ. Most of these are about changing professional practices to support the values that family businesses want to see: consistency, collaboration and facilitation. Family business owners frequently remark how ‘the one thing that advisors need to do much more


of is to put families in touch with other families’. This is because clients learn best ‘by speaking to other families who’ve been through the same thing’. For advisors to satisfy business owners’ needs, they need to focus more on networking than on sharing their technical knowledge. This theme applies equally to how advisors

market themselves to prospective clients. Rather than focusing on technical solutions, ‘there needs to be a cultural and emotional fit to make a connection’. Family business owners tend to be reactive rather than proactive in seeking advice: ‘We wouldn’t go out of our way to look for somebody unless we actually needed to.’ This tendency means advisors need to actively and continually interact with family businesses to highlight the value of their advice. We observed more experienced practitioners using networking and consultative selling techniques to secure engagement with prospective family business clients. One advisor described this process perfectly: ‘Great selling is about a dialogue, with the seller probably asking more questions than making statements.’ But when it comes to paying for advisory services, there is clear evidence from the research that pricing is undermining value propositions. Comments such as ‘I think advisors need to get away from the clock ticking’ were heard together with demands that ‘It has to be an outcome-based fee structure, not an hours-based fee structure’. For advisors, this is one area where there are no easy solutions: hourly pricing is well entrenched in most large partnerships and accountancy firms. But the gauntlet has clearly been thrown down, with new thinking required in this area. After all, it’s hard to argue with the observation of one business owner that ‘the advisor should be as skilled in pricing their services as our business is in pricing our products’.

Overcoming barriers to working more collaboratively Another area where it was felt advisors could improve is collaboration. Advisors tend to work in partnership silos, whereas families work as networks, and this mismatch becomes most apparent in the weaknesses of the professional referral system. One advisor noted that ‘certain firms give each other quite a lot of referrals even if they may not be the right person to deliver that service’. This same problem arises in the intangible constraints that the partnership structure imposes on collaboration between advisors in the same firm. Either way, advisors need to recognise that advisory business models may need to be adapted to produce positive outcomes for family business clients.

Conclusion Family businesses have complex needs that demand a distinct set of advisory skills. Not surprisingly, this complexity is commensurate with more attractive fees, provided the advisor can get over the hurdles to secure an engagement. As this research has shown, broadening skillsets beyond the technical to encompass soft skills, and adapting business practices to support family business values can prove effective in both securing and managing family business relationships.

APRIL 2013 35


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