Not so ‘black and white’ in the family business

captureThere’s often a perception that a lack of formal structures or processes in a family business is indicative of a lack of professionalism.  Many advisors are thinking “Can you believe they don’t even …” as they set out an array of services intended to ‘professionalize’ the business.

While the business’ affairs may well not have been conducted in a manner which the advisor deems to be the most professional, efficient or beneficial, it is important to recognize that this may not concern the founder who may have found an equilibrium between profitability, lifestyle and social / familial responsibility which works for them. It’s one thing to have a high performing business, but having a satisfied and fulfilled constituency of owners, family members, and employees is another.

Most surprisingly, some advisors seem to forget that regardless of what their own perception may be, the family has invariably built and operates a successful business. Whilst textbook examples of good governance may not be immediately apparent, there is some form of natural governance and organisational strategy at work.

Professional advisors, and after all I am one, undoubtedly have an important role to play in the family business ecosphere; they clearly have valuable knowledge and experience to impart. Family business studies and surveys, as well as the plethora of academic articles and journals, are also excellent sources of best practice examples and possible solutions, but we also need to look beyond these. It is not about being ‘right’ or applying theoretical concepts. Successful family business governance and advisory is about finding ways to balance the inherent contradictions of advising both a particular family and their business.

It is also high time to challenge the negative perceptions associated with being unstructured, and unprofessional and instead recognise that the very ‘fuzziness’ of such enterprises can be a competitive advantage and enable nimble reactions to market movements. Moreover, expertise in operating in loose, uncertain environments filled with quandaries and dilemmas can be valuable in the corporate world. Multinationals seeking to innovate are beginning to realise that a lot can be learned from family businesses and many of their characteristics can, and should be, successfully transferred and replicated elsewhere.

This is where it becomes essential for advisors to ‘touch’ and ‘feel’ the family business, embrace the ‘fuzziness’ and weave emotional elements with the business considerations, to manage business and family needs accordingly, with manage being the operative word.

The reality is that there is no right answer, no one-size-fits-all solution and definitely no panacea for common family business problems or issues. We have to view such businesses from both a strategic and emotional standpoint, develop an appreciation for ambiguity, and build creative solutions to manage the inherent paradoxes.

by: Yasmine Omari, Family Business Advisor, Deloitte Private, Middle East

The views and opinions expressed herein do not represent nor reflect those of Deloitte. Deloitte shall endeavor, as reasonably as possible, to screen such information which is obtained, to the best of Deloitte’s knowledge, from reliable source. As such, Deloitte cannot guarantee the accuracy of the information featured nor the validity of the opinions and/or analysis and interpretation expressed herein. Opinions, conclusions and other information in this interview/article which have not been delivered by way of the business of Deloitte are neither given nor endorsed by it.

This article contains general information only, and neither DTME, DTME affiliates nor any of Deloitte Touche Tohmatsu Limited member firms are, by means of this article, rendering any accounting, business, financial, investment, legal, tax, or other professional advice or services of any nature whatsoever. Information included in the article is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. None of Deloitte Touche Tohmatsu Limited, its member firms, or its respective affiliates shall be responsible for any loss or damages whatsoever sustained by any person who relies on this publication.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s