Getting The Balance Right!
1st September 2015 Gary Deans, KPMG's UK Head of Family Business
You need the right balance of skills when working with family business clients!
Gary Deans, Head of Family Business at KPMG in UK gives his thoughts on how advising family businesses calls on a unique combination of skills in the form of business consultancy and people skills.
People running family businesses, small to the very largest enterprises, often succeed through an intriguing ability to mesh emotional intelligence with commercial considerations in order to drive performance. Therefore, it stands to reason they expect a similar approach from their advisors, who have to be able to provide robust strategic analysis and tactical financial guidance, but which is absolutely in the context of family relationships and ideals.
Not that family businesses are soft and fuzzy; our latest Global Family Business Survey found that nearly six in ten family business leaders disagreed with the statement that “emotions and sentiments often affect decision-making processes in family firms” suggesting that those running family firms may have a high level of respect for emotional dimensions of business however, when it comes to making decisions, emotions become secondary to hardcore business considerations.
This was particularly evident when the survey queried the characteristics those running family businesses would be most interested to find in potential investors. Issues such as trust, similar values to the family, or a family business mindset came well after industry expertise, a similar appetite for business risk and return and the skills and capabilities they could add to the board.
In other words, family businesses don’t really “choose” between hard and soft factors in decision making. The most successful ensure they focus on both and give them the importance they each deserve. Emotional dimensions matter, undoubtedly more so than in other business ownership models, but not to the cost of purely business issues.
In fact this experience of coping with challenging dilemmas that blend commercial and emotional components can prove to be a key differentiator. I’ve seen nimble thinking and an analytical approach deliver real competitive advantage to family businesses in today’s complex and fast moving environment.
This could go some way to explaining the confidence in the family business sector, with 70% of executives optimistic about their prospects according to our European Barometer. This is important for the wider economy, given the boost such positivity gives to investment, growth intentions and ambitions.
It puts a whole different spin on conversations such as asking after a client’s children when it’s not just small talk; I can be learning about an entrepreneur’s succession plans, HR issues and wealth management intentions, and I need to factor these into future conversations and advice every bit as much as economic data or industry insights.