Insights from Research on the Role of Trusted Advisors in Family Firms

Introduction

In a 2013 research paper titled “The Most Trusted Advisor and the Subtle Advice Process in Family Firms” Vanessa Strike explores the crucial role trusted advisors play in the success and well-being of family-owned businesses. This article will delve into the key takeaways from the study and shed light on the significance of these advisors in navigating the complexities of family dynamics and business operations. To gain a more comprehensive view of the subject, you may read my article titled “The Role of Most Trusted Advisors in Bridging Logic Gaps“.

Takeaway 1: Level of Expertise

One of the primary findings of the research paper is the level of expertise found in the most trusted adviser in family firms. The most trusted adviser does not need to be the world’s leading expert on a specific topic. Instead, the most trusted adviser needs to have a broad understanding of concepts allowing him to ask the right questions. In practice, we often see the most trusted adviser being the gatekeeper to the client and the intermediary between the client and expert advisers. The most trusted adviser with a broad understanding of various topics allows him to navigate the issues at hand without getting bogged down in the minutiae of the solution. However, it will not suffice for the most trusted adviser to have no understanding of a concept and rely solely on external advisers. This might land both the client and the most trusted adviser in hot water when crucial connections are not made.

Takeaway 2: Capturing Attention

Another significant aspect highlighted in the study is the ability of MTAs to capture the attention of family firm members. By understanding the abilities and desires of family members, the advisor can tailor his advice and recommendations to resonate with their specific needs. This attention-capturing process is crucial in gaining the trust and respect of family members, ultimately leading to more effective decision-making and problem-solving within the family and the family business. This capturing of attention is not a passive process. It requires the most trusted adviser to actively influence the attention within the family as well. This active influence results in creating a collective attention within the family.

Takeaway 3: Subtle Processes and Implicit Practices

The research also sheds light on the subtle processes and implicit practices employed by MTAs in their advisory roles. These practices go beyond the traditional advisory functions and involve fostering collaboration, facilitating interrelationships among family members, and promoting mindful governance. By adopting these practices, advisors can create a harmonious environment where family members can work together towards the business’s success. This can also lead to the adviser mentoring family members or developing and maintaining the entrepreneurial spirit within the family.

Conclusion

The role of the most trusted advisor in family businesses cannot be underestimated. The most trusted adviser has certain attributes that we have outlined above. A most trusted adviser is seldom born this way but has seen his skill set develop over the years through deliberate practice. By understanding the subtle processes and employing implicit practices, these advisors can navigate the complexities of family dynamics and contribute to the overall cohesiveness of the family thereby enabling the family to start thinking and working towards transgenerational wealth.

Citation:

Strike, V. M. (2013). The Most Trusted Advisor and the Subtle Advice Process in Family Firms. Family Business Review, 26(3), 293-313. https://doi.org/10.1177/0894486513492547