How to Choose and Use Advisors
Chapters (6)
Few business owners use professional advisors wisely. Nearly one-third of family businesses have no trusted advisor outside the family, a recent survey by Massachusetts Mutual Life Insurance Co. shows. (Please see Table 3.)
Good advisors to the family business are more than just experts in their field.
Just as the attributes described earlier signal benchmark service by an advisor, some behaviors should sound an alarm.
Once you know what you want in an advisor—and what you want to avoid—how do you find the right one?
... The key dimension of the cooperation of FAs with incumbent principals lies in linking their interests with those of the FB, which, in turn, benefits the incumbent principal. The primary challenge that FAs must face, therefore, lies in becoming acquainted to them (Aronoff and Ward, 2011). The succession process' complexity, in turn, determines the scope of these interests, and the fact that some may remain unknown (Ojasalo, 2001). ...
... Without trust, cooperation between FAs and FB incumbents would be impossible. Trust is a key factor in the cooperation between the incumbent and the advisor (Aronoff and Ward, 2011;Collin et al., 2017;de Groote and Bertschi-Michel, 2021;Kakabadse et al., 2006). Trust also helps reduce the asymmetry of information between them (Nikolova et al., 2015). ...
... Among these, we identified trust, communication, advisors' human capital, and the willingness to assume this role. These factors are also important for the general development of cooperation among incumbents (Aronoff and Ward, 2011;Nicholson et al., 2010;Quarchioni et al., 2022). ...
Purpose
This study explores the roles of formal advisors (FAs) in the succession process of family firms and the factors that determine them.
Design/methodology/approach
Data for this study were collected through interviews with 38 FAs, including lawyers, tax advisors, financial ad-visors and others.
Findings
FAs play multiple roles simultaneously in succession processes (both internal and external), which the authors call role hybridity. Among them, the authors differentiated roles, such as educators, sherpas, initiators, experts, managers, consiglieres and protectors. Additionally, the authors demonstrated that the critical factors shaping these roles are trust, communication, human capital and willingness to take on the role. To explain the role hybridity phenomenon, the authors used stewardship theory's assumptions and formulated propositions for further research.
Originality/value
This study provides insight into both internal and external succession processes from the perspective of various types of FAs. The authors indicate their roles and the factors that determine them.
Purpose
– The purpose of this paper is to increase understanding of the often questioned willingness of family businesses (FBs) to seek external advice on challenges they face.
Design/methodology/approach
– Mixed methods were employed gaining 140 responses to a survey of FB CEOs on their use of advice, followed by 51 semi-structured interviews of FB owners, managers and advisers. It drew upon institutional theory and those concerning both trust and organisational knowledge creation; also upon experiential knowledge gained in advising FBs.
Findings
– Cost was found to deter use of professional advice, also unawareness of where it was to be found. Dissatisfaction with many advisers’ “soft” skills was prevalent. Clients took as given advisers’ technical knowledge; empathy and listening skills being the discriminants of successful practice. Effective means of skills creation were identified but seen to be obtained fortuitously, not systematically. The professional institutions of accountants, the most frequently used professional advisers, require tertiary institutions seeking their accreditation to develop their students’ “generic skills”, including “the ability to listen effectively”: conditions not being complied with. However, advice-seeking is found to be greater than assumed because of an unexpected resort to peers, often through networking. Widespread peers’ recommendations of professional advisers impart instantaneous “vicarious” trust, found to be more common than the “slow maturing” kind posited by previous researchers.
Originality/value
– This paper offers a rarely recorded FB client perspective on their use of external advice. It extends understanding of the trust upon which they rely. It discloses how some achieve a mutual learning that expands understanding of organisational knowledge creation. It describes a route, “shadowing”, through which professional advisers have achieved outstanding performance.
ResearchGate has not been able to resolve any references for this publication.