This week, Yasmine Omari, a Manager with the Deloitte Middle
East Family Enterprise Consulting team in Dubai, discusses
structure and ambiguity in the family business system.
There'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 'professionalise' 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 recognise 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
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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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