Original article from the Flevy business blog can be found here: http://flevy.com/blog/approaching-professional-intervention-as-a-process/ Professional intervention in a family business to resolve disputes is a smart strategy as the issues that confront a family in business together are difficult and complex. “A family business expert, who is experienced in dealing with family business dynamics, can be more objective to help grow the family business, to help maintain healthy family relationships and to help transition the business to the next generation of family management and ownership,” says leading family business expert Don Schwerzler . “A family business expert can be a more objective strategist as he/she does not have the “baggage” associated with being a member of the family and not someone associated with the management of the business.” Schwerzler has been working with family business entrepreneurs for more than 40 years and is the founder of the Atlanta-based Family Business Institute and the web organization Family Business Experts . Running a successful family business is substantially more difficult than running a non-family business. There are many contributing factors. Conflict between generations as to the strategic requirements of the business – what are the goals and how do we get there. Financial information is rarely disseminated to even the top managers (family and non family members) thereby thwarting those managers who, in fact, may be skilled in strategic planning, budgeting, costing, pricing, etc. A family business will generally have more severe problems in recruiting and retaining non family professional managers since upward mobility and advancement are restricted.

1. Approaching Professional
Intervention as a Process
Contributed by Don Schwerzler on June 29, 2015 in Management & Leadership , Organization, Change, & HR
Professional intervention in a family business
to resolve disputes is a smart strategy as the
issues that confront a family in business
together are difficult and complex.
“A family business expert, who is experienced
in dealing with family business dynamics, can
be more objective to help grow the family
business, to help maintain healthy family
relationships and to help transition the
business to the next generation of family
management and ownership,” says leading family business expert Don Schwerzler .

2. “A family business expert can be a more objective strategist as he/she does not have the
“baggage” associated with being a member of the family and not someone associated with
the management of the business.”
Schwerzler has been working with family business entrepreneurs for more than 40 years
and is the founder of the Atlanta-based Family Business Institute and the web organization
Family Business Experts . Running a successful family business is substantially more
difficult than running a non-family business. There are many contributing factors.
Conflict between generations as to the strategic requirements of the business – what are the
goals and how do we get there.
Financial information is rarely disseminated to even the top managers (family and non
family members) thereby thwarting those managers who, in fact, may be skilled in strategic
planning, budgeting, costing, pricing, etc.
A family business will generally have more severe problems in recruiting and retaining non
family professional managers since upward mobility and advancement are restricted.

3. The dynamics for successfully managing a family business are blurred and often difficult to
ascertain – is it a Family First Business or a Business First Family?
Because family businesses tend to have more informal management style than a non family
business, performance standards tend to be poorly described or non-existent for most
segments of the business.
Because “operations management” information is scarce or not existent, outside advisers
such as attorneys, financial planners, CPA’s and other professional counselors rely on
perceptions of reality steeped more in “how it has always been” rather than “how much
better should it be”. This is a crucial deficiency because it disengages the professional
resources from serving both the business and the family as well as they could if they were
dealing with timely, accurate and factual operating information about the business.
The management dynamics of a family business are often more consensual than action or
performance orientated. Thus, a family business is generally not able to react to problems
and take the required remedial action as quickly as a non family business.

4. The ego of an entrepreneur is such that they feel capable of doing everything themselves.
Because they feel they can do “better” than anyone else, it is difficult for them to let go –
either to delegate to subordinates or asking for professional help even when they know that
help is needed.
Professional fees are often difficult to cost justify or value. The major contributing factor,
however, is that a family business tends to procrastinate on bringing in professional
resources until the “ox is gored and already in the ditch”. The analogy of the Fram oil filter
commercial “you can pay me now or pay me later” is aptly applied to a family business
situation except the consequences can be substantially more expensive when the survival of
the business is at stake.
The family business is less objective about profitability and other types of performance
standards – more forgiving or tolerant of people and the work management systems of their
business. With a family business being orientated to consensus, harmony and friendship
(we are all part of the family here at XYZ Corporation), change management is a difficult
process. Attitudinal platitudes such as “why fix it if it ain’t broke” prevail over the difficulties
perceived with change. This is evident not only in the internal management systems of a
family business but also to professional resources. Just as members of the management

5. team are impacted by “the Peter Principle” as the business grows, that same growth problem
impacts on the professional resources such as banking, legal and accounting. Unfortunately
these changes follow generational succession rather than the more immediate needs of the
business.
Approach as Part of a Process, Rather Than as an Event
Our experience in dealing with the very unique problems confronting a family business
suggests that professional intervention should be approached as part of a process rather
than as an event . That lead to the development of our highly successful Family Business
Assessment. The Assessment maximizes the benefit and minimizes the trauma of change.
Furthermore, because the problems of a family business are generally multi-dimensional,
professional intervention should best be introduced into the situation by taking a multi-
disciplined approach to avoid fragmentation and the waste of time and effort that generally
occurs when a single dimensional approach is employed.
Operational Assessment
The first part of the professional intervention process we normally recommend would
include an operational assessment of the business.

6. What opportunities are available in terms of profit optimization, cost containment or cost
reduction?
What are operating parameters of the business and what changes in operational procedures
or operational protocol might increase the ROI of the business?
What options are available for improving the health of the business, both internally as well
as in the marketplace?
This operational assessment provides the family business the facts and objectivity that are
often obscured by the owner /managers being too close to the problems.
Involve a Skilled Professional
The second part of the professional intervention addresses the family side of the family
business equation. The focus is on communication, training and professional & personal
growth of the family. In other words, the family business expert should be able to facilitate a
strategic plan for the business “system” and a strategic plan for the family “system” as well.

7. Addressing one system and ignoring others is wrought with problems that can cause a
family business to self-destruct – especially when dealing with inter and intra-generational
issues and disputes.
Planning for Tax Consequences
The third phase of the multi-disciplined approach to professional intervention focuses
primarily on the tax consequences of succession. Without proper planning, succession
(planned or unplanned) can become a financial catastrophe for both the business as well as
for the family.
More often than not, some financial planning has taken place. Unfortunately, most of these
efforts are focused only on one individual – the owner/ entrepreneur. As a result, the
planning generally is incomplete or only sequential solutions are engaged.
The financial planning for succession should be approached from the perspective of
minimizing the total tax consequences of succession. This concept allows for the
development of a connected and well integrated approach, an approach that considers the
goals and objectives of the family as well as the future needs of the business.

8. The “on-going” processes for maintaining a healthy family business would include strategies
such as conducting annual or semi-annual
Family Meetings and establishing an Advisory Board. It should be noted that one of the
major benefits of this multi disciplined team approach professional is the ability to involve
“outside” professional intervention to the family business in a purposeful yet expedient
manner. Although the segments of the process have been cited to help illuminate the
process, the multi disciplined team approach allows for each segment to be addressed
simultaneously.
If this approach to professional intervention makes sense, give us a call and we can discuss
the particulars of your situation and help you to formulate a plan of action and a timetable
for beginning the succession planning and the succession management process. The most
difficult hurdle to overcome is procrastination hoping the problems will go away or will
solve themselves. As Tom Watson, former head of IBM, reflected, “Lying dead in the water
and doing nothing is comfortable because it is without risk, but it is an absolutely fatal way
to manage a business.”

9. About Don Schwerzler
Don Schwerzler is one of the world's leading family business experts. He is the founder of the Atlanta-
based Family Business Institute and the Family Business Experts website ; and has been featured in the
Wall Street Journal. Don Schwerzler began his career as a family business consultant in 1967 and
founded the Family Business Institute in the mid 80s. The Atlanta-based Family Business Institute is
nationally recognized for pioneering the multi-disciplinary consulting protocol that has proven highly
successful in dealing with the unique and complex problems that confront and confound families in
business together. If you have any questions about family business, you can ask him here .

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