Family businesses: seekers of advice

Abstract

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.

Citation

Reddrop, A. and Mapunda, G. (2015), "Family businesses: seekers of advice", Journal of Family Business Management, Vol. 5 No. 1, pp. 90-115. https://doi.org/10.1108/JFBM-08-2014-0018