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Research and Practice: FBR Special Issue

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The Practitioner is pleased to bring you the first in a series of preview articles from the FBR September 2013 Special Issue on Advising Family Enterprise, co-edited by Trish Reay, University of Alberta, and W. Gibb Dyer, Brigham Young University.

This week’s feature is:

The Effects of Goal Orientation and Client Feedback on the Adaptive Behaviors of Family Enterprise Advisors
co-authored by Walter D. Davis, Clay Dibrell, Justin B. Craig and Judy Green

Summary by Karen Vinton, Assistant Editor, Family Business Review

In the last two decades family enterprise advising has emerged as a distinctive subset of the professional consultant industry. Yet relatively little attention has been given to the behaviors of this new professional group. To begin to address this lack of knowledge, the Family Firm Institute (FFI) responded to a request from scholars at Northeastern University and the University of Mississippi (Ole Miss) to survey the FFI membership to better understand the advisors who work on complex and unique problems for their family enterprise clients.

This article presents the findings of that survey.  A total of 231 surveys from family business advisors were returned and analyzed.  The study found that advisors’ goal orientation, i.e., learning orientation or proving orientation, affects how they gather feedback from their clients and how they engage in adaptive behaviors. The results also indicate that getting quality feedback from clients significantly increases the ability of advisors to be innovative and creative in their use of resources.

An expanded summary of the major findings is provided below. Practitioners should find the Implications section of this paper particularly interesting and thought-provoking.

Learning and Proving Orientations: Family enterprise advisors use both

An excerpt from the Implications section of this article indicates that, “…both feedback and goal orientation [emphasis added] can have a positive role to play in the advisor-client relationship, and that feedback may be the mechanism that links learning and proving orientation to adaptive behaviors.”

Goal orientation refers to whether individuals primarily strive to: enhance their knowledge, skills, and competence, referred to as a learning orientation; or attempt to demonstrate their abilities and expertise, referred to as a performance/proving orientation.

Continuing from the article, “Individuals may be predisposed to have one orientation or the other, but advisors are often adept at choosing their own approaches to goal accomplishment.  Advisors may choose to either pursue a learning approach [emphasis added] to meeting client needs, or a proving approach [emphasis added] to meeting client needs.  From a practitioner standpoint, the following questions which may arise: (a) when and how might an advisor choose to adopt a learning orientation as opposed to a proving orientation? (b) what kinds of feedback-seeking behaviors are more likely to lead to the high-quality feedback needed to successfully execute an advising relationship?”

The answers to these questions are likely to depend on two dimensions:  complexity of the advising assignment, and “openness” of the family client.  “[C]omplex tasks require active learning and the acquisition of more complex procedural knowledge in order for performance to be optimized in the long run.  Other tasks, those that are well learned or relatively simple, would be better accomplished with a proving orientation.”

What To Do When?

“There is considerable evidence from the goal orientation literature that learning orientation has its greatest effects on goal accomplishment when tasks are complex [emphasis added] and require greater procedural knowledge.  In this type of setting, advisors may benefit from taking an approach where they seek to experiment with new ways of serving client needs, and take the time to learn from mistakes.  This may be especially helpful in longer-term advisor – client relationships. Presenting clients with an array of potential solutions to family firm needs, and allowing time for evaluation of these alternative solutions, may lead to more useful feedback and more innovative solutions in the long run. In relatively simple assignments of a shorter duration, a proving orientation [emphasis added] might be more appropriate.  Here, the advisor is more concerned with delivering a relatively simple solution to a problem as quickly as possible, without a need to learn much more about the problem.”

Client Feedback as a Link to Adaptive Behaviors: What are they thinking?

“The ‘openness’ of the family client will determine the extent to which the client provides (or withholds) feedback that might be needed by the advisor. Some clients will be ‘open’ in that they are able and willing to provide feedback about their needs.”

When working with an “open” client, advisors may simply need to be active listeners in order to obtain the feedback needed.  It may not be necessary to actively question the client.

“On the other hand, some clients, will be either unwilling or in some cases even unable to provide the advisor with needed feedback.  These feedback environments can be viewed as more ‘closed’ in nature.”

“In a ‘closed’ environment, where the family client is reluctant to provide information, or is for some reason shy about providing feedback about the advisor’s performance, the advisor may need to be more direct in seeking feedback.  Here, an experienced advisor will know the right questions to ask the client and feel comfortable asking those questions directly.  Advisors may also need to assess the reasons why a client is ‘closed.’ The lack of feedback from a client might not always reflect a ‘closed’ organizational culture or climate, but may simply reflect the inexperience of the client, or the uncertainty that the client may experience with respect to the information the advisor needs.  If the client does not know what feedback to provide, the advisor will need to be proactive in acquiring this information.”

Figure 3 provides a model which presents a summary of what approaches are most useful for getting feedback under which client conditions. (See complete article for Figure 3) 

Some conclusions:

  • Family enterprise advisors’ goal orientation is linked to individual innovative behavior.
  • The quality of feedback from the client can play an important role in mediating the goal orientation to behavior relationship.
  • “As family enterprises seek out family enterprise advisors, both parties should be cognizant of how the two parties are interrelated and how the nature of their interdependent relationship affects the adaptability of the advisor to client needs.”
  • “Given the heterogeneity of the family enterprise sector and the variety of the tasks and environments that advisors undertake, advisors and clients may choose different approaches to their relationship depending on the complexity of the assignment and the openness of the client.”
  • “Interactions with family stakeholders, and the subsequent openness to provide feedback, would likely vary by assignment and this may determine the choice of advisor and have a bearing on the relationship, and ultimately, the effectiveness of the outcome.”
  • Practitioners should find this article thought provoking and beneficial for their practices.  In particular, it should aid practitioners in assessing the needs of the client, determining how best to serve the needs of the client, and building effective feedback environments.

The complete article is available here.

Listen to the podcast here. 

Stay tune next week for another issue of The Practitioner.

Yours in Practice,

The Practitioner

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