Practical Research And Researched Practice

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Today’s article is the third in a series on evolving concepts, global data points and research on practice in the family enterprise field.

Dr. Sharma’s article, “Evolution in thinking about generational transition in family enterprises” (Practitioner, June 11), identifies a very real risk in our evolving field, i.e., taking oft-quoted statistics as fact and proof. Another risk is confusing anecdotes with data. As Harvard physics professor Eric Mazur noted in his lecture, Confessions of a Converted Lecturer, “the plural of anecdote is not data.” We as practitioners have perpetuated that by giving advice that is often not based on any real data. Anecdote after anecdote has defined what works for us in our practices. We share cases and stories and anecdotes of successes and sometimes failures. We make suggestions based on our experiences and not on data. And research on practice has been scarce. Theory and beliefs have been the basis for practice. As Einstein once said, “In theory, theory and practice are the same. In practice, they are not.”

For example, “Best Practices” based on the 30-13-3 statistics have been the rule and our efforts, as Sharma notes, have been “directed to enable family firm leaders to beat the odds and transition their firm to the next generation of their family”. With new research showing that “both the creative destruction of firms and pruning of the enterprising family are integral parts of the longevity of an enterprising family,” our advice and counsel must change. Fortunately, that is slowly changing — research on practice is growing but its progress will depend on the ongoing communication between researchers and practitioners.

A 2009 article, “Using and Abusing Family Business Research, ” in Family Business Magazine by Joe Astrachan, challenged practitioners by suggesting that “family business leaders should take a skeptical view of suggestions not supported by research.”

And the ‘process of practice’ is beginning to be studied and challenged. Presentations at the Boston (2011) and the San Diego (2013) annual FFI conferences discussed the applications of research to practice — the myths and the realities. For example in the Boston conference presentation “Persistent [email protected],” it was noted that the conventional wisdom is that outside directors improve board performance, but the results are inconclusive regarding the relationship between outside directors and firm performance. Nonetheless, outside directors are often recommended by practitioners.

The “Family Business Review Special Issues Panel: Advising family enterprise” in San Diego reviewed several research articles related to practice that included some practical suggestions:

  • skills of family dynamics and coaching increase effectiveness
  • knowledge sharing and team building are important
  • self-knowledge and self-management are critical
  • a learning orientation and the ability to encourage an environment of collaboration and mindfulness is necessary

Furthering this progress, there are two recent literature review articles by Vanessa Strike in FBR. In “Advising the Family Firm: Reviewing the Past to Build the Future” (2012), Strike concludes: “There is little evidence therefore concerning when and to what extent advisors succeed in influencing family firms and the effect on family performance…. advisors may fulfill family firm needs, yet the process itself remains shielded.

And in her 2013 article, “The Most Trusted Advisor and the Subtle Advice Process in Family Firms,” Strike challenges both researchers and practitioners by saying “this study therefore provides a window, and develops a deeper understanding of a phenomenon, the Most Trusted Advisor and the advising process, that has remained largely unknown even to scholars and business people within the inner circle of family firms.”

We have been inaccessible to each other and, if all we did was based on research, we would be able to recommend very little. So, let’s stop claiming this or that works. Let’s really listen to each other; where there is little research, let’s ask for more. And, then, let’s read it and apply it. Let’s give researchers feedback and help make the research more user-friendly and practical. Let’s not confuse anecdotes with data. Let’s continue on-going, challenging conversations between practitioners and researchers, creating feedback loops that develop our field and build stronger family firms. And, to accomplish that, we practitioners must challenge our assumptions and open our practices and processes for study.

About the contributor:

Jane_Hilburt-DavisJane Hilburt-Davis, ACFBA, is president of Key Resources, LLC, a Boston-based consulting firm. She is an FFI Fellow and president emeritus of FFI and has received the prestigious FFI Richard Beckhard Practice Award. Jane is senior author of the widely acclaimed book, Consulting to Family Businesses and co-author of the FFI ebook Family Enterprise: Understanding families in business and families of wealth. Jane can be reached at [email protected].