The process of working with family enterprises can be complex, due to the intricacies inherent in the family business system, the urgency surrounding the functioning of the business, and the unique context each individual member brings to the system. Many practitioners who advise family-owned companies employ assessments or surveys to gain a glimpse into what’s occurring in the family business system.

The focus of these tools can vary based on the choice and expertise of the practitioner. For instance, some surveys gauge the extent to which the family owners have structured governance in place. Others focus on less tangible areas, such as the perceived connectedness of the family, or what anxiety is being felt at the individual level. In general, these tools are used at the beginning of a client engagement to help the advisor get a feel for what work should be proposed. Sometimes medical terminology is used, referring to the tool as an “intake form” to provide the advisor with a baseline understanding of what “symptoms” are in the system and what course of action can be offered.

Although these tools do not provide a complete view of the system, they do offer an opportunity for each family member to express his or her perceptions on subjects like the following:

• There is a clear set of family values that everyone is aware of
• There are policies in place regarding family members entering the business
• I know my role in supporting the family business

With a background in industrial/organizational psychology, I’ve been drawn to examining these various tools and assessments and thinking critically about the value they bring to client engagements. At our company (Legasus Group) we’ve developed our own tool to use at the onset of engagements. This tool focuses on assessing the level of family connectedness, the clarity each family member has regarding his or her role in the business, and the level of individualization. It is a helpful barometer to gauge how the family is doing and what areas may need to be addressed during the initial conversations.

If nothing else, it provides our clients with a preview of inquiries we will have during meetings and the possible scope of our work. We try to keep the focus of results at the system level and avoid the pressure to hone in on one or two individuals whose results significantly differ from others. The tool is used to provide a holistic appraisal of the level of reactivity in the system, the general connectedness in the system, and the level of ambiguity regarding the family’s interaction with the business.

Measuring the state-based anxiety (how anxious the participants feel now) is also part of the tool, used as a moderating variable. This measurement can provide an indication of something currently occurring in the system that is provoking anxiety that would not normally be present. If the tool is ever used to track relative improvement over time, the fluctuations of anxiety in the system can then be accounted for.

It is our experience that using a tool at the beginning of an engagement:

• Provides client families with a preview of what future meetings might entail
• Gives voice to members who may be uncomfortable expressing themselves in a group
• Offers the family an opportunity to think critically about specific areas
• Provides the advisor with immediate insights into the functioning of the family business

As the family business advising arena evolves, there will likely be an influx of tools integrated with technology to support the advisors’ work. Research on tools and how they are used will undoubtedly become more commonplace. This is still a profession in its infancy, providing a great opportunity for research, and even trial and error, to develop more sophisticated tools and assessments to better serve multi-generational family enterprises.

About the contributor

Luke Simmering is a family business advisor with Legasus Group LC in Wichita, KS. He brings knowledge and experience working with business leaders to unearth both individual and organizational capabilities. His previous Practitioner blog, “Fownergement,” can be read here. Luke can be reached at lsimmering@legasusgroup.com.