Your consultants should keep their distance

By Joseph Horak

horak_232The TV commercial begins with a family at the beach. A wife asks her husband a question about their investment portfolio. "Let me ask him," he says, and turns to the man on the beach next to them. The ad emphasizes the benefits of access to a financial adviser.

Yet what happens in real life if an adviser becomes a close friend? Does this increase the chances for more disclosure of information, or can it cripple the adviser's ability to remain influential? The answer lies in the work of two European scholars working a century apart: Georg Simmel (1858-1918), a Jewish German sociologist, and Mattias Nordqvist, a family business researcher currently at the Jönköping International Business School in Sweden.

Before addressing the issue of how close is too close, it is important to understand the two basic types of family business consultants. Greg McCann, the founder of the Family Enterprise Center at Stetson University, makes the distinction between an "expert" consultant and a "process" consultant (G. McCann, "A family business consultant: An option worth considering," Generation Magazine, Fall 2011).

Expert consultants provide specific answers to issues that often are fairly apparent. Attorneys and accountants—like the one with the couple on the beach—are often expert consultants who may give specific advice on topics such as strategies to reduce taxes or preserve family wealth across generations.

Process consultants often have expertise in the behavioral sciences and are more systemic in their approach. They ask deep, probing questions to help identify larger systemic issues (root causes) that result in various problems the family members are embedded in and therefore can't resolve effectively. The family's immediate problems are generally symptoms of a larger issue. These consultants lead a family through a process, like succession planning, that doesn't just result in a specific outcome. They help create deeper understanding among family members and ultimately change the underlying family dynamics.

In other words, expert consultants solve specific problems. Process consultants help change the system so the family can solve problems in the future without them. Both are needed to address different types of situations.
However, both process and expert consultants can run the risk of becoming too close to family business leaders. Process consultants, in particular, run the risk of losing their ability to remain a change agent separate from the family system. To understand the danger of a consultant becoming too close, we turn to the work of Simmel and Nordqvist.


The Simmelian Stranger

In 1908 Simmel devoted a chapter of his manuscript Soziologie to the concept of the Stranger. (The most recent English translation, by Donald Levine, can be found in Georg Simmel: On Individuality and Social Forms, University of Chicago Press, 1971, pp. 143-50).

As Simmel described it, the Stranger is a member of his or her community yet remains distant. The Stranger carries out tasks that other community members are unwilling or unable to do. In pre-modern societies Strangers were traders and, because of their distance from the group, sometimes served as arbiters or judges. Maintaining a certain distance from the dominant group provided certain advantages.

Nordqvist, in research published in 2011 (M. Nordqvist, "Understanding strategy processes in family firms: Exploring the role of actors and arenas," International Small Business Journal, 30[1]: 24-40, 2011), studied the role of "non-family actors" (such as consultants, board members, senior managers and network contacts) involved in strategic work of the family firm. He observed that non-family actors quickly entered and became influential in various strategic processes. However, if the non-family actor lost a sense of detachment and became too close to the family business leaders, something shifted. The non-family actor still was granted access to important strategic decisions, but the content shared by the family changed, and the non-family actor's degree of influence on the outcome was reduced. More than a century after Simmel identified the benefits of the distant Stranger, they had reappeared.


Blurry boundaries

Even if a consultant understands the necessity of remaining a Simmelian Stranger in order to be effective, it is not always easy to do so. Many family enterprises have blurry boundaries in relationships. These enmeshed families quickly befriend their consultants, inviting them to participate in various personal and professional functions. Sometimes without even realizing it, consultants become embedded in the very system that they are trying to change.

Psychological research tells us that while enmeshed families appear to be close, in reality they do not tolerate autonomy. When a family member attempts to become more independent (such as expressing a desire to leave the family business or implement an innovative strategy), these moves are often interpreted as disloyal. Enmeshed family leaders will respond to such moves with manipulating guilt to keep members in line.

Even if the family is not enmeshed, consultants can be co-opted into a dynamic called "Groupthink." The concept of Groupthink was developed by Irving Janus (1972), a social psychologist from Yale University (I.L. Janis, Victims of Groupthink: A Psychological Study of Foreign-Policy Decision and Fiascoes, Houghton Mifflin, 1972). Groupthink occurs when a homogeneous group of people engages in a decision-making process that values harmony or conformity and discourages robust dialogue, critical evaluation and alternative ideas. Loyalty to the group is valued over individual creativity, uniqueness or independent thinking. As the group isolates and overrates their ability to make decisions, there is no Simmelian Stranger to speak the truth. This concept explains how very intelligent people (from U.S. presidents and their cabinets to family business leaders and their boards of directors) can make horrendous decisions that no one questions at the time.

Consultants themselves play the crucial role in whether or not they lose their standing as Simmelian Strangers. Consultants who lack a secure sense of self need external validation to regulate self-esteem. These consultants become enamored of their "important" clients (especially those with a high net worth). This type of consultant is more vulnerable to becoming enmeshed and participating in Groupthink. These consultants may erroneously believe that working with "important" clients somehow makes them more important.

More emotionally mature consultants have a secure sense of self and do not believe that the importance or fame of their clients enhances their self-worth. There is a saying among therapists: "You can only take a client as far as you have gone." More psychologically mature consultants not only understand how to be a Simmelian Stranger, but also have the capacity to pull it off.


Keeping consultants at a distance

What should family business leaders do to avoid having consultants become too close and thus lose their effectiveness? Ask yourself the following questions:

1. Can you allow—and even encourage—your advisers to speak hard truths to you?

2. Do you need too much external validation? Are your self-esteem needs bleeding into your family business relationships?

3. Are consultants included in your personal events? Are they too enamored with you or your company?

4. Are your advisers too similar to you? Do you have sufficient diversity around you to avoid Groupthink?

5. Are you too dependent on a consultant? Can you disagree with your consultant and have a robust dialogue?

Family business leaders must find advisers whom they can trust and to whom they can speak openly about their challenges in their business and their family. However, as Nordqvist discovered, at some point a line is crossed and the adviser loses his or her ability to be influential in strategic decisions. To avoid this pitfall, it is imperative to have one or more advisers who can function with the distance of a Simmelian Stranger, as well as family business leaders who can tolerate hearing uncomfortable truths. When you vacation with your family, don't invite your advisers to come along.

Joseph Horak, Ph.D., is an adjunct faculty member at the Seidman College of Business at Grand Valley State University and a licensed psychologist and family business consultant (




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March/April 2014

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