Kenneth Kaye

Roles of Trust in Consulting to Financial Families

Kenneth Kaye, Sara Hamilton

Summary: Trust is not only crucial to success among the owners of substantial wealth, it is also the sine qua non for successful teamwork among professionals who work with them. There can be dangers, however, in too much trust and too little healthy confrontation, just as there are in mistrust and chronic conflict.

A consulting assignment becomes more complex as there are more family branches; as those branches are tied together in more business relationships; as more corporations, partnerships, and trusts own their assets; as they do business in more states and foreign countries; as they have more advisors involved; and as more transition events approach (a leader retiring, a matriarch passing away, a trust terminating, a business being sold, etc.). Complicating factors can also include publicly traded stock, a family’s prominence, a tragedy or a scandal, and of course, the whole gamut of addictions and other mental health issues.

Although much of this article will apply to all family business consulting, financial families are defined as those that are complex in all or most of the ways mentioned above.

The authors are, respectively, a psychologist specializing in conflict resolution and successor development in family firms of all sizes, and the founder/CEO of Family Office Exchange, an organization that assists owners of substantial wealth with multi-generational family office and wealth management. Co-consulting to such cases has sharpened our focus on some problems about trust. Here we refer not to the legal entity, a trust (a property interest held by one person for the benefit of another), but to the vital aspect of all human relationships, trust (reliance on another’s character, ability, strength, or truthfulness).

Family Office Exchange, Inc., has collected data on more than 2000 families owning between $100 million and several billion in assets. Financial families highlight the roles of trust, especially with regard to three constant challenges of consulting work:

§         Constant Challenge #1: devote careful attention to the working alliance between consultant(s) and clients;
§         Constant Challenge #2: always build processes that will accommodate change, rather than permanent structures the clients will have to live within;
§         Constant Challenge #3: bring together a multidisciplinary consulting team, and manage relationships among its members as well as the family’s long-term advisors and key employees. Different disciplines will be required in different cases, but they will normally include at least one “content” person who concentrates on the legal entities, forms of governance or management, and knowledge of applicable best practices for the given type of business; while at least one “process person” is primarily tuned to the interactions, human development, and unconscious group dynamics. Both types must have some training in, and be alert to the other’s perspective.
Those three challenging aspects of consultation are today widely accepted in the literature and practice (Swartz, 1989; Hilburt-Davis & Senturia, 1995; Bork, Jaffe, Lane, Dashew, & Heisler, 1995; Davidow & Narva, 2001). This article discusses them in connection with trust among family members, among outsiders, and between the two groups.

There is a growing literature on the role of trust within business families (Powell, 1987; Bradach & Eccles, 1989; Kaye, 1995; LaChapelle & Barnes, 1998; Lansberg, 1999; Steier, 2001; Hamilton & Kaye, 2003). There is also literature on trust in the process of advising them (Alderfer, 1988; Whiteside & Brown, 1991; Kaye, 1994). We argue that managing trust is the sine qua non when working with all sizes of family firms.

The Trust Catalyst

A central concept throughout this discussion is that of the Trust Catalyst. LaChapelle & Barnes (1998) pointed out that amid the frustrations, anxieties, and disharmony that can hamper the work of a business family, often one person helps create higher trust. The same person maintains that role for years, even decades. It could be the wife and mother of an owner and his children. It could be a high-status friend of the parents, respected by the younger generation without the ambivalence of a parent/child relationship. (In The Sopranos, Hesh Rabkin, old friend of Tony Soprano’s father, is the guy everyone wants at the table if they have to arrange a “sit-down”.) A Trust Catalyst may be an uncle, an in-law, an attorney or other long-term advisor. In multi-branch families, it can be one of the CEO’s siblings or cousins, or even a member of the successor generation. In many businesses, a non-family president, CFO, or head of Human Resources provides a bridge of trust between the generations.

LaChapelle and Barnes used the word catalyst because these members inspire other family members and business partners to trust each other. Family members basically want to do so, but past experiences have put them on guard. Trust Catalysts serve as reminders of the family “glue”. They seem to put a damper on conflict, often by little more than being good listeners and remaining calm. LaChapelle and Barnes give examples of successful transitions aided by the presence of a Trust Catalyst in the family business. They contrast those with some examples of chronic conflicts when no one fills that role.

Clearly, in interviewing a family and its key employees, consultants should look for the existence of one or more Trust Catalysts. However, one should not assume that their effect is always salutary. We will revisit the concept of the Trust Catalyst as we explore each of the three constant challenges in family consultations.

Constant Challenge #1: Awareness of the Alliance

The greatest determiner of successful change in a family business is the consultants’ ability to maintain a working alliance with leaders in the client system-and to keep moving the engagement forward step by step (Vago, 2003). Clinical psychologists call it the “therapeutic alliance.” This is a more consistent factor in success than the consultants’ stores of knowledge (management, law, family systems theory, best practices in human resources or in wealth management or in family office administration). The alliance affects the success of a consultation more than how “dysfunctional” the system appears to be, how profitable the business is, or the size of the assets at stake. First and foremost, we have to engage with the family business system-in fact, become temporarily part of it-so we ourselves can exercise leadership within it. To put this another way, if the family doesn’t have a Trust Catalyst already, we need to perform that role, for awhile; and if they do, we need to be another one.

When clients make progress by achieving a stated objective-for example, adopt a mission statement or a set of by-laws, resolve a family member’s desire to take his equity out of the business, agree on new roles, hire a new CEO, or establish a family office-the consultant keeps the engine running and ready to depart as soon as the passengers are ready for the next stage of their journey. But even when the process stalls, or regresses a step or two, the alliance enables consultants to reassure the clients, alleviate anxieties, resolve conflicts, and get the train back on the track.

If the consultants are wise and skillful and their styles and values are compatible with those of the client family, then the clients will have made a valuable investment in the consultants’ learning about the family members, their business challenges, and their long-term needs. The consultants have developed rapport and learned how to communicate differently with individual family members. The clients may have asked for help with a single event, but this was a step in a long process with which they’ll need help, from various professionals, over the years. Frankly, they need to be shown what they’re really in the midst of. They usually don’t know what questions to ask. They know what hurts, but not why. They don’t know which problems will lessen with time, and which will get worse if untreated. If this makes consulting sound like a sales job, so it is. (The first author prefers to see himself as Yoda in Star Wars.)

Conversely, if consultants lose an engagement because the clients blame them for a painful experience that didn’t achieve its objective, or it achieves an objective without raising awareness about the big picture, then not only have the consultants lost future business, but the clients have wasted the time and money they invested in the consultants’ learning about them.
Family business consultants reveal how important the personal alliance is when we present a case to colleagues at a conference or workshop. We invariably tell the story as a sequence of interpersonal moments. If we’re presenting a fairly successful consultation, we may describe a “stuck” phase where their resistance to change had us temporarily stymied, and then we’ll say, “That is when cousin Bob called me” (indicating a key person on the genogram).

In those same presentations, we consultants often explain our failures by pointing to key members on the chart with whom we were unable to form a constructive personal relationship. For example, one of the authors was two years into an engagement with a family. This family suffered from a long-standing rift between the CEO (who was also the sole active trustee of a dynasty trust) and his wife, on one side, versus the rest of the family. When the wife made a hurtful remark about another family member in our meeting, the author’s attempt at neutral intervention alienated her. A few months later he resigned, since he had lost the trust of a powerful, besieged branch of the family. He had been unable to make the case for better tolerance because of his own failure to establish a good enough alliance with both sides.

That failure was particularly instructive because the client system did have a Trust Catalyst. The family office’s outside attorney was an expert on their problematic content area-the trusts and holding companies they inherited-but was also sensitive to the emotional upheaval into which their father’s death had thrust them. This Trust Catalyst, in fact, was the one who had brought the author in as family process consultant. But a good alliance between the embedded Trust Catalyst and the outside consultant wasn’t enough. The author had failed to become, himself, a Trust Catalyst for the family.

Such experiences taught us that our consulting team has to become a temporary member of what Davis (1983) called the “sentient system.”

“A subsystem [of the whole family business] is the sentient system that has the family at its core and is made of individuals bound by strong emotional and loyalty bonds. The sentient system will generally include nonfamily members who are “drawn into” and become subject to the basic organizing rules of the family” (p. 51).

Constant Challenge #2: Always build processes-and trust is one of them

Creating a process that can accommodate change is much more important than any structure the founder and advisors might devise. Each generation must be prepared for responsibilities their parents can’t foresee. The ship is moving. That is why the estate plan should be understood to be as much process as structure. The process must accommodate the development of leadership in the next generation, just as it must accommodate the beneficiaries’ changing needs and circumstances. In each generation, the trustees and governing council of a family face a new set of challenges for succession to the next generation. Will the family be able to work together on how to reallocate assets after the sale of a business? How will they handle the evolving administration of a family office, foundation, or trusts? In addition to the functions of those who serve on the Board, processes for the whole family include continually improving communications, resolving conflicts, reaffirming purpose, developing human capital, and perhaps most important of all, continually reassessing how well the trustees and advisors are fulfilling their roles (Hughes, 1997).

Does the importance of processes mean the “process” consultant is the team’s leader? No. In fact, he or she may observe from the sidelines much of the time while the “content” consultants educate and stimulate the group. The content expert will be equally concerned that what the clients are building is a set of processes to accommodate change.

We try to teach our clients, when they have problems of mistrust (as all people do), that trust is not black and white. It, too, is a process (Barnes, 1981; Lansberg, 1999; Hamilton & Kaye, 2003). The decision to entrust responsibility to someone is not a binary decision, to do so or not. The question in whom to place trust is inseparable from how much trust to place, and in what areas of responsibility.

In talking with clients, we have found it sufficient to distinguish among three types of trust: ability, honesty, and motives. Is the person competent in this role? Does she tell the truth? Does he work for the whole family’s benefit, not merely his own? If one of those kinds of trust is lost, but at least one of the others exists (for example, John doubts Jane’s competence but trusts her motives), it may be possible to rebuild the needed trust (Kaye, 1995). Unfortunately, as we all know from our own lives, the destruction of trust can be swift and terrible; its reconstruction slow and exhausting.

The way to build trust is to test it first by entrusting the person with small matters, then bigger ones as he or she proves to have been reliable. The responsibilities of ownership are entrusted in that same way, building from smaller ones (does her public behavior do credit to our name?) to the privilege of participating in meetings, then having a vote, then chairing committees, and so forth.

Two paradigmatic forms of economic organization are “hierarchy” and “market”, but there is a literature on other, hybrid forms all along the continuum between them (Powell, 1987; Bradach & Eccles, 1989). Trust determines where an organization fits on that continuum. Steier points out that as a firm evolves through the generations, “in some cases, what was once a very resilient trust is replaced by an atmosphere of fragile trust or even distrust and an important source of strategic advantage is lost” (p. 353). To some extent, this is inevitable in the most harmonious family. The business needs more controls as it grows beyond the day-to-day scope of its family owners. Any group of owners will need to reinvest in trust and trust-building activities, over time.

When too little trust leads to too much trust

Too little trust can quickly become a vicious circle. People who mistrust others are very likely to become less trustworthy themselves, as they defensively withhold information and renege on promises. A whole culture of distrust is born, taking hold like cancer, making succession impossible.

On the other hand, a family business can suffer from too much trust, as easily as too little. It happens when the sheer amount of learning and work required to exercise responsibilities of ownership tempt members to delegate some tasks that must not be delegated. They don’t want to squander their wealth, but they expect it to make their lives easier, not harder.
Owners should never delegate goal-setting, oversight, measuring success and holding the leaders accountable. Nor should owners let anyone else decide how much and how long the assets will be held collectively for the benefit of future generations, or how involved family members will be in managing the wealth process. Yet they do. Ironically, in our experience with financial families, after a founder places too little trust in the next generation, they tend to place too much trust in one leader, or in outsiders.
Consider the psychological differences between entrepreneur and successors. Staying in control has paid off well for the former. As risk-takers with capital, entrepreneurs trust their own instincts but not those of others. They often guard control and have difficulty trusting even their best employees, let alone their children. And perhaps because they know so well the narrow margin between success and defeat, they distrust their children’s ability to make successes of themselves. Many don’t seem to want them to succeed (McCollom, 1992). Therefore they tend to favor complex structures, which their children don’t understand and don’t want to manage.
What happens when the wealth passes from the founder to the second generation? Most sibling groups are more risk averse than their parents were, having been taught to avoid risk and preserve the assets they were so fortunate to inherit. They are more concerned about not losing it than with building more for future generations. So they seek to simplify complex, highly leveraged assets. And they often retain overly-concentrated stock positions, especially in their legacy company. But they have little or no experience with the financial, tax and legal issues, such as the risk/reward tradeoffs surrounding an undiversified asset. And the financial services industry makes it difficult for owners to learn what they need to know about the process, as most firms still view client education only as a marketing tool rather than a core business.

Nor are they prepared for governance processes. The inheritors’ job is, in some ways, more difficult than the one the founder was doing. They will have to make decisions as a group. They won’t have the autocrat’s luxury of being able to ignore unappealing suggestions (Lansberg, 1999). Having watched a patriarch operate with sole authority for 30 to 40 years, brothers and sisters and cousins have had no role models for collective ownership.

The next step is almost inevitable. The structures are so complicated-extending, not infrequently, to dozens of partially interlocking partnerships, each with different assets and obligations-that the inheritors have to find sophisticated advisors, and delegate major aspects of financial oversight to others.

Those outsiders, respected for their knowledge and appreciated for relieving anxiety, are well situated to become Trust Catalysts. An outsider may arrive in this position through actual competence, good intentions, and the well-earned trust of family members. However, it is easy for families to entrust too much to one person. The successors may delegate too much authority to a single family member, business officer, or outside professional. They allow him or her to wear too many hats (for example, attorney, trustee, and director; or CEO of a business and trustee of a foundation that is a major shareholder), with insufficient checks and balances. They may thus create an interest that conflicts with those of the family.

In our experience, when an outsider falls into this position, it usually happens through good intentions and the owners’ desire to hold on to trusted relationships. When a business is sold, for example, they want to retain the trusted CFO, so they entrust the family office to him without considering experienced candidates. Yet the skills that made him a wonderful CFO in the entrepreneurial business may be exactly wrong for wealth managing and trust administering. The blind lead the blind into new territory.

In some cases, over-trusting of an outsider occurs for a different reason, which we call the founder’s inverse bias: “No one in the family can be as smart as Grandfather was. Let’s not consider any of our own for such important responsibilities.” (Of course, there is another group of families who will only trust a family member, and a third group who never commit themselves to trusting anyone at all, for long.)

Financial families vastly underinvest in financial education and in training for leadership roles that owners themselves should fill. Family Office Exchange members spend an average of about $20,000 per family per year, less than one hundredth of one per cent of their assets!

Finally, over-trusting either an outsider or a family member can occur as a result of conflict avoidance. They may be chosen by default. When people sense that they are in over their heads, but are not sure what’s wrong, one normal human response is to deny the complexity, to feel greater certitude or false confidence, suppressing unspoken doubts and plunging ahead into the darkness. The family may avoid discussing doubts about one another’s competence. They may never have acknowledged those doubts, even privately, so they resolve the question quickly at the first sign of a possible fight.

This problem of trusting by default is doubly dangerous when the recipient is a family member, who in many cases may not have earned any confidence at all in his or her abilities. An outsider probably had to prove something, but with an insider the family may arrive at a flimsy consensus, either a decision to divvy up responsibilities or to delegate them to the member who most wants them. At best, he or she has established credibility in one area, which doesn’t transfer to the responsibilities being conferred. Trust is granted, in other words, not having been earned. This postpones and ultimately worsens conflict.

Thus the conflict-avoiding benefits of a Trust Catalyst carry risks, equally so whether it is an outsider or a family member. The egregious cases, in which such people deliberately cheat their employers or beneficiaries, are few. We have known occasional misappropriations of funds. But there is another, more prevalent kind of damage from relying on too few family members: The others sit back, so to speak, and withdraw their human capital from governance. They’re in denial about how much owners and beneficiaries need to know, and to control, if they hope to survive as a wealthy family. When only one or a few family members pay attention to business or wealth matters, their siblings and cousins often forfeit any means of reviewing them and setting their compensation. Nor do they assess trustees’ and advisors’ performance.

In short, a family can have too little conflict as well as too much. Family harmony can be a trap. We call this kind of consensus “flimsy” because it will fall apart, not having been built on a working foundation. What is needed is a formal process of continual evaluation to guard against the natural human tendency to avoid raising uncomfortable doubts. As Ronald Reagan famously advised, “trust but verify.”

Another safety mechanism is the rule that all family business agreements should incorporate exit strategies. We emphasize with our clients that every joint endeavor they enter into, whether a business corporation, investment partnership, family office, or private trust company, must be voluntary in the sense that no individual dissenting partner is trapped in the relationship. One can choose to go along with the majority, but no one should be compelled to participate either by the legal structures or by family pressure. Such compulsion would sooner or later destroy their family bonds, without which their financial partnerships are doomed.

A disaffected member who believes his own interests conflict with the group’s should not have to attack or sabotage their shared business. Again, formal procedures make it possible to raise such questions in normal constructive discourse rather than destructively, in helpless rage.
Our data on Family Office Exchange financial families indicate that about 60% of their assets are held in trusts. One reason so many beneficiaries of trusts are dissatisfied is the “arranged marriage” nature of the structure. Rare is the estate planner who cautions grantors that creating a trust will make its beneficiaries permanent bedfellows (McCollom, 1992).

During a consulting engagement, the presence of the multidisciplinary team reduces the risk of premature agreement. One advisor may be so convinced that the proposed agreement is in everyone’s interest that he misses the lack of conviction with which they are agreeing to it. But the second or third set of eyes and ears, tuned at that time to the process more than the content, can interrupt and ask those who seem to be withholding their doubts to put them on the table.

Constant Challenge #3: The multidisciplinary team

The authors we cited in the introductory section of this article, among others, have discussed the necessity of working either as a practiced partnership of professionals from several disciplines, or a well-coordinated ad hoc group of advisors who find themselves involved with the same family (Barber, Hilburt-Davis, McKillip, Swartz, & Wofford, 2002). Increasingly, especially with financial families, a team of two or three consulting partners will need to coordinate with a number of long-time advisors as well as the family leaders.

Unpredictable issues will surface in the course of such engagements, requiring the professional team to function flexibly and creatively, and to communicate efficiently among themselves. All of which means that trust is as vital in the consultant subsystem as it is in the sentient subsystem of the family business. And if trust is vital, the consultants and advisors themselves are likely to need at least one Trust Catalyst just to moderate their own mutual apprehensions, professional differences and assertive personalities. The lead liaison with the family is probably in the best position to be a Trust Catalyst for both team and clients. Individual clients will not have time, opportunity, or inclination to form a working alliance with each individual advisor. But if most of the client family members, and especially their own Trust Catalysts, get comfortable with at least the Trust Catalyst on the consulting team, the engagement can work productively.

The number of people in a family makes a huge difference in how well consultants can retain their trust. Compare two of our clients with approximately the same collective net worth: slightly over $2 billion. One has nine members, including spouses and children. The other has more than 100, of whom we met 76.

The Doe family (not their real name) are third generation wealth creators. They grew up in one branch of a very wealthy family, but through separation of assets and their own success they now control a larger, sibling-owned portfolio of businesses. They are a sister and two brothers, in early middle age. This client relationship has evolved over seven years. It began with conflict resolution by one of us, and guidance by the other in helping them hire a family office CEO with strengths appropriate to the transitions they were facing. We continued with close involvement with the new CEO, as well as their business CEO and investment managers. Gradually taking a back seat, our relationship now is primarily information providing. The therapist member of our team has found and introduced leading child development and education professionals who provide diagnostic testing, therapy, or schools consultation. Although he still facilitates two family meetings a year, his presence there is that of a trusted resource who knows the history and personalities, rather than a therapist concerned with conflicts or crises. Our family office expert has direct contact only with their office CEO.

Discussion with many of our colleagues-family process and content experts alike-indicates that this is the norm. One person maintains a long-term advisory relationship, facilitating the clients’ trust in a succession of other resources, as needed.

With a larger group, however, it has been our experience that this sort of long-term leadership becomes exponentially more difficult to sustain. This makes sense mathematically: Trust is bound to be attenuated as a family grows branches. Although conflict may not reach the intensity that it does in a nuclear family, the family members know each other less well, and will know the consultants less well. There will be little opportunity to detect and repair those inevitable tears in the fabric of the client-consultant alliance. Every additional family member increases the likelihood that a consultant will fail to maintain someone’s trust. Every additional collaborator in the consultation does so as well.

Furthermore, sheer numbers hold back what can reasonably accomplished over any period of time. We planned and facilitated two days of a three-day family retreat for the 76 members of the Ray family (51 adults, compared with the Doe family’s five). The meeting was exciting, and most participants rated it very worthwhile. One technique we used was to exaggerate the differences in our perspectives, family relationships versus returns on financial capital, so as to model our ability to disagree yet actively listen to one another and enjoy our working relationship. They were a conflict-averse family, by nature and tradition, so we engaged in some respectful debate in front of them (Swartz, 1989). Another technique was to break them out into constituency groups that had never before expressed distinct positions; for example, all the in-laws in one room, all the 18 to 30-year-olds (some of whom barely knew one another) in another room. In each case, a new perspective emerged, which they reported to the whole family for the first time. This exercise broke up what our interviewees had described as entrenched factions.

Those two days led them to add members to existing committees, form at least one new committee, and proceed to deliberate over some important questions. For example, one question they faced was whether they would initiate joint philanthropy in the fourth generation, about ten of whom were already adults. The second and third generations had always done philanthropy separately, by branches. Another question was whether to start a private trust company to manage wealth for other high net-worth families.

Unfortunately, what we hoped would become an ongoing engagement didn’t last long. Although we know that they moved forward with respect to the foregoing issues, they accepted only limited follow-up from us. Kaye did subsequently facilitate the office’s Mission Statement committee, whose work the whole family ratified. Hamilton continued to be a resource for the CEO. But we did not succeed in establishing a sufficient working alliance to leverage all that they had invested in our learning curve. Like some other families, they continue to bring various speakers in to each annual meeting (certainly a worthwhile thing to do) but have so far avoided tackling a major governance problem. We had hoped to lead them through an integrated, gradual, process of change. In retrospect, we fault ourselves for trying to take them too far, too fast. We overdid the content and underestimated the time it would take to let the ones who were comfortable with us serve as Trust Catalysts for the more reticent or apprehensive members of this very large family system.

We find that the bigger the family is, the more they resist formalizing an advisory team to provide on-going assistance. Cost cannot be claimed as a reason, as it might be with less wealthy families. Something else is at work. Unlike clinical therapy, in which the patient system feels both acute and chronic pain, and fears the consequences of failing to get help, the business systems we hear from often lack that awareness. They want to take little nibbles of consultation, but don’t believe they need as much help as they do. Or perhaps they secretly do believe it. Awareness of the many layers and players in their drama may make them feel less threatened by isolated presenters than by a less controllable team with a long-term assignment. When we hear the question, “Why do we need more than one of you?” we have learned that the concern is not about money. It is about controlling the pace of change.

Be true to your team?

Differences among members of a consulting team are just as salient as those among the client family. Some differences are due to disciplinary perspectives. For example, technical advisors try to reduce uncertainty and provide solutions, while process advisors look for change through the family’s own insight and dialectic. Attorneys are careful about rights, obligations, and compliance. Psychologists think about risk to the family’s emotional fabric.

Other differences are matters of personality and working style. One of us has a greater need to plan our face-to-face meetings with groups-what we’re going to say and who will do what. The other favors spontaneity: let’s see what happens when we get in the room. But each of us will feel differently depending upon the clients and the task of the moment. Knowing each other well, and trusting each other to pursue or block an unplanned digression, is absolutely essential.

This means that the more work we do together, the better we are as a team. We can be on a conference call with one or more clients, without body language or other visual clues, yet still signal our thoughts to one another sufficiently to coordinate our interview or advising. The more the two of us work with a third colleague-an attorney, for example, or a philanthropy expert-and the longer we work with a client’s existing advisors, the more comfortable all of us are. And that, in turn, leads to a problem. How loyal should we be to one another? What if a family takes a dislike to one of us? It isn’t our job to make all of them like all of us, all of the time. There are times when at least some members of the team have to be provocative. “Please all, and you please none,” as Aesop said. For example, we may have to confront substance abuse, and a family’s collusion in it. The more people in the room, the more certain it is that some of them will be unhappy with at least one of the consultants, even after a productive session. And the less likely that they will say so at the time.

On the one hand, we have said that the long-term changes these families must make are best led by a consultant with broad, forward-looking vision. That person must form bonds with as many family members as possible, and definitely with their Trust Catalysts. He or she must also be a Trust Catalyst among the group of disparate outsiders. But if the leader has to be an advocate for a fixed team, in the long run it isn’t going to work.

Sometimes, resistant clients will split the consultants: “You’re helpful but your partner is not.” This may be a pattern in their own dynamic that they would do well to look at, explore, and overcome. But it is also true that any of us may make a faux pas, or simply have a personal style that doesn’t work well with particular clients. Should the team demonstrate loyalty-one for all and all for one-or should it demonstrate willingness to accommodate to this client system by replacing the miscast colleague? The answer is that teams should be neither too quick to dump a trusted colleague, nor too inflexible to consider doing so when it’s in the best interests of the work.

The person who is team leader and principal liaison needn’t always be the consultant whom the family first engaged. Nor does it matter whether a content expert or process facilitator performs this role. What matters is that he or she is one who (a) can best advocate for the long-term process, to client members and especially to their leaders and Trust Catalysts; and (b) is in a position to respond to the clients in timely fashion and proactively stay in touch with them during periods of dormancy.

A content expert who has good rapport with family leaders has at least two things to fear when bringing in a family dynamics person as a co-consultant. One is that some or all family members who had been comfortable with the business/legal/financial consultation are suddenly uncomfortable with the suggestion that there may be something wrong with their family, mental health issues to be addressed, buried traumas to be exhumed. The other worry is quite the opposite: that a good facilitator might lead the family to discuss issues and find resolutions at odds with the content expert’s recommendations. They might decide the latter has been enjoying too much trust.

On the other hand, where a family therapist is the initial trusted consultant, bringing in a content expert can undermine the therapist’s relationship with his clients. One of us learned this after he had worked for over a year with a sizeable international firm. Majority ownership was still with the founder, two of whose four children ran the company. This sister and brother had always been close since childhood, but they were battling for two different visions and styles of leadership. (Nor did they love each other’s spouses.) They came up with various ideas about splitting ownership, each acquiring control of one corporation and serving as minority shareholder and director of the other’s. The parents adamantly wanted them to keep the whole empire intact and “work together.” However, they agreed to be introduced to one of the leading financial advisors to family firms.

We had a good meeting in the founder’s office-both parents, both successors, the trusted family process consultant and the experienced, impressive financial expert. The latter stepped back from the successors’ ideas about ways to divide the turf, to discuss what his firm would consider before making specific recommendations. He promised to get back to the founder with a suggested approach to the big picture, and did so soon thereafter. The initiating consultant was pleased with how the meeting had gone. Yet the parents not only rejected the idea of engaging the new firm, they soon ended the original engagement as well. The agenda had been to fix their warring children. The consultant had enjoyed their trust as long as they could believe he was only hypothetically entertaining the scenario of division. Bringing in a very knowledgeable, polished expert who might have offered some such solution went beyond the hypothetical, apparently, to the antithetical.

As we said earlier, well-designed exit strategies are vital for any kind of enterprise. Surely that aspect of teamwork is one which consultants should model, just as we model good communication, mutual respect, and our ability to disagree. The consulting team shouldn’t rigidly stick together. Replace a team member, if necessary, to keep the work going forward. The consultants must then nurture and repair their own relationships, outside of the client system. Just like a family.

Assuming that is the smart position to take, what strong relationships must be required to implement it! What self-confidence! The world of multidisciplinary consulting is not to be entered by the thin-skinned or the overly competitive. There will sometimes be as much work for a team to do behind the scenes, off the clock, as there is on the client’s bill. Especially in the course of their first five or ten cases together.


In addition to the three constant challenges, we have learned some things, and raised a problem to which there is no easy solution. The things we learned came from the literature cited in this article and from multidisciplinary study groups and consulting teams throughout the world, confirmed by our experience. They are:

§         The alliance continues even when the process is slow and disappointing. The consultants may be the only ones who know it isn’t over. Hold onto your notes, and make it easy for dormant clients to reach out to you when they wake up.
§         Trust is itself a continuous process of building and testing. This is true in the client system, and the consultant system, and their intersection.
§         It will not be possible for every member of a consulting team to form an alliance with every member of the client system. Therefore, the lead liaison has to be as much of a Trust Catalyst as possible to both groups.

Ultimately, though, commitment to the principle of multidisciplinary teams raises the paradox about loyalty. In any sport, teams perform better the more they play together. On the other hand, members of a consulting team have to be replaceable, within reason. Consequently, managing our own set of dynamic relationships, building and testing trust, always preserving the option of replacing players, yet somehow without demoralizing those on the bench, may prove to be the most difficult process challenge of all.


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Kenneth Kaye, Ph.D. is Principal of Kaye Family Business Associates, Inc.
Sara Hamilton is Founder and CEO of Family Office Exchange, Inc..
This article appeared in the Spring 2004 issue of Family Business Review, published by the Family Firm Institute.

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