Action Research: A Model for Family Business Consulting
by Jane Hilburt-Davis
There is no single map for
consulting to family businesses, but one approach that I use, and have recommended
in our book, co-authored with W. Gibb Dyer, Jr., Consulting to Family Businesses, is a modification of the action research method of assessment and
change, commonly used in organization development. Kurt Lewin, credited with being partially responsible for
the term, states that there is “no action without research, and no research
without action.” At the heart of
the action research model is the basic assumption the information and insight will
motivate change and action and focuses on planned change as iterative and
cyclical. It is a combination of gathering data and planned actions. The words
are actually in reverse of the actual sequence.
As those of us who work with the complexities of family businesses can
testify, the change process, as in any human system, does not happen in a
straight line; it is not linear. However, it is necessary for us to understand
the fundamentals of this model to be prepared for surprises, emerging events,
unintended consequences, and, seemingly, random events. I am often amazed by these events as
they emerge during my work. Even
the mere presence of a consultant can generate changes. For example, as I was
helping to prepare a daughter, the heir apparent, to take over for her father,
early on she made the decision to pursue a teaching career, a surprise to all
of us, including herself. It turned
out to be the right decision for her and she was only able to realize her true
interests as the succession process became serious when the consultant was
invited in. “Process checks” along the way enable us to evaluate our progress
and make the necessary mid-course corrections.. This article outlines
the goals and tasks of each of the steps. Because these steps are iterative, we’ve outlined them in a circular
fashion in figure “Stages of the Consulting Process” below:
Contact—The first contact is often over the telephone. The advisor’s (in this article, I use
the terms ‘advisor’ and ‘consultant’ interchangeably) tasks include
understanding the major players and the reason for the call. During this first
contact, several questions need to be answered: What is the role of the person
calling? How much power does s/he
have in the family business system? What is the source of the referral? Are you
more likely to make compromises if this comes from a ‘great’ referral source?
Does this affect how you might work with the client? In other words, what types
of consulting skills are needed? Is the caller asking for technical advice
(information) or process guidance (teaching processes and procedures)? Your
risks at this point include underestimating the complexities or overestimating
your abilities, i.e. taking on something that you don’t have the resources or
expertise to handle. Finally, remember the old adage: “Clients call not to
change but as a result of change.” Thus, it is important, in this initial call,
or meeting, to ascertain the source of that stress related to recent events
that have finally influenced them to call for help. A desired outcome is to schedule an appointment for the
Meeting— During the chemistry meeting, the issues facing the client
are discussed in more detail. Usually, I invite the critical players to this
meeting. There are several goals. The first is to begin to establish an atmosphere of trust and openness
in which the ‘back story’ issues are more likely to surface. This atmosphere of
openness and safety are created by (1) establishing ground rules of
confidentiality; (2) defining rules of behavior, a code of conduct; (3)
building a collaborative process; and (4) directing energies at the problem not
at each other. A second objective is to define the client, which is not as easy
as it seems since each professional may define the client differently, although
there is growing appreciation that the family business is best served by the
consultant who defines the family
business system as the client. Other important questions to ask yourself: Are you and the client system
a good fit? Do you like them? Are they willing to commit resources (time,
money, personnel) to the change process? What Does the client understand the
collaborative nature of the consultation? If, after answering these questions, you and your prospective client
agree that you are a good ‘fit’, you then move to the next stage and write the
proposal/engagement letter. (If either of you find that there is a poor fit,
decline the engagement and refer the client to a more appropriate consultant.)
3. Letter of
Engagement-- Careful scoping
on the front end with the proposal can avoid problems in the evolving consultation.
The proposal letter is to define the relationship and nature between the
advisor and client. The letter should outline the work to be performed; the
expectations the consultant has for the client; and the ways that the
consultation will benefit the client. You will describe what you will do and make an educated guess at what
the client will do but cannot guarantee that. The time, money, and effort to be
expended are described, along with the method of payment. Finally, the letter should describe who
will serve as the liaison (for administrative issues, scheduling, meeting
preparations, etc) between the client and the consultant.
Billing is a subject that is not often
written about, but which is discussed frequently, for a combination of reasons,
including our own vulnerabilities, competition, and criticism of fee setting.
Because the field of family business consulting is comprised of professionals
from several professions, there are differences in the way they charge for
services. Methods of billing
include but are not limited to: per hour; per day; per project; retainer; and
results based. I have found that several guidelines work for me in my
practice: (1) Choose a
method that fits your values, skills, bookkeeping, and comfort level. (2) Be
clear with your client exactly what they are paying for and stick to it, (3)
Renegotiate around the work, not the fees, if necessary. (4) Remember that one
size does not fit all, so decide in advance what fees you will charge for
different size companies, geographic area, and your level of skills and
expertise. (5) Choose cases that you want to work with. (6) Pro bono work has
its own rewards; if you accept the work, be clear about your contributions and
why your are agreeing to do the work, for example, is challenging, contributes
to the community, or eventually, will lead to more work. (7) When working with
a team or other consultants that you have brought in or have brought you in,
decide beforehand whether you will bill individually or as a team.
--Once the client has agreed to engage you as a consultant, the real work
begins. An assessment of the family firm’s system is the first step, and has
several objectives: (1) to provide the family and the consultant with a road
map for the change process; (2) to complete a realistic picture of the
situation; (3) to give the members of the family and business an opportunity to
tell their stories; (4) to prepare feedback for the family to prioritize the
problems to solve; (5) to evaluate any discrepancies between the presenting
problem and what you discern to be the real problem (6) to get a feel for what
it’s like to work in the boundaries between family and business in this system;
(7) to assess the impact of the consultant’s presence in the system (8) to
determine how effectively the family can really hear and use the feedback;
and (9) to identify any special
problems, such as addictions, personality problems, or ethical; legal; or
financial issues that require referral to a specialist. It is during this phase
of interviewing the relevant family and business individuals that I begin to
organize the large amount of information, patterns, and emerging themes, in a concise and efficient manner. It
is also during this phase of the consultation that I introduce the
genogram. Additionally, I am
continually asking myself: What is the real problem? How long has the problem
existed? Is the problem related to ‘unfinished’ business? Where is the most energy for change?
Does the problem serve a function? Problems pay important roles in families and
in the workplace; they are windows into solutions. Ask these critical questions before you rush in to fix
5. Feedback/Action Planning-- This phase
of the action research model includes deciding on the best way to present the
data, your inferences, and conclusions, so that the family can make the best
use of it. I usually use a modification of the SWOT analysis, backing up each
conclusion or inference with direct and anonymous quotes from the interviews. How the client system uses your
information is key to creating changes. There are actually three interconnected
steps in what we call feedback and action planning. First, the consultant
organizes the data in a way that’s meaningful for the client. Second, the consultant makes
suggestions and recommendations to resolve the problems facing the client
system. But, in the end, the
client must own any solutions so the consultant and the client should jointly
problem solve in the feedback session to come up with action steps that can be
implemented with commitment and resources. Finally, the client and the consultant work out a detailed
action plan that has been agreed on. (If the family is complex, consisting of
several generations, the planning session may be a second meeting, at a later
time.) Whether or not this succeeds depends on several variables: the chemistry
between the family and the consultant; skills and experience of the consultant;
quality of the report and the functionality and ability of the family to
process and use the information.; and how the consultant has organized the
Here are some tips for generating solutions
with everyone’s buy-in.
the problem to be solved.
- Find out
what’s been tried.
suggest old solutions but, instead, help the clients generate their own
new solutions; stay focused on the common ground and the future (not the
past and the differences
- Set and
agreed to ground rules for communicating and managing negotiations.
together what’s needed to close the gap between what is the present
reality and the ideal future state.
should be relegated to the background. Interpersonal conflicts are toxic for work groups. They should be address with a plan
to deal with them at a later date or off-line. (Dad and daughter will
discuss this between now and the next meeting; they will report back to us
what they have decided to about this.”)
- It is always
important to end this meeting with a set of action items, recommendations,
a time line, and who will be responsible for what.
- Here are
some sure ways to get bogged down, from Consulting to Family Businesses, in the feedback and planning
- Focus on
- Focus on
the negatives and areas of difference, rather than on the positives and
areas of agreement.
your values and goals on the process.
- Ignore the
process; focus only on the content; be unsure of the differences.
- Ignore the
- Don’t give
everyone a chance to speak and be heard and don’t use your power as
consultant to allow all an opportunity for input.
yourself to be sidetracked from the ‘real work’ that has to be faced.
neutrality with objectivity, giving no feedback or advice.
- Get thrown
off by high emotionality of the relationships.
the noise with the signals.
patterns of behavior and communications.
disconnected events with patterns.
- Be unclear
about your role and your contract with the client.
6. Implementation -- Intervention, literally, means
“to come between”. This is the
moving and changing stage in Kurt Lewin’s three phases of the “unfreeze,
move/change, and refreeze”. Once we understand the nature of the client’s
questions and problems, and are armed with good theory, we can begin to take
steps to choose appropriate interventions. In my experience, success is related to three factors: (1)
what the client brings; (2) what the consultant brings; and (3) the agreement
that the client and the consultant have on the goals of the engagement. Since change is always the goal of
interventions, we need to be clear on the type of change needed and
possible. There are two major
types of changes, incremental, also
known as first order or evolutionary change and fundamental or revolutionary, or second order change. First order changes include, for
example, readjustments to the work roles and family involvement; fine tuning to
procedures that improve the business but do not change it fundamentally. Second order or fundamental changes
involves a change in the rules and, subsequently, the system itself. This type of change includes essential
changes in the organization’s culture, vision, strategy; or large changes in
the way the family or firm functions, such as selling parts of the company, or
dividing it into separate units, each to be managed by the next generation.
Incremental changes usually take less time and typically don’t generate a great
deal of resistance.
On the other
hand, second order changes often require significant shifts in the thinking and
acting of the client. She or he is being asked to think, feel, and act in very
different ways, and often takes a great deal of time and energy. I find Roger
Harrison’s guidelines in his classic article, “Choosing the Depth of
Organizational Intervention” to be useful. He advises to intervene at a level no deeper than (1) that
required to produce enduring solutions and (2) that at which the energy and
resources of the client can be committed to problem solving and change. To that I would add to intervene at a
level no deeper (1) than your skills and training allow; and at a level no
deeper than (2) that described in the initial contract without getting
permission from the client system. Always consider working with a multidisciplinary team when consulting to
family businesses. Generally, one
professional cannot do the work alone that is required with these complex
7. Follow-up-- I build a ‘follow-up’ meeting into
the contract. It is difficult to establish an exact time but usually within the
first 18 months after our work together, I will schedule a follow-up meeting to
review the progress, reinforce positive changes that have occurred, At this
meeting, we either recontract for additional work or we end our work together.
I have found that
successfully managing each stage of the consulting process, from first contact
to exit, gives the family business advisor his or her best chance for success.
Since we are working with both the content and facilitation of the process,
this model offers a map and provides a benchmark to assess our progress. Of
course, we bring ourselves and our experiences in collaboration with each
client. And it will work if we always pay close attention to the feedback we’re
getting and are willing to respond even if it means repeating steps, making mid
course corrections and constantly checking out the alignment with the original
contract. While our consulting framework may be orderly, the client system is
not, and change often occurs not in tidy sequential steps but in sudden
unpredictable ways. There is a constant cyclical nature of the work. Keep in
- Never work, consistently, harder than your
client. Never do your client’s work; and avoid client engagements that assume
you will do the work.
- Practice life-long learning; join or start a
multidisciplinary study group. Continue to learn, read, attend workshops, and
increase your repertoire order to be prepared for what emerges. Know when to call for help, or bring in
someone from another discipline.
- Although change doesn’t always start at the top,
leadership must be a champion of the project.
- Never break your own rules, no matter how
tempting. Know and manage your own
- The odds are against you; 75% of change efforts
do not yield promised results, often
because the consultant is unprepared for the twists and turns in the
relationship with his/her client. (Olson & Eoyang, 2001, Facilitating Organizational Change). Lewin’s model, of unfreezing and refreezing, is a useful measure, if only we
were working with blocks of ice! Remember, you are working with human systems that offer surprises along
the way and be prepared. Given the uncertainties and often unpredictable
responses of our clients, never is this more important than with family
businesses, which are emotional as well as work systems.
- Always challenge your own assumptions and ask:
am I asking the right questions? Am I really listening?
- If you get stuck in one phase of this model,
first ask “What got missed in the previous phase?”
- Avoid interminable consultations. Know when to declare victory and get
out. This includes both real
victories in which you and the client have reached the agreed-on goals and near
victories in which each of you has gone as far as you can go.
< Return to Resources