Is your advisor too close? Hire a Simmelian Stranger.

Updated: Aug 11, 2021

The 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 other 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, a German sociologist, and Mattias Nordquist, a Swedish family business professor.

Before addressing the issue of how close is too close, it is important to understand the difference between an expert and a process consultant. 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 deeper systemic problem. These consultants lead a family through a process, like succession planning or resolving a conflict, without recommending specific outcomes. They help create a 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

The German sociologist, Georg Simmel, a German sociologist, developed the concept of the Stranger in his 1908 work, Soziologie. 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.

A century later, a Swedish family business professor Mattias Nordqvist, researched the role of “non-family actors” (such as consultants, board members, senior managers, and network contacts) involved in the strategic work of the family firm. His research found 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 keeping a distance in their boundaries, like a Simmelian Stranger, it is not always easy to do so. Many family firms 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 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 moves toward autonomy with subtle guilt or even shame to keep members in line.

Even if the family is not enmeshed, consultants can be co-opted into groupthink. The Yale social psychologist Irving Janus developed this term in the early 1970s. 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 a crucial role in whether or not they lose their standing as Simmelian Strangers. Consultants who lack a secure sense of self may need external validation to sustain their self-esteem. These consultants become enamored with their proximity to clients who have high net worth or social standing. These consultants desire to be closer to their “important” clients erroneously believing this relationship somehow makes them more important. More emotionally mature consultants do not draw their self-esteem from their clients. Consultants who have a more secure sense of self not only understand how to be a Simmelian Stranger but also have the ability 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 your consultants included in your personal family 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 need to 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. 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. And finally, when you vacation with your family, don’t invite your advisers.

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