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Articles - Choosing an Advisor - Consultant in the Family - Business

E-consultation is ideal for members of a family business

Monday, September 03, 2001

By Kathy J. Marshack, Ph.D., P.S.

"How can I help my Dad? He is part of a family business that he inherited from his father. Now Dad and his brother run the business, except that my Dad does all of the work. Dad is stressed all of the time but doesn't want to disrupt the family. I'd like to come to work for my Dad but I don't want to be part of carrying my lazy uncle. What should I do?"

This was the first problem ever presented to me when I hosted an Internet Chat for members of family firms. We "chatted" for about an hour, via our computers and covered a lot of territory. Even though the young man who contacted me lived on the East Coast, he was able to get expert advice on the precise subject he needed help with because he was comfortable searching the World Wide Web. And by the tone of his messages, he was pleased by the end of our hour to have a plan of action to present to his father.

This new medium of e-consultation is ideal for all business owners, but especially family business members. A son can't always call up his father's accountant or attorney and talk over such problems. He is not likely to feel brave enough to confront his uncle or even his father on such a touchy subject. He could hire his own local consultant or psychologist, but isn't likely to find a local expert on families in business. But from the comfort and privacy of his home, he can "surf the web" until he finds just what he needs. In this case it was a psychologist whose specialty is helping families in business solve those sticky problems that cross over from loving relationships into the business marketplace.

E-consultation is ideal in many other ways as well. It's tailor made for travelers and those of us who work odd hours. You can get on line anywhere, anytime. The convenience means that you will probably take advantage of the service more often and get to the bottom of the problem faster. In fact, a study at Johns Hopkins University found that people open up more quickly using a computer than they do face-to-face with a psychologist. E-consultation may attract those who are too embarrassed to bring a problem up fact-to-face or it may just be that they can ask the questions when they come up, rather than having to wait for an appointment.

As a psychologist for many years I have encouraged my clients to educate themselves about life's problems by reading books and articles. Now in addition to some excellent books, I recommend highly regarded websites. Ignorance about life slows you down. Educating yourself helps to reduce your fears and defensiveness. With knowledge you are in a much better position to problem solve. With knowledge comes confidence and with confidence comes creativity and with creativity, options and solutions start to materialize. It seems to me that the World Wide Web provides us with a wealth of information in a convenient form that can shorten your problem solving time.

Of course there are downsides to this form of consultation too. How do you know who you can trust? Is your e-mail or chat confidential? In addition to a wealth of helpful advice, there is a wealth of garbage and damaging material on the Internet. The surfer does have to beware. You can't assume because someone has a website that they are honorable, legal, credentialed, caring or experienced. However, if you use the same common sense you use in business to size up any person or situation, I think you can sort the wheat from the chaff.

For example, on both of my websites, I not only provide a lot of information on the common issues that families in business face, but I include all of my credentials, extensive information on confidentiality, and several ways to contact me for more information to check on my background. If you are not going to meet the person face-to-face or you do not have a personal referral from someone you trust, take the time to read what the consultant has posted on their website about their qualifications.

If you are still shy about accessing the World Wide Web for information take the plunge. As a business owner you need the Internet to stay alive and ahead of the competition. You already know that. Now consider using the services of websites to keep yourself up to date on more personal issues such as those vexing problems of keeping a healthy balance between your work and your home life.

'Soft' side of estate planning in the family business

Thursday, February 08, 2001

By Kathy J. Marshack, Ph.D., P.S.

Most entrepreneurs are so caught up in the passion of their enterprise that they rarely plan ahead for the wealth that will accumulate. Although there is a desire to make money, only a select few entrepreneurs actually make money their goal. Rather wealth is a byproduct of having done well. Furthermore, most entrepreneurs did not grow up in wealthy families, so they don't have role models for managing their money or planning for the continuity of the family business. As a result when it comes time to develop an estate plan, many entrepreneurs are at a loss for where to start, or to even know they should start.

It would seem that the logical place to start is with your attorney, CPA, investment advisor or banker. However, while all of these professionals should play a part in the development of your estate plan eventually, the first stop on the way to a successful estate plan is the psychologist's office to deal with the soft side of the family business. Many an estate plan has been left undeveloped because the interpersonal relationships in the family were counter to the best interests of the business.

It is important to understand that the most important part of our lives are spent not as individuals but in relationships. And the relationships that we hold most dear are those of our family (whether or not we hold them fondly or with resentment). Within the context of a family business this fact is quite evident. Regardless of how successful, famous or old the family business, the family still comes first. Understandably the system that has been around the longest has priority.

Gerald Le Van, an attorney explains this concept from the perspective of the changes that have occurred in the business world in the latter half of the 20th century. The Industrial Revolution that lead to the technological revolution created the philosophy that the business world was like a clock, where successful enterprises were machines, conceived by engineers and monitored by accountants, where the goal was maximum industrial productivity at minimum cost, and workers were a collection of individuals or parts of the machine. Today, however, the business world is not envisioned like a clock, but like a rain forest.

According to Le Van, "Enterprises are no longer machines, but ecosystems whose fitness to survive is determined by their relationships to other organizational ecosystems in the rain forest world. Enterprises are no longer collections of individuals, but systems."

Within the world of family business the rain forest model is very effective. Family firms are a system of family members, in-laws, shareholders and stakeholders. These systems interact with vendors, customers, employees, and the commercial community at large. It is a delicate balance to maintain a successful business and a successful family enterprise when the systems are integrated into a family firm. The stress on the system becomes even greater when it is time to develop a plan for the continuity of the business and the family, and a fair apportionment of the wealth. If the family does not have mature and healthy interpersonal relationships, the process of estate planning can be costly, painful and unsuccessful.

Consider for example a CEO who is about to retire. He has two daughters and his instruction to his attorney is to develop a plan that gives each daughter an equal share. One daughter has worked for years for her father, helping him to manage his investments. She has proven to be a leader and visionary, much like her father. The CEO wants her to succeed him in managing the business because he believes in her competence. The other daughter has never worked for her father but has benefited indirectly from the growth and wealth of the business. Although she has never been interested in the management of the business before, now that her father is retiring, she and her husband want to take a more active position in the company. The first daughter doesn't mind continuing as the president of the company. In fact she believes she deserves the position. But she is not pleased about her sister's new interest, nor her father's decision to treat them equally. Where this family once got along just fine, a new problem is growing that they never had to face before. How would you are your advisors handle this "hot potato"?

Consider the entrepreneurial couple, who for decades have successfully founded and managed three enterprises. They have sent two children through college and now one of them works for the family business. The husband, now 58, would like to retire to the new vacation home they have recently built in a resort community. However, the wife is ten years younger and is not ready to retire. She is still excited by the challenge of managing their investments. Furthermore, she is grooming for the presidency, her son by a previous marriage. She would like to stay on long enough to see him well established in the leadership of the business. There are more than business challenges that this couple faces. Will the marriage withstand one working while the other retires? Will the husband trust that the new president will be trained well by his wife? How do other family members feel who are not related to the wife's son?

Consider the attorney who must advise his client on an estate plan. The attorney and his client, a CEO of a national corporation, have always trusted each other and seldom had a conflict. The attorney has always known that his client is alcoholic, but the alcoholism never interfered in their dealings, even though it did cause great personal tragedy for the CEO (i.e., a divorce and estranged children). Now, however the attorney is in conflict over the advice he must give his client. The CEO wants to place in the presidency the only child who is not estranged from him. Unfortunately this child is alcoholic too and has never held a responsible position within the company. The CEO is ignoring other possible successors, such as loyal executives who are not family members. The attorney appears to be in a no-win situation. If the attorney says nothing, the CEO may proceed with a plan that will ruin the company. If the attorney confronts a non-recovering alcoholic with the foolishness of his plan, he may lose a valuable client. In either case there is no healthy solution.

To create an estate plan that truly integrates the success of the family and the firm, it is necessary to seek the help of a psychologist who understands the soft side of families and particularly those families who are in business together. Cleaning up root interpersonal problems can mean the difference between the development of a meaningful estate plan or the development of increased family conflict. For example, with the help of a psychologist, the father with two daughters learned that "fair" was more appropriate than "equal" when it came to dividing the wealth and the business with his daughters. The entrepreneurial couple learned that their marriage could survive the transition of the wife's son to the presidency if they developed a clear buy-in for the son. Fortunately for the CEO of the national corporation, his son went into alcohol treatment after a serous auto accident. The CEO participated in family therapy at the treatment program, which forced him to look at his own untreated alcoholism. He eventually could see how he was letting his alcoholism make business decisions that were neither sound for the business, nor his family.

If you have worked hard to create an enterprise you can be proud of and if you want to create a legacy to pass onto your children and grandchildren, first evaluate the soft side of your family system for any unresolved issues that could spring up and bring the whole system down, during the process of estate planning. Also be prepared to deal with problems that never would have surfaced except for the need to discuss money matters with family. Then take these concerns and realizations to the psychologist, the professional uniquely trained to help with untangling family knots and reweaving a healthy family/business tapestry.

Cost Containment or Quality Care? Health Issue

Monday, July 06, 1998

By Kathy J. Marshack, Ph.D., P.S.

Are you a good old-fashioned American Capitalist? Most of you who are reading this article are entrepreneurs or business owners or executive or managerial employees of local businesses. This makes you American capitalists in the truest sense of the word. You believe in working hard, competing for profit, and setting your sights on the American Dream of financial success and security. Is it any surprise then that health insurance companies are American capitalists too? They were founded by visionaries who recognized a market just waiting to be tapped, employers and employees who needed help paying for medical expenses and who were willing to pay in advance for the insurance that the costs would be covered. Being capitalists, they used the existing American system for setting up their businesses and arranged to make a profit. As more people founded insurance companies, the competition began to heat up, which only fueled the enthusiasm of these early entrepreneurs. Competition honed the industry into the incredible, unbeatable American Dream Machine it is today. Don’t some of you secretly wish you could have been in on the ground floor of this multi-billion dollar industry?

Most of you readers were not in on the ground floor, nor do you own a piece of an insurance company. Primarily you have not been looking at the profitability of a particular insurance company, nor the investment potential of the market/insurance industry as a whole. Rather your main interest in the health insurance business is whether you have a fair and cost-effective plan to offer your employees and whether you, yourselves have the type of insurance that will take care of your health needs. However, in making decisions about buying and using health insurance plans, it is important that you understand that health insurance companies are businesses, just like yours. Their goal is to make money by providing a service/product that can be produced as competently and efficiently as possible. The problem is, can insurance business owners make medical decisions that affect your health, without the advice of professionally trained physicians, psychologists, chiropractors, dentists and so on?

The insurance companies of the nineties, and their cost-management sub-contractors, managed care companies, are indeed making medical decisions for each and every member of their plans. And they are doing so without sound medical and/or psychological advice. They are making these decisions based upon actuarial tables, not upon the unique individual needs of each patient. For example if the cost of a mammogram is cheaper than an ultra-sound to detect breast cancer (and it is), your cost-management company may deny the claim for an ultra-sound. If the actuarial tables suggest that most cancer is detected satisfactorily by mammogram and self-exams alone, then to contain costs, they will deny the ultra-sound. However, if you have a history of "breast lumps," and so far all of them have been benign, but your doctor is concerned that with advancing age there could be an increasing likelihood of cancerous tumors, or that the benign lumps are hiding the tumor, and in your case an ultra-sound is vital, there is still no recourse with the cost-management company. You may still have your claim denied because you do not fit into the range of what is most cost-effective according to the actuarial tables. There just is no room with insurance companies for the exception to the rule.

In psychology and psychotherapy, the picture is even gloomier. If you have a broken arm, the insurance company will authorize treatment. But if you are suffering from anxiety or depression, regardless of the cause or the intensity of the problem, your claim will be challenged by the cost-management company. One reason is that it is not the event per se that is paid for, but your reaction to it. For example, if you are in an automobile accident and your child/passenger loses his or her life, but you survive, you would be expected to be in shock, to be grieving intensely, to be unable to carry on your daily routine for weeks, months or even a year or two. Yet this event may not be allowable under your mental health coverage because you are reacting normally to the stress. In other words, you can only be covered under your mental health coverage if your reaction to the stresses of life are abnormal. But in my experience, even if you are suicidal (which insurance companies do consider abnormal) you will need to get prior authorization from your cost-management company before you can schedule an appointment with a psychologist. Because the psychologist is a specialist, cost-management companies do not make as much money on their services, so they have established a gate to keep the number of referrals to specialists at a minimum. If you are suicidal you must first call your cost-management company for authorization or make an appointment with your primary care physician, who in turn will make a recommendation to the cost-management company to refer you to a psychologist!

What this all amounts to is that psychological and emotional health do not mix very well with health insurance and cost-management companies. It is important to understand the distinctions between the two realms. Health insurance companies and their colleagues, cost-management companies (euphemistically called managed care companies), are in the business of making a profit by containing the costs of health care. While this goal may be needed or even admirable, it has nothing to do with providing the specific medical or psychological care that you or your employee needs today. The kind of mental health treatment that you or your employee needs today should be a decision between the patient and the doctor based upon the specialized needs of one unique human being. While what the patient can afford, either privately or through their insurance plan, should be considered by the doctor and patient, the best medical/psychological treatment that is necessary for this one human being should always be considered first, not secondarily to what the cost-management company will authorize.

Obviously you cannot ignore the costs of health care, even though psychological health care is relatively inexpensive. However, the biggest mistake that patients make is assuming that their cost-management company is making the wisest health care decision for them, when in fact the cost-management company is diagnosing by the actuarial tables. I know of suicidal patients who went untreated because their cost-containment company could not act as quickly as a phone call to the therapist. I know of patients who want a cure for serious clinical depression within the unrealistic five sessions authorized by their cost-containment company.

I know of patients whose personal, confidential medical records are reviewed by the employer’s human resources department before they are reviewed by the cost-containment company clerk, before they are reviewed by the cost-containment supervisor, before they are routed to the insurance company for a similar series of reviews, before the claim is authorized or denied.

Whether the insurance industry needs cost-management or not is not the question here. What is at stake is the quality of your psychological and medical health care. When making these very important decisions about your health care, consider that your insurance company is not the best source of advice on quality of care. They can only advise you on cost of care. For example, if you choose one of their preferred providers the costs may be lower but cost is no guarantee of quality. For quality of care decisions you have more work to do. Searching for a psychologist, for example, requires assessing just what your needs are, what approach would work best for you, what type of professional you can relate to, what credentials and qualifications make this provider better than another and so on. Furthermore, you may wish to work with a psychologist about problems that are perfectly normal, but that you want help with nevertheless, such as a divorce, child behavior problems, career planning, family stresses at work, work stresses at home and so on. Remember, your cost-management company is not under contract to help you with these problems, only those issues that you are handling abnormally.

When it comes to insurance, Americans are soft. We assume that we are entitled to "life, liberty, the pursuit of happiness and health insurance to cover every conceivable medical expense." Health insurance is an extra. It has its limits. It is time for Americans to build some unused muscle and start making decisions for themselves again. Stop looking for someone to take care of your every health or emotional need. Stop turning these decisions over to cost-management companies. Instead utilize your good old common sense and decide for yourself, with the help of professional advisors such as your trusted doctors, just what is the best psychological or medical treatment for you, your loved ones and your employees.

Compensation planning in a family business

Monday, April 06, 1998

By Kathy J. Marshack, Ph.D., P.S.

For years Arnie looked forward to having his son and daughter join him in his publishing business. Arnie and his wife, Ilsa, had rebuilt the business after Arnie’s father lost everything due to some poor planning and miscalculating the marketplace. Even though the business went under when Arnie was in college, he could see the potential. He had a degree in marketing and knew the publishing business from the inside out. With Ilsa’s accounting background, they systematically restored the business to a healthy functioning. About the time that Arnie’s and Ilsa’s two children were off to college the business was in expansion mode and Arnie was counting on his son and daughter to help take the company into the twenty-first century. The children were eager to help out too. They were getting relevant degrees in college, had acquired internships at publishing houses back East, and upon graduation were ready to come home and learn the family business under Mom’s and Dad’s tutelage.

Arnie and Ilsa had laid the groundwork well for inviting their children into the family business. The kids had seen how hard their parents worked, but they weren’t ignored. The family always came first. Also Arnie and Ilsa involved the children in the business from the start. Even as toddlers, they played in the office. As older children, they helped out with odd projects and straightening up. They were familiar with all of the employees, who felt like one big extended family to them. In high school, the children tried their hands out with some of the professional work. Frequently the family business was a subject for a high school project. It was common knowledge and often discussed that both son and daughter were welcome to work in the family business after they completed college.

All seemed to be going as planned until the day came to discuss the employment agreement with each child. Never before had the family had to consider real business when dealing with each other. As teenagers, the kids had been paid minimum wage or a bit better. There were no benefits or perks because their parents took care of those things. Now the children were adults, responsible for their own lives, which meant that negotiating compensation had to be strictly business. The children couldn’t be expected to work for minimum wage anymore and they expected to be compensated for contributions they made to the company. Arnie and Ilsa had some work cut out for them.

The question was, How to compensate their children, as if they were regular employees, but with the added benefit of having trusted family members to help run the business? Compensating relatives is a sticky business. Not all people are really created equal. It is sometimes very difficult to assess and compare the talents of family members who are also employees. Nor do all family members contribute equally to the business. As a result of the stress that this causes, many family business owners ignore the problem and let compensation become a breeding ground for dissension in the family. For example, many wives in family businesses do not earn a salary at all. The reason given by the CEO for this is that it saves on taxes. The justification is that she is an owner of the business, so she is growing an investment. However, the research also shows that family business wives are invisible when it comes to decision making and that they feel isolated and unappreciated. Lack of a salary or a nominal salary may account for this.

A recent survey by Mass Mutual Insurance Company reports a wide discrepancy between the salaries of sons and the salaries of daughters in family businesses across America. On average the typical son in a family business earns $115,000, while his sister earns only $19,000. These salaries also reflect the tendency of family firms to view the contributions of women as of less value and the strength of primogeniture in succession planning. In other words sons are groomed for leadership while daughters are groomed for supportive roles and paid less than their brothers.

In other situations, CEOs of family firms attempt to avoid the problem of compensation for family member/employees by paying everyone the same, even themselves. Or they hire a family member simply because they are family, regardless of their abilities. The problem with this method is that the talented and creative employees are not rewarded for their work and may become resentful of the family members they must "carry." And the employees who are overpaid are not getting accurate feedback for their work performance, which makes it hard to improve. Likewise the CEO is not really viewed as sacrificing when he or she takes a low salary. Rather he or she is viewed as a weak leader.

Although it is not easy to put aside the anxiety caused by developing a fair compensation plan for your family members/employees, it is absolutely necessary if business is to thrive. Family relationships built upon honesty are far superior to the games required by compensation plans designed to avoid friction. So if you follow the advice of experts you will design your compensation plan according to these five steps:

  1. Write up accurate job descriptions for each employee. Include responsibilities, level of authority, technical skills, level of experience and education required for each job.
  2. Identify what your compensation philosophy is. Do you want to pay about average, or higher? Do you want to attract talent from other companies? Do you want to offset the typical male/female wage differential? Are you a training ground for young, inexperienced people?
  3. Gather information on the salaries of similar positions in your industry. Size up companies that are similar to yours in number of employees, revenue, product, geographic location, etc. What salaries and other benefits do these similar organizations pay their employees?
  4. Develop a succession plan. How will a successor to the leadership be identified among family member/employees? How will they be prepared for leadership? How will this choice affect the morale of the family/business? How will this successor be compensated?
  5. Design an affordable plan. Obviously you want to do the best you can with the dollars you have. What can you afford to compensate each family member/employee relative to their contribution?

After you have a compensation plan that reflects the family’s values as well as sound business practices, you are in position to negotiate an employment contract with a family member. It is important that everything is spelled out up front so that when you have an annual review, there is a way to compare employee performance with outlined expectations in the job description. Salary increases can then be based upon the employee’s true accomplishments.

It will be hard for Ilsa and Arnie to totally separate their love for their children from this matter-of-fact compensation plan. There is room in any business for discretion in awarding raises and other forms of compensation. However, when the money decisions are made strictly from emotion or avoidance of emotion, there is bound to be trouble. As the CEO of a family business, make the best decision you can for the business. As a parent or a spouse, encourage your family member/employee to achieve their greatest potential within or outside the business. In this way both business and family wins.

Does Cutting Costs Create Mental Illness?

Monday, June 02, 1997

By Kathy J. Marshack, Ph.D., P.S.

Recently I heard a well known Dale Carnegie graduate give a talk on how to attract new business. He used as an example, what attracted him to the family physician who had attended to him, his wife and children for years. The good doctor had given a similar talk at a public event and impressed the man with his expertise, solid reputation, and sincerity. For something as personal and life important as the health care of his family, the man wanted such an individual as this dedicated doctor. And for years his initial decision to choose this physician proved to be a good one. Yet in spite of the importance of choosing the “right” health care professional, this Carnegie graduate dropped the doctor like a “hot potato” when managed care rolled into town. Because his company chose a managed care plan that would not allow the doctor to join the panel, the dedicated patient who had so carefully chosen and developed a meaningful relationship with his health care provider, decided to follow the impersonal dictates of the managed care plan. Closer to my own area of practice, psychology, is another story that is even more disconcerting. A young teenage girl had been treated for depression by a psychologist. In actuality she was not seriously depressed but rather angry at her boyfriend for being somewhat shallow. The girl’s parents called the managed care company and were referred to the psychologist. After a few short sessions with the psychologist, the girl felt she had more control of the situation and would not allow the boyfriend’s manipulation to continue. Two weeks after terminating psychotherapy, the girl and her father had a fight that erupted into yelling and screaming between the two of them. The father in frustration called his managed care plan (an 800 number in southern California) and told them his daughter was suicidal. Without any psychiatric evaluation and without contacting the daughter’s psychotherapist, the clerk at the other end of the 800 number advised the father to take the girl to a psychiatric hospital. Although the girl was not suicidal and didn’t need hospitalization, she did learn to fear her father and to behave lest she be hospitalized again. Not a healthy outcome. By now you probably have the tone of this article. While managed care may save your company dollars, and while there is a need for health care reform, you might think twice about just what you are subjecting yourself, your employees and your family to. The mistakes made by the Carnegie graduate and the father of the teenager are not uncommon. There is a mystique about managed care. People have come to believe that the 800 number is like a parent, able to solve all of their woes. They believe that they will get the same personal service they received for years by a doctor who knows them. They are puzzled when the service they do receive is not sufficient to resolve the problem. Often they assume that there is nothing more that can be done, since their managed care company has not authorized additional services. It’s as if the managed care company has assumed the paternalistic mystique that the family doctor once held. But now the mystique has no concern about the individual, only cutting medical costs.

All right, I realize that I am biased on this subject, given that I am one of those doctors that is being pressed by the managed care industry. It may be hard for some of you to accept my complaints about managed care, even though others of you have your concerns too. So let me relate a few statistics to bring you up to date on the state of the art when it comes to psychotherapy. The following points come from recent published research. Ninety percent of emergency room visits are psychosomatic in origin. In a review of 58 studies, 85% of the studies found substantial reductions in the medical and surgical costs of patients who regularly used psychotherapy. In a review of 475 studies, the authors found that the average psychotherapy patient at the end of treatment was better off than 80% of those patients who need psychotherapy but remain untreated. Therapist competence relates more to client improvement than does the particular treatment modality. By 8 sessions of psychotherapy 50% of the patients are measurably improved. By 26 sessions or about six months of psychotherapy, 75% of patients are improved. Cognitive-Behavioral psychotherapy alone is as effective and efficient in treating depression as are drugs, or drugs and cognitive-behavioral therapy combined. Drugs have side effects. These are pretty impressive statistics. If as an employer you could improve the health of an employee, certainly you would see an improvement in your bottom line. Healthy employees produce. Most managed care companies, however, are not into improving employee health, but in cutting insurance and medical costs. If they were really interested in your bottom line, why are they not increasing mental health benefits? If psychotherapy works as well as or better than drugs; if psychotherapy reduces emergency room visits and medical and surgical costs; if psychotherapy works better than no psychotherapy; if competent experienced psychologists are part of the success, why then are benefits for psychotherapy being slashed and watered down so dramatically? You may question my findings, noting that your managed care plan includes mental health benefits. However, if you review your benefits in particular, you will find some serious flaws. Such flaws include the fact that your employee is entitled to five or ten employee assistance visits with a counselor. If the problem cannot be resolved in five or ten sessions, they get no more. Also the counselor they must see cannot be of their own choosing. Many of the psychotherapists contracted to managed care companies are inexperienced master’s level people. Another flaw is that all psychotherapy plans must be reviewed with the clerk at the managed care company. The treatment plan is not a confidential arrangement between the client and the psychologist. It is part of a computer record available not only to the insurance company, but to the managed care company who reviews and authorizes insurance claims.

There are some estimates that up to 12 people see your psychotherapy treatment plan. For things as personal as serious depression, or marital problems, this is hardly sensitive or confidential. Furthermore, do you really want an anonymous clerk to be making decisions about your personal mental health? A third flaw is that the managed care company makes decisions about what kind of treatment you should receive based upon actuarial tables. It is not based upon your unique situation, nor what you and the doctor feel would be best. There is no sensitivity to your needs, but what fits the budget. If psychologist competence is significant to treatment outcome, then why is a clerk making these decisions? I personally am willing to participate in only three managed care plans for the above reasons and more. I will work only with those plans that leave the treatment plan between myself and the client. I will work only with those plans that maintain client right to confidentiality. I will work only with those plans that pay me what I am worth as a seasoned professional. I will work only with those plans that authorize appropriate treatment and will not cut off therapy for short term gain, forgetting the long term health loss. If you are shopping for a new health plan and if you are considering a managed care plan, why would you be interested in my point of view? After all, as I said earlier, I am biased in favor of preserving my profession. But there are compelling reasons to take a good look at all sides of the situation. It’s like my CPA says about taxes. If you find a way to save some taxes in one area of your business, you ultimately pay more tax somewhere else. It’s the same with mental health. If you cut premiums and cut services to your employees when it comes to their mental health, you pay the price in increased medical and surgical costs, employee accidents, higher turnover rate and so on. In an ideal world, there would be enough to go around; enough dollars to pay for health care and the ability to choose any provider you wished. However, obviously employers have to strike a reasonable balance and health care has skyrocketed. But in the time that medical and surgical costs have skyrocketed, mental health costs have not grown. They are essentially at the same utilization rate and cost as they have been for decades. So psychotherapy is not the place to cut. It just doesn’t make financial sense, when the price you pay is increased health problems. So when you are shopping around for a health plan, I hope you consider just what you are buying when it comes to mental health benefits. ? Do you have ample psychotherapy benefits; at least 26 to 52 visits per year per employee? Do you have the right to choose the most experienced and competent psychologist? Is there true confidentiality guaranteed? Is the treatment plan dictated by actuarial tables or by the unique needs of the situation and the employee? Is the payment to the therapist worth the time of a competent professional, or are you forced to seek out an untrained, inexperienced person who will charge rock bottom prices?

Making the most out of psychological consultation

Monday, August 19, 1996

By Kathy J. Marshack, Ph.D., P.S.

The other day, a client came into my office and sat down in the rocking chair, she crossed her arms and asked, "Well, what do you want me to talk about today?"

Her response reminds me that many clients of professional consultation, particularly psychological consultation, do not know how to use the consultant's time. Paula's questions reveals her belief that the consultant is in complete charge of the relationship, can read her mind, and has ready advice for every contingency.

It is understandable that people put this much power into the hands of their consultants. If you have a problem that is overwhelming, it somehow feels safer to let someone else be in charge of the solution.

The problem is that you the client/business owner have to make the decisions about your life and work. As Harry Truman said, "The buck stops here." No one other than yourself can ultimately decide your proper course of action.

Psychologists know from our research that people will take credit for their successes and blame someone else for their failures. What most people don't realize is that if you are brave enough to take full responsibility for all of your decisions, whether or not they were guided by a consultant, you have much more of a chance of success.

Because you are noticing all of you little and big failures along the way, you stand a better chance of correcting the problems before a crisis erupts.

Too often I am confronted with clients who have waited until the top has blown off the project. They are desperate. They want immediate solutions. They often get disgruntled with the consultative process because we are taking time to repair damage before we can move to more proactive work. If as the client or business owner you are ready to face your weaknesses as well as your strengths, if you are ready to admit your ignorance, the consultant can step in sooner to help you.

If you view each failure as only feedback, you will be operated as the cybernetic system you were designed to be. Get your Ego out of the way. Admit your ignorance. Use skills creatively. Use your employees creatively. Be open to solutions that at first sound ridiculous. They may sound ridiculous because you haven't had time to expand your consciousness to include new ideas.

The consultant's job, if they are doing their job, is more process oriented than task oriented. While you may want the advice or labor of our consultant regarding tasks that you are not skilled to handle, the consultant can help you best by getting you to think and use your own talents toward the solution.

Your lawyer cannot writ up a will without knowing your wishes specifically. Your CPS cannot advise on investment of even tax planning without understanding your financial objectives. Your Organization Development Psychologist cannot guide you in those tricky interpersonal problems without knowing how you and your personnel fee.

Knowing that you are really the decision-maker makes it a lot easier to take charge of the consultative process and ask the questions that need asking. Don't be afraid to ask a stupid question.

Slow your consultant down and ask for clear explanations and rationale for their recommendations. The psychologist is an expert in her field and may not realize that you don't understand her jargon or thought process. You are paying the psychologist for her education, knowledge and expertise, and to help you make the best decision for yourself, your family and your company.

Finally, if you are going to benefit by the use of a consultant, be prepared to do some hard work. Change is not an easy process. Just as when you first learned to drive a car, you have to be aware of every little move if you are to change your behavior and business organization or strategies. Now, driving a car is so automatic that your rarely remember the time between putting the key into the ignition and arriving at your destination. But at one time it took every ounce of concentration you had to master the ignition, the clutch, the rearview mirror, the brakes, the accelerator, the odometer, and so on.

The psychologist/consultant assists and guides in the process of change, but it is up to you to do the work. It is also up to you to refine the advice of your consultant to fit your unique situation. Things may sound good on paper, but in practice may need a little modification.

Psychologists know from our research that if too much time lapses between the consultation and taking action, the person will not do the required work in order to change. Take the time to put into practice what your consultant and you have decided. Notice where it works and where it doesn't. Then keep modifying until you have a system that fits you perfectly.

Process consultation is a valuable contribution to your business. The psychologist can open your thinking in directions you never thought of before.

For example, two brothers were arguing bitterly about how to manage their landscaping business. In terms of skills they were ideally suited to be partners. One was the landscape architect; the other had the sales skills and business management savvy.

They had also grown up with the business and inherited it when their father died. Nevertheless there were constant arguments about how to handle clients, employees, investments, and so on. The trust between the two brothers/business partners was shattered.

The brothers finally turned to a psychologist when their business consultant, attorney, and CPA failed to find a resolution. The psychologist helped the brothers recognize that while they loved each other as brothers, their lack of common interests and values make it difficult to be business partners. In other words if they had not been brothers, they may never have chosen each other as friends of business partners.

The psychologist also helped them to get over feeling guilty for breaking up the family and the family business that Dad had founded. Each was able to move on as an independent landscape contractor with his own business modeled after his own distinct personality. Now they can socialize as brothers, attend family functions and even refer each other business.

Psychological consultation is probably the most intricate form of consultation you will engage in. The focus is more on how you communicate and make decisions than on what you say or do. Many decisions and relationships can be much improved by changing the how or the process. If the two brothers had maintained their old method of relating they would have destroyed their relationship, the business or both. As a result of being willing to consider other methods of defining a family and a family/business, the brothers were able to transform themselves to amore productive and happier level of functioning.