Green and Yellow Are OK; Red? Lookout!
Having recently been involved as an advisor and mediator with some families where the relationships could hardly be described as harmonious, this week I want to talk about how important it is to try to keep such situations under control, and not allow them to boil over.
I’ve written about aspects of this before, so there will be a few links to previous posts along the way.
In 2017, with Yellow Light Family – Proceed with Caution we looked at the “family dynamics axis” of a model that places families in a particular zone based on traffic lights, with which most people can readily identify.
Green light families are great to work with; when the light turns yellow, there are a few more challenges that many advisors with some experience can often help families overcome, but when the light turns red, all bets are off and many advisors prefer to head for the hills.
Kissing Your Proverbial Sister for Real
A couple of years later, in Kissing your Sister – Playing for a Tie in FamBiz, I shared this quote from a slide I’d seen during a presentation on Family Governance:
A General Family Business Precept:
In a Family, if you play to Win, you Lose;
In a Family, if you play to Lose, you Lose;
In a Family, if you play to Tie, you Win
Richard Goldwater, MD; Boston, MA
I found that so perfectly appropriate for most family enterprise situations that I just had to share it.
A few weeks ago, I wrote Getting Legal Advice for your FamBiz vs. Lawyering Up. In that post, I shared learnings from some recent work I was in the middle of, where I saw my role and my goal as keeping the siblings from instituting any legal proceedings against each other.
FWIW, up until now, I’ve been successful. But things still feel more “adversarial” than I’d like.
Letting Things Cool Down
For some reason the word “adversarial” came to mind recently as I pondered how to approach this blog.
As I sometimes do, let’s see what comes up when I Google the word:
“involving people opposing or disagreeing with each other”
Hmmm, I was really only considering the “opposing” part, and not the simpler “disagreeing” aspect.
When people work together, disagreements often come up, it’s only natural, and we need to learn to be able to work through them.
One expression around this that I love has to do with learning to “disagree without being disagreeable”, and that’s something I’m often called on to do when working with family members.
When Opposing Viewpoints Create Opponents
Situations that cause more opposing viewpoints often revolve around a Zero-Sum game, where everything one person gains is at the expense of someone else.
The greenlight families noted above typically involve businesses where things are already going well and they are expected to keep going and even improve.
When you’re making a bigger proverbial pie, the fight over who gets which slice takes a back seat.
Whenever a family limits its view to what’s already there, and there’s no plan on increasing what’s available for all to share, the chances of adversaries taking up sides increases.
Can you find ways to make it about more than what everyone can already see? Sometimes you need to expand what you are looking to accomplish and consider some intangibles instead.
Many Kinds of Wealth and Capital
This brings us to some of my other favourite topics, examining what wealth and capital really are.
Too many families, and their professional advisors, seem to believe that financial wealth is by far the most important consideration for every family.
While the financial wealth is certainly not something to ignore, families who also work on their social capital and human capital actually have a better chance of success with all forms of capital.
Earlier in my career, I was managing financial wealth on a daily basis, with one eye on my computer screen and the other on CNBC. (No, I don’t miss those days.)
One market guru, whose name I’ve forgotten, used to talk about the two kinds of capital: financial and emotional. He was reminding his fans not to overspend their emotional capital, because it is a limited resource.
Families fighting over money end up wasting lots of time and energy dealing with negative situations, to the point of exhaustion or breakdowns. It’s just not healthy.
Were They Always Adversaries?
If family members are currently adversaries, I like to ask if they were always this way, or if there was a time in their lives when they were more cooperative and working towards common goals.
What changed? Can they go back?
Burying the hatchet can be good for the soul. I encourage it.
