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Lessons from SG-FECC 2021 – The Kids Are Alright

University of Vermont Case Competition

Every January for the last several years, the college town of Burlington Vermont has become the center of attention for people from around the globe.

Okay, so maybe it isn’t (yet) a worldwide phenomenon, but, for students learning about Family Enterprise, this is the one place that hosts the annual Schlesinger Global Family Enterprise Case Competition (SG-FECC).

The University of Vermont (UVM) has been doing this for a few years (this was the 8th edition) and they have it down to a science.

This year it was held virtually, for reasons that don’t require much explanation, and that could have caused all sorts of challenges (and likely did) but you never would’ve noticed.

 

An Impressive Bunch of Young Leaders

The second part of my title references a movie featuring one of my favourite rock bands of my childhood, The Who, so perhaps I’m dating myself here.

But I really wanted to properly frame the “A-Ha moment” that I had this year, similar to the one I’ve had every time I’ve participated as a judge. If I’m not mistaken, this was my 6th time.

You may think that I’m talking about the competitors, who come from schools all over the world, every year.  And you’d be right, the students who compete in the Case Competition have impressed me every year.

 

It’s really nice to see the social aspect of the competition when it’s done in person, noticing that some of these undergraduate and graduate students are seeing snow for the first time in their lives.

 

A Huge Volunteer Undertaking by UVM Students

But it’s much bigger than just the competitors, it’s the entire organizing committee, which is composed of a few dozen students, who take care of everything from A to Z.

Yes, they are led by a few paid “adults” who work for UVM in various capacities, all of whom fall under the watchful eye of the brainchild and fearless leader of this project since Day 1, Pramodita Sharma.

But what impresses me every year is just how mature, competent, professional and diligent these young people are, and what they’re able to pull off, with only minimal supervision.

What they do have is structure and people who have done the job in previous years.

Come to think of it, this is a lot like many family businesses, and that’s where we’ll turn now.

 

Motivated and Aligned Young People

The young people of today, who many label as Generation Z, are so impressive to me, in so many ways.

I know that many business families can be hesitant to incorporate these youngsters into important roles, but from my vantage point, many of them are way more ready than the young 20-somethings of decades past.

They also benefit from having grown up with the latest technology, and with school systems that do a much better job of giving them practice at working together on projects from a young age.

Many also seem to be much better than their elders at harnessing the collective wisdom of the groups to which they belong.

They typically have plenty of motivation, so if you already have some structure and some vision, they can often handle way more than you might expect. 

 

Great Examples Abound

The recent Presidential Inauguration gave us another great display, as Amanda Gorman, a 22-year-old Poet Laureate knocked my socks off with her poem.

My own kids are 19 and 21, and I see so much promise in them and their friends too.  I see it in my clients’ rising generations and at SG-FECC every year too.

With the recent passing of Hank Aaron, I happened to hear his Baseball Hall of Fame speech, in which he said “A man’s ability is limited only by his lack of opportunity”. 

Amen.

 

Many Winners, Especially Wilfrid-Laurier and ESADE

There were many winners at SG-FECC this year, especially those from Wilfrid-Laurier University (Canada), who won the undergraduate competition, and ESADE (Spain) who took top spot in the graduate category.

I look forward to being back in Burlington for the next “in person” version, whenever that is possible.

Meantime, like so many other areas of life these past few months, we’re all adapting and realizing how much we can all still accomplish even in these sub-optimal conditions.

And with these promising young people taking on bigger roles all the time, the future is bright.

 

 

 

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Sibling Compatibility is Not Sufficient

Family Harmony Is Very Important, But…

One subject that I harp on a lot is family harmony and making sure that everyone gets along together.  

This is important for families who want to ensure that the business they built, or the wealth they’ve accumulated, will be able to continue after the next intergenerational transition.

And while harmony really is something that families need to work on if they don’t already have it, in many cases it will not be sufficient.

I came across something recently that made me think about this and how I may not have been doing justice to some other key considerations in this space.

This week, I want to address a couple of them here.

 

If You Aren’t Growing, You’re Shrinking

The first thing many families ignore at their peril is the importance of competence.  

Of course this can take many forms, but bottom line, if no family members are competent in managing the business or the wealth, dissipation will often be the result.

I’ve noticed a lot more being written in this field about the importance of having an entrepreneurial spirit in families, so that with each generation, there is some renewal of activity to maintain and hopefully grow the family wealth.

In cases where there isn’t anyone with the inspiration and ability to at the very least maintain the family wealth level, some choices around how to manage things and what the next generation family members can expect to pass on to their offspring will need to be made.

If you just take a look at how many households are being supported by a business in the first generation, and then extend that down even two generations further, the geometric expansion in that number will be difficult to match without an equally rapid progression of the family’s wealth.

So if all you have is “one big happy family”, but nobody willing and able to drive the amount of wealth forward, it becomes a matter of time before dissipation will kick in.

 

Complementary Roles for Family Members

Besides competence, another area that becomes important in many families is the existence of complementary skills in the sibling or cousin group who will be taking on leadership roles after the next generational transition.

If everyone is good at the same thing, and there are areas where nobody has any skill or desire to take on leadership, there could problems.

Having too many cooks can cause unneeded conflicts, and having skill gaps can lead to being blindsided in certain areas.

Of course when a family attains a certain wealth level there are some benefits that are easy to see, such as having an ability to find roles for just about any interested and motivated family member.

And when they have skill gaps, a family with enough resources can typically hire outsiders to fill such roles.

 

Competent + Compatible = Complementary

As I was writing this I got to thinking that maybe complementarity is the intersection of competence and compatibility. Let’s work through this and see if it holds up.

If you have people who are competent, i.e. good at something, and then you get to the point where the group of people get along, i.e. are compatible, can you not then ascertain that they are complementary?

It feels almost like this fits with one of my favourite ways of pointing out synergy, which is to say that “One Plus One Equals Three”.

Earlier I mentioned the geometric growth of the family and now I just opined on synergy, I guess this is a good place to link to The Exponential Magic of Family Collaboration.

 

So Strive for a Complementary Team

This may be a stretch, but perhaps either competence or compatibility are scalar, while putting them together gives you complementarity, which is a vector quantity.

I just flashed back to my High School Physics class there, and since that was over 40 years ago, I admit that I needed to Google this to get the terms right.

As Mr. Henry used to say, “velocity is speed with a direction”.

So if you strive for a complementary team in your sibling or cousin group, you’ll be able to combine everyone’s ability to get along with a direction and a purpose.

This isn’t to be confused with complimentary, although if they also develop the habit of saying nice things to each other, that’s OK too!

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The Ownership Connection to Family Legacy

It’s More Than Just About Family and Business

There are some subjects I cover pretty often in these blogs, because much of the work I do revolves around areas where families have predictable challenges that I try to help them work through.

Regular readers know that I’ll often return to such staples as communication, governance, family meetings, harmony and working together.

Well lately I’ve been seeing and hearing much more about the subject of ownership, so that’s where we’ll turn now.

 

The Forgotten Circle?

I can’t believe it’s been over three years since I wrote Ownership: The Forgotten Circle of Family Business. I guess that at that time I was noting an absence of discussion on this topic, so it seems that may no longer be the case.

A few months before that, I penned Pruning the FamBiz Ownership Tree, in which we looked at the issues that arise over generations where ownership of a business ends up coming down to family branches with different involvement in the business, and how those issues need to be dealt with somehow.

But today I want to look at a specific area around ownership, and that is the way that the feeling of ownership is so important for families to recognize, if they are expecting their following generations to maintain their family legacy.

 

The Ownership – Legacy Connection

I typically make one similar assumption when I begin working with any family, which I normally end up validating early on. That assumption is that the leading generation of the family, the ones I sometimes label the “NowGen”, have at least some interest in creating a lasting legacy.

Those words mean different things to different people, so let’s look at this more. For me, a lasting legacy is one where even after the NowGen has left this earth, there is some continuity of what that generation built, grew, and/or stewarded, by the “NextGen”.

Let’s look at the opposite of that, which sometimes occurs, and which is also fine if that’s what makes the most sense for that family.

If the family wealth is to be split among the descendants and then they will all each go their own way, then there will be little or no legacy left.

In most families in what some call the 99%, this is standard practice.

 

That Feeling of Ownership

When a family attains a certain level of wealth, the idea of maintaining some sort of legacy will often come up.

Such families will then typically consult a number of professionals who are experts in the area of protecting that wealth so that it may then be preserved for future generations of the family.

One of the details that gets dealt with at that time is the ownership of the assets that make up the financial wealth, and this is where some important considerations sometimes get lost along the way.

“Family specialists” like me who work with the family members on how they will govern the family wealth often walk into situations after most or all of the ownership details have been cast in concrete.

And in situations like that, we typically note that there were some opportunities to make the future owners actually feel like owners.

 

Just Trust Me On This, Kids

Of course when the offspring are still children, it is normal for their parents to make important decisions for them. The problem comes up when those children become adults, and yet their parents continue to treat them as children.

I always encourage parents to work on having adult-to-adult relationships with their offspring, because a “one-up, one-down” framing can be crippling to the development of the rising generation.

Growing up in my family, I had legal papers put in front of me and was told to just “trust me, sign this”, and many others went through the same thing too.

 

Feeling Like You Actually Own It

Getting back to those experts who prepared legal documents about the wealth, they understand the differences between legal ownership and beneficial ownership for assets in a trust, and my point here is that at some point those beneficiaries need to have this explained to them as well.

Who will share ownership of what, and when those changes are expected to happen are also key.

To preserve a family’s legacy, feeling like you own it cannot be overlooked.

If the debate is to share this information now or later, my advice is that sooner is always better.

 

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On Observing and Absorbing in Enterprising Families

When Two Words Arrive in the Same Sentence

This week we’re going to do a bit of “freestyling” in this space, and see where it goes.

Regular readers are likely familiar with my penchant for taking some seemingly arbitrary topics or words and trying to weave them together into something useful and entertaining for those interested in the family enterprise space.

I’m writing this during the Christmas holidays, so it feels right to just reflect a bit and see what comes out. Thanks for joining me.

 

A Coaching Session as an Inspiration

As a coach, I think it’s important to also work with my own coach too, because it really helps to underscore how much one can gain from this kind of relationship.

It would feel pretty disingenuous if one of my clients asked me about my coach and my reply was “Who?”.

A few weeks ago during one of my sessions with Melissa, I uttered a sentence that contained “observe” and “absorb”.

Now you may not think that that’s noteworthy and I wouldn’t blame you. But as someone who writes 52 blogs every year, I need to find my inspirations wherever I can.

 

Observation is an Obvious One

When I work with members of a business family, one of the biggest things that I bring to them is an outsider’s perspective on what they’re living.

Lately I’ve been using an aquarium example to illustrate this, and I think it works pretty well.

I have a 90-gallon aquarium at home and a 55-gallon tank in my office, so this inspiration is never far away.

I know that the way I observe the fish in my aquariums is quite different from the way they observe each other.

The fact that I’m outside the system gives me an ability to see the bigger picture, and it allows me to have a much wider perspective of what’s going on within the system.

I need to constantly remind myself, though, that I need to work at staying out of the system, or else I’d quickly lose much of the objectivity that my outsider status affords me

 

And What About the Absorbing Part?

The part about absorbing might be a bit less obvious, but let’s see if we can make it make sense here. Whereas the observation part was more about the space aspect (i.e. big picture, outsider) the absorbing is more about time.

This is where thinking about a sponge can be helpful. When a sponge is completely dry, it has a lot of potential to absorb liquid, but it can’t do it instantaneously. It takes a few seconds to be able to take everything in.

And whereas the observing is typically something done with the eyes, the absorbing involves the heart and your emotions, and is more of a full-body experience.

Absorbing Anxiety from the Emotional Field

As an outsider to a family system, a great deal of my focus is on observing the emotional field of the family when they’re together.  It’s amazing to note the difference in baseline anxiety levels from one family to another.

Some families have a “modus vivendi” of being together that’s very easygoing and free, while with others you can almost feel the tension. See Family Governance, More than a Modus Operandi

You can guess which families are more fun to work with, and they also seem to have more success in transitioning their business and wealth to the next generation.

When working with a family where there’s some tension, part of my role is to absorb some of it, almost like taking a sponge and soaking up some of the extra and trying to keep things tidy.

 

Family Members Assuming Their Roles

Naturally the observing and absorbing are not limited to the outside coach or facilitator, as each family member is also doing some of each.

Families with whom I work have typically already recognized a certain level of interdependence that they have with each other, and they are therefore part of a system where there’s a good deal of focus on all of their one-to-one relationships as well.

When the family members are able to make factual observations about each other, that’s usually a sign of progress.

At the same time, they’re hopefully acting in ways where there is less “absorbing” going on.

When all family members have adult-to-adult relationships and everyone becomes a resource to everyone else, you’re really in business. I love to observe that.

 

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Family Governance, More than a Modus Operandi

Communicating and Making Decisions Together

One of the topics I return to most frequently in this space is family governance. 

There are a few reasons for that, including the fact that it’s a really important part of why some families have been successful at transitioning their wealth through generations, as well as the fact that it remains pretty much a misunderstood area for families who simply aren’t there yet.

As I look back at how I’ve treated this subject in the past, I was happy to come across this blog from 2017, Old MacDonald Had Family Governance (E-I-E-I-O).

Those vowels from the children’s song happened to line up nicely with some adjectives I’d been thinking about when considering family governance.

 

Things a Family Needs to DO Together

So much talk about family governance surrounds the things that the family needs to do together. In a sense, they’re about creating a “modus operandi” for the family.

I need to give a tip of the hat to Walid Chiniara for this idea, as his recent book, Dynastic Planning is where the seed for this blog post was planted a few weeks ago.

Of course there is much that any family needs to learn to do together that becomes the foundation of their governance.

From communicating and decision-making to creating forums and learning to solve problems together, there’s always more that needs to be done.

 

Method, protocol 

When I went to Shutterstock to search for an image to accompany this post and I entered “modus operandi”, I got a couple of hits with those exact words, but also some other suggestions that made me think.

The two that stood out to me were “method” and “protocol”, which might be some ways to keep in mind as your family (or your client family) works to establish the ways that they are going to do things together, as they prepare for the family’s wealth to eventually transition to the next generation.

But of course the title of this post promised that there’s much more to family governance than a modus operandi, and so this is where I want to turn to now.

And this is where Chiniara’s inspiration from that book truly kicks in.

 

The Way a Family Needs to BE Together

I feel like I’ve been over this territory a lot, but it’s so important that it bears repeating nonetheless.

This “territory” is the distinction between “doing” and “being”.

It’s as basic as the difference between asking a child “what do you want to be when you grow up” as opposed to “what to do you want to do”.

And yes, I do realize that the two are very much intertwined, so for many people it may be a distinction without much difference.

But in the family governance realm, the way a family learns to be together is something that’s always worth working on.

 

Informal Family Governance

So much of what ends up driving a family’s governance is actually very informal, especially when a family is still figuring all this stuff out.

Before the “protocols” and the “methods” actually get formalized, most families more or less fly by the seat of their pants for a while, and that’s perfectly fine in the early stages.

And whereas the formal part becomes a “modus operandi”, the informal part is much more of a “modus vivendi”.  (Thanks Walid)

Vivendi translates to “of living”, and it’s all about how the family members learn how to live together and be together, when working on their governance.

Of course when you Google “modus vivendi” the top hits will direct you to an underwear brand that uses that name; I guess it is a pretty clever name for that intimate layer of clothing.

 

Practice, Practice, Practice

To reprise the punchline from the joke about “how do you get to Carnegie Hall?” the answer here is also “Practice, practice, practice”.

Family members who will be expected to work together to make decisions for the good of the family in the future need to practice working together and making decisions together before they get thrust into situations of real importance.

The longer the runway, the better.  Let the elders step aside and watch how their offspring actually act and behave as they plan and execute on events and ideas together.

The modus vivendi they co-create will become the foundation required to support the eventual wealth transition you’re striving for.

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Planning your Family’s Declaration of Interdependence

This week we’re going to go over some old ground, and cover some things that are brand new to this space.

There’s an “A-Ha Moment” involved, as well as a new way to attack an old problem.  

One thing most regular readers will recognize is that we’re once again visiting the wonderful world of “family governance”.

Never Start with a Constitution

Let’s set up the family governance part off the top.  Back in 2018, in Behind the Flawed Family Constitution we talked about the fact that for some reason, having a “Family Constitution” had become a really cool thing that families thought they needed.

Or at least, there seemed to be renewed interest in such a deliverable, likely caused by some professionals who discovered the idea of possibly selling this idea to their family clients.

I’ve also since met with families who’ve come to believe that a family constitution could be an appropriate thing for their family, and I usually try to get them to back away from the idea, once I realize that they’re still very early in their family governance’s evolution.

 

Start Small, Let It Evolve

I’ve tried making this point in various ways over the years, with families as well as with other advisors who are a bit newer to the area of getting families they work with on a proper path to governance.

Then recently, form an unexpected place, I got the killer line I think I’ve been looking for to seal the deal.

I was watching a WBECS coaching webinar recently, where David Burkus was talking about working with teams in businesses and other organizations in work situations.

A big part of such teams’ success stems from getting to the point where they understand the value of teamwork. Then he said the magic words.

“I want them to make a Declaration of Interdependence”. 

It hit me right between the eyes.

Why Didn’t I Think of That?

You see, back in 2015, I wrote a blog titled Independently Wealthy VS INTERdependently Wealthy, in which I first shared this notion about families being interdependent.

And, as most of you hopefully already know, in 2019, I published my second book, which happens to bear the title Interdependent Wealth.

But I had never thought about using it in an expression like “Declaration of Interdependence”.  But of course that ends now.  

And a little bit of knowledge of U.S. history also leads to a way to use it in the context of families, especially when they think they might want a family constitution.

 

A Time Lag of Measured in Years

Even though I’ve lived my whole life in Canada, it’s all been spent within an hour’s drive of the U.S. border, and there’s been a constant American cultural barrage, first over the TV airwaves and more recently over the internet, that most Canadians have become quite used to.

So I know that the U.S. Declaration of Independence was signed on July 4, 1776.  

I also hear about the U.S. Constitution on a regular basis, especially since I’m kind of a politics junkie.

I admit I had to Google the date of the Constitution, because it’s less well known. It was signed in 1787 and then had to be ratified by the 13 states, which took another few years.

 

The Family Governance Version

So now, whenever anyone talks about a family adopting a constitution, I’ll ask when they signed their declaration of interdependence.

Now, I need to clarify how I look at this, but it’s certainly not far fetched.

You see, while the U.S. was declaring itself independent from Great Britain in 1776, whether they admitted it to themselves at the time or not, they were simultaneously declaring themselves interdependent with each other.

And that’s the most important part for any family to realize.

 

Families and Wealth – Intention and Commitment

When I work with a family it’s usually understood that they have twin goals of keeping both their wealth and their family together through the generations.

That work takes some intention and commitment, because, as I love to remind them, that stuff doesn’t just happen all by itself.

This is where all the governance stuff comes in, along with working on engagement, alignment, and clarity.

And while some families will end up with a Family Constitution, eventually, there are more important things to take care of first.

Understanding and accepting that all family members, from all generations, are truly interdependent, is the first key step.

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Sharing the Load as an Enterprising Family

Most family businesses actually start out with one major contributor who builds something large enough to eventually employ many people, including other family members.

As any parent with children who want to help out around the kitchen knows, even when they’re really too young to contribute, it can sometimes feel like a step back as you need to actually take a bit more time to include some of these helpers.

This week we’re looking at the idea of sharing the load with family members, as the family matures and there actually are others who should be able to contribute to the family’s success.

Bringing them in isn’t always as simple as we hoped at the outset.

“Many Hands Make Light Work”

In theory at least, sharing the work among many people makes things easier for everyone.  Many hands make light work, the saying goes.

But what if we’re talking about more than simple “work”.

I’m trying to get at some of the things that underlie the complex nature of enterprising families, who are working towards an intergenerational wealth transition.person holding another person

There’s a lot of work to do there, in many cases. And if it were just a lot of work, it might be simple to divvy up.

But what if it feels more like a load?

“It’s Not the Load that Breaks You Down …”

The idea for this post came from a recent webinar I attended, by the Family Enterprise eXchange (FEX).  The presenter happened to be a friend and colleague, Thomasina Williams, with whom I once presented at the Rendez-Vous of the Purposeful Planning Institute (PPI).

She was presenting on Stress, Health and Well-Being as a result of the pandemic, and one of her slides featured a quote that I loved.

It was from Lena Horne, and it read: “It’s not the load that breaks you down, it’s the way you carry it”.  

According to Google, it also seems to be attributed to C.S. Lewis and Lou Holtz. It seems like great quotes get recycled a lot.

When Does Work Become a Load?

When we think about work, we’re typically pondering things that go on in what I like to call the “business circle”. 

If you aren’t yet familiar with the Three Circle Model of family business, you may want to start here: Three Circles + Seven Sectors = One A-Ha Moment

The place where things can start to feel more like a load often come up in the “family circle” and even the “ownership circle”.

Part of the difficulty in the family circle comes from the fact that there are often some members of the family who do work in the business, while others do not.

The “information asymmetry” that this creates can become a big issue for the family to address.  When someone is a family member and perhaps even an owner but isn’t involved in the day-to-day dealings of the company, they can feel like they’re flying blind at times.

Sharing the Load

Keeping all family members current with what’s happening in the business becomes important when there’s an upcoming generational transition.  

And by “upcoming”, I mean within a decade or so. In fact, it’s really hard to start this process too early.

One way to make the load easier to carry is to share it among different people. Of course the onus of sharing the info should fall on the ones who work in the business, but that doesn’t mean that all the work is theirs alone.

All family members who are currently owners, or those who expect to be in the future, also share in this task.

Ideally, the information flow should have both a “push” and a “pull” component.

Lightening the Load

As we think about ways to lessen a load, apart from sharing it, there is also the possibility of making it lighter.

This may seem like a bit more of a stretch, but here’s one way to look at it that might be useful.

Last week in Live from the Forum – Success Transitions we were looking at regular family forums, I don’t think I spent enough time talking about the importance of having fun together as a family.

Everyone should be looking forward to such meetings, knowing that there will be plenty of opportunities to share some laughs along the way.

In my book, spending time with people you love, and having fun together, always makes things much lighter.

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Live from the Forum – Successful Transitions

The Real Secret to Success for Families

As a child growing up in Montreal, home of the famous Montreal Canadiens hockey team, I heard the word “forum” hundreds of times before I had any idea what that word really meant.

You see, the arena where the Canadiens played their home games for the first 3 decades of my life was called the Montreal Forum.  

As a child, when my Dad managed to get tickets to a game, it was always a treat to go there, because the team was always very good and the games were always sold out, so tickets were tough to come by.

 

What Other Forums Are There?

It was a bit of an eye-opener when I later learned that there was also a Forum in Los Angeles. I recall thinking that they had “stolen” our name.

Of course this blog isn’t about arenas, it’s about families and the challenges they face in trying to transition their business or their wealth to the next generation.

And so you might be wondering what a forum has to do with that.

I hope that you’re intrigued and that you’ll always remember this idea, in part because of the way I’ve presented it here.

 

More Than Just a Meeting

Before we go much farther, let’s look at a definition that came up when I Googled “forum definition”.

“a place, meeting, or medium where ideas and views on a particular issue can be exchanged”

Many people who work with business families profess that the single most important thing such families should do is to make sure that they have family meetings.

I agree that having family meetings is very important, and I want to go a step or two further.

What I’m suggesting is that more than just having meetings with family members, you should strive to have family forums.

Teams working on their devices

The Importance of Open Discussion

Looking at other definitions of “forum”, I came upon one that included the following:

a public meeting place for open discussion and a medium of open discussion or expression of ideas

When I talk to clients or potential clients about these meetings, or forums (fora?) I always stress the importance of making sure that all voices are heard.

The absolute worst way to have a family meeting is to have one person, typically a guy named Dad, telling the family what he expects.

Monologues of any kind are the best way to kill any family meeting.

 

Striving to be a Family of Affinity

The bottom line is that you want to make sure that any family meeting is something that all family members will look forward to attending.

The kinds of families who are successful at transitioning their wealth to the next generation are ones who enjoy being together.  Some refer to them as “tribal families”.

Jay Hughes sometimes uses the term Family of Affinity. Just for fun I Googled that term and found this:

People with or without blood ties or legal ties, feel they belong together and want to self define themselves as a family.

There’s a lot there and for many families this is a pretty high hurdle

 

Discussing Things That Matter

I want to share one other tidbit I found while looking at definitions, before closing with what may be the most important item.

Forum: a meeting in which people can talk about a problem or matter

There aren’t a lot of words there, but they say a lot.  

“Can talk about” makes me think about how important it is that everyone feel safe sharing their viewpoints, and things that matter means we need to discuss more than just the weather or last night’s game.

 

When Is the Next Forum?

Having teased something very important above and quickly running out of race track, here we go.

A Family Forum is NOT a “one and done” deal.

You need to continue to have them, over and over again. Maybe you do it once a year, maybe more often

But you need to make this a regular thing; it needs to become a habit.

Family members need to learn what kinds of things they can bring up at these meetings, and then as they learn about each other, they will need to revisit subjects again.

Always schedule the next forum before everyone leaves. And if you can get a few of them involved in planning the next one, that’s even better.

 

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Sandwich Generation Challenges in Legacy Families

Yet Another Label for Generations

This week we’re looking at the challenges faced by one particular generation in many families. 

While we’ve previously discussed topics related to the “rising generation” in a family (a.k.a. NextGen) and on the leading or senior generation (a.k.a. NowGen), we’re going for something a bit different this time.

Most people are familiar with the term “Sandwich Generation”, based on the everyday challenges people in this position face no matter which socio-economic strata they inhabit.

I want to examine some of the special aspects of being in such a situation in an enterprising (a.k.a. affluent) family.

 

The Meat in the Sandwich

The term “sandwich generation” comes from being caught in between two other generations, much like the meat in a sandwich.

With increasing life expectancy, combined with couples having children later, more and more people in their 40’s and 50’s find themselves in this unenviable position.

Their offspring still rely on them and they’re rightly concerned with that following generation properly launching into independent adulthood.

Meanwhile, their parents have reached a stage in their lives where they also require care and attention.

This segment of the lives of the sandwich folks also happens to overlap with the most important years in their careers, and thus their work responsibilities, only adding to the challenges.

 

Patience Has Its Limits

A few months back, in On Patience and Impatience in Family Transitions, I wrote the following:

“The two (or three) generations need to take their time and incrementally move decisions and actions from the NowGen to the NextGen.  

 

That might sound like a very simple thing to do, but in reality it’s quite difficult.

This came home to me recently when my social media team put a podcast interview I’d done a while ago back into circulation.

On a 2018 episode of The True Wealth Project Podcast, which I recently re-listened to, I was personally stumped by a question about my own personal legacy planning vis-à-vis my children.

 

One Generation at a Time

The host asking me about my own family brought home the realization that I myself was one of these sandwich dwellers, and I knew that I was not alone.

In fact, when I wrote “The two (or three) generations” in that previous post, it should have been clear already.

Perhaps when I had written that, where the context was a family who were actively working on clarifying their legacy so that it would be successfully passed down, I was assuming that the generation in the middle would see themselves as part of the process and therefore not an afterthought.

But as I reflect on this, I can’t help but think that people in this position really need complete clarity of what is coming to them before they can think about how they’re going to eventually leave it to their offspring.

 

When Will Things Be Clear?

As I write these words and process them at the same time, it’s dawning on me that I’ve been confounding two separate issues: timing and clarity.

Last week, when I wrote How to ACE your FamBiz Succession Planning the “C” in ACE stood for “Clarity”, so I was unintentionally foreshadowing this point a week in advance.

But things don’t necessarily have to have already happened for them to be clear.

Perhaps the fact that I married into a family with little clarity has affected my view on this topic.

Don’t Wait for the Triggering Event to Ask Questions

Some families just never talk about things that are in fact inevitable, such as the eventual death of one of the family elders. 

They don’t want to talk about such subjects because they don’t want to be disrespectful or seem like they are rooting for something to occur in the near term.

Meantime, any planning for the future gets put on the back burner, because of the lack of clarity mentioned above.

Somewhere in a legal document lie the answers to many of the questions that are on the minds of many family members.

But nobody wants to ask the questions.

 

Coach, Coach Thyself

Every family is different, and some members are more comfortable in rocking the boat and bringing up uncomfortable subjects.

The expression “physician, heal thyself” comes to mind now, for me.

I’m not a doctor, but I am a coach, and maybe I need to think of myself as a coaching client and see if there are any ideas I might want to be pursuing myself, as I search for some clarity. 

Or maybe not.

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How to ACE your FamBiz Succession Planning

Don’t you Mean Continuity Planning?

One of the most popular topics in the area of family business is always succession planning. I’ve known this for a while, yet I rarely use that term in my writing, especially not in the headline.

So in order to prove that I can “zag” as well as I can “zig”, I did it this week. Why the change?

I’ve just spent several weeks refreshing my website, and my “web guy”, who is really good at what he does, told me that I needed to write about succession planning, because that’s what a LOT of people are searching for.

 

Yeah, But….

When I explained that there’s a better term that people like me now use, “Continuity Planning”, he patiently nodded his head and reminded me that if people are searching for one thing and you continue to call it something else, many of those people will never find you.

Alas, I acquiesced.

It kind of feels like I went back to build a worse mouse trap, hoping that the world would now beat a path to my website.  I guess we’ll soon see if new folks find me.

 

So You Want to ACE It

 

So in the spirit of writing something newish, catchy, and useful about family business succession planning, I decided to share a mnemonic way of thinking about it. 

A few months ago, in Family Engagement and Family Alignment – Chicken and Egg I shared the idea that engagement and alignment were two sides of the same coin, and two of the most important aspects of getting a family’s planning and governance on track.

Since engagement starts with an “E” and alignment starts with an “A”, I knew I had the makings of something. A good mnemonic should be something that spells a short word, so vowels carry a premium.

I just needed the right consonant to hold everything together.

4 aces in a deck of cards

Clarity to the Rescue

After kicking around a number of other options, I finally settled on “clarity” to complete my catchy word, “ACE”.

I was tempted to use “communication”, which would have given me the same word, and communication is, of course, crucial to family business success over generations.

But bringing things right back to the “succession planning” angle I was going for, I thought that clarity was a better word.

So let’s look at how this ACE holds together.

 

Does the Order Matter?

What I’m hoping people take away from this post is that family business succession planning can be a success IF you concentrate on the three items in the ACE mnemonic: Alignment, Clarity, and Engagement.  That’s it.

Now, are they in the right order? 

No. Or Yes. I’ll settle for a hard Maybe.

Does it matter? Definitely not.

Succession planning is not an event, it’s a process. And because it is a complex process, it’s definitely NOT linear.

You don’t do “Step 1” and then “Step 2”, etc. 

 

It’s NOT an Estate Plan

Some people may want to argue this, and I think that most of those folks are probably confusing family business succession planning with a related process, that of estate planning.

Estate planning is a specific subset of succession planning, and it can certainly be much more of a “linear” operation.

When we talk about family business succession planning, there’s a LOT more at stake, and it MUST involve those who will be expected to play future roles.

 

Engaging and Aligning, with Clarity

Whereas an estate plan is mostly about who’ll be the legal owners of specific assets after their current owner passes away, a succession plan is more about who will do what.

It’s about how a group of people will interact and decide things together, for the common good of the whole family.

That means that these people need to be aligned in their thinking. They also need to have a common and clear understanding of everything that’s at stake.

This stuff definitely doesn’t just happen by itself, which is why you also need to have everyone engage in the process.

 

Incremental Iterations Work Best

You need to constantly go from engaging to aligning, and back again, while making sure to always strive for more clarity.

This happens over time, as the family members learn to work together and understand that they are interdependent.

Small gains add up over time, and incremental is a good word to keep in mind.

Keep at this over time, and you will ACE it.

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