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Lessons Learned from Women in Family Business

Guest blog from Kim Harland – Thanks Kim!

Lessons Learned from Women in Family Business

Family businesses account for 50%–80% of all jobs in a majority of countries worldwide.[1] And it seems women are leading the way, doing far better in leadership and management positions in family businesses than those in the non-family business sector. For example, 80% of family-owned businesses have at least one female director whereas only 17.7% of companies in the FTSE 100 have female directors.[2]

To celebrate the key role women play in family businesses, we spoke to a number of leading ladies and asked them to share their advice on range of topics plus give you a few tips on how to apply them to your family business.

 

What makes family business successful?

Across the board, all the women we spoke to felt three important principles underpin family business success – communication, a clear family vision and trust.

According to Lea Boyce, a key advisor at Boyce Family Office (5th generation family business), family businesses also have a crucial competitive advantage over the corporate sector – their nimbleness.

“While non-family businesses are busy having layers of meetings, a family in business has made the decision, got family buy in, done the deal and moved onto the next opportunity. As a result, they are able to be more entrepreneurial,” she says.

Another factor vital to family business success is the induction process for the next generation of family owners. On this topic, Priyanka Gupta Zielinski (author and executive director at MPIL Steel Structures Ltd, a 2nd generation family business), has some important advice.

“As you bring your daughter or son into the business, remember that you are unsettling an existing framework – things will change and you have to be willing to let them. It is important to let your children make their own mistakes. Sometimes their screw-ups will be of enormous magnitude – but remember, at least the worst is happening while you’ve got their back,” she says. “Whenever possible, help your children calculate and mitigate the risk without taking away their sense of ownership of the project.”

 

Your family business check-up

  1. Do you have a formal structure to allow open and honest communication as a family group?
  2. Has your family group articulated and documented shared business and family goals?
  3. Are you harnessing the opportunities presented by your next generation?

What’s the biggest challenge for women in family business?
Many of the women we spoke to believe the greatest challenge they face in business is the struggle to be taken seriously.

Lea says when it comes to families, patriarchy remains the dominant world view so when clients encounter a matriarch running the business they find it very confronting and challenging.

Priyanka feels that even in 2017, there is still a lack of role models for women in business. But she has an interesting idea for change.

“What is needed is a community of feminist men in family businesses who help women along the way by challenging the opinions of other men,” she says.

 

Your family business check-up

  1. Look for role models within your own or other family businesses.
  2. Consider a mentor – it is always helpful to work with others who have been there before you.
  3. Keep in mind that many women in family businesses can draw great inspiration from the men in their lives – their fathers, brothers and husbands.


The benefit of hindsight.

Everyone loves a bit of hindsight and when asked what advice they would give to their 25- year-old selves, our interviewees provided some excellent food for thought.

Looking back, Sara Pantaleo – CEO of 2nd generation family business La Porchetta – has this counsel for young women.

“Fight for what you believe. Gender doesn’t matter so just go for it. Don’t be mediocre. Strive to achieve. I sometimes see amazing, intelligent young women just accept things and I think that’s quite sad.”

Finally, Corrina, a 6th generation member of the Oliver winemaking family, suggests reflecting on one’s partner to see how they can help – rather than hinder – your family business.

“Recognise the key role your husband plays in enabling you to succeed in business and life – with support, not competition or jealousy, and contributing his share to the family.”

 

Your family business check-up

  1. What can you learn from the elders in your family? Ask your older family members the same question we did – “What advice would you give to a 25-year-old version of yourself?’ You might be pleasantly surprised at the answers and what they can do for your business.

We hope you’ve enjoyed these Insights from a few prominent women in family businesses. We have recently published our “Women in Family Business E-book”. If you’d like to learn a bit more about what we do, head over to our website.

[1] Global Data Points, Family Firm Institute, http://www.ffi.org/?page=globaldatapoints, accessed 18/10/17

[2] Imperial College Business School, Leeds University Business School and Durham University Business School, http://www3.imperial.ac.uk/newsandeventspggrp/imperialcollege/newssummary/news_22-5-2013-12-0-36 , Accessed 4/10/17

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The Dimmer Switch vs. the On/Off

The Dimmer Switch vs. the On/Off

This week I’m going to touch on a very big topic that I haven’t written nearly enough about. It’s also a subject that lots of families face, whether they have a business or not.

The idea came to me a couple of weeks ago while listening to the weekly teleconference of the Purposeful Planning Institute.

As I had stated in Huge Liquidity Events – Great News, Right?, there was going to be at least one other blog that came from that call.

The great nugget for this blog actually came from the Q & A at the end of the call. (Many Thanks to Matt Wesley of Merrill Lynch)

 

Having the “Money” Talk 

One of the call participants asked a question about helping their client families have the big talk about wealth.

You know how this goes. Wealthy parents talk to their advisors, the advisors strongly suggest that the parents begin to share information about their wealth with the kids, and the parents usually balk.

They understand that they should have the talk, but that doesn’t mean that they know how to do it.

 

The Dimmer Switch Analogy

The man who asked the question was looking for ways to help his clients begin the important stage of sharing information about the family’s wealth with their children.

The answer that came back was brilliant, and it is one that I plan on using. Parents often think about this “talk” as an all-or-nothing proposition. They shouldn’t!

It’s not a binary situation, where you go from complete “secrecy” to “full disclosure”.

It’s NOT a regular light switch, where the family was in the dark, and you flip the switch up and now everyone sees everything.

 

Time for your Pupils to Adjust

If you’ve ever gone to the movies during the day and you walk out into the daylight, you know that it takes time for your eyes to adjust.

In the same way, you really don’t want to “blind” your children with everything in one shot.

There is no need to quench their thirst for information with a firehose.

I like the dimmer switch analogy for a couple of reasons.

 

Shine a Little Light

I think the idea of “shining a little light” is the perfect antidote to the idea of “keeping them in the dark”.

And everyone knows what a dimmer switch is, and what it does. It allows you to control the amount of light.

So where should you begin?

 

Why Are We Here?

So let’s say you’ve decided that you can’t wait any longer and you need to talk about your wealth with the next generation of your family. Great. It’s not rocket science.

A frank and open way to get started is to tell them that you love them and that you care about them, now, and for the rest of their lives.

You could also share that you understand that if things go as they usually do, they will very likely outlive their parents, and that’s a good thing.

So, given that, there’s a lot of “stuff” that you have accumulated over the years and you need to begin to figure out what’s going to happen with it all after your gone.

 

One Step At a Time

The stage is now set. You have made them aware that you will be having some important discussions going forward.

And you control the dimmer switch, on both “how much” and “how fast” you’ll shed the light.

You don’t have to do it all today. Or even this week. Or this month. But preferably once you start, you do continue again sometime this year.

They may ask questions. That’s a good thing. You need to respond to all of their questions, but that doesn’t mean that you have to tell them everything they want to know.

Take your time. Turn that dimmer switch very slowly. But do turn it. And don’t turn it back the other way, although I’m not even sure if you can turn this metaphorical dimmer switch back towards darkness.

 

Dialogue > Monologue

You may have pictured yourself giving your family a speech about this subject. I strongly urge you NOT to look at it this way, or to act this way.

The “go slow” approach works well because you can adjust as you go. A dialogue, where you take the time to listen to their questions and concerns, is what you should be going for here.

 

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Fluency: The Key to Becoming a “Personne de Confiance”

Fluency: The Key to Becoming a “Personne de Confiance”

Regular readers of this blog know that I’m a huge fan of the Purposeful Planning Institute and all that they do. So you shouldn’t be surprised that this post has its roots in one of the sessions of the latest PPI Rendez-Vous.

It was on Friday morning, and as usual there were at least two or three other concurrent breakout sessions that I hated to miss, but I had my sights set on Dean Fowler’s talk.

Something in his title, “Interdisciplinary Fluency: The Role of the Personne de Confiance” just spoke to me.

 

Inspired by Jay Hughes

I hadn’t even realized it at the time I walked into the room, but the term “Personne de Confiance” had been written about over a decade ago by none other than James E. (Jay) Hughes.

Hughes is a revered thought leader in the family wealth space, and he’s been a regular at the PPI annual Rendez-Vous up until this year.

Maybe I chose this session subconsciously just to get my Jay Hughes fix.

 

Personne de Confiance? 

You don’t need to be anywhere near fluent in French to understand what Fowler and Hughes mean when they use the term “Personne de Confiance”, as it translates rather simply to “Person of Confidence”.

What you may not realize is that the word confiance in French actually translates to the word “trust” as well as the word “confidence”.

So more than just being a “confidence person” (which has some negative connotations) we’re actually back to that old standby, the “Trusted Advisor”.

 

Who’s the Quarterback?

The beauty of most of the PPI Rendez-Vous breakout sessions is their interactivity, and this one was no exception.

Someone threw out the term “The Quarterback” which is so often used amongst advisors who understand the importance of a coordinated approach to serving family clients.

Fowler’s attitude seemed to be that you don’t actually have to be the quarterback to be the “Personne de Confiance”, and I have to agree with him.

 

A Good Number 2

Reading Hughes’s piece on the subject yesterday as I prepared to write this, it struck me that one of the keys to being that “Personne de Confiance” was knowing your place and being comfortable being “a Number 2”.

Of course the Number 1 in this case should be the client/family.

If the client family is Number 1, and I can be their Number 2, should I care if one of the other advisors considers themselves to be the quarterback?

As long as the client ends up getting what they need, I think not.

 

Fluency: Interdisciplinary and Otherwise

Fowler began the session speaking German at the front of the room in order to make the point that it can be very frustrating when you don’t understand the language.

Thankfully there was someone in the audience who also spoke some basic German to engage with him (OK, it was me) to make his point.

I’m pretty sure he used to refer to it as “Multi-Disciplinary” fluency when I first heard him at Rendez-Vous back in 2014. Either way, we’re talking about the ability to understand and be understood.

 

Complexity in Spades

The fact is, family wealth is complex business, and families who have a great deal of it need professional help managing it, figuring out how to keep it, and finding the best way to pass it down to succeeding generations of their family.

They need legal advice, they need experienced CPA’s and tax advisors, and they need a whole bunch of other qualified specialists from other fields too. (See Sharing Some Rocky Mountain Kool-Aid).

 

Who Understands ALL of This?

Most people who specialize in one area don’t naturally have the ability to see the bigger picture and many don’t even really care about the other pieces of the puzzle.

I Googled the word “fluency” and here is the second definition, (the first one dealt with foreign language ability):

 

“The ability to express oneself easily and articulately.”

 

Trust, Clarity, and Coordination

If the client family is Number 1, they’ll most likely crave having a “Personne de Confiance” who can make and keep everything clear.

The multiple advisors whose work must be coordinated also benefit from clarity.

The family client will trust the person who can articulate everything clearly.

That person, or Personne, will need to be fluent in many areas.

Est-ce que c’est clair? Alles klar?

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Sharing Some Rocky Mountain Kool-Aid

Sharing Some Rocky Mountain Kool-Aid

I just returned from another fantastic Rocky Mountain experience: four jam-packed days, over two conferences, hosted by the Purposeful Planning Institute.

This has become an annual trek to Denver for me, which will surely continue for years to come.

 

Four Going on Five

I first attended PPI’s “Rendez Vous” in 2014 and returned again the following year. Last year, they added something new, an additional conference called “Fusion Collaboration”.

I decided to do both in 2016, and I jumped in with both feet again this year.

There was some confusion again, on the part of some attendees at either or both this week, about the difference between these two conferences.

I came up with an analogy that got a great response from everyone with whom I shared it, and the title of this post gives you a clue as to what it’s about.

 

Try Some of this Great Kool-Aid

Fusion Collaboration, the newer portion, is aimed at technical professionals who deal with business families, and families of wealth, and its goal is to introduce these more transactional folks to some of the other, deeper ways that these clients need to be served.

The presenters at Fusion are mostly specialists who work on the less technical aspects of wealth transfer, in what I like to call the “family circle”.

Many people used to call these the “soft side” (and still do), but now it’s more often dubbed “relational”, or “family dynamics”.

Fusion Collaboration is PPI’s attempt to get them to try Purposeful Planning Kool-Aid and “get them hooked”.

 

Let’s Swap Kool-Aid Recipes

By Wednesday evening, Fusion was wrapping up, and many of the lawyers and accountants and transactional specialists were preparing to depart, only to be replaced by a fresh crop of attendees.

The people who came for Rendez Vous, for this, its seventh incarnation, didn’t need to be enticed to drink the proverbial Purposeful Planning Kool-Aid.

Most of these people already subscribe to “Kool-Aid Aficionado” magazine, and they bring their Kool-Aid mixing and serving tips and recipes to share with their friends.

Besides the relational experts, many traditional transactional professionals who’ve become Kool-Aid fans also attend this conference regularly.

 

What’s In this Stuff?

If you’re curious about the main ingredient in this enticing beverage, it was nicely summarized by PPI’s founder, John A. Warnick, in one slide, which read:

                      Purposeful Planning   =   “Client-centric”   +     “Family-centric”

Most professional advisors already recognize the importance of putting the client’s needs and desires at the heart of wealth transition planning,

They also usually understand (in theory, at least) how important it is to bring next generation family members into the picture, preferably early on.

 

Secondary Equals?

Many of those who’ve traditionally driven the discussions around the pieces of wealth and business continuity, and transitions to the next generation, would consider themselves the primary drivers of this important work.

That may be true in the strict “transactional” sense, but more and more families are demanding a more holistic approach, which naturally involves a host of other experts from different, perhaps “secondary” domains.

Ideally, a collaborative group, or better yet, a team of advisors, will work together to figure out and design a complete inter-generational solution, along with the client family.

In order to do this work efficiently, and effectively, it really helps if the advisor team can work as collaborative equals.

 

Who Are They?

To give you an example of the types of specialists I’m talking about, here are some words and titles from some of the business cards I collected this week.

  • Legacy Advisor
  • Independent Trustee
  • Family Enterprise Advisor
  • Facilitator
  • Coach
  • Consultant
  • Psychologist
  • Gift Planner
  • Communications Specialist
  • Family Dynamics
  • Philanthropy Consultant
  • Family Legacy Advisor

And I know I’ve easily missed at least a handful of specialties.

 

July in Colorado 

After the opening dinner of Rendez Vous, as a table exercise, the “Elders” in attendance were asked to share with the “Tenderfeet” why we keep coing back every year.

At my table, most agreed it was the people, all of whom seem to come for the right reasons, i.e. to serve families better.

It’s also a great place to fill up on information, ideas, best practices, contacts, and lots of hugs too.

Oh, and Kool-Aid, of course!

Hoping to see you in Denver in 2018.

Would you like a glass, or a whole pitcher?

Links to previous Rendez Vous blogs:

2016: SWEET SECLUDED RENDEZ-VOUS

2015: RENDEZ-VOUS WITH A PURPOSE

2014: THE RISING GENERATION IN FAMILY BUSINESS

 

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“Yellow Light Family” – Proceed with Caution

“Yellow Light Family” – Proceed with Caution

Last week’s post (Happy to Be Wrong on FEX) talked about the great symposium I attended in Halifax earlier this month.

If you’re a regular reader (thanks!) you know that one of my best sources of blog material comes from these kinds of events.

I often do some sort of “Top 10” of things I picked up, but I’m going to devote this blog to one specific presentation I attended.

In coming weeks, I’ll likely dig in to a few other memorable sessions from the FEX conference.

 

Green, Yellow or Red Zone?

The symposium had a good mix of sessions; a couple for families only, others just for advisors, but most were open to all.

In this advisor-only session, Jim Grubman of Cambridge Family Enterprise Group presented “Green, Yellow or Red Zone Clients”.

He introduced the concept of the “Two-Axis Model” of wealth advising, with technical issues along the X-axis (horizontal), and personal and family dynamics on the Y-axis (vertical).

In each case, the model ranges from low complexity to high, from left to right and from bottom to top.

The colour-scheme was reserved for the family dynamics axis; green at the bottom, yellow in the middle, and red at the top end.

 

Technical Bread and Butter

Grubman mentioned that as you go from left to right on the “technical axis”, more complexity is usually seen as a positive for advisors.

A family with complex technical needs is often a plus, in that it allows you to showcase your abilities to solve their issues, and to charge accordingly.

The more people, entities, trusts, and jurisdictions a family has to deal with, the more the advisors will relish the task. At least the best advisors do.

 

The Family Dynamics Axis

The vertical axis, on the other hand, where family complexities increase, can be a very different story.

This is where the “traffic light” comes into play.

The low complexity families, with little of no conflict, anxiety, addictions, etc. are where most advisors prefer things to be.

Green is good, because there’s no family stuff to trip you up.

As you begin to see any of those issues, you leave the safety of the “green zone” and get into the yellow territory. At this point many who advise on technical issues (legal, tax, trusts, accounting, cross-border, etc.) quickly feel like they’re out of their depth.

Sometimes it doesn’t take much to raise the proverbial red flag, and get the advisors to scratch their heads wondering if they will be able to resolve the family issues.

 

Break It Down

Here’s where the real value of the presentation came for me. Rather than simply looking at the family dynamics question globally, Grubman breaks it down into several components.

In many cases, one thing sets off alarm bells, but others are hardly any concern.

For example, the sensitive issue could be the family’s level of conflict, their communication style, addictions, perceived fairness, or lack of governance systems.

When you can put your finger on it with greater detail, you’re much better placed to deal with it.

It can also help to look at “state versus trait” variables. There could be a situational factor at play, which may just be temporary. (Traits are fixed, while states are transitory)

 

Isolate the Issues

When the advisor team can share their views using this type of breakdown, they can pinpoint the issue more easily.

A family that looked red, or “very yellow” can look much less daunting once you see that there is really one key issue that is flashing, and that the others are pretty green.

 

Coordination and Collaboration

Now I’m gonna switch from what Jim Grubman was saying to Steve Legler’s take.

No single advisor will be able to handle a family with any complexity above green, on either axis.

Technical professionals work together to solve the family’s asset-related issues. On the family dynamics side of things, the same should also be true.

Families will benefit from advisors who can coordinate their activities at a minimum, and hopefully even collaborate.

 

Inter-Disciplinary Fluency Helps

FEX’s FEA Program helps advisors develop the inter-disciplinary fluency they need to properly serve families.

Knowing what families need, and how the pieces all fit together, is key. And so is being able to work together.

Tools like Grubman’s help us all do a better job for families.

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There Goes the Neighbourhood

This past week was a little out of the ordinary for me as I took a quick trip to my cottage to get away and clear my head. My intention was to rest and plan, but instead it turned out that I was pretty productive.

I’m not sure if that makes it a successful week then, but as someone pointed out to me, sometimes a change is as good as a rest.

Good Fences = Good Neighbours

One item on my agenda during my visit to the cottage was to deal with a part of our property on which there is a building that’s in need of a lot of work. After initially considering demolishing it or carting it away, we are looking at salvaging it instead.

A neighbour from two doors down asked if he could purchase it and fix it up to rent to his sister who’s moving to the area.

After discussing it with him, I went to see the local land surveyor who had drawn up the plans a few years ago.

Sidebar: As a fan of languages, I’ll point out that the French term for Land Surveyor is “Arpenteur Geomètre”. An “arpent” is an acre, so that makes the profession one of “Acreage Geometrist” as a rough translation.

Warring Neighbours

While making small talk with the man, he noted that he was being more selective in choosing the jobs he’s taking on at this stage of his career, sticking to the “easy ones”.

It turned out that the degree of difficulty he was referring to has zero to do with the complexity of the land, and everything to do with the people who own the land.

All this time I had imagined that the profession of land surveyor was all about surveying land (and acreage geometry), but as it turns out, most of the stress of the job comes from the people who own the land.

Working with drawings, driving stakes into the ground, using a transit (the scope instrument on a tripod), calculating the square footage, well, that’s the fun stuff. Standing between warring neighbours who are each arguing that the line should be “further over that way”, well, not so much.

Déjà Vu All Over Again

When my new friend related this aspect of the job, I had a bit of a flashback. A few years back when I first became a member of PPI (Purposeful Planning Institute), I joined one of their weekly thought leader calls.

I’m not 100% sure who the guest was that week, but I recall that they got their start advising families after being called in to mediate a number of sticky situations. I also recall the guest stating that he now tries to avoid those types of clients, preferring to work with good families, helping them become great.

Professional Stress

So if the land surveyor is stressed out by the fighting neighbours, and the family advisor is stressed out by family fighting, how bad must if be for the parties on the INSIDE?

What can be done to lower the level of conflict and to help everyone coexist? Neighbours are kind of “stuck” with each other, and families even more so. Their interdependence is pretty high.

Sounds like some good, clear rules and guidelines would be helpful. Once again, it comes back to governance. (See Governance Aaaah!)

Drawing the Boundaries

Right now I own the land that is being re-drawn, so it is the perfect time to figure out where the stakes will go into the ground to divide the property.

Things are calm, and I control both sides, so I can divide it as I wish, and will make it clear what I am offering to sell to my neighbour BEFORE we make the deal.

When you look at your family situation, and how things will shake out when the next generation will be in control, are all of the lines and boundaries clear and well understood?

Although we hope and would like to think that our kids will just get along, hope is not a strategy, and many families who ended up feuding used to think the same thing.

Bottom Line: Draw the lines in times of peace, don’t wait for the fighting to start, because then it is MUCH more difficult.

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A Systematic Business Family?

This week we’re going to venture into the area of Bowen Family Systems Theory (BFST) and look at how it might be useful in understanding business families and how they tick.

I’m currently at the Spring Conference of the Bowen Center for the Study of the Family. As a student of BFST and a practitioner who works with business families, it’s really interesting stuff, and there’s still another full day to go.

Bowen Theory is used in many fields, from therapy to coaching and family counselling to clergy working with their congregations. This year’s conference is geared to organisations, which naturally includes family businesses.

 

The BFST FamBiz Book

I initially learned that the “family is a system” in the first module of the Family Enterprise Advisor program I took in 2013. But we didn’t learn specifically about Bowen’s version at the time. It was later that Murray Bowen’s name came up for me, and I decided to investigate further.

My natural reaction was to search for a book on BFST and Family Business, and when I did, I couldn’t find the book I was hoping to find.

Later, I got this crazy idea that maybe I should write it. I have been immersing myself in this ever since, and I may just be crazy enough to try it.

 

BFST covers LOTS of ground

The possible applications of the theory are vast, and I thought I’d share a few of my notes, just from today, to give you a flavour. I normally don’t take lots of notes, but when you’re thinking about writing a book on something, well, notes could come in handy.

 

Anxiety

  • The way a family operates when things are calm is different from the way it functions when it’s tense.
  • Business families are involved in coordinated functioning towards attainment of goals, so decreasing anxiety in the system is very helpful.

 

Time Factors

  • Families are open to innovative solutions, BUT they want quick results
  • Real shifts don’t occur quickly
  • You can’t use BFST to “fix” someone

Unproductive Effort 

  • So much unproductive time and energy gets used up dealing with anxiety and the emotional issues that family members deal with.
  • Collective intelligence requires diversity of opinion.
  • Hierarchical leadership models are being replaced with distributive leadership.

 

So many “clients”

Family business advisors work with many different constituents:

  • Individual family members
  • Single generation groups
  • The entire family
  • Business system
  • Ownership system
  • Other advisors and consultants

There is a lot of work involved just in defining these groups to themselves and to each other, and then to work with them in a coordinated way.

 

Automatic Behaviour

So much of human behaviour, and therefore family behaviour, is automatic. We do so many things without really thinking about them.

People need to be aware of these things in order to learn that they can control them, and they need to practice doing that.

Awareness precedes the ability to exercise the free will required to change behaviour patterns.

 

More Questions than Answers

BFST doesn’t actually answer that many questions, but it sure can help ask a lot of the best ones. It’s a lens that Bowen practitioners can use to help see things differently, by looking at them from a new point of view.

It doesn’t rely on “cause and effect” thinking, it’s all about the relationships between the individuals, because it’s a “systems view”, where the way the parts are connected together is highlighted.

 

My BFST Book

One thing that’s becoming clear to me is that if (when?) I write a book on BFST, it will likely just be about how I use it, and will not attempt to be THE book on the subject.

A few respected colleagues have suggested that I actually write the book for a very small audience. This isn’t because there aren’t that many people who could benefit from it, but maybe because so many people could.

 

An Audience of One

I will likely write the book for an audience of one. Yes, just for me. But I will certainly share it too.

Do I mean that the act of writing can be selfish, and that some people write things for themselves, first and foremost? Well, I know a guy who started blogging like that, and now he just can’t stop.

 

 

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Is your Continuity Planning “PAL” in Danger?

This past week on Tuesday, at Noon Eastern time, as I quite often do, I participated in the weekly teleconference of the Purposeful Planning Institute. https://purposefulplanninginstitute.com

I’ve been a member of PPI since 2014 and will be attending their annual Rendez-Vous in July in Denver for the fourth straight time. If I could only attend one event each year, this would easily be the one. http://purposefulplanninginstitute.com/rendezvous2017/

 

Planning Fatigue

This week’s call was about “planning fatigue” and dealt with ideas professional advisors could use to overcome situations in which client families don’t move forward on transition plans as expected, hoped, and required.

Because the entire process is long and complex, clients sometimes lose sight of why they are doing all this work and things can begin to slide, and sometimes never get completed as intended. This can be a huge issue, and PPI is the only organization I know of that actually talks openly about this kind of stuff.

Every Tuesday PPI holds a teleconference, with a host and an invited guest expert. This week’s featured Timothy J. Belber, PPI’s Dean of Fusion, with guest Kristin Keffeler. They’ve collaborated on client family files in the past, which was evident, as they gave plenty of real life examples of situations they faced together.

These PPI weekly calls are all recorded and archived, so even when members can’t make it live, we can always listen to the recording later.

 

Three Major Classes of Danger

While discussing the problems of not completing a family’s planning work, Belber mentioned the three major classes of dangers that exist when things are not carried out to the end.

“Hmmm”, my ears perked up, “I wonder what these three classes are!”

These three main danger areas, can actually serve as the three major headings that we should be thinking about at every step along the way: People, Assets, and Legacy.

 

Checklist?

I wrote them down, and immediately wondered if everything could all really be boiled down to those 3 simple elements. The fact that I am writing a blog about it should give you my answer.

In fact, as someone who thinks in lists of 3, I will now incorporate these into an easy-to-recall checklist, but not necessarily just while thinking of “dangers” per se, but as important elements to always keep in mind.

I expect them to become a good PAL of mine and I don’t like it when any PAL of mine is in danger.

 

People

This one should be front and center, but often isn’t. When we are working with a family to make decisions on “what to do” in an estate plan, tax plan, business plan, or more generally “continuity plan”, I always think about how every decision will affect the people.

(See: https://stevelegler.com/2015/04/12/successful-planning-who-should-be-involved)

Many professionals in this space are specialists in protecting the assets, and they do a great job, but sometimes the people are given secondary consideration (if any).

It should go without saying that when those people for whom we are making the plan are adults, it is wise to seek their input at some point. This is heresy to some, I know, but it is 2017, not 1977.

 

Assets

This element usually doesn’t get forgotten, mostly because it is the domain of so many professionals in the family’s sphere.

I won’t give this one too much space, save to remind you of one of my favourite expressions on this point.

“We spend too much time and effort preparing the assets for the heirs, and not nearly enough on preparing the heirs for the assets.

 

Legacy

This one is a bit trickier because it’s less tangible, but Belber also mentioned his way of thinking about this too, and I want to share it here as well.

He noted that your legacy is what others think, feel, and say about you.

If we try to tie a Legacy to People and Assets, exactly HOW you leave those Assets to those People should be pretty important, shouldn’t it?

If you worry too much about either the Assets or the People, at the expense of the other, your Legacy will surely suffer.

 

Conclusion

Maybe it should be People + Assets = Legacy?

Either way, I have a new PAL. He can be yours too.

 

  

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No, YOU Don’t Understand!

No, YOU Don’t Understand!

This week I attended a presentation at a local University’s Family Business Center.

The guest speaker was a local legal professional from a well-known firm, and she was there to talk about things that business owners need to pay attention to when doing the legal end of their estate planning.

As she regaled us with her stories, a certain phrase came up a couple of times. When I heard it the first time, I was mildly amused. When I heard it again, I knew that it was going to be the subject of this week’s blog post.

The scenarios were the same each time. During her discussions with clients, at one point the client would say, “No, Janet, you don’t understand…”.

 

Who doesn’t understand whom?

After listening to the client’s explanation of what she did not seem to “get”, she would turn it around and retort with “No, YOU don’t understand”.

In my experience with families, these kinds of exchanges take place quite often, and they happen at several levels.

They happen within the family, between members of different generations, and also within groups of the same generation, such as ia sibling group.

They are also common between the family (or its representative) and its outside advisors.

When these types of exchanges take place, there is nothing inherently bad about them, at least on the surface. I am reminded of the phrase, “It’s not what happens to you that is important, it’s what you do about it”.

 

OK, so NOW what?

When the person who comes back with the “No YOU don’t understand” then goes on to lay down the law and force their viewpoint on the others, despite what others believe and understand and agree to, there will likely be problems down the road.

The best case scenario for this type of exchange is one where the family representative is dealing with an advisor and it is the family leader who concludes that they are not being well served, who then concludes with “And that’s why I am going to find myself a better advisor”.

The whole “I understand and you don’t” is so “I am smart and you are ignorant”, and “I know what is best and you must obey”, and it really has no place either within a business family or between a family and their advisors.

 

The Search for Clarity

One of my new favourite words is CLARITY. When someone asks what I can bring to their family situation, it has become my go-to first response. I will help bring clarity to the members of the family system.

Clarity, in my view, is not really much more than a common understanding. First, the family needs to be sure that they have a common understanding of where they are today.

People are sometimes tempted to rush into figuring out where they want to go, and I usually need to slow them down and make sure that they all know where they actually are first.

Once they all undestand and agree about where they are, then we can look at where they want to go, and of course, how they can get there. This will also require clarity, or, put another way, common understanding.

 

Inside the Family First, then Outside

Then, and ONLY then, should there be a meeting among the family’s advisors, again for clarity, i.e. common understanding.

Far too often I see situations where the outside experts are brought in with ready-made “solutions” (i.e. products and services) before anyone has done the work on becoming clear on what is required in that unique family’s situation.

Bringing clarity to a family is hard work and it takes time, but it can be done. Successful multi-generation families have figured that out.

 

FOR yourselves, Not BY yourselves

Here is what it boils down to:

As a family, you need to figure it out FOR yourselves, but that doesn’t mean that you have to figure it out BY yourselves.

You will likely need some outside help, but the person who helps you will be a process person, not a product person.

Achieving family clarity on “where they are now” and “where they are going together” is what it is all about, and the journey to get there is at least as important as the result.

But it doesn’t just happen by itself.

 

 

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Getting Dirty without Getting Stung

Two Kinds of People

There are two kinds of people in the world, those who don’t mind getting dirty, and others who would rather just stay clean.

That’s an oversimplification, but let’s just roll with it. If forced to classify myself as one or the other, I am quite OK with being in the dirty group.

This week I was involved in organising an annual fundraising dinner at a non-profit where I have been volunteering for the past seven years.

During the evening, I had the pleasure of presenting an award to someone I have worked closely with from my first day there.

 

Dirty versus Clean

The award was named for a colleague volunteer of ours who passed away last year. The three of us had spent many a Thursday afternoon getting dirty together, distributing food in the organisation’s food bank.

It struck me that few of our fundraiser “committee people” or those who attend our evening events ever actually see the day-to-day workings of this community charity, much less get involved “on the ground floor”.

Likewise the people who come and volunteer in various capacities during the day are not those who typically come out for the evening events.

There are exceptions, but in general there are the “blue collar” types who don’t mind getting dirty, and “white collar” types who prefer to stay clean. One group contributes time and effort on the ground, the other supplies donations and connections at a higher level.

 

We need both types

Everyone who helps out is needed and appreciated, I’m not making judgements here, and all contributions are welcomed and gratefully received. My point is that most people feel at home in one group, but not both.

Likewise, in the realm of family wealth, advisors who work with legacy families exhibit a similar dichotomy, but from a slightly different angle.

Some work directly with the family members, while other professionals work in other specialized fields and bring particular expertise to the table for those families, but don’t typically meet all family members.

 

Content versus Process

On the content side, lawyers draw up shareholder agreements, insurance specialists create the best combination of policies to take care of tax liabilities, and advisors craft perfect estate plans, yet seldom interact with the actual family members whom they ultimately serve.

On the process side, we understand family dynamics, facilitation, mediation and coaching. Many come from a psychology background, and are more akin to blue collar, ground floor, and “it’s OK to get dirty” types.

The content/transactional advisors work mainly for firms of professional partners, who specialize in knowing the laws and regulations and have a knack for creating structures and documents that are used by the family as part of the estate planning process. To me, these folks are more akin to “white collar”, upstairs, and “I prefer to stay clean” group.

Once again, both groups are important, absolutely needed, and thankfully available to serve the family. There is a symbiotic relationship here, but who is serving whom?

 

Really Feeling It

In the charity example, the daytime staff and volunteers see the benefits of their work first hand. Those who come out only for the fundraising events are often told of what goes on, and they are often amazed but never really “feel” it.

Most advisors to families will recognize proverbial hornet’s nests in family situations and steer clear of them, not wanting to get stung, nor leave the family in worse shape.

Working closely with the family members, doing much more “process” work, I see the hornet’s nests too, but I don’t necessarily run away from them, instead I often prefer to point them out.

I am not suggesting that the content people get involved in the process stuff, but if they better understood the implications their work has on their ultimate clients (the whole family) they could do an even better job.

 

Connecting the Two

When donors come out to a charity event, we try to show them how important the work is that we do for the end clients.

Those who bridge these gaps, in charities and in families, are always necessary, yet not always appreciated. But we will always do it, because it feels so good and so right to make these important connections.

We don’t mind getting dirty, and we are not afraid to get stung.

 

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