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Ready to Lead > Ready to Leave

Certain topics come up over and over again in the world of family business.

Today we’ll be looking at two of them, although when you get right down to it, maybe it’s really just one, because they’re often wound pretty tightly together.

As you may’ve already gathered from the title, I’m talking about a changing of the guard at the top.

Some Batons Are Sticky

As I wrote in my Quick Start Guide on this subject, Sticky Baton Syndrome(Ask Prince Charles) there are plenty of cases where the person at the top of a family business is just not ready to leave.

There are all sorts of excuses that are typically mentioned as to why they must remain in place.

Some of them are even true, and some of them are actually good reasons. Many, however, are just excuses, given by people who are simply scared to face certain realities.

bird leading other birds

The Father of the Three Circle Model

In September I was in Niagara-on-the-Lake for the annual Family Enterprise eXchange (FEX) symposium, featuring John A. Davis as one of the keynote speakers.

If you don’t know who Davis is, he’s one of the co-creators of the Three Circle Model, of which I am a big fan.

See: Three Circles + Seven Sectors = One A-Ha Moment

He regaled the crowd with a presentation about the “Future of Leadership” and then led a discussion with Philippe DeSerres that was also very well received.

But my take-home message from his talk was something he only mentioned briefly in passing, right near the end, which was the inspiration for this post.

The Money Quote

He was talking about getting the timing right when it comes to transitioning the leadership of a family business.

He noted that more and more these days, and from his decades of experience as a leader in consulting to this field, there is one factor that trumps the other.

According to Davis, it makes more sense to make the leadership transition of a family business when the rising generation is

Ready To Lead,

than to wait until the current generation is

Ready To Leave.

Notably, he took the time to spell it out, i.e. “lead, l-e-a-d” and “leave, l-e-a-v-e”, just to be sure we all understood him.

I understood. I hope you do too. But just in case, I will continue…

A man leading other people

Too Soon or Too Late

At the outset of this blog, I noted that these two topics are often connected.

The biggest way this happens is that the current leaders will sometimes subconsciously hold back on giving the rising generation the opportunities to show what they can do.

And one of the major reasons that they do this is because of their own desire to remain important.

What Else Is There?

So many business leaders attach so much of their identity to their role as the leader of their business.

I like to think that this might just be too narrow a viewpoint.
Let me explain. The key to this lies in the Three Circle Model.

Note that the Business circle is only one of the three systems that intersect, and that the “big picture” also includes Family, and Ownership.

Step Back to See the Whole Picture

If the leader of the “business” steps back and looks at the whole picture, including the Family and Ownership systems as well as the Business system with which they are already intimately familiar, they will see many other, greater, opportunities.

If the business is a huge success, yet the family falls apart and the owners end up in a dispute that has various family members “lawyering up” against each other, then just how important will the business success have been in retrospect?

Three Circle = Three Systems = Three Leaders?

If you’re trying to create a true multi-generational family business, you cannot neglect any of the circles.

Each circle ultimately needs its own governance structure, and likely its own leader, or leaders. Someone needs to foresee all of this and line up and prepare those future leaders.

There comes a point in the life cycle of any business leader when their focus should shift from running a successful business to overseeing a complete enterprising family (i.e. all 3 circles)

So you built a great business, congratulations.

If you want it to continue to survive as a family enterprise for generations, you’ve still got more important work to do.

Stop working IN your family business,
Start working ON your business family.

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Marshmallows and Filet Mignon

This week we’re looking into one of my favourite subjects, and we’re going to do it from a couple of different angles.

We’ll start with some psychological research done at Stanford University about five decades ago, and we’ll end with a real life example from my own experience.

The subject is delayed gratification, and I have long maintained that it is the secret to success for most people.

 

I Want It Now

The average attention span of people has been shrinking for decades, and this has only added to many people’s expectation that everything be there for them the second they want it.

I will not get into any debates about young people these days being worse than we were at their age.

I believe that every generation has people from across the spectrum and I have no desire to kick any of these proverbial hornets’ nests.

 

Who Wants a Marshmallow?3 marshmallows on a pink table

Walter Mischel was a psychologist at Stanford who came up with the “Marshmallow Test” back in the 1960’s.

Mischel passed away a few weeks ago, which has resulted in renewed interest in his work, so if you Google his name and the word “marshmallow”, you will surely come across lots of interesting things to pursue (once you’ve finished this blog, of course).

His subjects were children around 5 years old.  The “test” was constructed this way:

Children were brought into a room and given one marshmallow and told that they could eat it now.

Or, if they could wait 15 minutes while the experimenter left the room, and NOT eat it, then they would receive a second marshmallow as a reward.

 

Not As Easy As It Sounds

Apparently only about 200 of the 600 subjects managed to hold off on consuming the treat for the 15 minutes (which surely seemed like an eternity for those who succeeded).

There are lots of interesting videos you can find showing how the kids struggled with the temptation while alone in the room, mostly from more recent versions of the experiment, conducted to replicate the initial results.

 

The Take-Home Message

If you’ve understood that delayed gratification is not easy, that’s great, but you’d still be missing out on the larger message of the research.

You see, they followed up on the kids over the years and tracked their success in life, and they discovered something that I hope you’ll really get out of this story.

The kids who were able to restrain themselved for those agonizing 15 minutes also happened to live much more successful lives, on just about every dimension they measured.

If you can delay your need for immediate gratification, that will help you for your whole life.

 

Good Things Come to Those Who Wait

So where do you think that those young subjects got that ability to be patient and resist temptation?

I won’t get into the specifics because I’m not a social scientist and so much of this ground has been covered by those much more capable than I am in this area, but I have a very short answer of my own.

 

Their Parents.

Now I can’t say if it’s in their DNA or if they learned from observing the behaviours that their parents modeled for them,  (or both) but they got it from their parents, one way or another.

 

The Steak Versus the SizzleFilet mignon - Steak

Here’s my real world example.

Years ago, my Dad had retired to a small farm where he raised breeding cattle.  He hired some of the locals to do much of the work.

He paid his employees nicely and also got into the habit of giving them an annual bonus, paid in meat.

Every year, a couple of animals would “fall into the freezer” as he liked to put it.

 

Did You Try the Meat Yet?

My Dad and I were very much on the same page with many things, but our viewpoints were also quite different.

But when he was making a point, I could usually see him coming a mile away.

One day he relayed this story, about an exchange with one of his workers, the day after they had picked up their side of beef from the butcher.

 

The Look of Dismay

Dad asked if they had a chance to try the meat.

“Oh, yeah, it was great.  We had the filet mignon”.

I can still see the look of dismay, and Dad shaking his head in disbelief.

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Family Office: “WHAT” vs. “HOW”

Family Office: “WHAT” vs. “HOW”

A few weeks ago, in From Family Business to Family Office, I mentioned that I’d start writing more about the family office world. Being a man of my word, here we are again.

I had a bit of an issue choosing my blog title, though.

I began by thinking about the idea of “Strategy” versus “Tactics” in the family office space.

But my bias is to try to stay away from “jargon” terms and use the simplest possible words, at least most of the time.

 

A Thousand Words

Of course when it came time to select a photo to go with this post, terms like “strategy” and “tactics” garnered more interesting search results from Shutterstock than “what” and “how”.

At the end of the proverbial day, though, whether we use the simple questions or the business jargon terms, we’re talking about the same issues.

Ten Years Flew By

The most important idea here is this:

You need to recognize the difference
between the strategy (the “what”)
and the tactics used to accomplish
that strategy’s goals (the “how”).

If you get nothing else out of reading this, my Dad would’ve been pleased. What does he have to do with this, you ask?

It has now been 10 years since he lost his final battle with cancer, and I cannot count the number of times his wise words have been summoned to the front burner of my brain.

“Let’s figure out what we’re trying to do first, and then we can figure out the best way to do it.”

 

Family business office

 

The Family Office (The “Who”)

A family office is typically composed of people, from one to a handful, or sometimes even dozens. (Key variables include the size of the family, the amount of wealth they control, and the level of complexity involved)

The employees of the family office should be working for the benefit of the family, and so they should be concentrating on the tactics, the “how”, and be less involved in the strategy.

Ideally, the strategy will have been worked out by the family, before the family office people get too far down the road of implementing the best tactics.

 

It’s Complicated

I used the term “ideally” because I know that this is often not the way it works in the real world.

But that typically isn’t the fault of those who work for the family office.

Much like the ideas I wrote about in FamBiz: Management vs. Governance, different groups of people have different roles that they should be playing.

When the people who are supposed to play those roles don’t play them, then others will invariably step in and assume those roles.

 

Benefits Come with Responsibilities

Families that have a family office (FO), or who are clients of a multi-family office (MFO), have set up this relationship so that the FO or MFO can serve the needs of the family.

The decision to go this route may have occurred last year or last century, and it may have been decided by this generation of family leaders or by their parents or grandparents.

The fact remains that it was done for the benefit of the family members.

And as we all know, with benefits come responsibilities.

Family business Work

Where Are We Going?

I’m going to take a guess and say that most readers are fine with what I’m saying here, but that they may be wondering what my point is.

So here’s where I’m going.

I think that relationships between families and their family offices tend to be out of balance, or off-kilter.

My anecdotal evidence suggests that family office employees often control not just the tactics, but much of the strategy too.

This can be mitigated when the FO includes family employees, but that can also make things worse.

 

Family Alignment: The Missing Link

As I stated above, this is not typically the “fault” of the family office, but usually that of the family.

They need to intentionally work at getting the entire family aligned together, in order to make the decisions that the family office should then be executing.

 

The WHAT, the HOW, and the WHO!

Getting a family aligned so that they can effectively drive the strategy of their family office does not just “happen”, all of a sudden, or all by itself.

It begins with the recognition that it is necessary for the long term good of the family and its legacy.

Recognize anyone?

See also: The Exponential Magic of Family Collaboration

 

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From Family Business to Family Office

Welcome to a new theme here at Shift your Family Business, (the website). In some ways it’s long overdue, and in others, well, it’ll be more of the same.

 

I’ve begun to realize that I haven’t written nearly as much about the Family Office space as I have about Family Business.

 

Of course there’s a huge overlap of topics that suit both areas, and these have been covered here at length.

 

But for some reason, I get way more questions from families about operating their businesses than from those who’ve made the transition to managing and transitioning their wealth.

What’s the Difference?

If you stop anyone on the street and ask them what a family business is, everyone will give you some kind of answer that would score at least a few points on any grading key.

I daresay that if you asked “what’s a family office”, a lot more people would ask you to repeat the question, or would have only some vague idea of what you were asking about.

I consider myself to be pretty good at explaining complex things in simple terms, and this one is a big challenge.

In the simplest explanation, a family office is a formal structure set up by a family to manage the family’s wealth and everything that goes with it.

Family Business Office People Working
I’m Too Sexy for my Wealth

In the last decade or so, the term “family office” has been discovered and co-opted by many professionals who work in the area of wealth management.

I come across examples regularly that make me shake my head, where I see this very broad term used as a label to describe a very narrow service offering.

The image I have in my head is of a hot dog stand with a sign that says “smorgasbord”, where you can have your hot dog with mustard, or ketchup, or both!

OK, but where’s the rest of it?

Not for the Mass Affluent

Financial institutions typically like to attract the clients with the most wealth, and they also have products and services geared to lower levels of wealth too.

There are terms that get used in their industry to segment different wealth levels, and they kind of make my skin crawl when I hear them.

There are the “mass affluent” with “only” a few million dollars, then you get to HNW (high net worth) and eventually UHNW (ultra HNW!)

Who qualifies for what level of services varies over time and from one institution to the next.

Let’s just say that family offices have historically been for families in the upper reaches of society, and so anyone who markets their services as “family office” is trying to be seen as more “big time”.

That, and the hope that families will use their services because then they can talk about “their” family office at cocktail parties, I guess.

How Do They Get There?

Historically, family offices are set up once a family has achieved a certain level of liquid wealth, and/or a certain level of complexity.

Liquid wealth is money that can be quickly transferred from one asset to another, like cash, stocks and bonds.

Family operating businesses and real estate are usually considered “illiquid”.

The most common way a family arrives in the land of a family office is after a liquidity event, i.e. the sale of a family business.

See: Liquidity Events in a FamBiz: Pros and Cons Part 1 and Part 2

 

Custom Made Mystery

But every family is different, and so every family has different needs.

Most families are not 100% sure of what they need, and they have an over-abundance of providers who are trying to convince them that “I am your solution”.

There’s an expression in family office circles that “If you’ve seen one family office, you’ve seen ONE family office”.  There are no two the same, nor should there be.

Family Office

Demystifying Family Offices

From discussions with families, acquaintances, and peers, I realize that some demystification is overdue.

So look for more frequent posts on this fascinating subject in this space going forward.

 

Looking to get a head start?

– See chapter nine of my book

SHIFT your Family Business, (the BOOK),

Chapter 9: Towards a Family Office Mindset

  • See this article by Jaffe and Grubman

“Development Stages of a Single Family Office”

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Wanted: Purpose, Passion and Community

Wanted: Purpose, Passion and Community

 

When I was in Denver a few weeks ago for the annual Rendez-Vous of the Purposeful Planning Institute, I met a bunch of interesting people, as usual.

Having been there the past five years, I’m starting to see many familiar faces each time I return, which is great, of course.

And I always meet interesting new people every year as well.

Attendees come from a whole bunch of different backgrounds and professions, and occasionally I meet folks from areas where I’ve had no contact or experience.

Such was the case with the young women I met from Koplin Consulting.

Addiction TreatmentCommunity in family business

Koplin offers in-home counselling, treatment and recovery services for those working through addictions.

I’m fortunate to not have ever been in the market for those services for my family or for client families – yet (?).

I ended up at the same table over meals with all three of their representatives at the conference and I found them very refreshing.

During one of these discussions, it was mentioned that the key to successful recovery usually involves people finding strength in three places: Purpose, Passion and Community.

The “Trifecta”

When I hear about something that works in one area of life, I’m compelled to see if it could also apply elsewhere.

So today I want to look at those three elements from the perspective of families who are hoping to transition their wealth down through the generations.

I just searched each of those words on my website to confirm that I have actually addressed them all in this space over the years, several times, but not yet in the same post.

Family Purpose

For a family to be successful in passing down their wealth to the rising generation, it’s really helpful if they have some sort of shared purpose.

When a family undertakes the work necessary to figure this stuff out, they often start by trying to analyze everyone’s values first.

From individual values, they typically try to identify a handful of common values that everyone in the family can agree on.

Finding a common purpose becomes easier once you’ve decided on those shared values.

Individual Passions

Just like everyone has their own set of values, each individual will have their own passions.

But unlike the values, where we hope to find a few in common, to help lay out a clear family purpose, the individual passions should be looked at for each person separately.

Everyone has different things that make them tick, talents that they exhibit that set them apart, and activities that they do so well that when they’re doing them, it doesn’t ever feel like work.

Human Capital

The special talents, skills and passions that each person possesses are part of the family’s “human capital”, and ways should be found to leverage each person’s individual strengths.

Families that are able to harness the best from every member of the family will have a much easier time keeping their family wealth together for coming generations.

Part of a Community

When it comes to the “community” aspect of a family, I think the most common element is how much time

family members actually spend together.

Time with the family

And while that isn’t something that you’d measure with a stopwatch, there really is no substitute for “face time” in the old sense of the word.

Technology has made it much easier for people who are physically separated to be in regular contact, and that’s great, but to be successful at keeping their wealth in the family over generations, some regular contact is a prerequisite.

Wanting to Spend Time with Family

As I work with various families, it’s pretty easy to see which ones have got the community aspect figured out and which ones never will.

In many ways, it has more to do with wanting to spend time together, and looking forward to lots of interaction than it does with the amount of time they actually spend as a group.

Putting it All Together

Families wanting to benefit from the Purpose-Passion-Community idea can do so by spending time together working on their common values to drive a shared purpose.

They should allow each member to work their own passions within that, though, and not try to make everyone the same.

There’s no substitute to spending time together, with everyone bringing their best self. Good luck.

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Accountability in the Family Business

Back in June, in Five Things FamBiz Can Learn from Fortune 500’s, I noted a few ways Family Businesses could benefit from emulating large corporations.

After it went out to subscribers, I got an email from an old friend, suggesting a 6th thing I could’ve added: Accountability.

So I explained to “Gary” that my lists always stop at 5 (much to my wife’s consternation) and maybe I could tackle accountability in a future post.

 

And here we are…

 

Noticeable In Its Absence

 

Gary doesn’t come from a business family himself, but he did marry into one, so he’s familiar with some of the dynamics involved.

His email to me included this sentence:

“After placing individuals in the right “seat” for them to succeed, you must hold them accountable for both the execution of the strategy and corresponding results.”

This made me wonder if some of Gary’s in-laws were perhaps not being held sufficiently accountable for their execution and results.

Accountability is something that’s much easier to notice when it isn’t there, and often especially so by outsiders whose workplaces are much more formal than many family businesses.

 

General Accountability… with Exceptions (!)

 

Of course, there are some cases where lack of accountability causes more problems than others.

You may be inclined to think that as long as there is some accountability in a business, then that’s better than none at all.

Well, that would make perfect sense in many cases, but maybe not in some family businesses.

If you’ve ever worked for a company where everyone is held to account, except those who have the same last name as the boss, then you know what I mean.

 

Formality is your Friend

 

One of the bad raps that family businesses often get is that they are not run as professionally as they should be, and that’s often true.

I like to think that that it has more to do with the size of the company than whether it’s family-owned and operated.

A strong correlation between firm size and formality makes more sense to me than one centred on the level of family involvement.

 

Family Business Relations

Minimal Standards for Success

 

Gary mentioned strategy and results, so let’s look at those.

In the original post, I mentioned “Executing on Strategy” as my fourth point.

Now IF the business has a clearly understood strategy, AND those charged with its execution have the resources available to do their jobs effectively, then it makes perfect sense to hold the people accountable for the results.

Unfortunately, in too many family business cases, people can easily argue that they’ve been set up for failure because of a lack of clarity and/or resources.

 

 

Give Me an Another Chance

 

Nobody’s perfect and everyone deserves a second chance, right?  And family businesses are supposed to have more of a long-term orientation, so let’s not be too quick to judge, right?

The point where a lack of accountability really rears its ugly head is when it goes on and on, year after year, and nothing changes.

It’s never easy to have to come down hard on relatives, but at some point, it can become a matter of survival for the business.

 

Family Business Relations

Direct Reports

 

One of the simplest ways to minimize this issue is to try to make sure that nobody reports directly to a parent or a sibling.

In smaller companies, this can be almost impossible, but wherever it can be done, this should be a no-brainer.

 

 

Problems at the Top

 

One place that you might not expect there to be a problem with accountability is at the very top of family business, especially when the founder is still running the show.

But the fact that one person feels that they’re accountable only to themselves will probably catch up to just about every person at the top.

Most founders are reluctant to set up a board of directors for their business, because they prefer to run things as they see fit, by the seat of their pants, and never need to answer to anyone else.

 

Who can blame them?

 

The A-Ha Solution

 

At some point, when (if?) they realize that they are in fact mortal, they might wake up to the fact that once they’re gone, a board will be just what the doctor ordered for the company to succeed.

 

So why not set up the board now, to instill

accountability for the next generation, later?

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Great Nuggets from Denver

Great Nuggets from Denver

Regular readers of this blog know that there’s one annual event on my calendar that I look forward to more that most.

I just got back from Denver, where I spent most of the week trying to milk as much as possible out of the conferences put on by the Purposeful Planning Institute (PPI).

Rendez Vous is the one time each year that I “fill up” with great ideas and input from other members of my “tribe”.

Working with families on the difficult tasks of transitioning their wealth from one generation to the next can be lonely work for some, so getting together with others who do similar work is energizing.

 

One Nugget at a Time

This was my fifth time at Rendez Vous, and after each one in the past I’ve used this blog space to capture and share some of my thoughts and take-aways.

(There are links at the end to those posts if you’re interested.)

For 2018 I’m taking a “random” approach, sharing some nuggets from my notes from at least a dozen of the thought leader speakers and breakout session leaders.

Here goes…

 

– Difficult Subjects: 

From Emily Bouchard, two of the biggest subjects in everyone’s lives are also two of the most difficult to discuss: Money and Death.

This work involves both of them, so it’s no wonder that bridging those subjects with clients is difficult.

But that doesn’t mean we shouldn’t take up the challenge.

 

– Business Exits:

From John Brown, transitions usually involve owners exiting their business. But the owners want and need to exit on “their own terms”.

If we want to be useful to them, we need to recognize this, and focus clearly on “owner-centric” exit plans.

 

– Financial Transitions

From Susan Bradley, wealth transitions usually present a lot of confusion to those affected. Within that confusion also lies an opportunity.

Each person needs to “figure it out”, and that often necessitates time and help. If we want to help, we need to recognize that everyone figures it out at their own pace.

 

– New Vocabulary

As usual, John A. Warnick, the founder of PPI, had plenty to share with his tribe, including an update on the new vocabulary required to advance how we work with “Legacy Families and Families in Business”.

He’s working to compile, clarify and disseminate a primer on the words we use in this space, to improve our ability to work with such families more consistently.

 

– Five Voices

From Mark Hartnett, I now know about Giant Worldwide’s Five Voices tool, and that based on it, I’m a Connector, as well as a Nurturer.

And my nemesis is the Pioneer, perhaps because that was my Dad’s main voice.

 

– Don’t Try to “Change” Families

From Matt Wesley, I better understand the folly in trying to “change” any family.

Any attempts to “violently homogenize” a family to fit into a particular way of being is bound to fail.

 

– Book Club Benefits and Bird Language

 From Amanda Weitman, I learned that creating a simple “Book Club” within an organization can have benefits far beyond what anyone could ever had predicted in advance.

From Jon Young, I learned that those who master an understanding of bird language also discover the secrets to sensory integration.

 

– Appreciative Inquiry and the Importance of Voting

From Courtney Pullen, I learned how quickly one can go from “I have a problem” to “I AM the problem”, and how appreciative inquiry can help resolve that uncomfortable situation.

From Ian McDermott, I better understand the importance of how I “vote” with my Time, Money and Energy, and that “Trusted Advisors” become so when they “trust themselves”, making them “congruent”.

 

– Adult Development Levels

From Cathy Carroll, following up on Christine Wahl, I now realize that one can only properly advise others up to our own level of adult development.

 

– Purposeful Planning as a Career

From Michael Palumbos’ panel of industry veterans (Bradley and Pullen, plus Bruce DeBoskey and Kristin Keffeler) I know that we need to keep showing up “dynamically”, should avoid billing for our work by the hour, and not expect many referrals from lawyers or CPA’s.

 

– Last But Not Least, Jesus  

From David York, a perennial favourite PPI speaker, I know that Jesus is considered one of the greatest teachers of all time, yet, according to the bible, he asked many more questions than he answered.

And his most frequent question was “What are you looking for?”

If you’re looking for a tribe to support you in this kind of work, come join us in Denver next July.

 

 

My blog posts from previous Rendez Vous:

2017    Sharing Some Rocky Mountain Kool Aid

2016    Sweet Secluded Rendez-Vous 

2015    Rendez-Vous with a Purpose

2014    The Rising Generation in Family Business

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Rest in Peace, While You’re Still Alive!

Rest in Peace, While You’re Still Alive!

Every so often I have an “A-Ha” moment as a result of seemingly random discussions that occurred weeks apart.

Writing this blog allows me to process these in some sort of useful way.

Today’s subject is “Peace”, which came up in conversations with my coach, Melissa, even though we typically don’t spend much time on that subject.

 

Inner Peace Through Meditation

After months of hearing good things about meditation, I brought up the topic during one of our weekly coaching sessions.

Melissa mentioned an App called “Insight Timer” that she’d been using for a while, and suggested I try it out.

A good coach will mention plenty of ideas that a client might want to look into, and then it’s up to the client to act on them, or not.

I did act on this one, downloaded the App into my phone, and tried it out.

Long story short, I’m a big fan, and maybe even an addict.

 

What Was I Looking For?                                  

A few weeks later, I mentioned that I was using Insight Timer a couple of times a day, and I was enjoying the ways it was making me feel.

Melissa noted that she thought it was pretty cool that I was working on finding “inner peace”.

“Wait, what?”

I never said that I was looking for inner peace (did I?).

The truth is, I didn’t know what I was looking for when I decided to try it, and I’m not sure that I know what I found either.

 

Mr. Legler Is Resting in Peace

Weeks later, as we were starting our weekly call, she asked me something along the lines of “So, how is Mister Legler doing this morning?”

I pulled out the old “Mr.Legler? That was my father!” line that I often use when I feel like someone is being more formal than necessary.

“And, he died in 2008, so I guess he’s resting in peace”.

There it was again. Peace. “A-Ha”.

 

Seek and You Shall Find

So many questions were now bouncing around my brain, and, as usual, that meant that I’d eventually blog about this.

Did Mr. Legler need to die to find peace?

Did he find it there? Or did he find it before?

What about me, am I finding it?

Was it even what I was looking for, don’t I already have it?

Do you need to seek peace in order to find it?

Do some people search for it and never find it, while others just sort of have it without much searching?

 

Multi-Generational Peace Process

As usual, I’ll now attempt to take the subject of this post and introduce the family business angle, because that’s the area in which I claim to have some subject matter expertise.

Business families, almost by definition, involve people from different generations.

One of their goals is typically to find ways for the family business and/or wealth to move smoothly from the senior generation to the rising generation.

Okay, so what does “peace” have to do with all this?

 

Everything and Nothing

The quick answer is that peace has nothing to do with this at all. It’s the easy answer, and the one that many people would prefer.

Of course, that means that I’m interested in the other side, the one that says peace has everything to do with it.

Many families struggle with the important discussions and planning that are necessary to effectuate successful inter-generational wealth transitions.

 

Peace, Love, and Harmony

Families too often delay talking about how they will handle all the details around who will get what, and who will do what, precisely because they are worried about upsetting the peace and harmony that exists in the family.

In fact, they’ll do anything to avoid upsetting the peace.

In many cases, however, the harmony that seems to be there is actually rather fragile, precisely because of the uncertainty around what’s going to happen after the senior generation has passed.

 

Settle it Now, Reap the Peace Dividend

The lack of discussion leads to lack of clarity and adds uncertainty to both generations.

Those who take care of these things in advance reap what I’ll call the “peace dividend”

I like to think that Mr. Legler found peace while he was still alive because he had put his affairs in order and communicated everything to his family well in advance.

Don’t forget that peace dividend is shared by both generations.

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Caring, Mattering and Meaning in Family Business

Caring, Mattering and Meaning in Family Business

This week I’m going to stay with my recent philosophical slant and write about three related subjects I’ve come across, that all deal with the human aspect of business families.

 

I Don’t Care How Much You Know 

I have some “go to” expressions that I’ve picked up over the years and I sometimes have a tendency to think that they’re universally known.

Then when I pull one out in conversation, I get a reaction that makes me realize how useful it really is.

I used one recently regarding the way experts are sometimes dismissed by their target clients as being too much of a “know-it-all”.

The expression I love for that is:

“They don’t care how much you know until they know how much you care”

 

Stakeholder Lives Matter

A few weeks later, I was reading the weekly newsletter of the Family Firm Institute, The Practitioner, which featured a piece aimed at trustees who serve on boards of directors, by Patricia Annino.

The following quote jumped out at me:

“Human nature tells us that if you can’t matter in a positive way, you will matter in a negative way because what is most important is to matter”.

I’m not sure that I ever heard it put that way before, but it really struck me.

The next sentence is also worth quoting, because I don’t think I could paraphrase it any better:

“Human nature also tells us that most people strive for recognition. Having voices heard and questions answered are critical to the ongoing dynamic.”

 

Part of the “One Big Happy Family”

Being part of a business family can be tricky at times.

There’s a group of people, with a common family bond, each with different interests, talents and abilities.

There are also lots of roles to play, in the business, in the family, and for some people, in both.

And at the end of the day, every single one of them

wants to, and even needs to, matter, in some way.

 

Purpose and Meaning

A few weeks ago I heard Kevin McCarthy, author of a number of books about “Purpose”, speak at a conference about family wealth.

He had a great quote right off the top of his presentation that struck me too. Here it is:

“The Enemy of Wealth is Meaninglessness”

Wow.

For some reason another expression that came to mind immediately was this one:

“The opposite of love is not hate, it’s apathy”

 

“Frenemies”?

I don’t know that I fully agree with the word “enemy” in McCarthy’s quote, but I know what he was getting at.

And that’s the fact that people without meaning will quickly destroy wealth, if they have access to it. So in that sense I guess “enemy” works.

But if we look at some opposites, would that make “meaningfulness” the “friend of wealth”?

I’m not sure I’d want to have to make the case for the correlation between meaning and wealth.

 

Wealth OR Meaning?

What happens if we look at the question of which one people would choose, if offered a meaningful life without wealth or a life of wealth without meaning.

I’m tempted to guess that many would quickly opt for the wealth without giving the question much thought.

I’m also inclined to think that many people who made that choice would soon regret it.

 

And For Your Offspring?

Sometimes things can be clearer to us if we remove ourselves from the equation, and instead ask what we would choose for our children instead.

So if you could offer your children a life with lots of meaning, or one with lots of financial wealth, which would you choose for them?

Of course, most people would hope that their kids would end up with both, but I think that too many people likely believe that if you have the financial wealth, the rest will take care of itself.

 

Not So Fast

I know for a fact that there are many members of families that are very comfortable financially who do not feel like they have a lot of meaning in their lives.

Those same people likely also don’t feel like they matter that much to their family.

And if that family has advisers who are great at their specialty, those family members likely don’t care how much they know.

Financial capital is always the biggest focus, but families should worry much more about their human capital.

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Questions of Discernment in Family Business

Questions of Discernment in Family Business

 

Discernment: Noun

  1. The ability to judge well
  2. Perception in the absence of judgement with a view to obtaining spiritual direction and understanding (in Christian contexts)

This week’s blog is sponsored by the word “Discernment”.

Okay, so that’s not literally true, as there are no sponsors of this blog. Maybe I just had a little Sesame Street flashback, and should have said that it’s “Brought to you by the letter D”.

I keep a file of blog ideas and every couple of months I put together a calendar of topics. This is the first time that I’ve noted my subject idea with a single word, i.e. discernment.

 

Bowen Family Systems, Spring Conference 2017 

Discernment first popped onto my radar screen over a year ago, in Washington DC at the Spring Conference of the Bowen Center.

Murray Bowen’s theory has eight concepts, but the one he called “Differentiation of Self” is both the “biggest” one, and one that people have the most trouble truly understanding.

Some Bowen fans, myself included, tend to explain it to newcomers as “emotional maturity”.

At this conference though, some speakers proffered the word “discernment” instead.

Hmmmm, maybe they were on to something. But I also wonder if most people “get” discernment right off the bat.

(See: A Systematic Business Family? for my blog on that event.)

 

Definitions

I began this post with the definition that I got when I Googled “discernment” and found it both sufficient and interesting.

“The ability to judge well” is a great start to understanding what I’m getting at, and I feel like it fits with the “emotional maturity” part too.

Number 2, “Perception in the absence of judgement” almost threw me off at first, but then it made me flash back to my post “Judgement, Not Judgement” from back in 2016.

The take-home message there was that having good judgement is laudable, but being “judgemental” is not.

The spiritual and Christian angles also intrigued me.

 

Questions to Help Understand Discernment

In order to get a handle on discernment and how it applies to business families, let’s look at some basic questions and examine them from a discernment angle.

I’ll start with questions requiring low levels of discernment, and then move along to those that call for higher and higher levels.

 

– “WHAT” Questions

Asking about “What business are we in?” or “What markets should we look to enter?” are simple and relatively straightforward for any business.

They are also necessary to consider from time to time.

They require good business sense, but don’t necessarily require much in the way of discernment.

 

– “WHO” Questions

Then there are questions about people, like “Who should we hire?” and eventually “Who should take over when Dad retires?”

Now the need for discernment gets ratcheted up a bit.

And in some sort of “meta” way, we are looking at judging people about their judgement!

Once you get into questions about people, things usually get a bit trickier, and emotional maturity is often called for to make the right choices.

 

– “WHEN” Questions

Those “Who” questions can be tough, but so can those around timing, like “When should we start working on succession?” and “When should we start having family meetings?”

Regular readers will quickly recognize my bias around these topics, and that’s okay too.

As long as we’re on the topic of my biases, let me be clear that my preferred answers to those questions is always sooner rather than later.

There’s a certain maturity required to start tasks that have been kicked down the road long enough.

Combining “Who” and “When” questions, well, now we are getting into the area of “How”.

 

– “HOW” Questions

To me the types of questions that require the most discernment are about “How”, like “How do we make sure we include everyone?” and “How de we make sure we follow through on all our plans?”

I’m reminded of the expression “Ideas are a dime a dozen”, which is all about simple “What” questions.

Execution and implementation are the key to making any idea work, and that’s where you need people with discernment.

A “good sense of judgement” requires plenty of maturity and wisdom around the all of the “Who”, “When” and “How” questions that are part of getting things done.

 

Whose Discernment Are You Counting On?

If you’re a family business leader, and you’re hoping for your family and business to be successful in the long run, finding people high on the discernment scale should be a priority.

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