Stop Kicking the Can Down the Road

When speaking about the kind of work I do with families, the way I explain myself is always evolving.

When I got into this a little over a decade ago, much of what I said had to do with how I was hoping to have a positive impact on client families, but it was more theoretical then.

As I have now served many families, the vocabulary and expressions I use today are based on the experience I’ve gained over the years, and are more refined.

As I use certain expressions with prospects, clients, and colleagues, I’m always conscious of their reactions, so I can see what lands well and what resonates best.

I’ve recently been using a bit of a one-two punch that I’m starting to really like, and so that’s where we’ll be going this week.

Having Important Conversations with Family

The first of those punches is to simply note the fact that families really just need to learn to have conversations with each other.

The idea of speaking together, regularly, about subjects that are important to their future, is actually relatively easy for people to grasp.

When you contrast that with not speaking, not sharing, not setting expectations, not asking questions, not learning to agree on how you want things to play out, it isn’t difficult to get people’s heads nodding.

So the first part of my explanation of the work I do is all about noting that families should be having more conversations about their future, especially as it relates to the ownership and management of their wealth.

More silence and secrecy is not what the doctor ordered.

This Isn’t a Surprise to Anyone

So if the first punch is about simply getting families to have more conversations, what’s the second punch?

I’m glad you asked.

After mentioning that conversations among family members is the key, I now always follow up with the fact that these families already know that they should be talking about these subjects.

“Every single one of these families already knows that they should be doing this”, I typically say.

And that of course begs the question about why they aren’t doing this, if they already know that they should?

Well, I also know that I should exercise more and eat less, and yet here we are.

Really? I Never Thought of That!

I can promise you that when speaking with family members about the importance of having more discussions about such matters, I have yet to have a response like “Really, we should be talking about this?”, or “Hmmm, I never thought of that”.

Everyone knows that such conversations would be useful to have, and yet what so often happens is that the leading generation frets about how to have such discussions productively, while the rising generation’s questions about their roles and expectations continue to go unanswered.

The simplest answers as to why families don’t have such conversations are that they don’t know how to start them, and that they fear they will not go well.

Many times it’s partly because such conversations were in fact attempted, but for any number of reasons, things did not go well, so any ideas of restarting the process are met with serious “second thoughts”.

An Unbiased Non-Family Facilitator to the Rescue

My Dad called a family meeting in 1985. It was not well received, as he decided to run it himself, and not to engage an unbiased non-family facilitator.

Our next family meeting did not occur until 2006, and that was only in response to his cancer diagnosis.

These meetings can get into some deep subjects, and families typically don’t have a lot of experience in handling such topics on their own.

A huge part of what a facilitator brings is to take charge of the process and make sure that everyone feels safe, so that everyone can feel heard.

This can take a few meetings to achieve, but a good facilitator will normalize this fact and accompany the family on their journey, at whatever speed and pace makes sense for them.

Strive for Progress, Not for Perfection

It takes time for families to learn how to be together while addressing important topics around the future of their wealth.

It can also take a while for them to recognize that they can in fact make progress on this journey.

A facilitator helps with all of this.

The End Result of a Great Wealth Transition

This week we’re looking at a subject from a bit of a different angle, as I’ve decided to share my thoughts on a recent book that I want readers to be aware of.

As an avid learner, I consume my share of reading material every year, but occasions where I dedicate an entire blog post to one particular book have been pretty rare.

Well, Dr. Tom Deans has just published his third book, The Happy Inheritor, and based on the sales of his previous efforts, I expect that many people will read it, if they haven’t already.

I’ve been a fan of Deans’ work since I met him over a decade ago, and we’ve shared thoughts and conversations over the years, as we both toil in the field of family wealth transitions, and are both proud Canadians.

Feeling Compelled to Write and Share

Deans recently told me that he had not planned to write a third book, but then he seized upon a subject that he felt that he couldn’t let go of.

As an author and public speaker, he kept meeting people from wealthy families who were failing to follow what to him were some pretty straightforward recommendations when planning their wealth transfers.

Some great clues as to what to expect from the book come right from the front cover, where the secondary title reads “How successful families prepare heirs and transfer wealth”.

The fact that we both agree on the need to prepare heirs shouldn’t come as much of a surprise to my regular readers.

But there’s another line on the book’s cover that may seem a bit further afield from my writings, to wit, “Many people transfer family wealth with great care and joy, while others use it to control and destroy”.

While I can write provocatively at times, that’s a line I would not have come up with on my own.

Regular Family Meetings

If I had to boil the book’s message down to one statement, it would be something like this:

The best way to ensure a happy inheritance is to make sure that the whole family meets together regularly to discuss their wealth transfer plan, “with kindness, care and joy” (quote from the back cover).

My regular readers will recognize this recommendation, as it is something I’ve repeated here in various ways over the decade plus I’ve been sharing my thoughts on this overall subject.

While some families hope that they can accomplish a lot by having one single big meeting, where they download the leading generation’s “instructions” as a monologue, Deans seems to agree that a series of regular forums, where ideas are discussed between generations, is a more durable solution.

Beware the Covert Narcissist – Hiding in Plain Sight

I would be remiss in sharing my thoughts on The Happy Inheritor if I skipped over a very important secondary theme that Deans tackles throughout the book.

I already hinted at it above, and it’s all about the fact that in some families, there are some figures who are actually working towards a more nefarious goal, and enjoy using their wealth to “control and destroy”.

He spends a good portion of the book detailing these “covert narcissists” that exist in many families, and the fact that these people are often hard to detect because they always come off as nice and agreeable.

These people always say nice things and seem very friendly, yet they quietly go about trying to control everything and everyone in harmful ways.

These folks don’t exist in every family, thankfully, but they are more prevalent than you might imagine, and they can completely kibosh wealth planning for their family.

Understanding Appropriate Expectations

When you get right down to it, planning for the intergenerational transition of wealth in a family comes down to everyone understanding what’s expected.

As I wrote in Striving for the All AND Nothing Inheritance, most parents would be thrilled to know that they could leave all of their considerable wealth to their offspring without worrying whether or not they could handle it, while at the same time understanding that even if they left their next generation with nothing, that would also turn out alright.

The best way to make sure that appropriate expectations are met, is to talk about them together on a regular basis, in structured family meetings, ideally with the help of an independent facilitator.

Family Governance Is a Contact Sport

Transitioning a family’s wealth from one generation to another is my beat, and every week I take a stab at adding some useful perspectives to this work.

Doing this work is rarely easy, and I like to think that all of those who work this space like I do, in support of families trying to succeed, can and must learn from one another.

Recently in Building Processing Time into your Process, I noted how one peer group I’m part of likens family work with skiing only the double black diamond runs.

In my weekly posts I often share things I learn in peer groups, but I just realized that one of my regular conferences offers something I don’t get anywhere else.

A Conference Like No Other

I just returned from the annual conference of the Institute for Family Governance in NYC and once again, it did not disappoint.

But I’m only now coming to grips with what makes it so different from the other annual family enterprise events on my calendar.

I get a lot out of Family Enterprise Canada’s Symposium, the RendezVous of the Purposeful Planning Institute and the Family Firm Institute’s annual conference.

But IFG is different and it’s because it’s just so damn real.

The organizers manage to bring together real people from real multi-generational family businesses, who share real stories.

Because family governance is very much a contact sport, some of these stories are not necessarily all butterflies and roses, as you might guess.

But somehow at IFG, they tell the real stories and really share, warts and all.

Strictly Obeying the Chatham House Rules

The IFG Conference runs on the basis of Chatham House Rules, which means that I’m allowed to share much of what I heard there, so long as I don’t share who said what.

I can easily share some snippets of words shared during talk at my table between presentations, though.

A man beside me noted that he did not recall hearing the word “A-hole” so many times in one day at a conference before, and I had to agree.

I shared a comment with a young woman on the other side of me at the end of the day, where I told her not to expect to hear the sharing of such frank stories at other conferences.

A Spirit and Culture of Blunt Sharing

The stories we heard typically involve families whose wealth has already successfully transitioned a few times from one generation to the next, and yet still there are some elements involving conflicts that got resolved, seemingly against long odds.

We can learn from the successes of other families, but we may even be able to learn more from their failures.

The stories shared involve a lot of successes that were required to build the wealth of the families, and then the hiccups along the way as that wealth was being shared by the family.

The blunt sharing of the less beautiful aspects of those transitions is what makes the IFG conference special, as the culture has been created where that’s a safe space for family members to share.

Families and Their Wealth Grow at Different Rates

One of the issues that can arise is that the wealth can continue to grow at some reasonable rate, but when you go down a couple of generations, the growth in the number of family members can expand exponentially.

As a generous amount of wealth is expected to be available to more and more people, that can become problematic.

Who gets to decide how the wealth is managed and shared?  See Who Gets to Decide Who Gets to Decide from 2017.

Pruning the Family Tree

Building wealth is difficult enough, but learning how to keep it and share it as a family is probably even harder.

It shouldn’t be surprising to learn that many of the stories we heard about from families where the wealth was first created over a century ago, were able to transition it a few times by limiting the number of family members who shared in it.

This sort of “pruning” of the family wealth tree is simple to explain, but not necessarily easy to implement, assuming that you value harmonious family relationships.

The IFG conference did a nice job of normalizing the fact that families can face a bumpy road on this journey, but when we learn to share the good, bad and ugly, we can help others to be forewarned.

Letting Go Suddenly Can Be Difficult

As I was preparing for an upcoming meeting with a couple who have long been leading their family business, I imagined what subjects might arise during our time together.

At the very top of my list, based on some previous discussions I’d had with a some of their offspring a couple of years back, was the idea that at least one of them seemed very resistant to the prospect of “letting go” of their responsibilities in the company.

So I added the idea of switching one’s mindset from letting go to instead think about loosening one’s grip to my blog ideas folder.

Alas, as it turned out during our meeting, this challenge is far from the biggest priority for that family right now, but that doesn’t mean it’s any less blogworthy!

An Event Versus a Process

One of the mantras I always go back to when working with families is to stop thinking in terms of events that you need to tick off a to-do list, and instead consider the whole process of getting something important done.

Almost every one of my colleagues have said at some point “succession is not an event, it’s a process”.

I personally don’t like to use the word “succession”, and I began phasing it out of my vocabulary even before I became a fan of the TV series.

See Efficient Vs. Effective Continuity Planning, for example

Focusing on continuity, or what you want to remain the same, lends itself almost automatically to thinking more about process than any particular event.

A Transfer Versus a Transition

Staying with the importance of word choice, regular readers will note my preference for talking about the transition of wealth from one generation to the next, as opposed to its transfer.

Watch: Wealth Transfer Vs. Wealth Transition

Once again, though, the idea is the same.

I almost always prefer things to go slowly but surely, as opposed to rushing through something just to get it over with.

So the idea of learning to loosen your grip rather than fighting the push to “just let go” feels like it fits the pattern.

One Small Step at a Time

Part of the problem that some people have with learning to move forward with any change is simply stubbornness.

When faced with someone like that in your family it can be tough to get any movement, especially when you approach them in an “all-or-nothing” way.

If someone is reluctant to allow you to make a bigger place for yourself in the business, I suggest that you don’t simply give up, but rather look for the tiniest place to take on part of someone’s role that they hold a death-grip on.

Small, incremental steps, done without much fanfare or even any discussion, can be a way to start to get someone to loosen that grip.

See Asking for Permission Vs. Asking for Forgiveness

The Beach Versus the Pool

Whenever I think about this subject, I have flashbacks of my Dad, who’s been gone for over a decade and a half.

I some ways we had a non-standard father-son relationship at work, where he was often quick to want to do something big, and I was the one who preferred we take our time and take a more modest approach.

I like to walk into the water at the beach, while he preferred to jump into the deep end of the pool, proverbially speaking.

I think this is a contrast from what you might normally see, where the rising generation want to go quickly and the elders force them to slow things down and not change things too fast.

However, he was very slow and progressive with his retirement, where he started taking a half a day off each week at 55, and then added another half day to that every year, until he got down to one day a week.

An Updated Torch Metaphor?

Let’s close out with a torch metaphor that may not be the one you’re used to hearing.

The expression “passing the torch” is well worn and actually often counterproductive when it comes to family transitions.

I prefer the version where each person has their own torch, and the flames from the elders’ torches are used to ignite those of the members of the rising generation.

This way, everyone can maintain as tight a grip as they want, because it can be dangerous to simply let go of a flaming torch anyway.