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No, We Aren’t “There” Yet

In some ways the new realities we’re all facing during this pandemic are starting to feel like a really long car trip.

“Are we there yet?”, ask the kids for the umpteenth time.

No, unfortunately, we don’t seem to be “there” just yet.  

And it may be another few hours, if we don’t have car trouble.

Finding Gratitude

As hard as it is though, it could be worse. In fact, for many people, it is worse.  

Lately whenever people have asked how I am, I reply that if I took 100 random people around me, and ranked them by how much they now have to worry about compared to before, I would rank somewhere near the bottom of the list.

I try to remind myself of that on a regular basis.  It’s good to have things for which we are grateful. 

Gratitude, being thankful for what we do have, is an important habit that more of us would do well to adopt.

Comparing to Other People, and to Other Times

So we can compare ourselves to other people who have it worse, and admit that we have less to worry about than most of them; I suspect that most readers of this blog are in similar positions.  

Business families, and those who advise them, are often part of the upper middle class, if not also part of the proverbial “1%”.

So what if we compare this pandemic to how it might have been to live through something similar in a previous decade.

Imagine a real car trip from your childhood, where you were in the back seat, bored to the point of playing “licence plate bingo” or some other lame distraction.

Back then, we were truly left “to our own devices”, whereas today’s kids typically each have their “own device”!

 

Still Getting Things Done

Many of us are continuing to “get things done”, even if we need to modify how we do it.  

Many of us are “zooming” or using other online platforms to meet, and getting better at it all the time.

We better get used to it, because there doesn’t seem to be anything that will magically happen that will get things back to the way they were a few months ago.

And so if things will remain uncertain for a while, what can we do?

Plan for the Worst

I think that hoping things get resolved quickly and continuing to do very little else is likely the worst course of action.

The old adage of “Plan for the worst; Hope for the best” still holds.

I heard a business owner on the radio recently, who happens to be a former client, who runs a manufacturing operation with a large and growing online B2C business.

He said that they are working on the assumption that things will remain as they are now for the next 18-24 months, and they are acting accordingly.

I knew he was a wise man when he hired me a few years ago, but he proved it again just there.

Doesn’t it make sense to plan for a long period of this, and then you can hopefully unwind it early, rather than to simply patch things as you go, and hope things will come back next month?

 

Family Issues to Be Addressed?

Meanwhile, these past few months have likely raised some issues in the family circle in addition to the business circle.

In some ways the question “Are we there yet?”, when asked about a family’s governance, might also have a clear “No, not yet” answer.

Some of these family aspects, now that they have surfaced, may be worth revisiting, before they get worse.

Individual Development for “When We Get There”

And as long as there’s still some more time to go until we “get there”, isn’t this an ideal opportunity for some of the individuals who are part of the business family, to work on themselves to develop whatever capacities they need to work on, to be even more ready for the day when they’ll be expected to take on more responsibility?

This new, unconventional situation we are living is full of questions, but not all of the answers are negative.

There are positives and opportunities here, available to those who have their eyes open and who have the right attitude.

We may not be there yet, but we will get there.

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The Crisis as a Test of your Family Governance

As we continue to move through these unprecedented times, some things are beginning to get a little bit clearer. 

There are still so many unknowns, of course, but for many family enterprises, they’ve succeeded in “putting out the fire”, and now a different kind of work is needed.

During this preliminary stage of the current transition to the “next normal”, most families have begun to learn a lot more about each other. 

Sometimes they’ve learned positive things, and other times they may have been disappointed.

 

People and Relationships

As much as they’ve discovered about other people in their family, what some families may have also started to notice is that the way they had their relationships set up before just might not be optimal anymore.

Let me give you the background and proper credit for this idea and how it came to me. 

If you’re like me, you’ve never received more invitations to webinars than you have in the past few weeks.  Some of them are actually worthwhile.

The idea for this blog came from one of those, sponsored by Family Enterprise Xchange (FEX), of which I am a proud member, as their FEA Program was what made me discover the world of working with business families in the way I now do.

 

A Friend and Mentor

In light of the new reality we’re all now living in, FEX recently hosted a webinar featuring guest thought leader Jim Grubman, who I consider a friend and definitely kind of a mentor to me, as he always has time for me, and I definitely look up to him.

Towards the end of the Zoom call, during the Q & A if I’m not mistaken, Jim noted that this current crisis is serving as a test of family governance for many families.  

He kept going for a bit, but as far as I was concerned, he could have dropped the mic right there.

Bang, it was so clear to me all of a sudden.  

Families who work together or manage assets together are feeling the shockwaves of the pandemic and its associated economic and societal fallout in interesting ways.

 

Are They Passing the Test?

At a time when everything is getting shaken up, systems and their limits get tested.  

When a system is well prepared, and is able to adapt quickly, the relationships between the people in the system will likely survive relatively unscathed.

But what about systems (families) where things don’t go so well, adapting doesn’t happen as some expected, people second guess each other, and contingencies that some assumed were in place don’t operate in the way they were expected to?

Jim is correct that underneath all of these relationships lies the family’s governance, whether they know it or not, whether they see it or not, and whether their governance is formalized or not.

That family governance is being tested these days, and some families are realizing that they’ve got work to do.

Students sitting in class and stressed

Character Building Events

Any crisis can act as a character-building event, and this one is no exception.  Things that were going “okay” just a couple of months ago are suddenly no longer okay.

For families who are working together, a crisis like the one the world is seeing now can be seen as a test of family character.  

Any shortcomings, that may have been hidden by the “good times” we were in, are now suddenly exposed.

If you’re having trouble picturing what I’m getting at, imagine any business being run by siblings or members of different generations of a family (or both). 

Now, throw in some new kinds of decisions that need to be made as a result of the new reality.

 

Decisions, communication, problem-solving

Family governance is all about how family members make decisions together, how they communicate, and how they solve problems together.

There’s nothing like a crisis, caused by a pandemic, to bring these into a sudden sharp focus, largely because some new kinds of decisions need to be made.

Ideally, everyone agrees not only on the right decision, but on who gets to make the call!  See: Who Gets to Decide Who Gets to Decide

The answers aren’t always obvious, and situations can get complex pretty quickly.

 

Self-Reflection Question

So, how’s your family governance doing? 

Is it passing the test?

If the answer is “No”, you’ve got work to do….

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Pandemic Creates Spectrum of Opportunities for Enterprising Families

From Societal Transformations to Intergenerational Transitions

Thanks to the pandemic, there’s no denying that the whole world looks very different today than it did just a few weeks ago. 

Few could have predicted how quickly and profoundly things could change, and so far, most of what we’ve seen has been for the worse.

But while most of us haven’t figured out what it’ll all mean in the long run, some families have already started making some big moves to try to get out in front of the tectonic shifts that are happening.

From societal changes that are happening in plain view of everyone, right down to key transitions within families, it seems like everything is in motion right now.  

As a family enterprise advisor who lives and breathes the world of business families and their family offices, I want to share some of what I’ve already been noticing.

 

Broad Societal and Industry Moves

Let’s start with the things that we’ve all been seeing on the news. 

With shortages of necessities like personal protective equipment (PPE) for medical personnel, hand sanitizer and ventilators, many companies, including plenty of family businesses, have begun to shift their production from their usual products, to helping fill the sudden demand for what frontline responders need right now.

There are examples, big and small, from all over the world, because every country is being affected by the current pandemic. 

On a more local scale, many family-owned restaurants and grocery stores are moving to deliveries to deal with the new reality of the “lockdowns”, as well as getting food to overworked medical personnel and to food banks having trouble keeping up with local needs.

 

Family Offices and Impact Investing

At another level, looking at things with a longer lens, family offices are already lining up future investments in industries poised to be part of the long term solution and new realities that the world is suddenly facing.

This crisis is presenting all sorts of opportunities, not only from an investment perspective, but also for the betterment of society. 

The field of impact investing, often a favorite of the younger generation of successful intergenerational enterprising families, is also rightfully excited by the chance to get involved on the ground floor of some of these widespread changes.

This ties in nicely with a piece I wrote last year on the natural fit between family offices and impact investing.  See Family Offices and Impact Investing: A Great Fit

Pandemic Creates Spectrum of Opportunities for Enterprising Families

From Macro to Micro

Within any given family, as much as the societal and industry shake-ups affect their businesses and the assets they own, there’s typically an upcoming generational transition that’s never more than a decade or so away.

Enterprising legacy families always need to look at the long term trends in the world at large, while making sure to never lose sight of the life cycle realities in their families.  

They need to look at the macro world and its opportunities with one eye, without forgetting about the micro reality and potential threats that might present themselves if they don’t sufficiently prepare the members of their own family to be ready to take the reins one day.

As the world faces major shifts, it becomes more important than ever for families to seize these opportunities while proactively involving the younger, rising generations of their family.

 

The Strengths of Each Generation

While the senior generation has the experience, wisdom, and patience to run the operations, the next generation of the family will normally be much more tech savvy, have more energy, and be well connected to peers all over the world.

Yes, the generations have different strengths, but in many ways, they have even more things in common.   See: Is There a Generation Gap in Business?

While the MIT-Sloan article above isn’t aimed at #FamBiz in particular, the similarities between members of various generations are even greater when we consider members of the same family.

There are so many opportunities to mentor and “reverse mentor” each other in such families.

 

Opportunities Abound – Will Your Family Capitalize?

This pandemic will create some enormous opportunities for those families that are poised to capitalize on them.

Families in business together can move into action more quickly than most corporate entities, because they’re more flexible, they aren’t focused on the next quarter’s results, and they understand the values that have made them successful over generations.

These crazy times are turbulent for everyone, and smart family enterprises are already beginning to capitalize on them.

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Stuck in the Middle with You

Most of us are living in a new reality, temporary as it will (hopefully) be.  There have likely been many adjustments in your day-to-day lives, some of which are unwelcome.

While nobody knows for sure how long this will last, it’s very unlikely that we will get back to exactly the way things were anytime soon, if ever.

That last part, “if ever”, is not meant to be alarmist, I’m just making the point that when such fundamental and widespread events happen in society at large, they create some displacements that end up being permanent in nature. 

We just don’t know what they’ll look like yet.

 

Not the Beginning, Not the End Either

So it’s safe to say that we’re not at the end of this ordeal yet, and we are no longer at the beginning.  You could say that we’re somewhere “in the middle”.

Unfortunately, I think we’re still way closer to the beginning, but hopefully I’ll be proven wrong (it’s been known to happen).

It’s a process that we’re moving through, and while decades from now it will seem like an “event”, right now, while we’re in it, it feels like it’s moving quickly, while in other ways it feels like it’s going too slowly.

 

Extreme Reactions, or Middle of the Road?

Another way to think about this week’s theme of “the middle” is that “Goldilocks” place I think we should all be striving for, in terms of how we’re responding to things.

Last week I went to my local liquor store, and had to wait in line outside, since they were intentionally limiting the number of customers inside, to increase personal space for everyone.

The man minding the line-up was asking us to be nice to the employees, because evidently some customers were less than nice earlier that day.

He then shared his thoughts about the kinds of people he was seeing. I’ll give it to you in colloquial Quebec French first, then translate:

“Y’en a qui s’en foute, y’en a qui capote, et il y a le reste, dans le milieu”

Loosely “There are those who don’t give a crap, those who are freaking out, and the rest, in the middle”.

Sometimes it’s good to be in the middle.

 

Middle of the Crowded House

Another change that many of us are being forced to deal with is the “crowded house” phenomenon arising from so many “stay-at-home” orders.

I was on a Zoom call recently with 16 people from nine different countries, and the vast majority were working from home, while the few exceptions were in very small offices.

The “stuck in the middle” title of this blog came from this idea that many people are now suddenly all being forced into staying together for much longer periods of time than usual, typically for longer than they’d prefer.

Luckily some warmer weather is finally arriving, even in Canada, that will allow us all more opportunities to at least get some fresh air from time to time.

 

Feeling Stuck – Usually Not Good

Enough about the middle, which isn’t necessarily a bad place to be.  

But feeling “stuck”, well, that’s rarely good, and for some people, that might be a feeling that is currently resonating with them, and not in a good way.

I want to share some thoughts on this, that can hopefully offer a new perspective on looking at our new reality.

There is clearly some upheaval going on everywhere right now, which means that things are changing.

If everything in your life was going well before, then change is not something you were necessarily hoping for, I get that.

But it’s here now, so it makes sense to acknowledge that things are changing and trying to think about what you can do now to be prepared.

 

Where Is This Going?

Unfortunately, nobody knows where this will end, and the only person I can control is me.

I’m spending a lot of time reflecting and being grateful for what I do have, and trying to think of ways to be a resource to those who could benefit from what I have to offer.

The rest will take care of itself.  Stay well, stay safe, be kind.

Feel free to reach out for a Zoom call to chat. Yes, I mean it.

 

“Clowns to the left of me, jokers to the right, here I am….”

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On Infections and Inflection Points

These past couple of weeks have been anything but “business as usual”, and so I’ve decided to break from my usual pre-set blog calendar and venture into the many discussions that are taking place in society and in the family enterprise space, on the many impacts the sudden uncertainty has us all facing.

I still have plenty of blog subjects that I want to get to about business families and their challenges in transitioning their wealth to the next generation, and we’ll get back to those in due time. 

But lately, as I’ve come across “regular” content in my inbox or on social media that seemed to act as if we were all still in the “same old, same old”, I’ve had an almost visceral reaction to some of it, as it struck me as tone deaf or just a little too oblivious for me to spend any time on, you know, right now.

 

Inflection Points – No Going Back

This past week, I was speaking with my coach, Melissa, about the new realities we are facing because of Covid19.  I was pleased and not too surprised when she told me that I am by far her calmest client right now, as most others are freaking out.

I shared with her my belief that we will be learning a LOT over the next few months; about the world we live in, about people, and about leadership.

We’ve hit a number of inflection points, and while it’s way too soon to predict how this will all shake out, I can state with great confidence that many things will never be the same again.  

But most of us will be just fine.

Family Timemathematical graph

One of the unexpected changes many of us are being confronted with is more family time.  

My wife and I have been “empty nesters” for almost five years (thanks in large part to boarding school) but we are now back into “full house” mode with both of our college undergraduates at home, likely finishing up their school years “online”.

It’s too early to tell how it will all work out, but so far, so good, everyone seems to have the right attitude, even with the “self quarantine for 14 days” part that they’re expected to respect after returning from the US.

 

Isolation and Distancing

This call for social distancing and isolation is being received better in some places and by some demographics than others, which is not unexpected either.

What it will do to the economy is still unknowable, but the variety of  timelines we’ve been hearing as people make their guesses as to how long until we’re back to normal is causing tremendous market turbulence.

In the future it will be easy to see where we should have been buying back in, but for now, it’s anybody’s guess.

 

Leadership – Good, Bad, Ugly

The leadership that we’ve been seeing on our TV every day has varied tremendously, from good, to bad, to downright ugly.

I won’t weigh in on who I think fits into each category, suffice it to say that I’ve seen a few in each category from politicians.

But I guarantee you that there will be some people that nobody knew before this crisis who will end up being heroes, and others who will get rich, and still others whose reputations will never recover.

But the jury is still out on all of that, and may be for a few months more.

 

Technology and Connection

Some of the good news is that technology now makes remaining connected so much easier than ever before.

As I wrote a few months back in Who’s Zooming Who?, I’ve become a huge fan of using the Zoom platform for online face-to-face meetings, both for 1-on-1 and group meetings.mathematical graph

More and more people are slowly learning about the benefits of such meetings, because they really don’t have much choice.

 

Reach Out, Just to Check In

One thing I’ve been doing (and promise to do more of) is to reach out to people, including clients and colleagues, from the past and present (and future?).

Reaching out without any particular angle or purpose, but simply to check in.

Connection is always important, and when times are filled with uncertainty, it becomes even more clear.

See you next week. Excuse me now, I’m going to call my mother. 

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Dropping the “Second Person” Mode

Off the top, I realize that my title this week is a little less clear about my topic than it normally is, so thanks for getting past it and reading anyway.

We’re going back to some grammar school stuff, and then we’ll move pretty quickly into more advanced topics. It should be an interesting ride.

 

La Conjugaison des Verbes

My elementary schooling was in French, unlike my older sisters who attended English school. (They weren’t expected to take over Dad’s business, I was; but that’s another topic for another day).

During class, and for homework, we spent a LOT of time conjugating every verb we encountered, always following the same sequence: 

                                          Je, tu, il;     Nous, vous, ils.

We started with singular, first person, second person, third person; and we continue through them again in plural, first, second, third person.

So for “le verbe avoir” it was: J’ai, tu as, il a, nous avons, vous avez, ils ont.  

For « aimer » it was J’aime, tu aimes, il aime, nous aimons, vous aimez, ils aiment.

 

Comparing Homework Among Siblings

My sisters were sometimes curious about my homework, as their English school did not seem to obsess over conjugating verbs nearly as much as my French school did.

But of course you never know when this might come in handy, say 45 years later when writing a blog about business families.

Somehow I never imagined any of this in my future.

What this repetitive work did give me, was an appreciation for the whole concept of “First person”, i.e. me, “second person”, i.e. you, and “third person”, i.e. he/she, along with the corresponding plural versions of “we”, “you” and “they”.

 

Cultivating Better Interpersonal Relations

Much more recently, having done more than my share of training in coaching, facilitation, mediation, and family systems, some common themes have emerged within my mind.

One of those themes is the importance we should place on how we direct comments to others, in ways that are more conducive to harmonious relationships, compared to other, less skilled ways that may produce sub-optimal results.

You guessed it, thinking about all this in terms of “first person”, “second person”, and “third person” can be helpful.

 

Feeling “Accused” Prompts Reactivity

I’ll start with a basic principle that most of us can vouch for from personal experience.

When you feel like you are being accused of something, you will typically react in some way, and in many cases, that reaction will be less than friendly or positive.

We don’t necessarily do this in a thoughtful, conscious way, it just happens, as our emotions get triggered. I touched on some of this a couple of years ago in Your Response Is Your Responsibility.

And when do we typically feel like we’re being accused? 

I think that when someone starts with the word “You”, that’s often a huge part of it.

 

Dropping “You”, Using “I” and “He” or “She”

So how hard would it be to drop the habit of using “You”? 

My take is that it’s something you can learn to do, with time and practice, like other speech habits.

I know lots of people who’ve learned to substitute “and” in place of “but” in many instances, with positive results.

I’ve seen suggestions to talk about one’s own reaction to things as a way to lessen the blow of the “you” accusation, for example, “When I hear the word _____, I feel _____”, as opposed to “When you say ____, you _____”.

My favourite example of the plural version was use of “you people” and its negative effect on Ross Perot during his Presidential bid in 1992, when he continually said “You people should….” during a speech to a room full of African Americans.  It did not go over well.

 

What About He or She?

As for using the third person, this naturally fits with situations when more people are in the room, and is something a good facilitator or mediator would commonly do.

Having the people tell the story to the third party, while the person in question is present, can really allow that person to “hear” the story in a way that they can respond, instead of reacting.

In any case, just learning to drop the second person mode will be a huge improvement.

Learning to state things from an “I position” can also help, as can using a trained neutral third party.

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Pleasant = Good, Unpleasant = Bad, Right?

This week we’re going to look at something that’s a little bit further afield from many of the more hands-on topics that I sometimes cover in this space.

Of course I will still make an attempt to connect the discussion to the field of family enterprise and intergenerational wealth transitions, because that’s still the main goal here.

Regular readers may recall that I’ve been meditating every day for almost two years now, so you shouldn’t be too surprised when I tell you that the inspiration for this blog comes from a meditation recording that I was listening to recently.

 

How Not to Judge Your Meditation Session

One of the apps that I use daily is 10% Happier, based on Dan Harris’ book of the same name.  One of his main meditation gurus, featured in both the book and on the app, is Joseph Goldstein.

In one of the recordings featuring Goldstein that I listened to recently, he noted that a mediation session can leave you feeling disappointed or confused at times, but that that’s alright and even to be expected. (I’m paraphrasing here)

His point was that you cannot judge your meditation by whether or not it is pleasant. Life has its ups and downs, which is to be expected, and so meditation should be no different.

The point was being stressed for beginners, in the hopes that they not give up the practice, simply because they do not walk away from every experience with perfect happiness and enlightenment.

 

Is It Any Different in a Family Business?

So now let’s think about this idea in terms of a family business, or, maybe even more specifically, from the point of view of various members of a business family.

Not everyone is going to be happy, all the time.  That’s to be expected, and there are likely cycles of ups and downs for the business and for the people who are part of the family, and part of the business.

I think it’s important for everyone to take stock of where they are from time to time and recognize that things can’t always be rosy.

 

Different Views from Different Generations?

Some people may think that one of the real variables here is the generation that you happen to belong to.  Let me explain.

When you’re young and working your way into the business, it may feel like you need to put up with things being a little bit tough for you, but oh, look out, when I get to be the one in charge, man, this is going to be awesome and everything will be great.

Meanwhile, the senior generation, who are stuck with their own problems and worries, may be looking at their younger relatives and thinking, “man, don’t they have it easy!”.

 

Should I Stay or Should I Go?

The reason that I decided to write about this topic was the idea that sometimes people working in their family business have unrealistic expectations about how much fun they will have and how great every day is going to be.

If you’re in such a situation, great, you’re doing better than most, more power to you, and may it ever be so.

There are probably more people who are in situations that are closer to the other end of that continuum, though.

I guess my suggestion to them is to occasionally step back and re-evaluate their decision to work there.

 

Was It Even My Decision?

If you’re one of those people who find working in your family business as a series of unpleasant circumstances, day after day, you may also be someone who has trouble with that last sentence, the one where I qualified the idea of working there as “their decision”. Ha!

If you’re like many people who are working in your family’s business, and you can honestly say that it was not your decision, or your choice, then my idea about stepping back and re-evaluating things may be even more important.

 

Something to Talk About

You’ve got a lot to think about, and hopefully sooner or later, something to talk about.

Talk with your family, talk with a coach, talk with your business partners, whether they are family members or not.

It may not be fun, but if you just keep going in an environment that you hate, how does that end?

These conversations won’t necessarily be comfortable, but hopefully they’ll be productive.

 

See: Conversations: Does “Uncomfortable” = “Productive”?

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The Case for Friendly FamBiz Competition

This week’s blog is one of the occasional instances where I leave an open spot on my blog calendar because of an event that I’m attending, and I allow something from my participation to inspire me in real-time.

The event in question this time is the Global Family Enterprise Case Competition at the University of Vermont (UVM). I just returned from my trip there, where I was pleased and proud to serve as the lead judge on one of the four judging panels on day 1 of the competition.  

This was my fifth time as a judge, and every year I come away impressed with the caliber of the students; not only the competitors, but also the dozens of UVM volunteers who run the event, under the watchful eye of Pramodita (Dita) Sharma, who remains the heart and soul of the event, as she has since she created it.

 

Friendly Competition, Global Participants

If there was an “A-Ha Moment” that arose for me this time, it certainly was not the global nature of the competition, and, by extension, the family business world.  I’ve commented before in some of my posts relating to my membership in the Family Firm Institute (FFI) that the FamBiz community is truly global in nature.

What really struck me on this visit was the friendly nature of the competition between teams.

The dinner after day 1 of the competition involves each team (3 student participants plus 1 coach) going to the front of the room and taking the microphone and introducing themselves in a fun and creative way.  Think of it as a gigantic icebreaker exercise.

It is very friendly in nature, and it is also competitive.

In fact, the entire event truly brings together both friendliness AND competition.

 

Neither One Alone Would Suffice

What I realized was that neither one of these traits (competitiveness and friendliness) would be enough in and of themselves.  Imagine if it was all friendliness and nobody really cared who won. Or, the reverse, if it turned into a dog-eat-dog fight to the finish.

But then I also started to think about the parallels this competition has with a real family business.  Bear with me here for a minute.

If you’re part of a family business and it’s all friendliness, all the time, that might be nice, but how long will it last, if you aren’t competitive enough? And I mean competitive as a business, but also internally with colleagues.

Likewise, if it’s all about competition and people aren’t even friendly with each other, what’s the point? Isn’t life too short for that?

 

The Pentland Case

The case that was used on day 1 was centered on Pentland, a UK business that was preparing the transition from the second generation of the Rubin family to the third.

It was written after Pentland had received an award for the being the best family business in Europe a few years ago, so it clearly wasn’t one of those typical business school cases where there are all kinds of obvious problems.

The setting for the case was a Friday evening family dinner where various family members had recently returned from visiting different branches of the family company, and they were about to embark on some key discussions about where the family was going to go from here.

 

Finding the Right Friendly / Competitive Balance

The key to this and many family business situations is finding the right balance between the friendly family dinner and the business meeting aspects of the important discussions that also need to happen.

Some families have difficulty with this balance, where every family dinner becomes a business meeting, much to the dismay of those around the table who aren’t involved and don’t wish to be part of any such meetings.

 

Coaches and Judges Mingle…. After Work

Personally, I also needed to work on balancing my serious role as a judge with some friendly after dinner discussions with some of the dedicated coaches.

I’m pleased to say that everyone got along very well and professionally, and my own network of family business contacts continues to expand..

I hope to return again as a judge next year.

 

And the Winners Are:

The winning schools at FECC 2020 were:

Undergraduate Division: Wilfrid Laurier University – Canada

Graduate Division: Universidad Francisco Marroquin – Panama

Congratulations to all those involved, participants and organizers.

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When Structural Solutions Aren’t Sufficient

When Structural Solutions Aren’t Sufficient

Plenty of business families have problems when siblings are placed into positions where conflicts are almost inevitable.  So there’s a natural tendency to look for an easy “work-around”, where the hope is that a simple structural change will make all the problems disappear.

This is what we’ll be looking at this week, thanks to another real live case from an overseas colleague who contacted me recently.

Let me start with the original set-up.

Two Brothers Stepping on Each Other’s Toes

The story, as it was related to me by my colleague, was that her client family had an operating company in which two rising generation brothers both worked.

Here comes the difficult part; they don’t get along, they don’t even speak to each other.  Clearly this is sub-optimal, we can all agree.

The question posed to me was if I had any experience in finding or creating a structure where they would not have to speak to each other.

The “Economy-Size” Box of Band-Aids

My reply to my friend was that I did not have any experience in setting up such structures, which is true. I also added that creating such an operational structure, in which they would not have to interact, would simply be putting a Band-Aid on the problem.

When you get right down to it, this issue of boundaries is quite common in many family businesses.

But in the end, if you choose this as your only remedy, you will continually need to re-apply new Band-Aids on a regular basis.

Yes, Structures ARE Necessary

I want to be clear that I’m not saying that clear structures and boundaries are not important; they certainly are.

Please note the adjective “clear” there, as it’s one of the keys.

What’s another key?  I’m glad you asked.

Another important aspect of any boundary is that it be mutually-agreed upon, and hopefully even co-created, by those on either side of the boundary.

No, Structures are NOT Sufficient

So one of the main points here is that the structure itself will rarely be sufficient to solve the issue. These brothers may be able to co-exist for some time with a structure that is imposed upon them so as to minimize of even eliminate their interactions.

It seems logical enough, I agree; they don’t speak to each other, so let’s set it up so that isn’t necessary, and, voilà, problem averted.

But just as swerving your car back into your lane to avoid an accident as you’re falling asleep while driving may have “averted” one accident, if you don’t change the essence of what’s going on, it’s bound to arise again.

Parents as a Buffer or Mediator

The details about the parents were not shared with me in this particular fact set, but I assume that they’re still around and playing key roles.

This is great, and should be capitalized upon, but everyone should also recognize that it won’t last forever.  In fact, if things go the way they usually do, the offspring will outlive their parents.

So let me ask the obvious question: What are they going to do after their parents are no longer around?

Family Dynamics Problems Need to Be Addressed…

I think that anyone looking at the case of these two brothers would agree that what we’re really looking at is a family dynamics issue, not a simple corporate structure problem.

If the two employees were not related, maybe a structural solution would suffice, but maybe not.  We could certainly expect that maybe one of the employees would be let go or reassigned in such a case.

But here it seems to be truly a question of their relationship as members of the same family.

…. with Family Dynamics Solutions

So if we have a family dynamics problem, we should be looking at a family dynamics based solution.

I recognize that most families and even most of their advisors typically hate to admit this, because this brings them into uncomfortable territory.

My answer to them is that it is already uncomfortable, and admitting what is there is the first step to being able to work through it.

A real solution hinges on the ability of the siblings to get along together after their parents are gone, so it’s better to start working on that and testing it now, not later.

If it turns out to be impossible, better to know that now, and begin to take appropriate action.

See also: FamBiz Conflict In Pieces for the Sake of Peace

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Dis-Covering your Enterprising Family

Business families, or “families in business”, as they’re often called, come in all shapes and sizes.  Advisors who work with them, like me, sometimes have trouble agreeing on the labels that we should be using to identify this segment of society.

Recently, a term that’s been garnering some momentum is “enterprising families”, which certainly has some cachet to it, especially when contrasted with alternatives we sometimes see, like UNHW families (Ultra High Net Worth).

The word “enterprising” connotes some action, which is so often appropriate, especially when there’s an “operating business” that’s (still) part of the asset mix that the family owns.

 

And…..”Action!”

While the action involved in the creation of the wealth is certainly important, whether that continues in the present or whether it’s only in the family’s past, my bias is to continue to focus on action going forward as well.

As I’ve written in this space in the past, notably in Is your Continuity Planning “PAL” in Danger, there are two main components in achieving a family legacy: assets, and, even more importantly, people.

Even if the assets are now passive, the people need to be active.

And therein lies the focus of this week’s post, which is about discovering, or more specifically, “dis-covering” the members of your enterprising family.

 

Getting to Know “The People”

Now the idea of “getting to know” people in your own family might seem like something that you wouldn’t necessarily need to spend a lot of time on, since you already know plenty about them.

And if that’s what you’re thinking, then you’re exactly the kind of person who needs to keep reading.

Because I’m not talking about the obvious details of your children’s lives that every family member already knows about, I’m talking about the questions relating to where and how they “fit” into the enterprising family.

Figuring all of that stuff out takes time and effort, but it’s the families who take the time and make the effort who’ll be the ones who manage to keep their wealth in the family for generations.

 

Inclusion and Belonging as a Bias

My bias is towards inclusion and belonging in every family, so that’s my starting point.  

I will always assume that all family members do want to at least look at the idea of being involved, somewhere, somehow, and at some time, in the preservation and transition of the family’s wealth from one generation to the next.

That’s not to say that every member of the rising generation will be interested in being part of this, it’s just that when I work with a family, I begin there.  

If certain family members are not interested in being involved, that’s OK too, but even those who “pass” are usually glad to have been asked.

 

It Takes a Village

For most families out there, things are much simpler than what I write about here.

For families that have a certain amount of complexity, and who have achieved a certain level of wealth, spending time and making the effort to do things in a thoughtful and inclusive way really makes sense.

Families who’ve been successful in creating, growing, and sustaining wealth, who want to make sure that that wealth stays in their family, should be doing whatever it takes to develop their human capital to take on the necessary roles, as their rising generation prepares to take on key roles.

There are plenty of important roles in most such families, whether they be in an operating business, a family office, a family foundation, or in an entrepreneurial venture.

 

It’s Not Just About the “Next CEO”

Each family member has their own strengths and desires, and taking the time to learn more about each of them is a necessary step, or phase, that’s worth taking the time for.

Having regular family meetings is a big part of how families can do this important work, building the foundation on which the sibling team learns to work together.

When the family members are all involved in co-creating their futures together, the odds of them all “buying in” and making it work go up tremendously.

Not everyone wants to be the next CEO, and not everyone gets to be that either.

But if you think more broadly about stewardship, governance, leadership and management, and consider the business, the family, and the ownership circles, there’s room for everyone somewhere.

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