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The “Plan A” FamBiz Transition Mirage

Many Families Want This, Few Will Achieve It

For those of you who read my weekly musings regularly, you probably think that I spend a lot of my time writing about the challenges that families face as they prepare for intergenerational transitions.

You certainly aren’t wrong, as I spend more of my time on this than most others. However, I spend a lot more of my time talking about these subjects all the time.

And sometimes, like this week, the things I hear myself saying over and over, in various contexts, eventually spark the idea in me that I’m overdue to share some of these “talking points” in writing.

Which brings us to the idea of “Plan A”, which I’ve talked about often, as well as the “mirage” part, which I just conceived as a “hook” for this blog post.

So Many Families Have the Same “Plan A”

Now I don’t have any statistics on this, but I have spoken with dozens and even hundreds of families over the years to some degree of depth or another, and I can confidently say that roughly 2/3 to 3/4 of families arrive at a similar point when considering what they’d like to happen, after the parents transition out of the business.

It’s some version of the following: “We want all our kids to own the business equally and run it together”.

“OK, great”, I reply, “Let’s call that Plan ‘A’. One of the first things I like to do, is to get a good idea of whether or not I think your Plan ‘A’ has a reasonable probability of success”.

Most heads nod along with that, but at this point their view of that probability of success is usually much different from mine.

Not as Simple as It May Seem

Coming to this conclusion as a great way to go is pretty easy to understand, because it seems so neat and tidy, and every parent would be thrilled to achieve such a wonderful, harmonious result.

There’s a variation, which may be even more common, where the hope is equal ownership and lead roles for some subset of their offspring, notably those who’ve been working for the business.

There are plusses and minuses to each, of course, but my main point here is that decisions around who’s going to run the business and who is going to own the business are complex enough on their own, and when you blend them together, you aren’t making things simpler.

I don’t disagree that such results would be lovely, if they can be pulled off. But I defy anyone to find me more than a couple of examples where this “Plan A” has been successfully executed and sustained over time.

I dealt with some of this back in 2017 in We Treat Them All Equally – That’s Good, Right?

Different Interests, Abilities, Motivations, Etc.

Let’s start by looking at the idea of having a sibling team run things together, and the challenges this can pose.

Each sibling has different interests and motivations for working in the family business in the first place, but of course this isn’t always a deal-breaker.

Where things get tricky is that the siblings typically have very different abilities to perform well in their roles.

When you try to put together a good leadership team, one of the keys to success is for all of the people on the team to accept and respect their positions relative to one another.

When Sis is the President and Junior is in charge of the shipping department, then it’s clear to me who should be making the big decisions, but when they’re all part of the family, that often gets blurry.

Ownership Is Another Complicating Factor

Setting things up for a sibling group to run the business is already difficult enough when none of them are owners.

When you add in the ownership question, things get even more complicated.

See The Challenges of Working with a Flat FOOT Enterprise which I wrote for the FFI Practitioner in 2022.

That feeling that as an owner, I get to have an equal say in everything is quite pervasive in a lot of families.

A willingness and ability to recognize hierarchy among a sibling group is not a given, and can take a lot of work.

Should We Be Looking for Plan B or C?

The good news for people like me is that these challenges are good for business, as families can use my guidance.

Starting to sketch out Plan B or Plan C often helps.

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On Wellness, Performance and Relationships in Families

Three Key Areas to Keep Tabs On

At the behest of my coach, a while back I finally read a book that she recommended to me, called Positive Intelligence, by Shirzad Chamine.

It came out over a decade ago, and I see from my Amazon account that I actually ordered it in 2023, so I realize sometimes things just take time.

As a coach myself, when my coach makes a suggestion for me to check out, I’m typically receptive.

After finishing the book, I signed up for a 7-week coaching program that uses the Positive Intelligence methodology.

I may circle back to that here some day, but right off the bat in week 1, I noted with interest that they kept coming back to making progress in three important areas: Well-being, Performance, and Relationships.

Hmmmm, I thought to myself, how is it that these three seem so “all encompassing” and yet I’ve never heard anyone put it this way before?

Using It as a Checklist

So now my challenge became how to write a blog about this in a way where I could actually tie in some “lived experience” with it.

I decided on Wednesday that this would be my subject, but I didn’t know how I’d approach it.

Then, this morning (Thursday), I took part in one of my peer group meetings, the one that I actually pay for, and the one where I probably make the most personal progress.

 

During this 3-hour session, I shared a case that I worked on with a family during the first half, and got some valuable feedback that I will use going forward.

During the second half, another colleague presented a case she was working on where she had experienced some recent frustrations and challenges, and we all provided insights that she found useful too.

And after we all said goodbye until next time, I started to think about this post and it hit me between the eyes.

That Was Great, Because….

As I reveled in the afterglow of a wonderful time spent with like-minded peers, I tried to integrate why I felt so enriched by the encounter.

So, let’s take them one by one….

Well-Being: I really felt good, physically, mentally, emotionally, spiritually, after that call.

Performance: The ideas and perspectives I received (and shared) will all most certainly result in better professional performance by me and the others, as a result of the valuable time we spent together.

Relationships: A few of these peers are folks I’ve known for a while, but others are relatively new to me, and vice versa. The depth of the exchanges has enhanced each and every one of these relationships as well.

So now I had a way to think about why I felt it went so well.

Family Business: Is Performance All There Is?

When I work with families who are in business together, or who own assets together, many discussions focus on subjects related to performance.

Of course it is important to make sure that everything that needs to get done is done well, by qualified people. 

And so we need to make sure that all of the people whose job it is to get things done are well equipped with the tools and training to do so.

 

That’s where a lot of people like to leave it though, simply looking at how the people perform in their functions.

But what about their well-being and their relationships?

Is enough attention being paid to those aspects of the lives of the people in the family? Typically, no.

Human Capital and Social Capital

Besides financial capital, there are other types of capital that enterprising families also have, and my belief is that more attention needs to be paid to those.

While lists and definitions vary depending on the source, I like to think of “human capital” as the people in the family, and I think that the term “well-being” is as good as any to help us think about how we want to maximize it.

And as far as the relationships that family members have, with each other and also others outside the family, those fit under my heading of “social capital”.

So I’m happy to now have another entry point to talk about these other kinds of capital, that otherwise might be neglected.

Framing them as well-being and relationships gives me a new way to broach the subject.

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What to Do VS How to Do It

The First Part Is Comparatively Easy

It feels like it’s been a while since I’ve given a shout out to my late father in this space, so in some ways this may be overdue.

He was an immigrant entrepreneur who lived the Canadian dream, arriving here with next to nothing as a teenager, and he went on to build a very successful family enterprise.

While working for him in various capacities during my younger years, I got to hear some important words of wisdom that will never leave me.

In addition to one of my favourites, about the fact that simple and easy are NOT the same thing, there’s the one hinted at above in the title to this post.

Experts Telling You What to Do

In the field in which I now spend all of my time, working with enterprising families and accompanying them through the challenges of their intergenerational transitions, I always meet families who’ve received great advice from expert advisors.

One of the issues the families can quickly run into is that while the “what to do” part of the advice sounded great, it fell short when it came time for the “how to do it” part.

Back to Dad, I can hear him saying for the umpteenth time, “First we need to figure out what to do, then we’ll worry about how to do it”.

He was good about finding the resources to help with the first part, but he was even better at figuring out the steps required to succeed at the second part.

He would listen to all sorts of ideas and advice, but would make up his own mind, always considering how to put the solution into place.

Examples from Family Wealth Transitions

Almost every time I get introduced to a family, there’s already been a good deal of work done with other professionals, to get some of the structure in place for their eventual wealth transition.

There are typically wills in place for the parents, there may have been some estate freezes in place to crystalize the value of a business for one generation so the growth can be more easily held by the next one, sizeable insurance policies may be in place, and some level of trust structure may already exist.

These families will have been well advised on these tools by well-meaning professionals, all of whom have served a number of other families with similar products.

These all fall under the heading of “what to do”.

The assumption that few have questioned along the way is, how is this all going to work with the members of my family?

“Well, just have a family meeting to tell them all” may be the extent of the advice they receive for that part. If only it were that simple.

The Tail Wagging the Dog

In such cases, which remain the norm, many decisions have already been made, before any conversations are even attempted with their offspring.

These plans are being made for a group of people, but those people, for whom all of this is ostensibly being done, have never been consulted.

The silent expectation that “we know best” is a given, along with the one about “they should just be happy with whatever we give them”.

I look at this as the tail wagging the dog, or a “bass ackwards” way to go about things.

And I recognize that I’m in the minority with this view. 

And I’m good with that.

Complexity and Co-Creation

In most families, the way to go about things that I outlined above is sufficient. But I’m not talking about “most families”.

When there is sufficient wealth that complex tools and structures are required, then it behooves the families to engage in much more thoughtful efforts to get it right.

The idea is to make the wealth last AND the family last, and that takes work.

A few months ago in The Family Conversations You Know You Need to Have we looked at some of this. Note the plural “conversations”, because this is not a “one and done” discussion.

The “How to do it” part can also benefit from some outside, unbiased guidance and support.

Families left to themselves can seldom achieve the level of discussion and conversations between generations that is necessary to get everyone into co-creation mode.

Thankfully, there are more people doing this work now to help them.

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Clarify the Facts, Weed Out the Interpretations

Make Sure You’re Clear with These Distinctions

This week we’re going to explore some territory that can become rife with confusion, in the hopes of leaving readers with a better understanding of what often sets the stage for things going of the rails.

We’re staying in the land of families who are planning on transitioning their business and wealth to the next generation, which we already know can be pretty complex.

When I work with such families, it takes a certain amount of time and a number of meetings (both one-on-ones and in groups) before I feel like I have a good handle on all of the facts.

One of the toughest parts of this work is to be sure that I am actually learning objective facts about the history and current context, because so many people slip into sharing their interpretations of the facts, without even realizing the distinction.

The Family Diagram (or Genogram) Example

Those who do this kind of work, accompanying families on this journey, often start off gathering facts and immediately begin drawing a family diagram (or genogram).

This remains the best way to capture many important details about the extended family tree, including birth order of siblings, and facts like dates of birth, marriage, divorce, and death.

The old sports expression “You can’t tell the players without a scorecard” often comes to mind when I do this.

When colleagues of mine talk about this tool, someone eventually asks, “Do you share the genogram with the family?”

My answer is always, “It depends”, which sometimes leaves people underwhelmed.

But this is the perfect example of distinguishing a genogram that includes only facts, from one on which interpretations and subjective assessments have been added.

I’m fine sharing a 100% facts-only genogram with family members, if only to make sure that I have the facts correct.

Don’t Be Like Elaine from Seinfeld!

I typically follow up my explanation with a story about the potential danger of having my interpretations seen by the wrong audience.

I then ask if they recall the episode of the TV show Seinfeld, where Elaine goes to the doctor. 

At one point the doctor leaves the room, but Elaine’s file remains on his desk, and while he’s away, she cannot resist the temptation to open the file and see what’s inside.

There she finds that he has noted that she is a “difficult patient”, and things go south from there.

And it’s the perfect explanation for why I prefer to keep such notes in my head, and never write them down anywhere.

Interpretations Among and Between Family Members

A big part of the work I do revolves around helping family members have conversations around difficult subjects.

They know that they should be having these discussions but can’t seem to hold them and have them go well when left to their own devices, which is why having a facilitator can be a huge help.

One of the simplest ways that I can be helpful is to make sure that they know the difference between assertions that they make that are facts, versus those that they make that are their own subjective interpretations of facts.

An example might be useful. “Sam doesn’t care about his job, he never gets in on time” is not the same as “Sam got in half an hour late today, and it also happened twice last week”.

I think you can tell the difference.

But when personal accusations start flying, things can devolve quickly. Ergo the importance of having a neutral third party involved to keep things calm.

Let’s Agree on the Facts First

It’s amazing how simply making sure that the parties all first agree on the facts can be helpful.

A respected colleague recently shared that this is because the part of the brain that deals with facts is separate from the part that gets all tangled up in emotions, so deliberately insisting that people take the time to use their thinking brain can be very helpful.

When someone is charged with keeping the parties focused on the reality of the facts, more productive and less emotional conversations can proceed.

Family members just tend to act more civilized towards one another when there is a non-family person at the table.

If that person also understands their role and knows how to play it, that’s even better.

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60,000 Hours to Build, 10 Hours to Transfer

Can We Please Spend a Bit More Time on the Exit?

Part of what I enjoy so much about sharing my musings with readers in this space is that I get to bring together ideas from lots of sources and try to combine them in interesting ways every week.

This time we’re going to start with an idea I got from a new colleague, bring in some previous posts, and then incorporate some other ideas that I happened upon on LinkedIn.

Along the way, we’ll bring in various metaphors, and hopefully give everyone some new ideas around how we think about transitions from one generation to the next in a family enterprise context.

Building a Business, and then Exiting It

Let’s start by explaining the numbers in the title of this post. During a recent peer group meeting, a new colleague who happens to be a financial planner, shared an expression that’s become common parlance in his field.

“We typically mention that a business owner usually spends 60,000 to 80,000 hours building their business. But then when it comes time to transfer it, they usually spend between 8 and 10 hours on that.”

Well let’s just say that I’d never heard anyone frame it this way, so I jotted it down and knew that I’d soon be expounding upon this idea here.

This particular peer group is for those who work with family enterprises and family wealth, and this new member of the group has long worked with non-family business people, so a straight sale to an outside party is what he was mostly referring to.

So let’s look at this from a family business viewpoint.

Ten Years or Fifteen Minutes?

One of my first thoughts when I heard the 60,000 to 10 ratio was a blog I wrote about three years ago, Contrasting Transition Timelines – 15 Minutes or 10 Years.

That line was from an acceptance speech for a Family Enterprise of the Year Award, where the recipient related the story about how, decades earlier, his father took only about 15 minutes to transfer the business to him, so he found it hard to believe when professional advisors would tell him that a good transition can take 10 years.

The moral of the story is that he now understands and agrees with the ten years, and that his father’s quick exit was pretty much a unicorn event.

The fifteen-minute version has the senior generation leader exit quickly, while the ten-year plan creates and allows for a period of shared leadership.

The Escalator Analogy

I also thought about an analogy I like and have written about, the one about the escalator.

See The Crowded Escalator Problem in Families

When someone is riding an escalator and they’re approaching the top (or bottom), they need to get off, and not step backwards.

In the case of the shared leadership period, it’s important for the parties to stay a safe distance apart, but you don’t need to wait for someone to disembark before getting on, because many people can ride together.

Congestion, Cohabitation, Turbulence

At the outset I mentioned some LinkedIn posts that I came upon as I was preparing to write this post.

A colleague had written something about a period of shared leadership as a “Période de Congestion” (this was in French) and I recognized that labeling it that way wouldn’t likely encourage families to work this way.

“Congestion” is often used here in referring to traffic jams and such, so I thought maybe “cohabitation” could work better.

As our comments went back and forth, she added that “turbulence” is also a term that gets used to describe this period. (Merci Martine!).

I suppose that just because it doesn’t sound lovely is not a reason to discount it, in fact I completely encourage it in almost every situation.

Learning to manage it well is the trick, of course.

Yes, It’s Messy. And It’s Necessary

For family enterprises, and for situations where there’s no operating business, but there is significant wealth and assets that are owned together with family, it’s important to make sure that what you are setting up is a transition, not a simple transfer.

See Don’t Transfer Family Wealth, Transition It

The time period where the leadership transitions will be messy at times, and that’s expected and completely normal.

And it is so necessary to make sure that the knowledge, skill, relationships, leadership and confidence are all moved down from one generation to the next.

We’re talking months and years, not minutes and hours.

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Musings from a Decade of FFI Conferences

Musings from a Decade of FFI Conferences

Hanging Out with Friends and Colleagues in London

Sometimes anniversaries that happen to be a “round number” give us pause to reflect.

I had such a birthday in August, and have now just attended and participated in the 2024 Family Firm Institute (FFI) Conference in London, an event I’d first attended in 2014, in Washington DC.

In the intervening decade, many things have evolved considerably: the FFI as an organization, me and my practice in this field, the number of people I now consider friends and colleagues there, and of course the field of serving enterprising families itself.

This week I want to share some of my musings around this collective evolution, because while much remains the same, it feels like even more has evolved, for the better.

Let’s Take It from the Bottom

On the last day of the conference, it seemed like almost every conversation I had with other attendees ended up veering towards marveling at how fast the whole field seems to be changing lately.

Between families who are kick starting things post-Covid, to new entrants in the field, to the continued move towards Family Offices, to professionals moving form one organization to another, it seems like the level of activity has never been higher.

And that’s a good thing, mostly.

Lots of change is necessary, but it won’t all be for the better in the short term, as mistakes will be made, firms will take steps that will turn out to be false starts, and families will continue to try to figure out who can best serve their needs, which remain difficult to define.

But there seems to be lots of effort and energy present to better serve families.

Learned and Learner Colleagues

Thinking back to a decade ago, at my first FFI Conference I knew only a handful of people, and thought I was there just to learn.

Being new to the field, of course there was a lot to soak in, and it was clear that this could be a long process.

What I had not appreciated going in was how much of an impact my new and growing network of colleagues would have on my learning curve.

At each successive conference, London’15, Miami’16, Chicago’17, London’18, Miami’19, Virtual’20, (I missed London’21), Boston’22, New York’23, London’24, I’ve gained new friends and colleagues, and we continue to all learn together, from one another.

We all learn better by sharing what we’ve tried and what’s working (and what’s not), all in the spirit of moving our relatively young field to evolve and mature.

Evolving in My Fifties

If your view of human development is that once we become adults, we have peaked, you may want to stop reading, lest your views be dispelled.

I had just turned 50 when I first attended, and I was entering a field I had just discovered existed.

I also knew that although much of my life experience was extremely relevant to this work, I needed to evolve and grow as a person, and gain the skills and behaviours necessary to do this work well.

I had lived my life believing that the “business circle” was paramount, but had now (finally) clued into the fact that it is in the “family circle” that the most difficult and important work happens.

That transition is not as simple as it may seem, and I’m happy to report that my efforts have been worthwhile and rewarded.

FFI Colleagues Rising to the Challenges

I’m not sure if it was due to my “newness” to the field back then or not, but it seemed to me that in those bygone days, many of those who presented during the breakout sessions were sharing their great successes and flexing in front of their fans.

My time in London recently was much different, as most of the presentations I attended were given with a great deal of humility and a willingness to learn from the other professionals in the room.

The global nature of the organisation continues to be one of its greatest features, as we all benefit from learning how this work is done in different cultures and geographies.

I continue to hope that the Family Firm Institute will grow in wonderful ways and create the environment required for this community of peers to meet, share, and learn from one another, for the benefit of enterprising families everywhere.

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On Connection and Empathy When Accompanying Families

The Two Basic Elements of Coaching Success

Working with families and other professionals who serve them as they plan their intergenerational wealth transitions can be rewarding, but also quite tricky at times.

The advisors who help out with structure and content solutions have interesting situations to try to resolve for, but for those who work more in what I often call the “family circle”, it can be even more complex.

The “soft issues” are actually the “really hard” parts of making everything work out in the end.

When I decided to plunge into this part of the field over a decade ago, the best advice I got (and which I have since shared with many others) was to go an do some coach training.

Listening Without Judgement, What a Concept!

When this was suggested to me, I did a Google search and was overwhelmed, so I went back to the person who gave me the advice (thanks JM) to help me narrow my search, she pointed me straight to the Co-Active Training Institute.

After my first 3-day weekend workshop, I was hooked, and I told my wife that even if this did not help me in my business, it would be sure to make me a better husband and father.

Over a decade later, I often share one of the most profound take-aways I got from the whole process, regarding the two main elements one needs to master to be a great coach.

I’ve share them in conversation countless times, but now realize that I haven’t shared them here explicitly enough, so here goes.

One of my coaching instructors at one point said, “Eighty percent of coaching comes down to two things: ‘listening without judgement’, and ‘being with’.”

Another Inspiration from a LinkedIn Post

I post on LinkedIn regularly, and also go there to find out what else is going on in my professional circles.

One day while scrolling my timeline there recently, I saw a post that read, “EMPATHY is listening without judgement”.

In my work, high empathy is a key success factor, and I typically score pretty well on that metric, but I’d never thought about it in terms of “listening without judgement” until now.

But if forced to argue one side or the other on that, I think I’d prefer to defend that thesis.

I know plenty of people who listen with lots of judgement, including family members, and upon reflection, they’re far from empathetic.

I value my empathy, and believe that empathy is truly a worthwhile “value”, especially in my work with families.

What About “Being With”?

So I began to consider what value could be ascribed to the concept of “being with” someone.

After some Googling and poking around the internet, I finally landed on “Connection”, and I was pretty happy with that.

Until, that is, I looked into my family facilitation toolkit and pulled out a Values Edge card deck.

I went through it and was disappointed not to find a card with the word “connection” on it, although there were several others that were pretty close.

So I’ve decided to settle on Empathy and Connection as keys I learned from coach training, as they apply to my work with families.

But I still have a problem figuring out what to call this family circle work.

Coaching, Facilitation, and Accompanying Families

Earlier I referred to those professionals who work on structure and content as key advisors who work with families.

The family work that I specialize in is all about process and relationships.

It involves coaching and facilitation, with an emphasis on the family’s human capital, but it’s hard to put a label on those.

As I noted last year in On Coaching, Parenting and Sub-Optimal Translations, I really prefer the French word for coaching, “accompagnement”, because what I do is truly “accompany” a family on their journey together.

Guidance and Holding Space

This work involves a number of skills and ways of being, including empathy and connection, which are valuable abilities when working with groups of people.

There’s also a lot of guidance and holding the space involved, which are also difficult to put a simple label on.

See also Choosing Your FamBiz Tour Guide and Holding the Courageous, Compassionate Space for a Family.

As I await the “perfect” name for this work, I have a Zoom background banner calling myself a Family Legacy Guide, and a business card where I call myself an Independent Advisor to Families.

Not perfectly clear, but clear enough.

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Wielding Influence Vs. Asserting Control

Is Control Going Out of Style?

This week we’re looking at the differences between exerting one’s influence over others, versus using our power to control them.

Some of the ways we use each of these are similar, and may even overlap, but there are other ways in which the differences are quite stark.

As usual, we’ll talk about these from the point of view of families preparing for some sort of wealth transition, and, as things typically go around here, I’ll weave in my own stories about how we even landed on this topic.

Things Worked Out Exactly as Planned

As a professional coach myself, I never hesitate to give a shout out to my own coach, Melissa, who’s had an enormous affect on me and my career.

               (Sidebar of Unsolicited Advice:

                Don’t ever consider hiring anyone as a coach

                If they don’t also have their own coach!)

A recent comment from Melissa is the genesis for this post.

I’ve been on a Board of Directors for a local charity for a few years now, including the past couple during which I was the Chair.

As I prepared my exit from the top role, I was hoping to set things up with “all the right people in all the right seats” around the table.

We’re all volunteers, and we’ve never had a vote on any single issue in all the years I’ve been there, always arriving at consensus for every decision. 

Democratic decision-making rules the day, not unlike it does in the best case scenarios in families I work with.

Through a variety of discussions with various Board members over the past few months, everything ended up working out exactly as I’d envisioned it for the executive committee going forward.

“Your Ability to Influence Is Strong”

When I shared this news with my coach, she said “You know that your ability to influence is very strong”.

I good coach will often point things out about their clients that we may not recognize on our own.

She coaches executives for the most part, and shared that they all ask for help on being able to influence their people.

I replied that I like to think about it as “soft power”.

Working with a volunteer Board can be tough for executives who are used to having some measure of control of others, but it seems from Melissa’s clients that perhaps control is less prevalent than in decades past.

A Client Stepping Back from His Company

Later that day on another coaching call, I was the coach and I was speaking with a long-time client who still owns his business but he’s stepped back from running it, and we ended up back on this subject by sheer coincidence.

He’s done a great job of keeping on top of things as the owner while resisting the temptation to reinsert himself into the day-to-day decisions.

See “Nose In, Fingers Out” for Family Business

He shared with me that he sometimes finds it difficult to continue to influence how the business operates, even though, strictly speaking, he still controls the company in every respect, from a legal standpoint.

This particular client is on the higher end of the self-awareness spectrum, and I love working with him because he is so atypical in this respect.

If You Can Influence, You Don’t Need Control

Ironically for him, he has control but is trying to find the right way to maintain his influence.

In many family business situations, the parents have ceded control from a legal standpoint, yet continue to make every decision.

These situations can be very tricky for the rising generation family members, who feel compelled to submit to the influence of their parents, often well past the point where it makes sense to continue that way.

It All Comes Back to Communication

As is so often the case, everything comes down to communication. 

When you’re able to get your wishes across clearly and consistently, you’re going to be able to influence others better.

Whether or not you actually can control people’s actions (and you’re likely fooling yourself if you believe you can), making sure that what you’re saying and asking for is understood by all will go a long way.

A favourite quote is from George Bernard Shaw, who said “The biggest problem with communication is the illusion that it has taken place.”

If you’ve been clear and intentional with your words, your influence will grow, regardless of who has control.

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Three Necessary Criteria for Helping Family Clients

And They Work Both Ways for Advisors

If you want to write a lot, it helps if you read a lot too. 

I suppose I could just spout off my own thoughts here each week, but I decided long ago that my best bet was to share lots of wisdom that I gather from elsewhere along the way.

Because the area of family wealth transitions is kind of a niche, much of what I do is read more “general wisdom” and then share how it applies to the work that I do with client families.

LinkedIn has been the source of many of these blog posts over the years, and this week is no exception.

I’ve shared ideas that came to me in French from time to time too, and we’re going back there again too, “Merci à mon amie Sylvie”, who posted something timely there recently.

“If You Want to Help People, Make Sure….”

Naturally, many of the people I follow on LinkedIn work with families as well, and a certain segment of them do specialize in the “family circle” like I do.

The network of those who do this work in French here in Quebec is growing too, and this post came from a friend and colleague I’ve known for over a decade.

She posted about an inspiring training session she’d attended, sharing a short quote the head trainer offered up.

Because it was in French, I’ll provide a translated version and then we’ll dissect it and share some thoughts.

“Remember that if you want to help people, make sure that you like them, believe in them, and have the skills to work with them”.

Let’s break down the three criteria in that statement.

Does “Aimer” Mean Like, or Love?

The first question that might arise if you read the original version is the translation of the word “aimer”, which can mean both “like” and “love”.

I chose “like”, but am aware that some people set a higher bar, and advocate for loving their clients. 

Not sure I fully subscribe to that, although I can see how it could be helpful, but also may cause issues.

But it definitely is hard to do this work for clients you don’t at least like.

I Believe in You

The second criterion is to “believe in” the people you’re trying to help.

That’s another thorny one for me, because it can sometimes seem to be absent, and then we need to ask ourselves if that’s on them, or on us.

Chatting with my own coach recently about a client with whom I was beginning to have doubts about my belief in them, she reminded me that our coach training rests on a fundamental belief that people are naturally creative, resourceful, and whole. So I am supposed to believe in them, because I’m a CPCC (Certified Professional Co-Active Coach).

Her implication was that if I was having my doubts about a client, I had some reflecting to do. 

And she was right (as usual!)

Having the Skills to Help Someone

The third criterion from the quote could be the trickiest one of all. 

Working with families on their “family stuff”, their relationships with each other, as they figure out how they’re going to make decisions together in the future, isn’t something that you can just take a course for to learn, and then state confidently that you have the skills for.

Many people come to this work from other fields that are more about structure and products, and they’re more about content for families.

My work, and that of many of my friends and colleagues, is all about process, and very light on content.

See Liberal Arts Vs. STEM Skills to Serve Families for more on my view of these skills.

I’m Not the Only One Who Needs to Believe!

So far we’ve been looking at this from the perspective of the advisor looking at their clients.

Of course the clients themselves have their own views on their advisors, that they rightfully consider even more important.

Few clients want to work with people they don’t like (or love), and any such relationship is doomed if they don’t believe in us.

That we have the skills is often assumed by the clients, so advisors need to be frank and humble about their skills when entering family terrain.

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How Can a Family Office Enrich You?

There’s Getting Rich and Staying Rich

My inspirations for these weekly missives are naturally quite varied, often coming from conversations with clients, prospects, and colleagues and conferences I attend.

This week, the genesis for my post is an article that landed in my email inbox, from one of a number of lists I’ve subscribed to along the way.

If you’re one of my regular readers (thanks!), you likely also see a lot written about the fascinating world of family offices, which continue to become more and more prevalent.

You also may not be surprised that my views on the family office world are very different from the mainstream.

If Some Financial Wealth Is Good, More Is Better. Right?

So let’s jump into the article in question, and see what we can learn.

The headline is what struck me first, not surprisingly. It read “Family Offices Might Not Always Make You Richer…. Bill Gates Is a Good Example”.

Wow, there’s a lot there, isn’t there?

The first thing that jumped out at me is the implied expectation that a family office’s role or goal is mainly about making the family richer.

And here when I say “richer” I am going with the mainstream definition of the word, i.e. relating to more financial wealth.

The article noted that the investment returns Gates has achieved through his family offices leave him with a lower net worth than he would have if he had never sold any of his stock in Microsoft.

Well, D’Uh!

It’s All About the Money, But Should It Be?

So first off, anyone with their own family office is already financially wealthy, so the role of the family office is not about the family “getting rich”. It’s a lot more about “staying rich”.

And while it’s easy for anyone to calculate what Gates’ net worth would be if he had held all or most of his MSFT stock, no financial advisor would ever recommend such a concentrated portfolio, void of any diversification, to any client.

But of course my view on this is that focusing only on the family’s financial wealth is an error that too many people continue to make.

The financial wealth is what everyone sees and talks about, and it also happens to be the easy stuff to deal with, and the area where most of those surrounding the family earn their salaries, thereby enriching themselves.

Scott Peppet’s M/L/F Ratio

I was nearly 100% certain that I had written about Scott Peppet’s “M/L/F Ratio” here before, but it turns out I hadn’t, until now.

So in the spirit of Too Good NOT to Share, here goes.

I wasn’t completely wrong, though, as I had shared it elsewhere, just not in my blog. See How can a family’s generations stick together? “Generative Alliance” to the rescue. 

That article, that I wrote last year for CanadianFamilyOffices.Com, included the views of both Peppet and the venerable Dennis Jaffe, but we’ll stick with Peppet’s ratio idea here.

Money – Legal – Family: What Percentage of Each?

Family offices need to focus on M, Money, of course. They are also responsible for taking care of a lot of L, Legal matters for the families they serve. Nobody is saying they shouldn’t.

But M and L are all about the “office” part of the family office, but what about the family, for whom all this work is ostensibly being done?

Why don’t most family offices focus much on the F, Family?

This is considered “the soft stuff”, but that’s a real misnomer, because it is really hard to do it well.

But does that mean that they shouldn’t be doing more?

Peppet speaks about the amount of time and effort, on a percentage basis, of those who work for the family office.

He believes that, on average, family office employees spend about 70% of their time working on M, about 20% on L, leaving only a measly 10% for F.

My guess is that his numbers are pretty close to what’s going on, on average.

Enriching the Family’s Other Capitals

But just as Bill Gates doesn’t really need more money, most families who have or use a family office have already achieved comfortable financial status.

They could often use support for the other types of capital, like human and relationship capital, that can be a challenge for such families.

Family office employees and outside advisors who can help in those areas can enrich their family clients is so many ways.

Just because some financial wealth is good, doesn’t mean that more is always better.

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