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Striving for the Right Kind of Ego in a FamBiz

Striving for the Right Kind of Ego in a FamBiz

It Can’t Be All About “Me”

When the inspiration for one of these weekly posts comes from an actual coaching session I had with a client from a family business, I really get excited.

Regular readers may recall that I have a penchant for mining for ideas in the land of translations between words in English and other languages, typically French.

So if you’re a fan of those, keep reading because that’s where we’re going this week.

It all began with a misunderstanding on my part, which I quickly realized, and then happily recovered from.

 

Young Rising Generation Leaders

I’ve been fortunate to recently become involved with some local organizations who offer programs to entrepreneurial families who are preparing for eventual intergenerational transitions.

The program I’m part of, as a freelancer, has me coaching some young rising generation family members who are expecting to take on leadership roles in both their business and their family, as the parents eventually hand over the reins in the coming years.

As I said this is local, and in Quebec that typically means that the work is done in French, which thankfully for me, n’est pas un problème.

My French is not 100% perfect, but I’m more than functionally fluent for the job, thanks to five decades of practice. (Merci École St-Rémi)

Management Versus Ownership

So there I was on a Zoom call with “Sandra”, the oldest of three siblings who are preparing to eventually succeed their father, the founder of the business.

Although she’s the oldest, she’s still in her early 20’s, and so they’re still obviously in the early innings of this eventual transition.

Because of her age relative to her siblings, and the position she holds thanks to her seniority working in the business, she’s poised to hold the eventual top role in the running of the company, at least as things stand today.

However, in terms of the ownership of the company, the assumption is that Dad will be looking to make his three offspring equal owners, with one third of the company each.

Take note of the word “equal” there, as it foreshadows where we’re heading.

 

Did I Hear That Right?

As I was trying to impress upon Sandra the difference between her management role and her ownership role, I pointed out that in the business a hierarchical situation is likely warranted, but the ownership reality is actually flat.

As she was replying that she recognized that they would all be “equal” in the ownership, she obviously used the French word, “égaux” (pronounced “AY-go”).

The problem was, in my head, I heard the word “égo”, which is pronounced exactly the same way. I think you can guess what that translates to in English.

So here I was, thinking that she was talking about her ego, rather than the fact that they were equals.

Bang!

 

Calling a Timeout

Wait, stop, sorry, back up!

I asked her to pause to allow me to explain and apologize and thank her for the blog topic.

How the heck could the word “ego”, which feels like it is all about “me”, the individual, be pronounced the same way as the plural for the word equal, which is all about us?

I hope you aren’t expecting me to give you an answer, because I don’t have one. If someone reading this does, perhaps a linguist, please let me know, and in the meantime, I’m just happy to have stumbled upon this.

It feels kind of like an oxy-moron to me.

 

Lessons for Families Working Together

The take-away for me is simply that sharing this story and the reality behind it creates an opportunity to put this subject on the table with family members.

The business can be organized as a hierarchy, the ownership is flat, and the family, well, the family is the family. We are right back to the Three-Circle Model again. (I can’t believe it’s been almost 8 years since I wrote that!)

So each circle has a different structure, and that’s how it usually goes.

That means that the people who are part of more than one circle need to recognize that it’s always important to consider whether they are discussing matters that have to do with the running of the business, or ownership issues, or family matters.

Those differences matter, and must be discussed and made clear. It will allow you to separate “ego” from “equals”.

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Guiding a Family’s Interdependent Journey

A Family’s Most Important Project of All

Welcome to another edition of “Steve tries to take a bunch of ideas and spin them into something coherent and useful for enterprising families and those who work with them”.

It should be interesting as I try to weave together the fact that families are very interdependent, that recognizing this is a key to intergenerational success, and that proper guidance on the journey will be of enormous help to them along the way.

These thoughts have all been brewing in my head for a while, stimulated by various recent interactions, and now it’s time to share where I’ve arrived. Thanks for joining me again.

 

Coaching Every Family Member Is Ideal

My favourite gigs with families are the ones where I get to spend both one-on-one coaching time with each family member, and then also participate in their group meetings.

While I’ve noted that in some cases it’s possible for a family to make progress in situations where there’s only one family member who’s sufficiently motivated to seek outside coaching, my best engagements are those where I get to work with everyone, both individually and together.

While recently discussing some cool aspects of coaching in general with another coach colleague, we kicked around the importance of the coach exuding an attitude of “I’ve got your back” and “I’m here for you without any other agenda, unlike most other people in your life”.

You can imagine that this might be a difficult role to play when you work with many of those “other people in your life” as well, and you wouldn’t be wrong either.

 

Serving the Whole Family’s Interests

The keys to doing this well are quite simple, in fact, but please don’t ever forget that simple is not the same as easy.

The first key is for the coach to see themselves as a servant of the entire family, not simply the one who hired them, or the one who pays their bill, but the group as a whole.

And then there’s another key that goes with that, and that’s the fact the to truly serve the family, it’s much easier when that coach is not serving an institution whose logo is on their (the coach’s) business card.

Family members are interdependent, and coaching them on their family journey is a special role with a unique skillset.

In fact, it’s more than just coaching, it’s also a bit of facilitation and lots of guidance.

 

Guidance for the Journey, Not the Destination

The term guidance is one that has grown on me lately, as I’ve re-branded my services and now call myself a Family Legacy Guide.

Part of the appeal is that I want clients to realize the importance of the journey they are on together, as opposed to any particular destination they’re trying to reach.

This is bringing back memories of a piece I wrote in 2018, There Is No Destination, the title of which is the first part of an expression I had recently discovered then, which is completed by “It’s ALL Journey. All. Of. It.”

 

The Individual – Togetherness Dichotomy

When working with various family members I also need to keep in mind the “familiness continuum” that exists, and how each person sees that.

Every member of the family is trying to find the right balance between their own individuality and the togetherness of the group, and that’s also a moving target.

By alternating my interactions from 1-on-1 calls with each of them to meetings with the group, I can stay on top of how this balancing act is evolving.

It’s during the group meetings that I notice issues that I can then take up with them individually.

 

Interdependence and Moving Targets

Most families underestimate their level of interdependence, as well as the importance that learning how to work as an interdependent system will have on their ability to transition their business or wealth to the rising generation of their family.

A few months ago in Planning your Family’s Declaration of Interdependence we looked at the fact that there needs to be a realisation that they are in fact all dependent on each other, in all directions, in order to make true progress.

The family is on a long journey that they are all on together, and so having someone come along with them, at certain strategic stages, can make all the difference in the world.

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Maybe Efficiency Is Overrated in Family Enterprises

It’s not often that I go out on a limb right off the top of these posts, but I suppose coming out against the importance of efficiency could certainly qualify as going against the tide when talking about business.

Of course I don’t typically deal in true business subjects, since my preferred domain is that of family business, where my emphasis is on the family aspects.

Getting things done quickly and efficiently seems like a laudable goal of course, with some notable exceptions.

The main exceptions I’d like to note here are those where you need to bring in the entire wisdom of a group of people, and where it’s important for everyone to feel heard.

Such situations abound in the family circle part of family enterprises, or, said better, enterprising families.

When Finishing Faster Isn’t the Key

I’ve dealt with certain examples of this before, notably in Going FAR? Go TOGETHER, which deals with a scenario involving a group of siblings in the rising generation of their family, preparing to eventually take on leadership roles, both in the business and in the family.

In recent months I’ve been involved in two group processes where I’ve truly embraced the idea of throwing efficiency and speed out the window, with positive results (so far).

The first example took place in a professional organisation I’ve been involved with as a volunteer for the past few years, as part of a committee charged with an important role in putting on our annual conference event.

The second example is ongoing, and has me playing a facilitation and mediation role with a sibling group who share ownership of some legacy assets together.

 

Professional Development “Live Case” Opportunity

In the first case, my role had recently changed from simply being a member of the committee to now leading it. I had the benefit of following in the footsteps of someone who had done a great job before me, but that also gave me big shoes to fill.

There are always challenges in putting on an annual event in the summer but having to make most of the planning decisions months ahead of time, and these are only magnified by the pandemic’s uncertainty as to what will even be possible regarding large groups six months out.

So we definitely had a number of considerations, lots of moving parts, and a general lack of clarity around much of the information we needed to base our decisions upon.

We also on-boarded three new volunteers to the committee, and the admin person from the organisation was also new, and had never been part of our annual event.

 

Learning About How to Be with the Group

There was plenty of pressure on us to come to some final decisions but I resisted the temptation to push for some closure on some items that I knew could and should wait.

It was way more important to make sure we took the time to consider all our options, evaluate a number of ideas, and take advantage of the wisdom of all the members of the committee.

As the head of the group, an important part of my role was to set the right tone and pace for our deliberations. 

Weighing many interdependent considerations and allowing everyone to share their inputs was more important than the somewhat arbitrary deadlines that could have distracted us.

 

Getting a Family to Take Their Time

The practice I got from working with that group set me up nicely for a new client situation where I’ve used some of those lessons to good effect.

This sibling group is getting used to some new realities and are learning to work under a more democratic decision-making framework than they were used to.

That kind of adjustment takes time, not only in terms of minutes and hours spent together, but in the days and weeks that are needed for new realities and understandings to sink in to each person’s thinking.

When you combine that with a severe “information asymmetry” between insiders who’ve always played key roles, and those who have spent their lives on the outside looking in, it’s key to set a pace that allows everyone not only to be a part of the process, but to feel like they’re part of the process, on relatively equal footing.

 

That methodology isn’t the most efficient, but wasn’t it the tortoise who won the race?

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Amphibious Guidance for Members of your FamBiz

Amphibious Guidance for Members of your FamBiz

The Old Family Business / Business Family Debate

Defining the kind of work that I do with members of business families is always a bit tricky for me, so sometimes I like to dive straight into the topic here, hoping I can either enlighten readers, or discover something new for myself.

My clients are either business families or members of such families, and I really don’t do much work with “family businesses”.

I know that may seem almost contradictory, but my focus is on the people and their family above all else, including whatever business they happen to own and run.

 

Not Really a Business Coach

It’s also taken me a while to truly embrace the term “coach” as a descriptor for what I do, but when I finally got my CPCC certification in 2019, it finally seemed to resonate with me and feel real.

But that doesn’t mean that I’m no longer an “advisor” or even a “consultant” to enterprising families and their members, although the former suits me much better than the latter.

The only exception is when I’m asked what I do while going through customs, where “family business consultant” has been my standard reply and it has never elicited much response, which is the ideal result in that situation.

 

So What’s with the Amphibious Stuff?

The idea for labelling the kind of advice and coaching I do as “amphibious” comes from thinking about the origins of many of the people I’ve encountered in this field.

Off the top I’ll admit that the term amphibious here is far from a fantastic metaphor, but I want to explore it anyways, because I think it might be instructive.

A quick search of the word amphibious brings back:

               “relating to, living in, or suited for both land and water”

What I was really going for was the “suited for”, which in my head would also include “at home in”, or even “native to” but instead of “land and water”, my version is “business and family”.

 

The Ambidextrous Triathlete?

Some other ideas that came up while considering this include the term “ambidextrous”, as in “able to use the right and left hands equally well”, which gets at a lot of what I want to convey, but still misses out on part of it.

Many of you know of my love for the Three Circle Model, and since the blog linked here dates back to 2013, you know that this is more than just a recent fling.

So if there are three circles, maybe my two-way amphibian isn’t capturing everything either.  Admittedly, it isn’t.

Maybe there’s something there to be explored later, where Ownership could be the swimming portion of the race, the biking part could be the Business, and the running at the end could represent the Family.

Those who know me will quickly recognize that all of this is quite far from my comfort zone.

 

And the Comfort Zone IS Key

But all kidding aside, the idea of a comfort zone is pretty important, and that’s where the amphibious part resonates.

People who grow up as part of a business family experience life differently form those whose parents have “regular” jobs.

Having grown up in such a family, I’m always comfortable sharing those experiences with clients as I coach them, and they frequently nod as they reflect on similarities to their own context.

We’re all more comfortable relating to realities of families similar to our own.

 

What About “Getting Out of Your Comfort Zone”?

But when working with folks who are part of a legacy family, in order to be part of a process where they make progress, they typically need to get out of their comfort zones, don’t they?

Yes, of course.

In order to do that, it’s always best to recognize all the realities that they’re living within that zone, which is precisely what their amphibious coach will be well placed to do, because they aren’t only comfortable there, they’re also natives.

 

Guidance and “Walking with” my Clients

The ability to “walk with” someone and to “accompany” them on their journey is something I expounded on in Work with Me, Walk with Me.

Yes, they’d typically be able to benefit from working with any skilled coach, no matter the type of family of origin of said coach.

However, if given the opportunity to work with a skilled coach who has a similar lived experience, the potential for a rich relationship goes up tremendously. And I’ll always say “ribbit” to that!

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Asking for Permission Vs. Asking for Forgiveness

Which One Is More Appropriate in a FamBiz?

During a recent board meeting for a local charity, the Executive Director asked us for guidance around a situation that was troubling her. The answer I gave her reminded me of advice my Dad shared with me decades ago.

Since Dad was the first Family Business owner I ever knew, and still the one upon whose wisdom I typically rely most, this incident provided a nice opportunity to share it here.

While Dad didn’t have a specific FamBiz application, because he concentrated on his own business, I do think about other people’s businesses, so I will adapt it to that situation.

 

Pandemic Safety or Easy Cash

The non-profit on whose board I serve has a large hall we rent out on occasion. Since our province has been on “essential services only” lockdown, that rental income really dried up.

Our government has allowed TV and Film production to qualify as essential, which, while being a bit of a headscratcher, became and opportunity for us.

We were approached by production crews to rent our hall for their people to take breaks and have their meals.

“Should we accept these rentals?”, was the question from our E.D.  “With so many government regulations because of our food bank, maybe we should ask first.”

“How much do these rentals pay?”, came the first question.

 

Some Things Are “No-Brainers”

When I heard the answer, which was a decent sum, I replied that it was better to go ahead and do it, and ask for forgiveness later, if we got into trouble.

It seemed inadvisable to me to wait and ask for permission first. And that brought back memories from my father.

With Dad, it was typically when he wanted to build something that might require a permit.  He would “play dumb” and go ahead and build, figuring that asking for permission would cause undue delay and possible extra costs.

In our charity example, it was a no-brainer.

But what about in a family business, when you’re a rising generation “future leader”, does this advice also work?

 

All About Seizing Opportunities to Lead

There’s a plethora of potential examples that cover a wide swath of situations where this could apply, and the answer will of course vary depending on the context.

The message I want share here is that when there’s a doubt, oftentimes making the leap, and taking action, will be perceived as the better option.

When I work with different generations of a business family, I notice that some rising generation family members will defer to their elders on too many decisions, for far too long.

Yes, I understand the attitude of “But if I screw up, Dad will be mad”; been there, done that.

 

Act as If I Weren’t Here; What Would You Do?

As I wrote those words, I actually had a flashback to the 1980’s, when I once asked for Dad’s direction on a decision.  I don’t recall any details, but I do distinctly remember his words.

                     “What would you do if I wasn’t here?”

Interesting, I thought. And from that point on, for issues and decisions that were not critical, and for which a timely response was important, I began to make more of the decisions in my sphere of influence than previously.

Naturally it was better for both of us that way.

And, importantly, this began an ever-increasing responsibility load that I was able to successfully take on for myself. Another Win-Win.

 

They’re Probably Secretly Waiting for It

There are certainly some exceptions, but for the most part, parents are actually pleased, relieved, and proud when their offspring are able to take on more important roles, responsibilities, and decisions.

They’ll usually forgive you if you make a mistake, too.

Asking for permission on too many minor questions, for too long, is only going to delay the important transitions of knowledge, experience, and decision-making that are key to making a family business succession successful.

 

A Gradual, Iterative Process (Like So Many Others)

These transitions are a long time in the making, and tend to evolve gradually. They’re also iterative, meaning that you do something, learn from it, maybe take a step back, evaluate, and try again.

Over time, you make progress in the desired direction

Eventually, because a family is truly interdependent, especially over the long term, you may get to the point where you resemble a family discussed in Asking for Permission in a Family Business.

Eventually, the shoe gets to be on the other foot!

 

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On Hunger and Thirst in the Family Enterprise

Different Things Drive Different People

It’s fascinating the things one can learn by listening to “real people” talking about their lived experiences.  Too often our learning comes from reading more theoretical ideas that, even though they come from smart people, can lack in true substance.

In some other instances we may spend time with colleagues or other peers, exchanging stories, ideas, and learnings, but those too sometimes lack the “oomph” that we can get when we have the chance to hear from those who are actually in the middle of living through an experience.

So when I recently had the opportunity to listen to a panel of rising generation members of local family enterprises share their stories, I was all ears.

Sharing Viewpoints On What We Heard

Of course I absolutely love opportunities to share with peers too, and when that sharing follows a panel of real-world experience sharing, it’s the best of both worlds.

And therein lies the genesis of this week’s post: comments about this panel of young people assuming important roles in businesses owned and run by earlier generations of their families.

One member of our group marvelled at the “thirst for knowledge” that all the panelists shared.  “Hmmm… she’s right”, I thought, as I reflected on what I’d heard.

It was true that each of the three panelists did seem to share that part of their journey involved wanting to always learn more and more and finding a variety of ways to continue that path.

But is a thirst for learning enough, I wondered.

Thirst for Knowledge VS. Hunger for Growth

Just a couple of weeks ago, in Sibling Compatibility Is Not Sufficient, we looked at how important it is that those expecting to take over the reins of any family business be competent, and not simply know how to get along well with each other.

Inherent in that competence, at least in my mind, is a willingness to take risks in order to continue to grow the business.

And another way to express that could be to talk about one’s hunger.

So when my colleague noted the thirst for knowledge that we had witnessed during the panel, my mind went to hunger. (Okay, it was also getting close to lunch time).

One Without the Other Is Asking for Trouble

So when we think about the attributes we’d like to see in rising generation family members who will someday take on key roles in the family enterprise, ideally they will have both a thirst for knowledge and a hunger for growth.

Let’s look at what you’d have if you only had one, without the other.

If you have the thirst for knowledge, you’ll have people who are curious and always wanting to learn more. There’s nothing wrong with that, of course. But, without at least some hunger to drive them to take risks, they could easily succumb to “analysis paralysis” that could certainly lead to stagnation.

On the other hand, if all you have is someone willing to take risks, but without the curiosity and desire to inform themselves in advance, you could have a lot of reckless behaviour that could quickly sink the business too.

A Look in the Mirror for Me

When I do some self-reflection, I realize that one of those situations I just described actually fits me pretty well.

Whenever I do any kind of assessment like Strengthfinder, I always score very high on “learning”.  I’m constantly looking for any opportunity to learn more.

But if I were to assess my willingness to bear risk, I’d score at the other end of the scale.

I’m guessing that deep down inside, when my father decided to sell the operations of our family business, that he had started before I was born, he also realized that handing the reins to me might not work out as well as he might have originally hoped.

No Regrets and Back in the Family Business Game

As his only son, I recall from my earliest days being told that my duty was to eventually take over the business from him.

And for the first four and a half decades of my life, that was the direction I took.

Now that I am back in the family business game, working with other families, my goal is to not have any family members need to take so long to find their rightful place.

There is room for the thirsty and the hungry, and both, in every family.

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Sibling Compatibility is Not Sufficient

Family Harmony Is Very Important, But…

One subject that I harp on a lot is family harmony and making sure that everyone gets along together.  

This is important for families who want to ensure that the business they built, or the wealth they’ve accumulated, will be able to continue after the next intergenerational transition.

And while harmony really is something that families need to work on if they don’t already have it, in many cases it will not be sufficient.

I came across something recently that made me think about this and how I may not have been doing justice to some other key considerations in this space.

This week, I want to address a couple of them here.

 

If You Aren’t Growing, You’re Shrinking

The first thing many families ignore at their peril is the importance of competence.  

Of course this can take many forms, but bottom line, if no family members are competent in managing the business or the wealth, dissipation will often be the result.

I’ve noticed a lot more being written in this field about the importance of having an entrepreneurial spirit in families, so that with each generation, there is some renewal of activity to maintain and hopefully grow the family wealth.

In cases where there isn’t anyone with the inspiration and ability to at the very least maintain the family wealth level, some choices around how to manage things and what the next generation family members can expect to pass on to their offspring will need to be made.

If you just take a look at how many households are being supported by a business in the first generation, and then extend that down even two generations further, the geometric expansion in that number will be difficult to match without an equally rapid progression of the family’s wealth.

So if all you have is “one big happy family”, but nobody willing and able to drive the amount of wealth forward, it becomes a matter of time before dissipation will kick in.

 

Complementary Roles for Family Members

Besides competence, another area that becomes important in many families is the existence of complementary skills in the sibling or cousin group who will be taking on leadership roles after the next generational transition.

If everyone is good at the same thing, and there are areas where nobody has any skill or desire to take on leadership, there could problems.

Having too many cooks can cause unneeded conflicts, and having skill gaps can lead to being blindsided in certain areas.

Of course when a family attains a certain wealth level there are some benefits that are easy to see, such as having an ability to find roles for just about any interested and motivated family member.

And when they have skill gaps, a family with enough resources can typically hire outsiders to fill such roles.

 

Competent + Compatible = Complementary

As I was writing this I got to thinking that maybe complementarity is the intersection of competence and compatibility. Let’s work through this and see if it holds up.

If you have people who are competent, i.e. good at something, and then you get to the point where the group of people get along, i.e. are compatible, can you not then ascertain that they are complementary?

It feels almost like this fits with one of my favourite ways of pointing out synergy, which is to say that “One Plus One Equals Three”.

Earlier I mentioned the geometric growth of the family and now I just opined on synergy, I guess this is a good place to link to The Exponential Magic of Family Collaboration.

 

So Strive for a Complementary Team

This may be a stretch, but perhaps either competence or compatibility are scalar, while putting them together gives you complementarity, which is a vector quantity.

I just flashed back to my High School Physics class there, and since that was over 40 years ago, I admit that I needed to Google this to get the terms right.

As Mr. Henry used to say, “velocity is speed with a direction”.

So if you strive for a complementary team in your sibling or cousin group, you’ll be able to combine everyone’s ability to get along with a direction and a purpose.

This isn’t to be confused with complimentary, although if they also develop the habit of saying nice things to each other, that’s OK too!

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The Ownership Connection to Family Legacy

It’s More Than Just About Family and Business

There are some subjects I cover pretty often in these blogs, because much of the work I do revolves around areas where families have predictable challenges that I try to help them work through.

Regular readers know that I’ll often return to such staples as communication, governance, family meetings, harmony and working together.

Well lately I’ve been seeing and hearing much more about the subject of ownership, so that’s where we’ll turn now.

 

The Forgotten Circle?

I can’t believe it’s been over three years since I wrote Ownership: The Forgotten Circle of Family Business. I guess that at that time I was noting an absence of discussion on this topic, so it seems that may no longer be the case.

A few months before that, I penned Pruning the FamBiz Ownership Tree, in which we looked at the issues that arise over generations where ownership of a business ends up coming down to family branches with different involvement in the business, and how those issues need to be dealt with somehow.

But today I want to look at a specific area around ownership, and that is the way that the feeling of ownership is so important for families to recognize, if they are expecting their following generations to maintain their family legacy.

 

The Ownership – Legacy Connection

I typically make one similar assumption when I begin working with any family, which I normally end up validating early on. That assumption is that the leading generation of the family, the ones I sometimes label the “NowGen”, have at least some interest in creating a lasting legacy.

Those words mean different things to different people, so let’s look at this more. For me, a lasting legacy is one where even after the NowGen has left this earth, there is some continuity of what that generation built, grew, and/or stewarded, by the “NextGen”.

Let’s look at the opposite of that, which sometimes occurs, and which is also fine if that’s what makes the most sense for that family.

If the family wealth is to be split among the descendants and then they will all each go their own way, then there will be little or no legacy left.

In most families in what some call the 99%, this is standard practice.

 

That Feeling of Ownership

When a family attains a certain level of wealth, the idea of maintaining some sort of legacy will often come up.

Such families will then typically consult a number of professionals who are experts in the area of protecting that wealth so that it may then be preserved for future generations of the family.

One of the details that gets dealt with at that time is the ownership of the assets that make up the financial wealth, and this is where some important considerations sometimes get lost along the way.

“Family specialists” like me who work with the family members on how they will govern the family wealth often walk into situations after most or all of the ownership details have been cast in concrete.

And in situations like that, we typically note that there were some opportunities to make the future owners actually feel like owners.

 

Just Trust Me On This, Kids

Of course when the offspring are still children, it is normal for their parents to make important decisions for them. The problem comes up when those children become adults, and yet their parents continue to treat them as children.

I always encourage parents to work on having adult-to-adult relationships with their offspring, because a “one-up, one-down” framing can be crippling to the development of the rising generation.

Growing up in my family, I had legal papers put in front of me and was told to just “trust me, sign this”, and many others went through the same thing too.

 

Feeling Like You Actually Own It

Getting back to those experts who prepared legal documents about the wealth, they understand the differences between legal ownership and beneficial ownership for assets in a trust, and my point here is that at some point those beneficiaries need to have this explained to them as well.

Who will share ownership of what, and when those changes are expected to happen are also key.

To preserve a family’s legacy, feeling like you own it cannot be overlooked.

If the debate is to share this information now or later, my advice is that sooner is always better.

 

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Sharing the Load as an Enterprising Family

Most family businesses actually start out with one major contributor who builds something large enough to eventually employ many people, including other family members.

As any parent with children who want to help out around the kitchen knows, even when they’re really too young to contribute, it can sometimes feel like a step back as you need to actually take a bit more time to include some of these helpers.

This week we’re looking at the idea of sharing the load with family members, as the family matures and there actually are others who should be able to contribute to the family’s success.

Bringing them in isn’t always as simple as we hoped at the outset.

“Many Hands Make Light Work”

In theory at least, sharing the work among many people makes things easier for everyone.  Many hands make light work, the saying goes.

But what if we’re talking about more than simple “work”.

I’m trying to get at some of the things that underlie the complex nature of enterprising families, who are working towards an intergenerational wealth transition.person holding another person

There’s a lot of work to do there, in many cases. And if it were just a lot of work, it might be simple to divvy up.

But what if it feels more like a load?

“It’s Not the Load that Breaks You Down …”

The idea for this post came from a recent webinar I attended, by the Family Enterprise eXchange (FEX).  The presenter happened to be a friend and colleague, Thomasina Williams, with whom I once presented at the Rendez-Vous of the Purposeful Planning Institute (PPI).

She was presenting on Stress, Health and Well-Being as a result of the pandemic, and one of her slides featured a quote that I loved.

It was from Lena Horne, and it read: “It’s not the load that breaks you down, it’s the way you carry it”.  

According to Google, it also seems to be attributed to C.S. Lewis and Lou Holtz. It seems like great quotes get recycled a lot.

When Does Work Become a Load?

When we think about work, we’re typically pondering things that go on in what I like to call the “business circle”. 

If you aren’t yet familiar with the Three Circle Model of family business, you may want to start here: Three Circles + Seven Sectors = One A-Ha Moment

The place where things can start to feel more like a load often come up in the “family circle” and even the “ownership circle”.

Part of the difficulty in the family circle comes from the fact that there are often some members of the family who do work in the business, while others do not.

The “information asymmetry” that this creates can become a big issue for the family to address.  When someone is a family member and perhaps even an owner but isn’t involved in the day-to-day dealings of the company, they can feel like they’re flying blind at times.

Sharing the Load

Keeping all family members current with what’s happening in the business becomes important when there’s an upcoming generational transition.  

And by “upcoming”, I mean within a decade or so. In fact, it’s really hard to start this process too early.

One way to make the load easier to carry is to share it among different people. Of course the onus of sharing the info should fall on the ones who work in the business, but that doesn’t mean that all the work is theirs alone.

All family members who are currently owners, or those who expect to be in the future, also share in this task.

Ideally, the information flow should have both a “push” and a “pull” component.

Lightening the Load

As we think about ways to lessen a load, apart from sharing it, there is also the possibility of making it lighter.

This may seem like a bit more of a stretch, but here’s one way to look at it that might be useful.

Last week in Live from the Forum – Success Transitions we were looking at regular family forums, I don’t think I spent enough time talking about the importance of having fun together as a family.

Everyone should be looking forward to such meetings, knowing that there will be plenty of opportunities to share some laughs along the way.

In my book, spending time with people you love, and having fun together, always makes things much lighter.

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On Rules of Engagement for FamBiz

Who Can Work in the Business, and When

There are a number of subjects that come up again and again in the wonderful world of family business, and sometimes it feels like I’ve written about most of them here already.

Still, when there’s a confluence of happenings over a short space of time that puts one of them back on my blog radar again, I like to revisit them.

Such is the case this week, as the subject of rules for working in a family business has come up a few times, from different directions, in my interactions over the past few weeks.

So let’s take a fresh look at the subject of “rules of engagement” for FamBiz.

Let’s Start with a Flashback

It’s not as if I’ve written about this recently either. In the summer of 2018, I wrote Forced into the FamBiz, which was about the fact that I believe that it makes sense to “force” one’s offspring to work in your family business when they are young, as a summer and/or part-time job.

It also clearly states that I’m a proponent of making a rule that families should not hire their children for fulltime jobs in the business until they have successfully obtained and held a similar job elsewhere, for a certain number of years.

This was an idea my father had heard about, but had decided unilaterally didn’t apply to his family (and therefore me).

I’ve recounted this many times since beginning my work with other business families.

I was an undergraduate business student at McGill, and my Dad told me he’d listened to some consultants explain why there were many reasons to forbid hiring family members until they’d demonstrated the ability to get a job on their own, without using their last name as leverage.

“But We’re Not Gonna Do That”

After I looked at him with some hope in my eyes (as I recall it, anyway) he stated “But we’re not gonna do that”.

Having not had to live by such a rule is now one of the main reasons I now endorse it.

But let’s get to the occasions where this came up recently. The first was on an FEX webinar where some family business leaders were sharing stories about how they got through the worst of the pandemic.

One business leader from western Canada related that her son had joined their business recently, and that this went against their family’s rule against allowing family members to come on board until they had worked elsewhere for 10 years. (10 years seems excessive, but alas, that was their rule).

As it turned out, every department of the company was now fighting to have him join them, thereby signaling that he had proved his worth despite the shortened period of working elsewhere for very long.

Family Business Collaboration

I recently joined a nascent group that pulls together members of family businesses and consultants who work with them. Family Business Collaboration

On a Zoom call recently, someone noted that his FamBiz had a rule about working elsewhere for 3 years.

I asked how long that rule had been around in his third generation company, and I found his reply interesting.

He noted that he was the first person to be “the beneficiary of that rule”, since his grandfather had not applied it to his father at the time.

Isn’t in interesting that a father who didn’t have to live by a rule went on to implement it, and his son, who was subject to it, found he was a beneficiary of it.  I get it.

A “Lessons Learned” Video

So when a respected colleague and friend (and mentor) asked me if I could share a brief video of myself for a family business conference she will soon be giving, this all came in handy.

She’s now asking several people involved in the FamBiz space about lessons they’ve learned along the way.

Would you be at all surprised to learn that the lesson I shared was all about the idea that there are many reasons why demanding that young adults work elsewhere before joining their family’s business makes a lot of sense, and that I wish my Dad had instituted such a rule?

I hope not.

I have few if any “hard rules” that I recommend to my family clients, but if I did, this would be it.

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