, , ,

Family Office: “WHAT” vs. “HOW”

Family Office: “WHAT” vs. “HOW”

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

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

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

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

 

A Thousand Words

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

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

Ten Years Flew By

The most important idea here is this:

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

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

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

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

 

Family business office

 

The Family Office (The “Who”)

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

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

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

 

It’s Complicated

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

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

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

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

 

Benefits Come with Responsibilities

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

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

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

And as we all know, with benefits come responsibilities.

Family business Work

Where Are We Going?

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

So here’s where I’m going.

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

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

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

 

Family Alignment: The Missing Link

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

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

 

The WHAT, the HOW, and the WHO!

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

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

Recognize anyone?

See also: The Exponential Magic of Family Collaboration

 

/by
, ,

From Suggesting to Managing in the FamBiz

Being fluent in more than one language has many benefits, most of which are quite obvious.

Having lived in Montreal my whole life, I experience this daily. Not a day goes by where I don’t use both French and English.

Facilitation = Making Things Easier

Every language has words that come from other languages, and when you’re fluent in both, some things can seem obvious to you that others might miss.

Years ago in the Family Enterprise Advisor program that I was taking in Toronto, we were in the module on “facilitation”, and some of my unilingual colleagues were a bit unclear on the meaning of the word.

I shared my take, which is that the word “facile” in French typically translates to “easy”, so facilitation is simply “making things easier”.

Some Are Less Obvious

Examples like that one are pretty easy to spot, but others are less striking, such as the one that inspired this post.

The genesis was a documentary I watched this past summer, in French, about Felipe Alou, who hails from the Dominican Republic.

Alou had a great career in baseball, first as a player and eventually as the manager of the Montreal Expos.

Promotion to Manager

Alou started the 1992 as the “bench coach” for the Expos, essentially the “assistant” to the rookie manager, Tom Runnells.

Runnells was the boss, and Alou was there to support him.

But this manager was in over his head, and often sought input from Alou, who was older and had much more experience.

When Runnells was fired less than two months into his first season, Alou was given the top job as many fans had hoped.

Giving Suggestions

Here is where the language thing comes in. The documentary was in French, but most of the interviews were in English, so there were French subtitles.

Alou was explaining, in English, how things were at the start of the season, when he was second in command.

He mentioned that he was suggesting things to Runnells, but then suddenly he was managing the team himself.

The French verb “to suggest” is “suggérer”.

And the French verb “to manage” is “gérer”.

Wait, what?

So, is “giving suggestions” tantamount to “sub-managing”???

male and female business people talking

Sub-Titles as a Visual

If it were not for the sub-titles I was reading (for no real reason, actually, since I understood spoken English!) it would not have hit me.

But there it was for all to read, about the big step Alou had to take to go from “suggérer” to “gérer”, from suggesting to managing.

Stepping Up, One Step at a Time

Now is the time for me to bring this blog into the family business realm. I trust that some readers are already with me here.

Let me relate my recollection of some of my own story as I worked with my Dad, decades ago.

Initially, my suggestions on some subjects were welcomed. As my ideas proved to be good, they were agreed to without much debate.

From Talking to Doing

At a certain point, some of the implementations were also left to me, as I demonstrated that I could be trusted.

Sure, at the early stages, I would clear things with him first before acting, and then eventually I would act and relay the information afterwards.

Eventually, I would do what needed to be done, and sometimes not remember to even inform him.

In many ways, I took the “suggesting” to “managing” steps as Felipe Alou did, but over a longer period of time.

I was afforded this longer timeframe because my Dad and I had planned for a longer overlap.

male and female business people talking
Radical Changes: In Case of Emergency Only

The firing of a baseball team manager is not at all like a family business succession, at least in terms of the way it should be done.

Except in cases of sudden death or accident, a family business will hopefully have the timeframe required to go the slow route.

“They Aren’t Ready”

We hear a lot about the leading generation being unwilling to let go of the reins (see Sticky Baton Syndrome –ask Prince Charles)

Sometimes those who have been running things just don’t know how to get started?

Handing things off to the younger ones needn’t be done in one step.

Accepting suggestions, and even asking for them, could be a great first step. It’s never too early to begin, either!

The longer the overlap, the easier it is to make it a smooth transition.

/0 Comments/by

The Evolution of Family Governance

Lately, I’m becoming enamoured with the term “Family Governance”, as some regular readers may have noticed.

In fact, I wrote a post just a few weeks ago relating to this subject, “Family Governance: From Filaments to LED’s”.

The subject has undergone an evolution of sorts in my mind.

I’m looking at it in new ways as I learn more, work with more families, and adapt my thinking to the ways other related subjects also continuously evolve.

 

The Family Governance “Field”

 

I’m not sure if we’re yet at the point where we can say that Family Governance has evolved into its own “field”, but I know we’re moving in that direction.

In fact, the field, as it stands, also feels like it is evolving in its own right.

If you’re interested in it, or even curious, please join me in New York City in January for the 3rd annual conference of the Institute for Family Governance.

I’ve attended the two previous editions, and my blog on the 2018 version can be found here: “Realistic Family Governance Goals.”

 

How to Make Family Governance “Stick”

So in terms of the evolution of family governance, we’ve already got the fact that the term has been growing on me and evolving in my mind, and the fact that the field is also evolving.

But the main point of this post that I’d like to make is how important it is for Family Governance to evolve within a family, if it is to have any chance of “sticking”.

Yet as more people discuss a certain topic and it seems like it’s growing legs and becoming “a thing”, there are always some who try to figure out how to sell the idea to others, with a view towards making money at it.

I supposed that’s to be expected, much as I mentioned last week when we discussed the family office space and the “business opportunity” problem there.

 

FOR the Family, BY the family

From my perspective and experience, when governance is thrust upon a family, either by one family leader from above, or by “experts” from outside, it is likely doomed to failure.

My go-to expression for this is “FOR the family, BY the family”.

Notice that I did not say for the family by one family member, or even for the family by experts chosen by the family.

You cannot buy governance off the shelf; it is not a product.  Of course, that doesn’t mean that there aren’t people who will try to sell it to you.

The Evolution of Family Governance

No Stone Tablets

Any family that’s interested in successfully transitioning their wealth from one generation of their family to the next will need to invest some time and effort into developing the governance structures and systems that will help them achieve that goal.

Unfortunately, there’s no set of “stone tablets” that Moses is going to arrive with, listing the Ten Commandments of family governance.

I hear you, “OK, Steve, so it needs to evolve. But from where, and how???”

 

Start with a Family Meeting

 

You really need to call a family meeting and throw the subject on the table.

Someone from the leading generation, (usually “Dad”) has to call everyone together and make it clear that they want to make sure that the family will be prepared to eventually take over the family wealth in all its forms.

They should explain that they’d like to ensure the smoothest transition possible and that this is the beginning of a series of regular meetings that will be used to establish the “who, what, when, where and how” all that will happen.

The first meeting needn’t be long, because family members will need time to adjust to this news.

But please don’t leave until the next meeting has been scheduled for a couple of months down the road.

 

Start Where You Are

Governance is all about three major questions:

  • How will we make decisions together?
  • How will we communicate?
  • How will we solve problems together?

Don’t expect the answers to just materialize without any work.

 

The Good News?

The good news here is that just figuring out where to begin and how to start the governance process, so that you can see how it all evolves, is the best way to ensure that it will actually work.

It’s a PROCESS, and how you get there is even more important than where you get to!

Get moving, keep going, and watch the evolution.

/0 Comments/by
, , ,

From Family Business to Family Office

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

 

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

 

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

 

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

What’s the Difference?

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

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

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

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

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

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

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

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

OK, but where’s the rest of it?

Not for the Mass Affluent

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

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

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

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

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

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

How Do They Get There?

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

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

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

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

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

 

Custom Made Mystery

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

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

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

Family Office

Demystifying Family Offices

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

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

 

Looking to get a head start?

– See chapter nine of my book

SHIFT your Family Business, (the BOOK),

Chapter 9: Towards a Family Office Mindset

  • See this article by Jaffe and Grubman

“Development Stages of a Single Family Office”

/0 Comments/by
, , ,

The Importance of Family Vision

It’s been over a year since I wrote about Family Vision specifically, so I think I’m due.

(5 Things You Need to Know: Family Vision)

 There are of course more than five things that anyone could say about every subject, and family vision is one that I think should be discussed more broadly, more deeply and more frequently.

But first I’d like to go back to the first keyword in the title that I decided to put on this post, i.e. “Importance”.

Questions Around Importance

A natural place to begin would be to ask “why” family vision is important.

But since this is my blog and I make the rules here, I’m going to “zag” instead of “zigging” and answer a few different questions instead.

I hope that no one thinks I’m acting like a politician when I answer a different question than the one that was asked.

My Dad used to say “You can do whatever you want, but don’t become a politician, because then even your friends will think you’re an a**hole”.

(My son recently reminded me of this, so yes, I have passed it down!)

 

– For Whom is Family Vision Important?

Making sure there’s a clear family vision isn’t an important consideration for every family.

In fact, I’d bet that most families have never even thought about this at all, and that’s OK.

But I don’t write these blogs for most families. I’m reminded of something my Aunt said to my Mom after she read my book, SHIFT your Family Business. “Oh, that’s a book for rich people”.

Well that isn’t the word that I would’ve used, but she isn’t wrong either. Most of what I write is geared towards “the 1%”.

I like to think that my ideas are just as valid, generally, for all families, but realistically, the higher up the wealth spectrum the family is, the more likely my thoughts will resonate with them.

 

– When Is Family Vision Important?

Just as family vision is not necessarily important for every family, neither is it important at all times.

Years and even decades can pass during which it never becomes salient. So when is it likely to become important?

Essentially, as soon as more than one generation of adults is involved, I believe that it is high time to think about working on a family vision.

As soon as the wealth that has been created goes from being the wealth of its creator to the wealth of the creator’s family, having a family vision becomes important.

When the wealth creator goes from thinking about “my wealth”, to “our wealth”, the paradigm has shifted.

 

2 kids walking down a road

– Where is Family Vision Important?

So assuming that a family is actually one for whom family vision is important, and that they are now at a point where the wealth is considered to be “family wealth”, where does the vision actually fit into things?

Discussions about family vision usually begin in the context of a family meeting.

If a family fits the profile based on the first two questions (“for whom” and “when”) but still hasn’t begun to have regularly scheduled family meetings, then that’s the most logical place to begin.

When starting out, I always suggest that families identify the smallest logical group of people to convene, usually the parents and their adult children. In-laws and children can be added later.

When I say, “regularly scheduled”, that doesn’t necessarily mean frequent.

Having a regular annual meeting will often suffice, and that’s preferable to having a few ad-hoc meetings over a few months and then not getting together again for three years.

– What is Family Vision Anyway?

Just what goes into a family vision will vary from one family to the next. No two families will go about figuring theirs out the same way, either.

The actual “content” or result of the vision is less important than the process the family goes through to define it.

If the family can answer the question “Where are we all hoping to go together?” I think that they’re well on their way.

Is it a family credo or motto? Yes, possibly. Is it a mission statement? Yeah, maybe that too.

Is it carved in stone? Well, maybe, eventually, but I’d suggest writing it down in pencil first, just in case.

So when’s the next family meeting?

Video version of (5 Things you Need to Know: Family Vision)

/0 Comments/by
,

Wanted: Purpose, Passion and Community

Wanted: Purpose, Passion and Community

 

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

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

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

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

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

Addiction TreatmentCommunity in family business

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

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

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

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

The “Trifecta”

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

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

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

Family Purpose

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

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

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

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

Individual Passions

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

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

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

Human Capital

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

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

Part of a Community

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

family members actually spend together.

Time with the family

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

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

Wanting to Spend Time with Family

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

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

Putting it All Together

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

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

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

/0 Comments/by
, ,

Accountability in the Family Business

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

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

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

 

And here we are…

 

Noticeable In Its Absence

 

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

His email to me included this sentence:

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

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

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

 

General Accountability… with Exceptions (!)

 

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

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

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

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

 

Formality is your Friend

 

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

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

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

 

Family Business Relations

Minimal Standards for Success

 

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

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

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

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

 

 

Give Me an Another Chance

 

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

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

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

 

Family Business Relations

Direct Reports

 

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

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

 

 

Problems at the Top

 

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

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

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

 

Who can blame them?

 

The A-Ha Solution

 

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

 

So why not set up the board now, to instill

accountability for the next generation, later?

/0 Comments/by
, ,

Family Governance: From Filaments to LED’s

Family Governance: From Filaments to LED’s

When it comes to “Family Governance”, there aren’t many bigger fans than me.

I’ve written several blog posts specifically on the subject on this site, and there’s even a chapter in my book, Shift your Family Business, titled “Governance, Ugh!”

That exclamation –ugh- makes it seem like I don’t like governance, but in the book’s context, it’s clear that I do.

For any family to have a realistic chance of their wealth surviving over generations, they’ll absolutely require some form of governance.

 

Family Constitution? Yes, but…

The form and structure of that governance, as well as how it evolves over time, is where all the many important questions and decisions come into play, of course.

My advice is to always start small and take it slowly.

You’re looking for a durable “solution” to last generations, so there should be no reason to rush something through in weeks or even months.

One place that I would almost never choose to

begin is with the writing of a family constitution.

And that’s especially true if it’s one dictated by the wealth creator and patriarch, by himself, without consulting any other family members.

 

Misguided Ideas

One of the peer groups in which I participate with other family business and wealth advisors recently tackled such a case.

Here’s a bit of the background provided by a colleague I’ll call Nelly.

A family patriarch, “Jack”, who was also the wealth creator, was approaching his 80th birthday, and one of his financial advisors had spoken to him about succession and transition planning.

Somehow the idea of a “family constitution” came up and Jack loved it. He then sat down and began to draft it by himself.

 

How’s That Working Out For You?

As Jack shared his progress with family members, he began to become concerned with their lack of enthusiasm.

The financial advisor who initially mentioned the idea of the constitution was way out of his league to be of use to Jack now, but thankfully, he called in Nelly’s firm for help.

As Nelly shared with our peer group, she was slowly encouraging him to involve other family members in the creation of their constitution.

After several repeated suggestions, he actually started to warm up to the idea.

As Nelly shared with us, there was a light bulb going off from time to time, maybe with only “one or two filaments flashing”, but she was starting to get through to him.

 

Input from the Rising Generations

Of course, a couple of filaments do provide some light, which is better than complete darkness.

But it’s 2018, and those bulbs harken back to Thomas Edison and aren’t exactly “current” anymore.

I pointed out that perhaps what they needed here was some LED lighting, not more filaments.

Jack was preparing to leave his wealth to his children and grandchildren, but he was missing out on the opportunity to have them involved at this key stage of planning.

 

For the Family, By the Family

I’m not sure what became of Nelly’s work with Jack and his family, although I suspect it’s ongoing.

I’m not saying that involving the family is simple or easy, because it’s not.

But I am saying that it’s more than

worth the effort when done right.

Jack created the wealth, so he can technically do what he wants with it, and even give it all away to charity.

But he has expressed a desire to pass it on to his family. So what he’s actually trying to do is transform his personal wealth into family wealth.

The best way to do that, is to create some form of governance, for the family, by the family.

 

And What IF He Does It “His” Way?

If Jack rejects Nelly’s ideas and simply ploughs ahead with authoring the constitution himself, I predict one of two results will occur after Jack dies.

If the family gets along and the wealth is structured rather flexibly, the family will make whatever changes they see fit, using his constitution as a mere guideline, which will fade away over time.

Or, more likely, if the family does not get along well, or if the structures are very rigid, the family squabbles will begin right after Jack’s funeral.

Jack has a choice, but I sure hope he listens to Nelly.

Grandpa’s filaments won’t be quite as useful in his grandkids’ world of LED’s.

 

/0 Comments/by
, , , ,

5 Ways FamBiz Rising Gens Can Prepare

5 Ways FamBiz Rising Gens Can Prepare

People in and around family businesses everywhere spend lots of time worrying about the rising generation of the family, wondering if and when they’ll ever be “ready” to take over from their parents.

There are as many variations of the situation as there are families and businesses, but there are some things that many have in common.

Those who are not content to just “wait their turn” can do a lot more than simply “be patient”.

With that in mind, here are…

 

“5 Ways FamBiz Rising Gens Can Prepare”

 

  1. Get Mentored

A mentor is usually someone older than the mentee, typically by more than a decade (and often two or three decades older).

The most important detail for a rising generation family business mentor is that they NOT be the parent, or any family member who is ultimately their boss.

A mentor can be from within the company, or from an outside organization, and will have some life and career experience that can be shared, on an occasional basis, over lunch, coffee or by phone or Skype.

 

  1. Create and Lead a Project

Up-and-coming family members in a business often have difficulty carving out their own leadership abilities, separate from those of their parents.

Creating their own project, either within their department, or as something new and intrapreneurial, is a way for them to show that they are able to make something happen on their own.

Of course they need to do more than just conceive an idea, and actually lead the necessary steps to do the work and bring it to a stage where the project can be deemed an accomplishment.

 

  1. Work on Sibling Unity

Unless the person is an only child, they will need to continue to deal with their sibling relationships for many decades to come.

Whether their siblings are working in the business or not, and even if they seem to display no interest in the business, those relationships should not ever be taken for granted.

Especially when there are siblings who never work for the family company, it behooves the ones who do to continually over-communicate what’s going on.

This should be done as “matter-of-factly” as possible, and never as bragging about one’s accomplishments or complaining about how tough it is to work for the parents.

Siblings may not be part of the business circle, but they are always part of the family circle, and don’t forget that they’re likely long-term ownership circle partners too.

 

  1. Build Your Network

While it is very important to get to know the people from outside the company who currently deal with the leading generation, from bankers, to customers and suppliers, having their own network is also beneficial.

Joining peer groups and making sure that they develop connections in their own age group will pay dividends down the road.

When their turn comes to take the lead on things, they’ll want to be able to call on their own contacts and people that they trust, and these relationships take time to develop.

It’s never too early to begin to cultivate a network of people you know and can trust.

 

  1. Round Yourself Out

Most people come into the family business from a certain specialty like finance, accounting, or marketing.

It is great to have a big strength on which to build your career, but the higher up the organisational ladder you go, the more that you can be a “generalist”, the better.

So if they’re known for their skills in one particular area, it may be a good time to work on building some skills and getting experience in another area where they’re currently less strong.

Once they get to the top, they’ll need to be able to properly relate to everyone, from a position of strength.

 

And Don’t Do This

The five ideas above are some ways that they can begin to take important and useful steps to ensure an eventual smooth transition.

Here is what they probably want to avoid.

  • Complaining to anyone who’ll listen that the current leaders are hanging around too long.
  • Whining that nobody takes them seriously
  • Bad-mouthing key employees
  • Being a part of “the problem” rather than bringing solutions
  • Displaying work habits that make them appear entitled

There are plenty of positive things they can do while they wait, and that includes some of the ideas outlined above.

Good luck!

/0 Comments/by
, , ,

Great Nuggets from Denver

Great Nuggets from Denver

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

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

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

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

 

One Nugget at a Time

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

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

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

Here goes…

 

– Difficult Subjects: 

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

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

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

 

– Business Exits:

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

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

 

– Financial Transitions

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

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

 

– New Vocabulary

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

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

 

– Five Voices

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

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

 

– Don’t Try to “Change” Families

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

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

 

– Book Club Benefits and Bird Language

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

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

 

– Appreciative Inquiry and the Importance of Voting

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

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

 

– Adult Development Levels

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

 

– Purposeful Planning as a Career

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

 

– Last But Not Least, Jesus  

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

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

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

 

 

My blog posts from previous Rendez Vous:

2017    Sharing Some Rocky Mountain Kool Aid

2016    Sweet Secluded Rendez-Vous 

2015    Rendez-Vous with a Purpose

2014    The Rising Generation in Family Business

/0 Comments/by