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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

 

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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)

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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!

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Family Business Without the Drama

Family Business Without the Drama

This week I want to discuss a subject that sometimes shows up in family businesses, and that’s “drama”.

But unlike some things that come and go in one business family or another, drama seems to either be largely present or mostly absent, depending on the family.

Let me try that again for the sake of clarity.

I find that some family businesses function in “all drama, all the time” mode, while other families might wonder what I’m talking about when they read this because they don’t operate that way at all.

Let’s take a little dramatic side trip now and we’ll come back to family business after.

 

Eliminating the Wicked Witch

I recently attended a High School play and I witnessed some unexpected bonus drama that occurred in the audience.

It was a presentation of The Wizard of Oz in a very small theatre on a Friday evening.

There were a few young children and toddlers present, presumably to watch their older siblings and cousins perform.

Everything was going as planned until the Wicked Witch of the West arrived on stage.

The girl who played her was perfectly cast.

I know this for a fact, because she had told me personally “Hey Dad, how perfect, I get to be the Wicked Witch!”

 

Exit Theater Left

The Wicked Witch’s arrival on stage, with her booming voice, green face, and the stage presence that only a six-foot-tall actress could pull off was simply too much for some of the younger patrons.

Crying, squealing, mothers taking their kids out into the hall, just wow. The witch’s parents were in hysterics observing this scene.

Each time she reappeared on the stage, there was palpable anxiety in the audience. Thankfully, when Dorothy finally eliminated her, a more calm and serene mood was enjoyed by fans of all ages.

 

Who’s Your Witch?

There are different kinds of drama in family businesses, but one common version is a variation of the witch.

I’m talking about people in the business whose mere presence has everyone on edge.

Likewise, when they are absent, everyone knows it too, and they can actually relax and get their work done.

 

Who Needs an Antagonist?

While a play needs someone to act as an antagonist, a business does not.

I’ve used the word “drama” here, and also talked about the “anxiety” that is sometimes felt.

They are not exactly the same but surely related. You can have anxiety without drama, but I’m not sure that you can have drama without any anxiety.

My conclusion is therefore that minimizing drama in a workplace should be a desirable goal.

 

Workplace Versus Homefront

Note that I chose the word “workplace” just there.

Sometimes the drama needs to have an outlet, and my argument here is that efforts should be made to limit the drama in the workplace, for the sake of the people who are there to get their jobs done.

So am I saying that people should bottle things up at the office and then bring their drama home with them?

Well, I’m not sure that would be the best interpretation either.

 

Drama Kings and Queens

Those responsible for the drama are quite often the same people, and they often play their “roles” in predictable ways.

It can be very difficult to get them to change their ways. But once a drama queen, well, usually “always a drama queen”.

So now what?

Well, the only person you can actually control is the person you see in the mirror, and so that is naturally where I’m going to suggest you put your focus.

 

Respond, Don’t React

A couple of weeks back in Your Response is Your Responsibility, I suggested that you make every effort necessary to avoid reacting, and instead take a deep breath, pause, and offer a response instead.

Drama kings, at home or at work, enjoy the reactions their tactics elicit.

When denied the satisfaction of those reactions, they may slowly, eventually, begin to subside, if only just a little bit.

 

Don’t Fight Fire with Fire

While it’s sometimes very tempting to fight dramatic fire with dramatic fire, I think that these fires should be fought with water instead.

Let’s end with a quote from George Bernard Shaw that makes this point nicely:

“I learned long ago, never to wrestle with a pig.

You get dirty, and besides, the pig likes it.”

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Your Response Is Your Responsibility

Your Response Is Your Responsibility

This week’s blog is a bit on the philosophical side, as opposed to practical. Then again, some people may think that’s just par for the course for me.

I’ll be sharing some of my thoughts on things relating to one’s responsibilities in a business family.

I’ve been thinking about this piece for a while, I’ve got lots of ideas kicking around, and they’re coming at me from different places, so let’s get started.

 

Your Responsibility

The first place this came up for me occurred a few years ago while reading about some family members who expected to reap the benefits of being part of a family business, but who didn’t necessarily realize that there was another side to that coin.

That other side, of course, is responsibility, because you shouldn’t expect to get all the positives without contributing anything yourself.

Unfortunately, as often as there are next-generation members who expect something for nothing, there are just as many occasions where the parents never tried to instill that sense of responsibility either.

 

Respond, Don’t React 

I’ve also been writing about working on my personal ability to slow things down, and “respond” to a situation or comment, rather than shooting from the hip with a “reaction”.

I’m actually just waiting for someone to ask me for “my reaction” to something so that I can reply that I prefer not to share my reaction, but would rather take a moment to reflect so that I can provide “my response” instead.

 

Response + Ability = Responsibility

Taking things further, I recently saw a video on LinkedIn, where a speaker was explaining that each person should actually feel compelled to respond to situations to the best of their ability.

The man recounted that he and his wife had taken in several physically challenged foster children because they “were able to” so they felt it was their responsibility to do so.

While I applaud people like that, I believe that they’re truly very rare, and I know if suggested we all go that far, I’d likely “lose” a lot of you.

 

Strengths Finder

I’m a big fan of the Strengthsfinder tool that has you do a quick survey and then gives you your five greatest strengths.

I’ve completed it a couple of times now, a few years apart, and the strength of “responsibility” showed up as part of my Top 5 both times.

To me, doing what needs to be done, especially when you said that you would do something, is not something that is negotiable.

 

My Response

So let’s get back to the title of this post, and get into the “my response” part a bit more.

The particular scenario I have in mind is one most of us have seen before, and if you’re part of a family business or work with business families, you’re probably pretty familiar with this too.

Some family members who work together are having a meeting, or just chatting together when one of them gets triggered and “goes off” on the other.

What happens next can make or break the way this will go.

 

What’s My Part in This?

It would be so easy to “react” in the same old way that we always have, and likely ratchet up the anxiety level and make things worse.

Instead, what I’m suggesting here, is rather than sharing our reaction, we take a couple of deep breaths and instead share a response.

That simple pause, combined with a reflective “what’s my part in this?” can change the direction that this interchange seemed to be going towards.

 

Easier to Blame Others

True, it’s easier to blame the other person for everything that has ever gone wrong in a relationship.

But, if you want to change how things turn out going forward, you know that there’s really only one person that you can actually change, right?

We are each responsible for our own responses.

We can simply react like we always have, and things will likely keep going down the same path.

Or, we can try to refrain from quick reactions and instead offer up a more appropriate response

My favourite way to remember the key distinction is a medical one.

When the doctor says you’re having a “reaction”, it’s never good.

When you begin to “respond” to a treatment, it’s usually a good sign.

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Five FamBiz Strengths to Capitalize On

Five FamBiz Strengths to Capitalize On

It’s been a couple of months since my last “5 Things…” post, so it’s time to pull that framework out again.

This time the emphasis is on the positive, though, as we look at the bright side of family businesses.

 

Here we go with 5 FamBiz strengths to capitalize on:

 

  1. Long-term view

Most family business leaders are much more concerned with the very long-term success of the company than they are about the short term.

Managers of publicly traded companies are typically much more focused on their next quarterly financial report.

For a business owned by a family, the month-to-month, quarter-to-quarter and even year-to-year fluctuations are far less important.

When you’re trying to build something for your family, that could hopefully include not only your children but also your grandchildren, a long-term view just comes naturally.

Smart family businesses capitalize on that strength by constantly building their staying power, and not getting sidetracked by having to look good every quarter.

 

  1. Trust

One of the main reasons people choose to hire family members is because they trust them.

It’s natural to trust those you know well more than those you do not and those who come from the same background as you do.

Hiring family members ticks both those boxes quite well.

Of course, there are exceptions, where knowing someone well simply confirms that you cannot trust them, and those scenarios arise in far too many families.

But in terms of strengths that family businesses can capitalize on, the ability to put people into a position to succeed by empowering them is something that built-in trust allows them to do quite readily.

 

  1. Brand

There was a time when calling yourself a family business was seen as quaint and somehow admitting to being less good than “real” businesses.

That pendulum has swung back pretty strongly in last decade or so. I’m not sure exactly what’s behind it, but it certainly feels very real.

There have been plenty of surveys done in recent years that confirm that customers often prefer to deal with family businesses whenever possible.

Part of it is surely the “buy local” phenomenon, to help keep neighbourhood businesses thriving, but even large-scale businesses are no longer shying away from self-identifying as family businesses.

Not many have actually incorporated this fact into their branding per se, but S.C. Johnson certainly has.

They’ve even recently kicked it up a notch, changing their slogan from “A Family Company” to “A Family Company at Work for a Better World”.

 

  1. Work Ethic

You may want to lump this one in with Trust, but I like to talk about it separately. The person who started and grew the business is usually a hard worker, and that hard work surely contributes to the company’s success.

When their children or other family members come on board, that work ethic is usually contagious. Most offspring will exhibit similar tendencies to their parents.

Of course, as with trust, there are exceptions. We have all seen them and heard about them. I maintain that there are far more good examples that we never hear about, than bad examples that make the news.

Good parenting and leading by example are a huge part of this, and the exceptions noted above are often related more to shortcomings as a parent as opposed to business leadership.

 

  1. Magic (Intangibles)

I will forgive readers who have never actually worked for a family business for not understanding this point about “magic”.

It may just be one of those things that you have to experience to understand in depth.

There are aspects to these intangibles that manifest themselves in good times and in bad.

Successful family businesses usually feel a bit like a family even for those who are not related to the family that owns the company.

Celebrating successes with family members is usually a much richer experience. And maybe part of that is having come through some of the setbacks together as a team.

 

Capitalizing on these Strengths

Sometimes we don’t recognize what we have until someone from the outside points it out to us. Most fish love water, but they probably don’t really know that.

So if you are part of a family business, I hope you will look at this list and recognize some of these as strengths, and hopefully capitalize on them, even more, going forward.

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The Importance or Saying “NO” in a FamBiz

The Importance or Saying “NO” in a FamBiz

Family businesses sometimes get a bad rap because of the way they often do things less formally than a “more professional” company would.

The less formal nature of any business can be a plus in many ways, but of course it can turn into a negative too.

When they do turn negative, it’s usually because someone has agreed to something (i.e. said “Yes”) that they really should have said “No” to.

Today we’re going to look at some of those cases.

 

Summer Jobs

Quite often the children of the “boss” get their first real exposure to the business as teenagers with a summer job.

When a teen asks “Can I have a summer job?” the best answer is usually “Yes”.

The part where it can be hard to say No is if there are follow-up questions like, “Can I take Fridays off?” or “Can I take a couple of weeks off” or “Can I start a bit later than everyone else?”

If the job is to work with other regular employees who all follow certain rules, every time you make an exception for them, you’re setting a bad precedent, that not only affects your child, but also everyone else who sees the special treatment.

 

Full-Time Jobs

When you’re dealing with adult children, the idea of consistency and no special favours also often comes into play.

“Can I get a job at the company?” will often be answered with a Yes.

But, “Can I have the same pay as my sister for less work, because I have family obligations?” should probably be greeted with a No.

“Can I come in later, work from home most of the time, take Fridays off, etc.” are things that other employees see and if they become standard perks for family employees and no one else, these are huge morale killers.

 

The Other Side of the Coin

Lest you think that it’s only the next generation who ask for things to which the parents should be saying No, I’ve got a more drastic scenario for you.

This one also occurs far more often than it should, and it involves the parents taking advantage of their kids.

Picture the daughter and/or son, who have been diligently working for the family business for decades, not only following the rules that exist for all of the employees, but going above and beyond.

 

Some Day this Will All Be Yours

They work evenings and weekends, never take a vacation, and do everything that’s ever asked of them.

They ask the owners, their parents, for a raise or some time off, but they are rebuffed with something along the lines of “Some day this will all be yours”.

That can be an acceptable answer, for a while.

Five years later, when it comes up again, and the answer is still just as vague, that’s where the children need to be able to say NO.

 

When Exactly IS “Some Day”?

At some point, some clarity, especially around the “when”, is needed. But just because you want clarity, and even need clarity, that doesn’t mean that you automatically get clarity.

Sometimes you need to demand it. And that begins with a firm NO.

As I write this, I’m picturing the old sitcom plot where the mother is tired of being taken for granted and decides to go “on strike”, and finally the husband and kids realize how lucky they are to have Mom around taking care of so many things.

 

Respect the Interdependence 

As the years and decades go by and family members age and grow into new roles that fit their evolving life stages, the “power balance” shifts.

The people and the roles are very much interdependent all the way through, but the nature of that interdependence changes too.

It’s usually so gradual and incremental that you barely notice it, but it is happening. Sometimes you need to take the time to stop and notice and decide that the way things have been going doesn’t work anymore.

In this circumstance the “NO” is not necessarily the answer to a question, it’s more of a statement.

 

NO, I’m Not Settling for That Anymore

Many people get to the point where they feel this way. Not all of them have the courage to make the statement though.

I’m not saying that it’s easy, but at some point it needs to be said.

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Christmas Resolutions for a Family Business

Christmas Resolutions for a Family Business

I hope everyone reading this has a great Christmas, or whichever other holiday they celebrate at this time of year.

I also hope nobody thinks that I actually wrote this on Christmas Day.

I’m a creature of habit and pride myself on being consistent, and my blogs have been going out to subscribers on Mondays for years now, and I’m not changing that just because it’s Christmas.

Recently I started writing them a week ahead of time to take the pressure off my website/social media team.

And if you’re wondering if there’ll be another blog in your inbox on New Year’s Day, stop wondering, because that’s a Monday too.

Timing Is Everything

Because I knew that this would be arriving in people’s inboxes on Christmas, and realized that many people wouldn’t be reading it until later, the “Resolutions” part that’s normally associated with New Year’s feels less clunky.

And it should help me make my point. So what is that point? Glad you asked.

During a recent exchange with a potential client, a lightbulb went on in my head as I realized they had some possible similarities with one of my current client families.

And in fact, I know of a few other families who could benefit from the kind of work I’m doing with them.

 

Rising Generation Group

The family client in question is one where I work with only the third generation sibling group. I’ve met with the parents only once, and this is an engagement that began almost two years ago.

The parents of the four Millennials from that family decided to hire a coach to work with their children, and that is what I’ve been doing with them, almost exclusively without their parents’ involvement.

I admit that this is a bit of a “non-standard” type of engagement, because most parents would not think of doing this in such a “hands off” fashion, but they put their trust in me to work with their offspring and haven’t looked back.

The other family I mentioned, the potential client, is one where the third generation family members are a larger group, and it includes four groups of cousins. But I’m going to suggest they try something similar.

 

Budget for Development

So the holiday tie-in I’ve contrived is that giving a generational group of people the gift of hiring them a coach to work with them could be a great Christmas gift.

But the gift can be even better if it is combined with a resolution (New Year’s tie-in!) to essentially stay out of trying to direct what the group works on with the coach.

If you are hiring someone to tell your kids what to think and do because they aren’t listening to you, save your money and time and forget it.

If you want to establish a budget for their development, especially to work on things together, that’s a pretty cool angle to take.

 

A Leap of Faith with the Right Attitude

My client family kind of took a leap of faith with me, but it was combined with the right attitude of trusting their kids enough to let them figure things out with me together.

My premise with them has always been that parents who have built up a business or great wealth all have the same fear:

that after they‘re gone, the kids will fight over things

and the wealth will destroy the family.

Having me as an independent, unrelated outsider to work with them has been a great exercise in teamwork for them, as I am essentially mostly a guide and mentor, as they do the real work of planning activities for the extended family group.

 

Early Stages

The early stage work we’ve been doing is also paving the way to the future important discussions that they will soon be having with their parents, once their parents recognize that they are ready.

After they’ve gotten to know each other better, and have learned how to work together as a team, those future “tougher” steps will be soooo much easier for everyone.

 

Xmas gift, NY resolution…

If you’re a family with the worry I noted above, why not resolve to look into this idea in 2018? I’ll gladly share some of the secrets of what I’ve been doing and see if it could work for you too.

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Genetics, Luck, and Karma: Secrets to FamBiz Success

Genetics, Luck, and Karma: Secrets to FamBiz Success

People ask me where my blog ideas come from, because I find something different to write about each week. My answer: “anywhere and everywhere”.

This week it’s from watching Jeopardy, and one of Alex Trebek’s brief interviews with the contestants.

 

Top 5 of All Time

A bartender named Austin Rogers had a fantastic run recently, running up over $400,000 in winnings in just over two weeks, which placed him in the top 5 of all time Jeopardy winners.

After he had accumulated some sizeable winnings, Alex asked the likeable young man from New York to what he attributed the success he’d been having on the show.

His honest reply struck me as quite refreshing:

“Genetics, Luck, and Karma.”

 

Fits with Family Business Success Too

 I couldn’t help think how nicely these three elements fit with family business success too.

I realize this isn’t necessarily obvious, but hey, that’s why I write these blogs, to share my thoughts on just this kind of thing. Let’s take them one at a time.

 

Genetics

The family business angle fits pretty clearly with the genetics comment. “He sure seems to take after his Dad”.

Yes, indeed, we do inherit many traits from our parents, and in a thriving family business, the hope is usually that the next generation will have many of the same positive characteristics that made the parents successful.

Problems can arise though, when the children have different positive traits, and clashes can happen when the generations don’t see eye-to-eye on everything.

 

Luck

Luck is a bit harder to get agreement on. Successful people like to think that they alone are responsible for their company doing well, and in most cases that’s true, but it’s only part of the formula.

I can’t help think that luck has more influence on how things turn out than most people acknowledge.

Yes, I’m quite familiar with the expressions “You make your own luck” and “The harder I work, the luckier I seem to get”, and they resonate nicely with me too.

But, for every business person who blames failure on “bad luck”, there’s probably another who should be thanking “good luck” for their success.

 

Karma

If you think that luck was a difficult concept to grasp, let’s move on to karma, and try our luck there.

Let’s start with a quick Google search, which turned up this nugget:

          Karma (car-ma) is a word meaning the result of a person’s actions as well as the actions       themselves. It is a term about the cycle of cause and effect. According to the theory of Karma, what happens to a person, happens because they caused it with their actions.

That wasn’t exactly what I thought my search would turn up, but who the heck am I to argue with Google? That might not bring me good karma. (See what I did there?)

A lot of different things come to my mind when I think about karma. The “Golden Rule”, and “Do unto others” are a couple of them.

I also think about humility, and not acting like you’re better than everyone else, because that probably won’t create good karma.

 

Humble and Kind

The Karma idea made me flash back to a blog post from June 2016, Humble and Kind, in which I wrote:

And if you do start out humble and kind when you are young, how did you get that way? My guess is that most of it comes from your parents and the example they set.

When family businesses fall apart, it is usually in large part because of family conflict, so what happened to the humility and the kindness?

When I first thought about Karma and family business, I thought about in the ways that the business interacts with customers, suppliers, and competitors; you know, the outside interactions.

But now that I’ve re-read the excerpt from that blog, it makes me realize that the internal Karma, within the family, is probably even more important.

Teaching your children about karma brings good karma.

 

Something to Think About

Back to Austin, our Jeopardy contestant. He eventually lost a game and was dethroned, but his reaction seemed to fit with his penchant for keeping the karma gods happy.

He was last seen laughing and high-fiving the woman who beat him.

His luck might’ve run out, but his karma was going strong.

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The Future of Family Business is _______________

The Future of Family Business is _______________

A few weeks ago I came across something that appeared to be a news item about family business, so naturally it caught my attention.

It turned out to be some survey results about family business issues, as well as a promo piece for an upcoming conference on the subject, in Australia, at which the survey results were to be released.

The headline read as follows:

         Survey Finds Longevity of Multi-Generational

                 Family Businesses is Under Threat

It certainly succeeded in piquing my interest, even though the headline was a tad alarming for my taste.

 

Hold Off on the Drama, Please

If that alarmist headline wasn’t enough, here is the opening sentence of the “Newswire” piece:

             Will multi-generational family businesses

                           be a thing of the past?

Oh brother. Can we hold off on some of the over-dramatic, end-of-the-world talk, please?

Family businesses have been around forever, and will continue to be one of the major forms of business ownership well into the future.

 

The Real Story

I’d like to relate some of my views on this subject, because the story isn’t “wrong” either. I just prefer to talk about in more realistic terms.

Building a successful business isn’t something that is easy to do. Keeping a business successful over a number of decades is not easy either.

People love to ring alarm bells about the “failure” to complete an inter-generational family business transition as if it should be a walk in the park.

 

Who Wants to Take Over?

The fact is, today, any offspring who may be qualified to take over the family business will likely have a whole host of other career opportunities to choose from.

If the qualified children choose something else to do with their lives, then you’re left with the less-qualified ones, and I don’t think I need to go into why that’s not exactly a great idea either, do I?

 

Hard Work and Complex Situations

Working in your family’s business can be fantastic, when things go well. There’s nothing like working together with the ones you love.

But, as great as things can be when things are heading in the right direction, when you hit a rough patch, things can take a big turn for the worse in a hurry.

The family relationships bring a whole lot more complexity to the situation, and that can be difficult to navigate.

 

The Right Ingredients

When someone we’ll call “Dad” builds a business and then decides it’s time to retire, what are the odds that the best person in the whole world to take over from him just happens to be one of his children?

The recipe for successful transitions calls for the right mix of ingredients if it’s going to be successful.

There needs to be at least one qualified AND interested successor. And don’t forget about the timing. You need someone to be “Ready, Willing, and Able”

(Please see: “Is ‘Ready, Willing and Able’ Enough?” for more on this.)

 

Better Options Abound

We always hear about how the world is getting smaller, and it’s never been truer than it is now.

Qualified successors have more options than ever before. Taking over the family business just doesn’t rise to the top of the list of career options for that many people.

 

Instill a Love of Business

One of my favourite ways of talking to families about this subject is for the parents to share their love of business with their kids.

I’m not talking specifically about Mom and Dad’s business, I’m talking about business in general.

If you can teach your kids how rewarding it can be to run your own business, and how to do it well, then maybe they can find something that THEY are passionate about, and you can help them start that kind of a venture.

 

Intrapreneurship 

I’m starting to hear a lot more about “Intrapreneurship”, which just happens to be a natural fit for family businesses that are faced with a situation where the rising generation wants to be in business for themselves, and not necessarily in the same business as their parents.

Please see: The Intrapreneurship Initiative for an innovative program put on by the Business Families Foundation.

They’re starting their third cohort in Montreal now, and will be launching in Toronto in 2018.

This just mght be THE best solution for many families. And hopefully we can all tone done the drama.

 

 

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