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My Baby, My Heir

There is something about reflecting on the past and dreaming about the future that can get us excited. When we specifically involve our family members in these thoughts, it can be even more remarkable.

Now if only we could make sure that the past memories and future dreams were all positive!

We start worrying about our offspring before they’re born, and sometimes even before they’re conceived. But for simplicity’s sake, let’s say it all starts at birth.

We also worry about what will happen to them after we’re gone. Of course after we’ve passed away, there isn’t really much we can do about anything anymore.

For practical purposes, the moment a baby is born, they become a future heir, and upon the death of a parent, they become the true heir.

During the time when a parent and child are both alive, there are many stages that they go through as they move from “baby” to “heir”.

 

Not All Distinctions Are Clear

Unlike birth dates and death dates, the movement from one stage to the next is usually less clear. Let’s look at some examples.

When does one move from “baby” to toddler, to pre-schooler? Do these stages always last as long as we hoped, or are they too long, or too brief? Do the child and parent agree on when they moved from one stage to the next?

Some of the periods are quite clear, “high school student”, for example, or undergraduate in college, with specific start and end dates.

There are overarching periods too, like “dependent”, and that one can become a bit ambiguous too. Parents usually say they want their offspring to become independent, but sometimes their actions make it look like they’re unsure how to go about that.

If the family owns a business, there’s a whole new set of stages, like part-time employee, summer intern, full-time employee, whether starting in the mailroom, or otherwise.

Then there are other business roles, like manager, VP, leader, board member, owner, CFO, CEO. Some of the distinctions are clear, some overlap, some do not apply, and a whole bunch of others can be added too.

 

Business Roles, Family Roles

Outside the company there are even more important roles, even if they do not come with a business card and title.

We don’t like to think about the time when there will be a role reversal, and the child will become the caretaker, and the parent will be the dependent. It is, however a reality that most of us will face. And it might be sooner than we expect.

There is a natural progression to all of this, but it isn’t always smooth, and in fact it can be quite “lumpy”, not to mention bumpy.

If you are concerned about your multi-generation legacy, as I believe you should be, it makes sense for both generations to be on the same page, but often they are not.

I have done some gross over-simplification here as we have gone along, only looking at a one child, one parent scenario.

Yes, I know that things are usually even more complex, involving two parents, and multiple children. My point is that even the one-parent-one-child situation is rarely simple.

I thought about calling this post “From Baby to Heir, and Everything in Between”, but shortened it. I want to highlight that there is a fixed period of time, while both generations are alive, where you can both truly work on the relationship.

 

Natural Order of Things

The relationship will NATURALLY change, from dependent to caretaker, from child to former child. I like the word “offspring”, as it covers both, and hopefully gets the parents to stop thinking of adults in their 30’s, 40’s and 50’s as “kids”.

The parent goes from leader, in the “one up” position, through a period of “equal” adults, and then finally to dependent, or “one down”.

Not thinking about this doesn’t change it, it only delays your doing what needs to be done.

Are there some relationships in your family that are still stuck in a framework that is no longer suitable, and is unsustainable?

What are you going to do about it? These conversations need to happen, however difficult they are to get started.

 

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So Maybe it IS the Highway

Highway traffic in sunset, travel concept background

“It’s MY way, or the Highway”

That expression is familiar to most people, and if you have ever been around an old-fashioned founder of a family business, it may hit especially close to home.

It’s interesting to note that as recently as a few decades ago, the default reaction to someone making this exclamation has probably changed.

What I mean by that is that in the middle of the last century, a family business leader who demanded that everything be done their way would more often than not succeed in getting everyone to do as they pleased.

In the early decades of this century, however, I would venture to guess that more often than not, they will have difficulty in getting everyone to buy into the “MY way”. So much so that fewer people will even dare utter that phrase.

So what has changed? Well there are a whole bunch of societal changes that have been occurring over the past few decades and it is important to be aware of how they are affecting business families.

 

Two Kinds of Life Expectancy

People are living longer, and staying productive and healthy for many more years than in the past, and the typical business founder has some difficulty letting go. Decades ago, their offspring could join the family business with the expectation that they would get to a point where they would inherit the business while still young enough to get to do things their own way. Not so much today.

The other kind of life expectancy is a term that I coined here myself, just for this blog. When invited to join the family business, more and more Next Generation members are thinking hard about what they expect out of their life.

 

Education = Options

Many families who have successful businesses will encourage their children to get a great education, but while they are getting educated, they are also getting exposed to the world of opportunities that such an education affords them.

What often happens is that a number of great options become hard to resist. If the choice is to return to the family fold and fall in line with a parent’s, “My Way”, or to go out and forge your own path, well, at least one of those paths is usually more tempting.

It can be understandably disappointing for parents to discover that a business that they built “for the family” does not seem to have any interested “takers”.

Families with means encourage independence in their offspring, and then lament the fact that they are no longer able to interest their children in being involved and taking over.

 

No Magic Bullet

At the risk of disappointing readers expecting me to provide a magic bullet solution, “sorry”. But I will offer some words of advice just the same.

It is true that there are more and more good “highways” out there, and if your “former chidren” have found a career for which they have a passion, then that’s probably better than having them come work for you and hate Mondays.

Also, if you have built a sustainable company and do not have any heirs who want to work there, all is not lost. Have you thought about having the family continue to own the business, even after you retire, having it run by professional, non-related management?

If you want to be involved with your children and they have an entrepreneurial spirit that they inherited from their parents but they are not exactly enthralled by your business, have you thought about helping them get started in a business venture in a field that they are passionalte about?

These last two ideas, long term family ownership of the business and starting a new business with and for your kids, are just a couple of ways to avoid the old question of My Way OR the highway.

 

The Family > The Business

If you have an open mind, and some creativity, you can look for ways to do things “Our Way”, and try a few different highways.

When thinking about the next generation, I always encourage people to be a great parent first, and think about the business second. I hope you see the wisdom of that approach.

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I Can See CLEARLY Now…

Empty road with motion blur

…the rain is gone.

Jimmy Cliff was not an advisor to business families, but he certainly put his finger on one of the bigger issues that families are faced with as they try to figure out how to make sure that their legacy makes it to following generations.

It has nothing to do with making the rain stop, and everything to do with CLARITY.

This all sounds so simple, doesn’t it, that making things clear is what you need to do, and if and when you do that, the rest is easy. Well, as important as achieving clarity is, it is rarely easy. But it is an essential first step.

OK, so what are we talking about here? Maybe I need to be more clear. True enough, because I could be talking about a whole lot of different things here, right? Well, yes, and maybe I am.

We are talking about business families, or UHNW (Ultra High Net Worth) families, or legacy families, and we are talking about when they get to the important decisions that need to be made surrounding the passing of their wealth to their succeeding generations.

The senior generation and the rising generation each see things from their own point of view, and a good deal of what they each feel is important will often remain undiscussed.

Let’s now add in the professional advisors to the family, from the accountants and lawyers to the wealth managers, bankers, insurance people and tax specialists.

Each of these trusted specialists also tends to see things from their own professional perspective, and since each one is armed with their own specialist hammer, they will often see every family’s issue as being just their kind of nail.

All of the parties are well meaning, competent, and intent on arriving at the best possible result for the family, because they all know that while it is not easy to beat the odds, this family has just what it takes to pass on their wealth for many generations to come.

After listening to a variety of ideas from their trusted advisors and even the members of the rising generation of their family (who will play instrumental roles in seeing the plans through), the leading members of the family who must ultimately decide on various courses of action are often hesitant to act.

The finger pointing can now begin. The rising genration can point at their parents and blame them for not trusting their children, the lawyer can blame the accountant, the insurance person can blame the tax guy, and Mom can blame Dad.

All along, the missing ingredient was clarity.

Here are just a few of the items that were probably not made clear, either because everyone assumed the answers where understood and agreed upon, or because they required discussing issues that are just no fun to talk about.

  • What are the main goals for the family; to run a business together, to run a foundation together, to share use of the family real estate, to raise future stewards of the family legacy, or for everyone to do what they love and happily gather as a family at holiday time?
  • How important is it to minimize the amount of taxes that the family will have to fork over to the government when each person passes away?
  • Do the people who are expected to play key roles in carrying out the plans actually know what those plans are, understand those roles, and agree to carry them out?
  • Are there other family members who may be expecting to play certain roles who are being left out?
  • Is anyone being conveniently blind to poor relationships that exist, and hoping that when these people inherit assets that they are to manage together, they will magically become great business partners?

Now I never said that making these things clear was simple, and I guess after looking at these questions it is easy to understand why these things get overlooked in the name of action, any action.

But as professionals helping families, we have to do a better job of helping families “see all obstacles in their way”.

 

 

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Facts versus Opinions and Assumptions

Hand holding a Facts 3D Sphere sign on white background.

Opinions disguised as Facts

This week I was participating in a monthly online group meeting with colleagues who are all Bowen Family Systems Theory enthusiasts, and one of them made a statement that immediately struck me as “blog-worthy”.

She was talking about her family of origin (the one in which she grew up) and when referencing her father, she attributed the description “someone who stated a lot of opinions as though they were facts”. Wow, I thought, that sounds like my Dad!

This got me thinking about the characteristics that helped my father become successful, which included his “don’t take no for an answer” approach to life, his self-confidence, and his ability to size up a situation quickly and develop a plan of action.

When I think of what helped make him a great businessman, these are some of the attributes that made him who he was. Even though I am certain about them, that doesn’t mean that my assertions qualify as “facts”. They are, quite simply, my opinion.

I am less prone to act quickly, preferring to observe matters, take in various details of what I see and hear, and then take my time before deciding if any action is warranted. Perhaps it’s just my nature, or maybe part of it comes from the fact that I usually feel like I have the luxury of time to think.

Looking back at my Dad and his own upbringing and the circumstances under which he built his business, for the first 50-some years of his life, I doubt that he ever felt like he could afford to think about taking his time.

 

Important succession character traits

When business families start to look at the questions surrounding succession of their business and who should be involved, the ways that the different generations consider these issues start to come into play.

An entrepreneurial business founder who started a company, and against all odds built it into a sizeable organization, will likely have many of the traits that my father had, including an action-orientation that leaves little time to consider various opinions about important matters.

The character traits that will help ensure that the company and the family will continue to prosper into the next generation, however, are likely to be quite different.

If the number of people involved increases from one generation to the next, as it often does, then the ability to consider the opinions of all stakeholders will likely become a factor going forward.

Sometimes the hard-charging founder will have a child who is literally a “chip-off-the-old-block”, and they will usually be seen as the “heir apparent” early on, with the thinking that what was important for the business in one generation would continue to be key in the next.

The problems with that line of thinking include:

  • The skill sets involved in growing a business from the ground up, versus those of maintaining it, are sometimes quite different;
  • Technology changes over a few decades can be considerable;
  • The main group of concern may no longer be the company, but may well have shifted to the family.

 

Expert Opinions are still Opinions

There is no simple answer to these questions of course, but as an advisor to families who are faced with business and wealth transition situations, I can affirm that the most successful plans come after consultation with the stakeholders.

The leading generation often seeks the input of trusted advisors, all expert in their particular domain, like legal, tax, or accounting. These experts are also prone to offer up their opinions cleverly disguised as facts, which makes them seem incontrovertable.

When a family gets the experts involved before including the family, a plan is usually presented to the family after it has been made, as a “fait accompli” (note that “fait” is French for “fact”).

The opinions of those for whom the plan was made, usually the children, will not have been considered (at least not their true opinions). More likely the parents will have made assumptions about what was best for them, without asking.

When you look at how often “assumptions” and “opinions” get treated as “facts”, you can understand why so many family business transitions fail.

Stick to the facts.

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It’s NOT about the Money

No Money bag sign icon. Dollar USD currency symbol. Red prohibition sign. Stop symbol. Vector

 

In some ways, this blog has been a long time coming. It feels like an obvious topic for me, I am almost surprised at myself for not having addressed it yet.

I am not sure what triggered it now, but here goes, let’s see if I can turn this question into something useful and entertaining.

Money has a huge impact on all of us, and working with business families and those in the UHNW space (Ultra High Net Worth) it is obviously top of mind much of the time. But for people who have a lot of money, is money all that they talk about, think about, and worry about?

 

What else is there to talk about?

In my experience, those who have plenty of money prefer to talk about other subjects. Maybe it is because they don’t have to worry about where their proverbial next meal is going to come from, or maybe it is because they are tired of listening to all the financial experts in their lives, who seem to talk about little else.

I arrived at this calling of working with enterprising families after a couple of decades managing a small family office that was created after a liquidity event in my family when I was in my twenties.

I quickly learned that when you are managing your family’s wealth, it is much better to lay low, or else you will become a target for anyone and everyone peddling their wonderful solutions to problems you never knew you had.

I guess one of the reasons I am writing about this now is that I have noticed an uptick in the number of these financial solution peddlers hitting me up lately. You see, when I decided to enter the world of family advising, it made much less sense for me to lay low, and in fact I needed to do a 180 and try to make a splash.

The curious thing is that these peddlers are contacting me repeatedly now, and I find very little compelling in what the vast majority is offering. For everyone who claims to offer something unique, I could literally find five to ten others offering something quite similar within a few block radius in any major city.

Before I look at how you plan to take care of any money that I might allocate to you, I need to feel comfortable with you and learn one whole heckuva lot more about you, and your firm, AND know that you have taken at least a bit of time trying to understand ME and my family.

 

Do I need ANOTHER financial solution provider?

Most families don’t need another financial solutions provider. They are almost literally available on every street corner.

Families who own significant wealth will more likely need help figuring out how to treat all family members fairly, whether they grew their assets by 5% last year or by 10%.

They will more likely appreciate help in deciding how to think about, plan, and communicate their legacy decisions, as they imagine how the things that they have worked for all of their lives will play out as the wealth gets transitioned to the next generation.

Oh, and that NextGen group? Yeah, well they probably have lots of questions for their parents too, not they they feel comfortable asking them. What kind of questions?

You know, the ones about fairness, controlling their own destiny, having a clear understanding of all of the “dreams and plans” that their parents have for them and their wealth, but that have not been discussed or written down anywhere.

If bragging about how your fund beat the S&P by 2 percent last year is what you wanna sell, good luck with that.

 

That Pie is pretty big!

Once the family pie reaches a certain size, making it bigger ceases to be the focus. Figuring out how to enjoy it as a family together over generations takes over as a priority.

Families have a pretty good idea of what they want to do, and why they want to do it. They usually need help with the HOW. The how involves family dynamics, and that can be a scary subject.

Can you help a family with that? If not, you better find someone who can.

 

 

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What Are You Leaving Them?

1yWhat are you leaving your Family - Curling Game

Just about every parent gets to a point in their life where they cannot help but think about just what they will be leaving their children when they die.

Among the things that they think about are both the tangible, like money, property and other valuables, and the intangible, like life lessons, values, unforgettable life experiences and a true sense of their family legacy.

“What” is not the only question that comes up of course, there is also “why” and “how”. And let’s not forget the sub-parts of “what”, like “when”, “where”, and “who”, but they’re well beyond the scope of one blog post.

The “why” and the “how” are pretty important to work out, because they are so often the root cause of family conflict afterwards, when children are unclear as to why their parents arranged things as they did.

When I ask these questions of parents, the “what” is the easiest place to start, and I always begin with the tangible stuff. We are not ignoring the important intangible things, just delaying them until we get a better handle on stuff that everyone can see and agree on.

I’ve always been a sports fan, and maybe even a bigger fan of analogies, and plenty of sports analogies come to mind on the topic of “what you are leaving”.

In rugby, when a team scores a “try” (similar to a touchdown in football), they get to kick a convert for more points, but unlike in football, the spot of the kick depends on where the player downed the ball in the end zone.

So if a player scores a try near the sideline, he (or his teammate) needs to attempt a much more difficult convert than if he scored in the middle of the end zone.

Moral: The details of what you leave definitely affect others and their likelihood of success.

In hockey, the difference between a good goaltender and a great one is often their ability to control rebounds. A good goalie stops the puck, a great goalie will not only stop the puck, but also make sure that it ends up in a location that makes it more difficult for the opposition to score on the rebound.

Moral: It is important to think not only about what you leave your loved ones, but also what you do NOT leave to others.

In billiards, a good player will sink the ball in the pocket, and then see what the next shot will be. A great player will plan her shot so that she leaves the cue ball in a good spot for her next shot, or at least not in a great spot for her opponent should she miss.

Moral: Sometimes you need to decide what to leave, without knowing what comes next.

In curling, you always know that your opponent will be throwing the next stone, and once again there is a huge difference between good players and great ones. Also, curling is the ultimate team sport.

A good team will make their shots and hope for the best with what happens next. A great team will always consider a number of things before even choosing which shot to attempt:

  • What is the score?
  • What are we trying to do with this rock?
  • What will the other team likely try with their next shot?
  • Where do we ideally want all of the rocks to be when they all come to a rest?
  • What happens if we miss, and how can we miss in a way that still gives us an OK result?
  • What are we planning to try on our next shot?

Moral: Complex decisions always entail a number of questions, and the best decisions come when the members of the team know each others’ abilities, trust each other, and have a clear idea of what they are trying to do together.

The curling analogy fits best for me, as each player contributes to each shot, and a great team needs to have great players and be well coached.

Your kids are part of your team, aren’t they?

Who is coaching your family?

 

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When your Greatest Desire is also your Greatest Fear

This week I was privileged to be invited to a lunchtime speech by David Lansky of the Family Business Consulting Group. Lansky is based in Chicago, but being a Montreal native, the good folks at Pembroke Private Wealth Management invited him to speak to their clients in Montreal and Toronto.

His presentation was entitled “Family Wealth Continuity”, and I went into it fully expecting to nod my head up and down throughout, and he did not disappoint. I am not a big “note taker” when I attend presentations, preferring to be fully attentive lest I miss something while I am jotting stuff down.

Occasionally though, someone will say something that I just have to write down, and then it almost always gets turned into a blog post.

So here is, from page 10 of his Powerpoint deck:

“What benefactors most want…they also most fear.”

Wow. I had never heard anyone put it that way. Let’s walk our way through this a bit.

People work hard to create wealth for their family. We all know many families who have done an extraordinary job of doing just that. We don’t often ask them why, because the answer seems so obvious.

They work for their wealth so that their family can be happy, have nice things, live in a safe place, go to nice places, have access to great healthcare, and lots of smiliar reasons.

They want their children to have a great life, and very often they don’t want their kids to have to work as hard as they did.

So far, so good. Somewhere along the way, though, especially in families who have done a really good job of creating more wealth than they could ever use in several lifetimes, some doubts creep in, and these parents start too worry about leaving their kids too much money

This brings back a memory of a great quote I recall from a CAFÉ Symposium a couple of years ago. Mike “Pinball” Clemons, a CFL Hall of Famer and winner of Grey Cups as both a player and head coach said, “Make sure that your family members are the beneficiaries of your family business, NOT its victims”.

Sometimes there is “too much wealth”, sometimes there are disputes between family members, sometimes both of these things are present, along with a host of other complicating factors.

Unfortunately, the fact that wealth can be a blessing or a curse will always be with us.

I have been running several questions through a model that I am working on to help explain and simplify things, and its basic elements are What, Why and How.

Allow me to try to demonstrate not only my thoughts on this important topic, but also use the three-stage model.

We start by looking at the What, i.e. what we are trying to do, in simple terms. We are trying to pass our wealth down to our children.

Now, we need to step back and ask ourselves Why we want to do this. So we talk about the things I mentioned off the top, having nice things, living in a nice place, making sure our kids don’t have to worry about money, etc.

Now comes the hard part, the How. At this point we have to look into the future and step forward and figure out all of the details around How we can do What we want to do, and have these details be aligned with the Why we want to do them.

My main point is that families can and do pass wealth down to their children without the fear that other families experience.

The major difference with the families who do that well and many others is that they are very careful with the How, and they take the time to talk with the entire family about the What, and the Why, and the How.

It is not always easy to have these critical conversations, but having them is what separates the successful families from the ones where the fear is justified.

It can be done, but it doesn’t just happen by itself. But then again, nothing important ever does.

 

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Teach your Kids to Make Lemonade

Depositphotos_29564613_m-2015

Our ability to navigate the tricky subjects around family business is often correlated with the parenting skills that were either present or absent while the kids were growing up.

Most people that I speak to about these subjects have agreed with me when I mention that almost all problems we see as advisors to business families stem from things that the parents either did or did not do while raising their little ones.

Ever since I began the work necessary to becoming an advisor to family businesses (taking coaching courses, attending mediation workshops, and even completing two years in a Bowen Family Systems Theory (BFST) training program) the most wonderful side effect has been the positive impact on my own parenting.

Back in February, I wrote a couple of blogs called Tell it to the Judge (Part 1 and Part 2) in which I suggested that the only people who could truly judge anyone’s parenting skills are those who were on the receiving end of them, i.e. their children.

So I guess I would have to actually ask my kids if they agree that my parenting skills have improved over the past few years, but I think so, and even my wife agrees!

During a discussion with my fellow BFST trainees, one member of the group described a situation wherein one of their teenage children had been involved in an unfortunate situation, and someone brought up the old saying “When life gives you lemons, make lemonade”.

So today I want to revisit the lemonade question and how parents might think about handling it. When something unfortunate happens to someone you love, it is tempting to jump in, and react quickly to try to save the day.

Unfortunately, nobody has yet invented the “rewind” button in life, where you could actually just go back and “undo” something bad that befells you or someone you care about. All we can really do is start today and try to make things better going forward.

So what are some of your options when your child receives a proverbial lemon?

Well, you could hit them over the head with it and blame them and make them feel even worse about themselves. This obviously doesn’t sound like a great idea, but that doesn’t mean that it doesn’t happen, and far too often.

We could feel sorry for our child, tell them that none of this was their fault at all, and Mommy and Daddy are going to make it better. “Here you go dear, I made you some lemonade!”

I suppose that is better than the first reaction, but this too can be taken to an unhealthy extreme, and is a missed teaching opportunity.

Somewhere in between these lies a more useful and balanced approach. I will try to break it down into some possible steps to draw out the ways I have thought this through:

  1. Make sure that the child is OK and that there is no more immediate danger or problem.
  1. Empathize with them, explain that sometimes bad stuff happens to good people.
  1. Explain the lemonade proverb to them, along with the old “it’s not what happens to you that’s important, it’s how you DEAL with what happens to you”.
  1. Don’t fall for the temptation to make the lemonade for them. Feel free to share your lemonade recipes (i.e. things that happened to you but which you overcame)
  1. Inquire about how their lemonade making is going, ask for a taste, and compliment them on the fine beverage they have produced.
  1. Encourage them to learn life’s lessons so that they can hopefully avoid being dealt those same particular lemons again.
  1. In due time, point out how proud you are of the way they made that batch of lemonade, and that you are sure that whenever they get some other kind of lemons, you are confident that they will be able to handle them with aplomb.

If you can do all of those things, chances are pretty good that your child will judge your parenting skills to be more than adequate.

I’ll drink to that.

 

Steve Legler “gets” business families.

He understands the issues that families face, as well as how each family member sees things from their own viewpoint.

He specializes in helping business families navigate the difficult areas where the family and the business overlap, by listening to each person’s concerns and ideas. He then helps the family work together to bridge gaps by building common goals, based on their shared values and vision.

His background in family business, his experience running his own family office, along with his education and training in coaching, facilitation, and mediation, make him uniquely suited to the role of advising business families and families of wealth.

He is the author of Shift your Family Business (2014), he received his MBA from the Richard Ivey School of Business (UWO, 1991), is a CFA Charterholder (CFA Institute, 2002), a Family Enterprise Advisor (IFEA 2014), and has received the ACFBA and CFWA accreditations (Family Firm Institute 2014-2015).

He prides himself on his ability to help families create the harmony they need to support the legacy they want. To learn how, start by signing up for his monthly newsletter and weekly blogs here.

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Humble and Kind

It has been over three years since I wrote a blog with a title borrowed from a country song, so I hope that nobody will accuse me of going back to the well too soon.

As with Blame it on Cinderella back in March 2013, I was driving when I heard the song, there was a conference involved, and I was on the East Coast. Last time it was a CFA meeting in Boston, and the song that inspired me came on during my drive home.

This time I first heard the song on the way to the Family Business Summit in Halifax, put together by the great folks at the Dalhousie Centre for Family Business and Regional Prosperity.

This time the song was by country star Tim McGraw, and because my radio was still set to HotCountry103.5, I actually heard it again as I was heading back to my cottage in New Brunswick when the summit ended.

I was driving away with a smile on my face, because I met so many great people over the two days, and I was actually trying to figure out what it was about these people that made them so easy to be around and get along with.

Part of me was thinking that it must be the geographic location, because Maritimers are known as some of the friendliest people you will find anywhere in the world.

Whenever someone asks why we have a cottage in New Brunswick (not exactly close to home in Montreal) I never fail to mention that one of the main attractions is the people and their relaxed, easygoing nature.

So the people were nice because they are from Atlantic Canada, right? Yes, but that is only part of it.

These people were also Family Business people, and over the past few years since I got back into the family business game, I had not really thought of this, but there is something about FamBiz types that makes so many of them great people to be around.

And just as I was thinking about all this stuff, still with that smile on my face, Tim McGraw’s latest hit, Humble and Kind, came on my car radio again.

Humble and Kind. Every single person that I had met during the previous 36 hours, from the hotel staff to the speakers, from the summit organizers to the family business people themselves, each one seemed to be truly humble and kind.

When I got back home I listened to the song again, and wouldn’t you know it, I had another A-Ha moment.

When I heard the song in the car, I was focussed on the “humble” and the “kind”, and if you had pressed me on it, I would have sworn that the song was about being humble and kind.

But that would have missed part of the whole lesson. The actuall lyrics that the father is singing to his children are “Always stay humble and kind”. So what’s the big deal about that?

In order to stay, or remain, a certain way, you have to be that way to begin with. Now we know that not everyone scores well on the humility and kindness scales, but is that because they did not stay that way, or because they never were?

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?

My theory is that there is a large “self-selection bias” in family business conference attendance. Families who attend are doing well and want to do better, so they come together, as families, and meet other families, and learn from each other.

The ones who do not attend are probably the ones who really should be there, because what they learn from others could really help.

The upcoming CAFÉ Symposium in Calgary will give me another great chance to put this theory to the test.

 

Steve Legler “gets” business families.

He understands the issues that families face, as well as how each family member sees things from their own viewpoint.

He specializes in helping business families navigate the difficult areas where the family and the business overlap, by listening to each person’s concerns and ideas. He then helps the family work together to bridge gaps by building common goals, based on their shared values and vision.

His background in family business, his experience running his own family office, along with his education and training in coaching, facilitation, and mediation, make him uniquely suited to the role of advising business families and families of wealth.

He is the author of Shift your Family Business (2014), he received his MBA from the Richard Ivey School of Business (UWO, 1991), is a CFA Charterholder (CFA Institute, 2002), a Family Enterprise Advisor (IFEA 2014), and has received the ACFBA and CFWA accreditations (Family Firm Institute 2014-2015).

He prides himself on his ability to help families create the harmony they need to support the legacy they want. To learn how, start by signing up for his monthly newsletter and weekly blogs here.

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Going Far? Go Together

 

Quoting African proverbs has not been a habit of mine, but whenever I come across something that makes me sit up and think, you know I will soon be writing about it here.

I don’t know where or when this first came across my radar screen, but that’s not important. The key is that it’s worth thinking about and sharing, and as usual I will add my views on the family business angles that I think are worth keeping in mind.

Without further ado, here is the proverb:

If you want to go fast, go alone.

If you want to far, go together.

What jumps out at me is that before you “go”, you need to think about your priorities so that you plan your “trip” the right way.

Family businesses, almost by definition, are about “together” and “far”, not so much about “alone” and “fast”.

But here is where things get interesting. Many, if not most, successful businesses were started by one motivated, hard-working, driven person, whose determination was the key to creating a business that was then capable of bringing in others, often including many family members.

Over time, of course, that founder gets older, and plans need to be made to transition the business to the next generation.

Not only are the skills required to continue the business very different from the ones needed to create it, technology changes over those decades often mean that the business needs to redefine itself to continue being successful in the future.

Now if that founder is lucky enough to have just one child, AND that child has exactly the right attributes necessary to keep the business in a sweet spot for another generation, great. But how realistic is that?

More often, there is not one child, but several children, and even if they all have valuable skills to contribute to the success of the company, what are the chances that they will all be in agreement about what to do, who does what, and of course the biggie, who gets to decide?

So here we are. We may have decided WHAT we want, i.e., we want to go together. We also know why, because we have decided that we want to go far. Okay, on the surface, most people are still nodding in agreement. But this is where it gets tricky.

HOW do we do it?

The devil, as always, is in the details. And the details around the “how” have derailed many a well-meaning family’s plans. So, what do we do?

Let’s go back to Africa, where our proverb came from. If we were planning a long trek through the desert or jungle as a family, what are some of the things that we would need to do before leaving?

And just for fun and some added realism, the parents aren’t coming along on this trip, it’ll be just the siblings. We need to be sure that they can survive as a group without their parents, because, well you know the part about parents usually dying before their kids, right?

If those siblings came to me for advice before their trip, I would recommend they figure out a few things before setting out. Among the most important questions are these:

  • How are we going to make decisions together?
  • How are we going to communicate effectively?
  • How are we going to solve problems together?

Notice the word “together” appears in two of those, and is implied in the other.

Now Mom and Dad could sit them down and dictate the answers to those questions, and that may be helpful. Or it may not be.

Ideally the answers come from the sibling group. Do I mean that the oldest child will dictate them? Um, no, probably not much better than the answers coming from the parents, maybe worse.

These details should ideally be worked on together, as a group. What we are looking for is co-developing them, and building consensus along the way.

Can they do this by themselves? Maybe, but likely not.

How about bringing in a skilled outside facilitator?

Great idea!

If you do that, your odds go up astronomically.

 

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