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Challenging the Defiant Ones

Wordplay Rears Its Head Once More

Regular readers will recognize my penchant for engaging in interesting wordplay in this space whenever the opportunity presents itself.

Thanks for indulging me once again.

There’ll even be a “sidebar” bonus, because last week I didn’t have space to include another tidbit that fits into this category, and I hate to let a juicy bit of trivia slip by. 

 

A Client’s Defiant Daughter

This one begins with a coaching client of mine who was sharing a personal story with me (as clients typically do) about his daughter.

The young woman was being defiant, and they each stood their ground.  I’ll spare you the details of what happened for privacy reasons and since it’s still a work in progress (what isn’t?).

Let’s just say that her defiance became a focus of our discussion together.

It was funny because during our previous call, before a bit of a summer break, he was pleased with some of the progress he’d been making in his relationship with her.

I’d even given him some ideas around allowing her to choose the ways that she participated in certain family projects, rather than having Dad point her in the directions he preferred.

 

Playing the Translation Game

Neither of us actually used the word “defiant”, but it was certainly an adjective that could have applied to what he was relaying to me.

A few days later, when the word defiant came up, during a meditation recording of all places, a bell rang in my head (I mean a proverbial bell here, not the one that ended the meditation).

I thought of the noun, “defy” and a close and related French word, “défi”.

The English translation of the word “défi”, is challenge.

Ding, ding, ding.

 

If the Defiant One Challenges You….

So how should you react when a defiant one challenges you?

Inspired by “fighting fire with fire”, my conclusion is to challenge them back.

It isn’t even that far off from where I had him exploring with her a while back, letting her choose her own way to be involved.

Maybe all we need to add is a bit of a challenge to it, to encourage her to not only make it her own, but to really make the most of it and outdo herself.

 

Translation Sidebar

Last week, in Stuck in the Mud? Don’t Wait for “MayDay”, it pained me to not have space to include some more “bilingual trivia”.

Did you know that “MayDay” actually comes from the French “M’aider” (roughly “help me”)?

Likewise, the term “Pan Pan” that was also featured last week, also comes from the French “panne”, which is roughly a “breakdown” for example regarding one’s car (“mon auto est en panne”).

Hats off to any creatives who thought the “pan” in Pan Pan was about being in the pan just before going into the fire of “MayDay”. 

End sidebar.

What Do the Defiant Want?

Let’s get back to the matter at hand, i.e. finding appropriate ways to handle family members who are defiant.

First off, it may be worth taking a moment to think back to how we might have handled situations when we were their age.

This spring when many people had young adults return home unexpectedly, many of us got to live a situation that had both positives and negatives.

When my wife was less than thrilled with the reactions of our two homebound college students, I quickly reminded her that if I had been forced back home at their age, I might be a bit churlish too.

 

I’m Impressed. Please Continue.

I’ve shared with anyone who will listen how impressed I am with today’s young people. I’m hopeful for the future of our world, largely because I have faith in our young people to do a better job than those who are running things now.

For those of you who agree, and who are lucky enough to have young adults in your family, I think you should share that feeling with them.

“I’m Impressed” is something most people enjoy hearing.

“Please continue” to impress me, might just be the kind of challenge that will keep them moving forward.

It seems like something worth trying, and is clearly a Win-Win.

And it sure beats trying to deal with constant defiance.

There’s energy in defiance, and if you can harness it like a martial artist, maybe you can even make it work for you.

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From Upstream to Downstream in the FamBiz

From Paddling Hard to Going with the Flow

Summer is in full swing and with it come some activities that we look forward to because we haven’t been able to do them for a while.

For me, one of those is kayaking on the tidal river at my cottage in New Brunswick, where I get in touch with nature while lazily paddling around looking at the sky in search of the occasional bald eagle.

Having recently arrived here, I received a text message from a friend asking me if I was enjoying myself, “floating downstream” on my kayak.

Regular readers won’t be surprised that something so simple would become the inspiration for a blog post.

 

Tidal Rivers and Delayed Gratification

While I’m no expert in tidal rivers, I can tell you that sometimes this river flows towards the ocean about a kilometer away, and then a few hours later it will flow in the other direction.

When heading out from the dock for a kayaking excursion, I always make sure to go into the flow of the current, so that I can coast back home, going “downstream”.

My wife and I learned this lesson the hard way years ago, when we went rollerblading, not realizing that we had the wind at our backs, only to turn around to go back home and quickly realize our misfortune of having a strong headwind to deal with.

It’s a simple example of delayed gratification, which I love to preach. See Marshmallows and Filet Mignon

 

Climbing the Hill and Coasting Back Down

The flowing river metaphor is similar to the uphill / downhill one that we hear about when talking about where people are in their life cycle.

Older people are described as “over the hill” while the younger ones are continually “climbing” towards the top.  Getting to the top and remaining there are the goal, we’re led to believe, and in many ways that makes sense.

But in the same way that I like to save the coasting part of my kayak trips to the end, why don’t we look at life the same way?

And if we’re part of a business family, isn’t there a way that one generation’s trip down the other side of the hill can serve as a boost to the next generation’s rise?

 

Capitalizing on the Strengths of Each Generation

The “rising generation”, as people like me have been referring to them for some time now, typically have more energy to devote to building their lives and careers, while their elders will normally have more experience.

Similarly, the younger members of a family will be more comfortable with technology, while the senior family members will often have a lot more contacts and long-standing important relationships that they can leverage.

Smart families figure out how to make the most of these complementary strengths, which takes a certain amount of self-knowledge and understanding, along with the ability to set egos aside for the common good of the family.

 

Stepping Away from the Top Spot

The ego component varies from one family to the next, but seems to be rather prevalent in cases where it’s the business founder who wants to remain in charge well past the point where their leadership is what’s best for the business.

Somehow once we get past that first generation transitioning to the second, it’s less of an issue when going from G2 to G3, and then G3 to G4 and so on.

Playing with this hill metaphor in my head, I’m picturing someone stepping off the top of the hill while pulling on a rope, which in turn is helping someone make their way to the top.

I guess there’d need to be some sort of pulley or rappelling device at the top for this to make sense.

 

Many Years in the Making

I don’t want to give the impression that generational transitions should take place quickly.  In fact, properly planned and executed changes in leadership will often take years.

That’s because while we think of these situations as singular events, there are actually transitions happening at several different levels.

There needs to be a lot of coordination to properly transfer all of the knowledge of the retiring leader, as well as the authority, which all takes time, and we haven’t even begun to talk about ownership.

So it’s best to get started early, and be sure to check which way the water’s flowing before you take off.

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5 Pandemic Silver Linings for FamBiz

Our new shared reality has shaken up a lot of things in everyone’s world, and many of the negatives remain at the forefront.

Being a “glass half-full” kind of guy, I’m always on the lookout for the bright side of things.

So, with that in mind, here are 5 “silver linings” for family businesses that could come out of this pandemic, for those families that are ready, willing, and able to take advantage of them.

 

Reflect on, and Learn from, Previous Challenges

Any family business that has survived to include more than one generation has probably gone through some sort of crisis before.

The younger family members may not have been around or old enough to understand everything then, so this is a great time to bring them up to speed with the lessons about the historical resilience of the family and its business.

Knowing that the family has held together before, and reflecting on what strengths that required, will help everyone as they look forward together.

 

5 Pandemic Silver Linings for FamBiz

Co-Create the Pivot

This crisis is creating an opportunity for different generations to work together and co-create the changes that will bring the enterprise forward for the coming decades.

A family with younger members involved in the business has the chance to bring in newer, fresher ideas, that can be led by younger members with more energy, more tech-savvy, and a longer view into the future.

By combining these strengths with the wisdom and patience of their parents’ generation, they can co-create whatever pivot they need to, to adapt to the new realities of the world.

Diversity is an asset, and being able to harness the best of all their human capital is something that many business families are particularly good at doing.

 

 

Bolster the Family Brand

Since this crisis began, there have been so many examples of family businesses doing the right things for the right reasons.

Especially in smaller communities, the long term support that this creates for the family brand should last a while. While this isn’t the reason to do any of these things, it can be a nice side effect.

Family companies need to find subtle and balanced ways of getting the message out there about their efforts for the common good, and in the long run they will be rewarded by customer loyalty.

 

 

Surrender the Baton (Or at Least Part of It)

Many families put off serious discussions about the future and who will become future leaders as one generation eventually steps aside and another takes the lead. It’s what many call “continuity planning”.

Given what’s been going on recently, the current leadership may get a jump on, or at least have some more reasons to consider, moving towards their next life chapter, knowing that things are in good hands.

Crises create opportunities for new leaders to step up, which may be just what the current generation was hoping for.  

Someone who has taken on the hard choices you’ve all been facing recently just may be catching the eye of a leader who has been waiting for the opportunity to begin backing away, and surrendering some of the roles to them.

Many advisors are advocating for this quite strongly, for a great example, see The Next Generation Should Get Their Licence to Operate Now

 

Re-Emphasize Family Governance

As I wrote about a couple of weeks ago in The Crisis as a Test of your Family Governance, many families have recently realized that things were not set up exactly as they had assumed and imagined.

So, the family’s governance systems and structures may have been tested in the past couple of months.  What better time than now to revisit and re-invigorate efforts in this direction?

Might it be a time for the current business leadership to shift their focus from working IN the family business to working ON the business family?

 

Plenty of Clouds, Even More Silver Linings

There’s no question that everyone’s lives have been affected, mostly for the worse.

But, for the families that are little bit more forward-looking, there are many opportunities that just suddenly landed on our proverbial doorsteps.

What does it take to seize them?

Well, important things don’t typically just happen by themselves, not even in the best of times.

I believe that the key lies in the family’s ability to tap into all of its human capital, from every generation.

That all starts with a family meeting to discuss all of this, and if it has to be done over Zoom, that’s OK too.

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Pandemic Creates Spectrum of Opportunities for Enterprising Families

From Societal Transformations to Intergenerational Transitions

Thanks to the pandemic, there’s no denying that the whole world looks very different today than it did just a few weeks ago. 

Few could have predicted how quickly and profoundly things could change, and so far, most of what we’ve seen has been for the worse.

But while most of us haven’t figured out what it’ll all mean in the long run, some families have already started making some big moves to try to get out in front of the tectonic shifts that are happening.

From societal changes that are happening in plain view of everyone, right down to key transitions within families, it seems like everything is in motion right now.  

As a family enterprise advisor who lives and breathes the world of business families and their family offices, I want to share some of what I’ve already been noticing.

 

Broad Societal and Industry Moves

Let’s start with the things that we’ve all been seeing on the news. 

With shortages of necessities like personal protective equipment (PPE) for medical personnel, hand sanitizer and ventilators, many companies, including plenty of family businesses, have begun to shift their production from their usual products, to helping fill the sudden demand for what frontline responders need right now.

There are examples, big and small, from all over the world, because every country is being affected by the current pandemic. 

On a more local scale, many family-owned restaurants and grocery stores are moving to deliveries to deal with the new reality of the “lockdowns”, as well as getting food to overworked medical personnel and to food banks having trouble keeping up with local needs.

 

Family Offices and Impact Investing

At another level, looking at things with a longer lens, family offices are already lining up future investments in industries poised to be part of the long term solution and new realities that the world is suddenly facing.

This crisis is presenting all sorts of opportunities, not only from an investment perspective, but also for the betterment of society. 

The field of impact investing, often a favorite of the younger generation of successful intergenerational enterprising families, is also rightfully excited by the chance to get involved on the ground floor of some of these widespread changes.

This ties in nicely with a piece I wrote last year on the natural fit between family offices and impact investing.  See Family Offices and Impact Investing: A Great Fit

Pandemic Creates Spectrum of Opportunities for Enterprising Families

From Macro to Micro

Within any given family, as much as the societal and industry shake-ups affect their businesses and the assets they own, there’s typically an upcoming generational transition that’s never more than a decade or so away.

Enterprising legacy families always need to look at the long term trends in the world at large, while making sure to never lose sight of the life cycle realities in their families.  

They need to look at the macro world and its opportunities with one eye, without forgetting about the micro reality and potential threats that might present themselves if they don’t sufficiently prepare the members of their own family to be ready to take the reins one day.

As the world faces major shifts, it becomes more important than ever for families to seize these opportunities while proactively involving the younger, rising generations of their family.

 

The Strengths of Each Generation

While the senior generation has the experience, wisdom, and patience to run the operations, the next generation of the family will normally be much more tech savvy, have more energy, and be well connected to peers all over the world.

Yes, the generations have different strengths, but in many ways, they have even more things in common.   See: Is There a Generation Gap in Business?

While the MIT-Sloan article above isn’t aimed at #FamBiz in particular, the similarities between members of various generations are even greater when we consider members of the same family.

There are so many opportunities to mentor and “reverse mentor” each other in such families.

 

Opportunities Abound – Will Your Family Capitalize?

This pandemic will create some enormous opportunities for those families that are poised to capitalize on them.

Families in business together can move into action more quickly than most corporate entities, because they’re more flexible, they aren’t focused on the next quarter’s results, and they understand the values that have made them successful over generations.

These crazy times are turbulent for everyone, and smart family enterprises are already beginning to capitalize on them.

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Asking for What You Need in the FamBiz

Asking for What You Need in the FamBiz

This week I want to look at what seems like a pretty simple topic, but after we get through it all, you may agree that it’s not as simple as you first thought.

We’re going to look at the subject of asking for things, which some people do with ease, while others do with trepidation.

When you’re dealing with family members, it should be easier, right?  Well, not always.

 

Asking for Help

The first way that this topic landed on my potential blog post list came last year, when I attended a coaching workshop and someone asked one of the course leaders for ideas on how to get clients.

The answer was “if you want to coach someone, ask them”, which seemed both too simple and too difficult all at the same time, to the questioner and many others.

Then a couple of months ago on LinkedIn, I came across a quote from Simon Sinek, which read:

 

                               “To overcome our challenges, all that is 

                                 required is the courage to ask for help”

 

OK, that sounds pretty simple, doesn’t it?  But remember, simple and easy aren’t the same thing.  If it were that easy, and it worked, the world would be a happier place. Oh yeah, and there’s that part about “courage” that’s often in short supply.

 

“Help” Versus a “Resource”

This post’s title is about asking for “what you need”, while Sinek’s quote encourages us to “ask for help”, so there’s a nuance there, unless what we need always comes down to help.

I’ve written about asking for help before, notably here, 5 Things to Know: Asking for Help for a FamBiz, but the context there was mostly about a family situation, where they get to the point where they realize that they need help from the outside.

People who interact with me regularly, and those who’ve read Interdependent Wealth, will know that I’ve been trying to eliminate the word “help” from my vocabulary lately.  I find it has too much of a “One up vs. One down” connotation, and that sometimes causes its own issues.

I seldom offer to help anyone anymore, preferring instead to offer to be a resource to them.

 

Help Isn’t Always Helpful

I wrote about this almost two years ago in When Is Helping Not Helpful. 

Yes, it usually feels really good to help someone else, and more people should do it. I can assure you, though, that when you do the exact same thing, only framed as being a resource, it feels just as good.

And while it feels just as good to the “helper”, I think the person who was helped probably feels better about it.

This gets close to another topic, the one where we feel like we need to “fix” someone, which brings with it a whole slew of other issues that are beyond the scope of today’s post.

 

“What You Need” Versus “What You Want”

Anyone who’s a parent is probably familiar with the importance of making the distinction between what you want, and what you need.

It’s a basic concept that many parents try to explain pretty early on in the lives of their children. It’s also a concept that can be taught in conjunction with the idea of delayed gratification. See Marshmallow and Filet Mignon.

So I mention teaching this to children, and that may make you think of youngsters, but I can assure you that there are plenty of “adult children” (a.k.a. “former children”, or, my favourite label “offspring”) who could use some brushing up on the differences between wants and needs.

 

The Business Family Version

We’ll wrap up with some thoughts on how this topic relates to business families, especially as they mature and prepare for intergenerational transition.

Too many subjects are left too late in such families, and I always encourage them to begin talking about important subjects early on, rather than waiting too long.

One of the simpler ways to do that is to ask people for what you need from them.  I said it was simpler, not necessarily easier.

 

It Works in Both Directions!

The good news is that this works just as well for parents asking things of their offspring as it does for the younger ones to ask their parents.

Sure, it takes a bit of courage to get started, but once you begin, it’s a lot easier to keep it going.

You might even start by asking someone to read this post, and go from there…

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Pleasant = Good, Unpleasant = Bad, Right?

This week we’re going to look at something that’s a little bit further afield from many of the more hands-on topics that I sometimes cover in this space.

Of course I will still make an attempt to connect the discussion to the field of family enterprise and intergenerational wealth transitions, because that’s still the main goal here.

Regular readers may recall that I’ve been meditating every day for almost two years now, so you shouldn’t be too surprised when I tell you that the inspiration for this blog comes from a meditation recording that I was listening to recently.

 

How Not to Judge Your Meditation Session

One of the apps that I use daily is 10% Happier, based on Dan Harris’ book of the same name.  One of his main meditation gurus, featured in both the book and on the app, is Joseph Goldstein.

In one of the recordings featuring Goldstein that I listened to recently, he noted that a mediation session can leave you feeling disappointed or confused at times, but that that’s alright and even to be expected. (I’m paraphrasing here)

His point was that you cannot judge your meditation by whether or not it is pleasant. Life has its ups and downs, which is to be expected, and so meditation should be no different.

The point was being stressed for beginners, in the hopes that they not give up the practice, simply because they do not walk away from every experience with perfect happiness and enlightenment.

 

Is It Any Different in a Family Business?

So now let’s think about this idea in terms of a family business, or, maybe even more specifically, from the point of view of various members of a business family.

Not everyone is going to be happy, all the time.  That’s to be expected, and there are likely cycles of ups and downs for the business and for the people who are part of the family, and part of the business.

I think it’s important for everyone to take stock of where they are from time to time and recognize that things can’t always be rosy.

 

Different Views from Different Generations?

Some people may think that one of the real variables here is the generation that you happen to belong to.  Let me explain.

When you’re young and working your way into the business, it may feel like you need to put up with things being a little bit tough for you, but oh, look out, when I get to be the one in charge, man, this is going to be awesome and everything will be great.

Meanwhile, the senior generation, who are stuck with their own problems and worries, may be looking at their younger relatives and thinking, “man, don’t they have it easy!”.

 

Should I Stay or Should I Go?

The reason that I decided to write about this topic was the idea that sometimes people working in their family business have unrealistic expectations about how much fun they will have and how great every day is going to be.

If you’re in such a situation, great, you’re doing better than most, more power to you, and may it ever be so.

There are probably more people who are in situations that are closer to the other end of that continuum, though.

I guess my suggestion to them is to occasionally step back and re-evaluate their decision to work there.

 

Was It Even My Decision?

If you’re one of those people who find working in your family business as a series of unpleasant circumstances, day after day, you may also be someone who has trouble with that last sentence, the one where I qualified the idea of working there as “their decision”. Ha!

If you’re like many people who are working in your family’s business, and you can honestly say that it was not your decision, or your choice, then my idea about stepping back and re-evaluating things may be even more important.

 

Something to Talk About

You’ve got a lot to think about, and hopefully sooner or later, something to talk about.

Talk with your family, talk with a coach, talk with your business partners, whether they are family members or not.

It may not be fun, but if you just keep going in an environment that you hate, how does that end?

These conversations won’t necessarily be comfortable, but hopefully they’ll be productive.

 

See: Conversations: Does “Uncomfortable” = “Productive”?

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Is 10 Years a Long Time? (It Depends…)

Looking Forward, Looking Back

This week we’re starting out with a thought-provoking trick question.  It was inspired by something I saw on Twitter a few months ago and filed away.  

Its author is unknown to me, but it came from the @Wealth_Theory Twitter account.

Here’s the main content from the Tweet in question:

 

                   10 years looking forward feels like eternity.

                   10 years looking back feels like yesterday.

 

I couldn’t agree more.  And of course there’s absolutely nothing magic about the number 10, it works equally well with 5, 15, or 20 (or insert your favourite number here).

10 years celebration text

Ages and Stages

For people in a family enterprise, including members of different generations of a family, a few things will remain forever “fixed”.

For instance, your sibling position, vis-à-vis your brothers and sisters, generally won’t change. Likewise, the difference between any two people’s ages doesn’t vary; I will always be 5 years younger than my oldest sister.

And whatever age you are at when your children are born, that gap will remain fixed until one of you stops having birthdays.

But even if some things are truly “fixed”, life goes on, and everyone ages according to the same calendar.

 

What’s your Halftime Speech?

As I write this, I’ve got a football game on TV (on mute) in the background, and it happens to be halftime now. I suddenly realized that when you play the “X years back, X years forward” game, it’s always halftime too.

So what happens in the locker room at halftime?

Well, if you’re winning, you talk to the team about what you’ve been doing well, and plan to do more of that.

If, however, you’re losing, or in a close game, now is the time to make adjustments and make plans for the second half.

 

A Different Game as it Progresses

Of course the second half is never the same as the first.  In real life, that’s even more true than in sports.

I’m 55, so it doesn’t make sense for me to expect years 55 to 65 to be the same as the ones from 45 to 55.

Likewise, my son, who just turned 20, will go through all kinds of new things from now until he’s 30 that will be markedly different than his years 10 to 20.

 

“Picture This…”

A exercise I like to do with families from time to time is to simply draw a basic family diagram with each person’s age written on it.  Simple enough, but now comes the fun part. First, label the page with the current year, say 2019.

Now re-draw another version and label it 2029.

Then have one of the family members put in everyone’s new age.  This is not a math exercise, it’s an exercise in picturing the family in a future state. Try it.

 

All Years Are the Same, Actually 

While the time it takes to go from January 1 to December 31 each year is very much the same, the speed at which it seems to be going varies depending you where you are on your path through life.

I remember thinking that 2000 seemed so far away when I was a kid, and when I look at it today, it’s also far away!

Okay, enough of the navel gazing, this blog is usually about business families, so it’s time I try to articulate my point for members of such families.

 

It’s All About Self-Awareness 

If I had to boil it down to one subject, it would be self-awareness.  But just to be clear, I am not talking about the “internal” or “selfish” aspect of self-awareness.

No, I’m talking about your awareness of your place in your family system.

Who you were, in your family, 10 years ago, and who you are, in your family now, are likely quite different.

Likewise, or furthermore, who you will be 10 years from now, will also likely be quite different.

 

What About the Others?

The same goes for the other members of your family.

Some people are still on the upslope of their arc of life, while others are very likely past their own peak.

The sooner everyone recognizes this reality, the sooner you can actually start to co-create a future where everyone can be part of a gradual transition from the way things are today, to a desired future state.

Because looking 10 years back, it does feel like yesterday!

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Co-Creation and Values in the FamBiz

This week we’re looking at two subjects that have an interesting relationship when it comes to business families.  I’m not really sure how to describe their relationship, but maybe we can figure it out together.

Please join me as we look at Values and Co-Creation in the context of families looking to preserve their wealth across generations.

People have been talking about Values in the family wealth space for a long time, and with good reason.  The idea of Co-Creation seems to be a more recent manifestation, and I’m really excited about how the two can actually work together.

Let’s get started.

 

Co-Creating the Families Values

Values, in the end, are usually a very personal matter.  It’s not often that any two people will have the exact same “top 5” values, for example.  It’s not quite like DNA, but still very much an individual thing.

So what about “family values”, then?

Well, thanks to the DNA metaphor that just popped into my head as I was writing this, we have something we can keep using here, with this analogy.

While no two people’s values will be identical, it’s not uncommon for family members to have a lot of overlap in what’s important to them in terms of values.

 

Handed Down from the Parents?

In many ways, like DNA, your values are determined, or at least influenced by, your parents.  So it shouldn’t be too surprising to realize, when you meet siblings for example, that their values will be similar.

But when you’re trying to find the “common values” of the family, I don’t recommend that they be dictated from on high, from one generation to the next.

That’s where the Co-Creation comes in.

 

The Process Versus the Result

If you begin with each family member’s individual values, you’ll undoubtedly find some common ground that can act as a foundation upon which you can then build the “family values” that you are looking to discover.

But please resist the temptation to quickly find “the answer”.

The process that the family members go through together, as they explain to the others how they view each of their important values, and why they are important to them, is even more important than the end result.

The discussions, especially in a sibling group, as they share examples of how they have lived their values and how they have seen others live them as well, is so rich with potential that it shouldn’t be ignored.

It’s the entire process of working together, that Co-Creation, that will ensure that when the family adopts their list of key family values, they will actually “stick”.

 

The Value of Co-Creation

This now brings us to the other view I have stuck in my head around the way that Value(s) and Co-Creation overlap.

We’ve been talking about the Co-Creation of the family’s Values, but I really want to underscore the Value of Co-Creation.  This is admittedly a bit of a clunky argument on my part.

As the author of all of my content, as well as the editor, I’ve given myself editorial licence to do this.  I hope you’ll continue to indulge me here.

The first message is that family values MUST be co-created.

But the second message is that Co-Creation in and of itself, has a lot of Value, in everything the family does together.

 

Family Legacy, Family Alignment, Family Governance

All of my favourite subjects in this work revolve around family, and I express them in different ways depending on the context and particular circumstances that any family is living.

But whether I’m talking to a family about the family legacy that they want to leave (and live!), or the family alignment that they may have to work on to get everyone working in the same direction, or the family governance that they’ll need to begin to work on, to hold it all together over the coming generations, the Co-Creation of these is always central to their ultimate success.

So, Yes, please remember that family Values should always be Co-Created by the family members, with a major input from the younger family members, please!

But Yes also to recalling that there is huge Value in the idea of Co-Creation of everything else the family is working on for their long term success.

FOR the Family, BY the Family. But not necessarily by themselves!

 

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Family Offices and Impact Investing: A Great Fit

This week we’ll look at a couple of subjects that have been written about a lot over the past few years.

I’ve written about the family office space recently, and promised to write about more often.  Impact investing, on the other hand, I’ve not written about, yet.

It’s interesting that more people are beginning to realize that family offices and impact investing actually go together like peanut butter and jelly, or ham and cheese.

I’m not claiming to have unearthed anything new here, but want to comment on some aspects of this combination that give it so much potential.

 

 

Millennials on the Mind

Let’s start with the premise that many family offices are essentially investment vehicles for wealth that is owned by a family.

Let’s add in the fact that these families want to keep their wealth in the family, and that much of that wealth is often liquid wealth, which can be invested in a wide variety of asset classes.

And finally, let’s not forget that when the wealth (eventually) gets transitioned to the rising generation of the family, there are likely going to be some millennials involved.

If you Google “millennials impact investing” you will get all sorts of hits.

Much of the mindset that impact investors bring to the table overlaps almost perfectly with everything that I’ve ever read about millennials.

 

 

Family Engagement

Anyone who works with wealthy families knows that a key obstacle to successful wealth transitions has always been the difficulty in getting and maintaining the engagement of the younger generation of the family.

It’s only natural for young people to want to find their own way in the world, to explore and develop their own passions, and follow their own dreams.

Their parents, who are currently stewarding the family’s wealth, and who may have been involved in creating and growing it, often become anxious when their offspring do not show any interest in these efforts.

 

family Business office

Generational Priorities Converge

So for families who have liquid capital to invest in different asset classes, it isn’t much of a stretch to begin to look at investments in companies or funds that look to make a positive impact in an environmental and/or social fashion.

Impact investing is about making money first and foremost, just not at any cost.  If younger family members can identify potential investments that satisfy both a social benefit along with an opportunity to make a financial profit, it should be a no-brainer to consider such opportunities.

I’m thinking about this from the point of view of a family that is trying to find ways to combine what is important to all generations of the family.

For a family office to look seriously at impact investing even takes into account future generations, including young children and those who aren’t yet born.

 

 

Like Philanthropy, But Different

Some people confuse impact investing with philanthropy, so let’s address the comparison here.

Philanthropy is another way that some wealthy families use to bring the family together and help prepare the rising generation.  Working together on a family foundation is a nice way to learn financial literacy and how to work together with others.

Families who understand and teach their younger generations the importance of giving back to their community have realized that there are lots of win-wins here.

But impact investing is different, because it’s actually about finding ways to invest money for profit, not just out of a sense of charity.

It just isn’t about profit without regard to side effects and unwanted consequences.

 

 

Who Gets to Decide?

Of course it’s easy to say that family offices should take impact investing seriously and start doing it.  It’s another to figure out how to do it, including asking the questions around “who gets to decide?”

We’ve looked at “what” to do (impact investing) and we’ve explored a bit of the “why”, (because of the engagement of all generations), but that still leaves a lot of the “how” questions.

A few weeks back, in Putting “Family” in the Family Office, I noted:

 

Ideally, the goals of the family would also

be taken into consideration too, not to

mention the family’s mission and vision

 

Impact investing needs to be driven by the family’s vision to really succeed.

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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.

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