Who Are the Decisions Really FOR?
This week we’re delving into something that will hopefully hit close to home for some readers because we’ll get into some deep areas that might feel uncomfortable for some.
Founders of successful businesses often come from humble beginnings, and thanks to some great achievements, they go on to build enterprises that far exceed their initial expectations.
Having played an instrumental role in creating what has now become a family enterprise, it’s natural for them to wish to continue to exert maximum influence on things, now and well into the future.
Figuring Out What Needs to Come Next
Hopefully at some point these leaders realize that it makes sense to shift their focus from continuing to build their enterprise, to pondering how they will create their legacy by passing down what they’ve worked so hard to create.
See: Is your Continuity Planning “PAL” in Danger? for more on the fact that more wealth won’t guarantee a legacy.
The idea for this post comes from an interaction I accidentally had with a Zoom meeting participant a few weeks ago, that was then followed by the retirement announcement of a relatively young hockey player who spent a few seasons with my local team.
I’ll try to weave those stories into some useful and entertaining prose.
Can’t I Decide How to Leave this to my Kids?
So picture a webinar where both advisors to family businesses and members of business families are all participating, and where a case study is being shared.
The case involves a business where some of the offspring work in the business, while others do not, which is quite common.
The facilitators ask for comments, and some advisor from Montreal (guess who!) mentions that the son who is running the company may not love the fact that his siblings who aren’t employed by the company are set to inherit a share equal to his.
Soon afterwards, another participant jumps in and says that he wants to reply to my comment, saying “Can’t I decide who I want to leave my business to?”
Well, since the situation did not allow for me to respond to the man, here we are. Perhaps he will read this.
The Short Answer or the Longer Answer
Of course the man can decide to do whatever he wishes. But just because you can do something, that doesn’t mean you should.
I’m flashing back to the story about the rich old lady who bequeathed everything to her cat, or was that an urban legend?
When you own something, a company, a property, a stock portfolio, you have the right to decide who will own it after you die. People sign wills every day that lay out such directives.
But we’re talking about a family business here. Yes, it is quite simple to divide the ownership of the company by the number of offspring and leave each an equal share.
Perhaps it is too simple. It is certainly worth a bit more thought and ample discussion with the intended inheritors.
Hanging Up His Skates for the Sake of his Family
A week or so after that interaction on Zoom, I learned of the premature retirement of a hockey player who was forced to hang up his skates before he turned 30.
There are only so many concussions a brain can take before they affect one’s quality of life permanently.
“I’d play until I died”, he said, “If it were up to me”.
However, considering his wife and young children, he made the only reasonable choice that he could, for their sake.
More Wisdom at Half the Age
The business owner was certainly much older than the hockey player, but who is wiser?
The hockey player’s children are way too young for him to truly consult about his decision. The business owner’s offspring are certainly old enough to warrant not only consideration, but also consultation, about important matters.
Me vs. Us vs. Them
When thinking about this subject, I believe there’s a certain progression at play.
We begin by thinking about ourselves first, i.e. “me”.
As we mature and our family comes into being, we shift into much more of an “us” mentality.
At some point, we need to become conscious of our own mortality, and then we need to shift again, with the ultimate unselfish shift, to thinking about “them”, in the eventual absence of “me”.
I connected with the man on LinkedIn.
An email exchange followed.
A Zoom call was scheduled.
He cancelled the night before…
To be continued?