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Doing Your MBWA in the Family Business

No, Not MBA, MBWA

Whenever I share my personal backstory, I always include the part about going away for a couple of years to do my MBA.

That’s because it was right after my MBA studies and my return to our family enterprise that big changes occurred for me, thanks to our unexpected liquidity event.

See Finding the Liquidity Sweet Spot for your Family

Instead of the steel fabrication business I was expecting to eventually take over, I ended up running our small family office.

The part of my story that typically gets skipped, however, is that before doing my MBA I was quite busy doing lots of MBWA.

During a recent coaching call with a client, he brought up this term, and it conjured up great memories for me, which I’ll share below.

Nothing Wrong with Doing an MBA

Let’s first dispense with a couple of MBA matters. 

Last year in Getting your MBA to Lead your FamBiz – 5 Things to Consider, I shared some thoughts on the potential value of pursuing MBA studies in advance of taking on a greater role in one’s family enterprise.

Looking back now, I regret one key word choice I made, right there in the headline.

I’ve long tried to make the distinction that I “did” my MBA, and I didn’t simply “get” and MBA.

Trust me, in the program I was in, there was a great deal of “doing”.

To me, “getting” an MBA makes it sound like something you grab off a shelf.

My bias is that too many people “get” their MBA, while not enough actually “do” their MBA, but maybe that’s just the boomer in me.

Wandering Back to the MBWA Discussion

When I was in the first 3 years of my career in our business, which I entered right after my undergrad, I quickly determined that the most important thing I was supposed to do was to learn the business.

I had some vaguely defined roles and tasks related to marketing and then scheduling production and reporting contract status to customers, but the main thing I felt I was supposed to do is figure out how everything worked.

Because I had the same name as the founder, along with a “Jr.” appended to the end, there was literally no place I could not go.

I learned a ton doing that, yet felt like I was wasting a lot of time being unproductive. Until, that is, the book In Search of Excellence came out.

When I read it and learned that “Management By Wandering Around” (MBWA) was actually a thing, it was a true Eureka moment for me.

I felt legitimized.

Sibling Partners with Different Styles

Then a few weeks ago, while on a coaching call with one of two siblings who are learning to co-lead the business they’ve recently taken over from their father, the younger one surprised me.

The book I referred to came out early in my career, well before these current clients were even born, and now I was hearing something about “I wish my sibling would learn to do more Managing by Wandering Around, like I do”.

You can imagine the smile this put on my face, as I shared much of what I wrote above.

So let’s close out by looking at what can be gained by adding a bit of MBWA to roles in one’s family enterprise.

See and Be Seen

When you wander around your business, you see a lot of things that you otherwise might not notice if you just sat comfortably in your office.

And not only do you see things and people, people also see you. 

Connecting with your people is something that often gets overlooked, and the work from home trend that Covid imposed certainly had an impact on this.

Being seen as caring about your people and interacting with them and perhaps even speaking with customers are all important parts of running a business.

Working In the Business and On the Business

Then there’s the part about not only working in your business, but also working on your business. 

That was the point my client was making regarding their sibling and the responsibility to be overseeing the business and not just doing the job of being one of the cogs.

Wandering around, and managing while doing so, is a way to kind of do both at the same time.

There are opportunities to learn, and also to teach, and more people should probably be doing more of it.

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Reveling in Revelatory Family Situations

Always Seeking to Uncover New Information

There are many concepts that arise in different ways and places in my work, and when I come across the same idea in various forms during a short space of time, it always gets my blogger brainwaves flowing.

Regular readers recognize my penchant for wordplay, including the use of words that might fall outside our everyday vocabulary.

I’m judicious with my word choices when speaking with most people, and I freely use the most accurate word to describe my thoughts, assuming I’ll be best understood that way.

Such is the case with a recent discussion I had on a coaching call I had with my long-time coach, Melissa.

I noted that I had some upcoming events ahead, that would make the next couple of weeks very “revelatory”.

Coaches Revel in Revelations

As coaches, we both understand full well the value we can bring, and she didn’t miss a beat.

She chimed in that a big part of what we do is to help our clients reveal who they are to themselves.

In turn, those clients can also focus on revealing who they are to others, but doing that internal work first is more helpful than you may realize, until you do it.

 

While that certainly applies to coaching, there’s also a big tie-in to working with client families in a facilitation capacity.

I’ve written about a particular aspect of this here before in Revealing a System to Itself.

Taking It Up a Level

Where coaching is often more of a One-on-One endeavour, facilitation involves groups of people, and one way that good facilitators can think of their role is to concentrate on revealing the system to itself.

What applies to individuals and the concept of helping them each discover who they are “as a person”, also applies to groups of connected people.

A connected group of people acts as an interdependent system, and facilitating such a system is all about helping them discover things about themselves and their relationships that used to he hidden to them. 

This can help unlock many areas, including new ways of relating to each other, which can lead to great progress.

It isn’t necessarily always easy, and sometimes what’s learned can be surprising and tough to digest, but seeing things more realistically is always useful to any group.

Another Example of Seeking Revelatory Info

I was recently contacted by someone who was referred to me by a business school professor at a University that has a family business program.

The young man was already running a successful and growing small business, and was entertaining the idea of having his brother join him in the business.

As I embarked on a couple of exploratory calls with each of them to see if and how I might be a resource to them, a couple of things became apparent.

As usual in any new situation I learn about, I have no idea or pre-conceived notion of where things might lead and how best to proceed; there’s a lot of figuring it out as we go, and that’s perfectly fine.

In speaking with them both separately, it became clear that the issue of compensation would be potentially thorny for them to resolve.

Why Don’t You Start There?

This is where I surprised even myself. I’m typically a fan of starting slow, and working on banking some small wins early on in any process, to provide useful momentum.

But in this case, since they were trying to decide on a “go/no go” of whether the second brother would quit his job to join the firm, I suggested they “Zag”, instead of “Zig”.

My suggestion to them was to see if they could come up with a satisfactory compensation arrangement they could both agree to, and to tackle that issue as their first major step.

My thinking is that the process of negotiating this area would be quite revelatory to the way the rest of their working relationship would go.

If they get through this obstacle, future challenges will seem easy in comparison.

It’s Not What Happens That’s Important….

There’s a saying that it’s not what happens that’s important, it’s what you do about it afterwards that counts.

Revelatory family situations tee up some of the best opportunities to respond in new and better ways.

Alternatively, they can also highlight some important “no go” decisions too. Either way, they lead to progress.

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When the Parents’ Dream Becomes their Kids’ Nightmare

Just the Way “WE” Always Wanted It

In many ways this post has been a long time coming. I’ve run into versions of what I’ll be sharing this week for years now, but never felt compelled to devote a whole post to it.

Some confluence of cases in my head, from the past and from current discussions with clients and prospects, has resulted in my finally deciding to tackle this tough subject.

In other ways, though, it’s so simple to describe, that even those who know little about family business can easily relate to such stories when I share the basic fact patterns.

Every parent says they want what’s best for all of their children, and every single one of them believes it when they say it.

But they sometimes overestimate how much they know, as well as what they can control to make that happen.

Building the Dream Family Business

The closest I’ve come to writing about a version of this was way back in 2016, with When your Greatest Desire is also your Greatest Fear.

But that post was about the fact that parents hope to get to a level of wealth that makes the lives of all their family members easier, and then end up “overshooting” that level, and suddenly realize they’ve got a whole different challenge on their hands, often labelled as entitlement.

This week we’re looking at parental desires again, but from different perspective, and with a whole other kind of downside.

Unlikely Business Partners

The simplest way to describe the phenomenon is to consider a family business with just one person or couple in charge, who have more than one child together.

They will often want to bring all of their offspring into the business with them, and run things together as the prototypical “one big happy family”.

And this can work for a time, especially while the senior generation remains in place, to mitigate any sibling issues “in the bud”.

The problem comes later, after the exit of the parents, when the siblings end up in a situation where they’re now unwitting partners together.

They’ve worked together for while, but at a lower level, with less at stake and possibly less ego involvement.

Eventually they realize they’re stuck in a partnership with people with whom they never would have entered into business together of their own free will.

“Plans that Don’t Include Us”

Too often the parents make plans with professionals regarding their estate plans that include an operating business, and because they’ve long dreamt that what they’ve been building will continue on with the whole family at the helm, those plans end up creating sibling partnerships that really don’t have a high likelihood of surviving long term.

See Why Succession Planning Fails

When the cart (the legal structures) is put before the horse (the relationships of the offspring expected to work well together), things are set up for failure more than for success.

And it happens all the time.

Hopefully it can be caught in time, plans can be modified, and a new plan, this time including input from those most affected, can be put into place.

If not, those who end up “stuck as partners” risk having their family relationships damaged because they can’t live up to Mom and Dad’s dreams.

We’re Better Than Our Parents!

I’ve even seen versions of this where a parent hopes to have all of their offspring continue together despite the fact that they previously worked with their own siblings, and quickly realized that was not a good fit.

They couldn’t work with their own sibling, yet they expect their heirs to successfully work together; presumably they believe their own parenting skills are far superior than those of their parents!

Parenting skills are just one variable in this equation, and the human desire for some independence is typically stronger than whether your parents taught you to play nicely together.

Playing nicely as children is one thing, working together as adults is quite another.

Time for a Reality Check

When a family calls in someone like me, it’s often an opportunity for a reality check on those dreams we were talking about.

Assessing the likelihood of success is a large part of what I do, and in many cases (most?) some modifications to “Plan A” are required, to increase the likelihood of their success.

Success looks different for everyone, but continued family harmony is at the top of my list.

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Direction Comes Before Destination for Families

Admittedly a Little Bit Counter-Intuitive

In last week’s blog I talked about the latest super-spreader event that I attended in 2022, and enough time has passed that I can safely confirm that I emerged unscathed once again.

I did leave the latest RendezVous of the Purposeful Planning Institute with lots of good stuff, of course, as has been the case each time I’ve attended since 2014.

There was a small nugget in the opening keynote presentation that made me jot down one single word, and I’ve been reflecting on its importance ever since.

That word was “direction”, and even though I can’t recall the exact context in which it was shared, it resonated with me, and so now I need to share some of my thoughts about that.

 

Fundamental Human Connection

The theme for this year’s conference was “The Fundamentals of Human Connection”, and our opening keynote was wonderfully delivered by Akasha Saunders, from Cultivating Leadership.

When he noted the importance of direction it hit me like a lightning bolt, as if it were the missing link to a number of disparate ideas in my head.

I write about families who face the challenges of transitioning their wealth or their business from one generation to the next, which is never simple or easy work.

When I’m engaged by a family as a resource to them to guide them on that journey, they often ask me lots of questions about the destination we are trying to get to.

I don’t like to get into “destination” type talk, preferring to focus on the “journey” instead.

The idea of focusing on “direction” appeals to me, probably because it’s even simpler than the journey, and is in fact a small subset of it.

 

But Doesn’t the Destination Give You the Direction?

I wrote about this 4 years ago in There IS No Destination which was inspired by a great quote I’d read: 

                                          There Is No Destination.

                                                It’s ALL Journey.

                                                    All. Of. It. 

That remains one of my favourite posts, and now I’m please to be able to revisit it and add the importance of direction.

Just because it’s a journey, that doesn’t mean it needs to be random.

You have a general idea of where you want to go, and that helps you and your family to point yourself in the right direction.

 

In a Hurry to Get to the End

I recently ran a first in-person family meeting with a family I’ve been working with remotely in 1-on-1 calls over the past 6 months, and as we wound up our successful time together, we ended with a look ahead at what could be the next logical step on our journey together.

Some of the family members seemed in more of a hurry than others, as the idea of tackling formal governance appealed to them.

I discouraged them from trying to “jump ahead” too quickly, and we decided together that working on defining the family’s shared values made more sense.

I explained my penchant for attaching the adjective “evolving” to the term “governance”, and they agreed that this sounded prudent.

See The Evolution of Family Governance, among other posts.

 

Shared Values Help Provide Direction

Uncovering a family’s shared values provides a great foundation, and that helps inform the logical direction that the family members need to take.

Getting everyone pointed in the same direction, and then starting to slowly move the proverbial train down the track is how I like to explain it.

Are you heading west, or south? 

You don’t have to know exactly where you are trying to go to begin to overcome the inertia that keeps too many families stuck in neutral.

Sticking with the train metaphor, there are lots of places where a train can deviate from straight ahead and take on a new direction.

The flexibility component of not simply looking rigidly ahead to a specific destination should not be understated.

 

Engagement and Alignment – Redux

In Family Engagement and Family Alignment – Chicken and Egg we looked at these two key elements and how interdependent they are.

We can now add direction, and perhaps even momentum, as key areas for families to focus upon, as they work to overcome the many challenges involved in successful intergenerational wealth transitions.

Most families have a good general idea of what it could/should look like, but that doesn’t mean that the exact destination is known or even achievable.

Simply making sure you have the direction right is something worth thinking about from time to time

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Fantastic Parts, an Even Greater Whole Community

Coming Down from a Rocky Mountain High

Over the years since I’ve been sharing my thoughts in this space on a weekly basis, there is one particular source of inspiration upon which I have drawn far more ideas than any other.

Regular readers can likely guess that I’m referring to the Purposeful Planning Institute, whose members long ago became my “tribe”.

I first attended PPI’s annual RendezVous in Denver in 2014, where it became evident for me that this community was unlike any other group of professionals I’d ever encountered. (I’ve yet to come across anything else even close to it since either.)

Having just completed our first in-person RendezVous since 2019, I’m coming down from my Rocky Mountain high and will share my experience.

Highest Membership Numbers Yet

I should explain my role with this group a bit further before I expound upon the “humble brag” that I’ve already set up here.

I’ve been serving on the Wisdom Expedition for RendezVous for 5 years now, including the past two years as its leader. 

Wisdom, along with its sister expedition, Experience, both sit below the Vision Expedition, which is responsible for each annual RendezVous gathering. 

The result is that the organisation benefits from a leadership group numbering a couple dozen committed believers, and that breadth has always been a hallmark of PPI’s success.

So when John A. Warnick, PPI’s founder and our fearless leader, shared that PPI’s membership is now over 450 people, there were many people in the room who beamed with pride, as this is the highest number since PPI’s initial RendezVous in 2011.

Pent Up Demand for Connection

Reconvening with one’s tribe is always great because although we’ve remained connected virtually in the interim, this is a group of “huggers” and many were long overdue.

And, at the same time, there were so many new faces this year too, and that bodes well for the future.

Our theme was well selected, “The Fundamentals of Human Connection” and I’m quite sure we won’t stray too far from that in the future either, as it is what sets the PPI community apart.

What we all have in common is a desire to better serve the families we work for, and doing so requires that we go deeper, and connect not just with our heads but also with our hearts and souls.

A Community and Its Members

Between sessions over the three days, there are lots of long breaks built in, during which relationships can be built and or rekindled.

By the final day, I kept returning to the same comments in my discussions: 

The whole of our community is greater than the sum of its parts, for sure, AND, so many of those parts are really fantastic to begin with.

As I often remark, the way we think about our professional community also happens to have many parallels to the work we all do with families.

Not all families realize how important it is for them to work on developing all of the human capital they have at their disposal in their family.

As we have the privilege to work with such families, part of what we often need to do is to nudge them in this direction, and encourage them to consider every family member and their individual development, and not simply be satisfied that the family remains wealthy or that their business continues to succeed.

A Few Highlights for Good Measure

Following RendezVous each year I typically blog about some of the highlights, but I didn’t leave myself much room this time.

From our opening keynote from Akasha to the closing salvo from David York, there were many other great moments in between.

The Dream Building session featuring Amanda, Cathy and Marlis was off the charts, the FRED Talks that I was honoured to introduce were all home runs, and the two Purposeful Connections speeches were wonderfully touching.

I was looking forward to finally meeting my friend Cindy Radu in person, but thanks to a late Covid diagnosis, she was forced to submit hers on video, and she blew everyone away nonetheless.

I always go to RendezVous to refill my proverbial “pitcher”, from which I pour for the other 51 weeks of the year.

As usual, the many firehoses that were present made it overflow and I left all wet, and very fulfilled.

See you again next year.

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Can the Family Actually Implement your Ideas?

A Key Question you NEED to Ask

Many of the professionals with whom I interact in my work with enterprising families are specialists in a particular domain, with decades of experience providing solutions for these families.

In many ways I admire these people because the work that they do is relatively easy to describe and ends up with a clear “deliverable” for the families for whom they toil.

When the result of that work actually ends up being useful to the family in question, it must be very validating for them.

Unfortunately, in many instances the output of those efforts never gets implemented into the family’s plans.

Ideas Are a Dime a Dozen

The question of “great ideas” recently hit me and had me searching for the quote that brought home the wisdom around how ideas are insufficient in themselves.

Google was quick to respond with the nugget I was searching for, courtesy of Mary Kay Ash, an ultra-successful U.S. entrepreneur in the last century.

 

                                    “Ideas are a Dime a Dozen

                                 People who Implement them

                                              Are Priceless”

 

Families who’ve accumulated a certain amount of wealth eventually face the challenge of transitioning that wealth to the rising generation of their family.

There are hundreds of ideas that can be useful to these families, and thousands of professionals who are expert in wielding them.

And yet the question of whether or not the family will actually implement them rarely gets asked in advance of the work being done.

MBA School Flashback

I’m now flashing back to my days in MBA school, a little over 30 years ago. 

It was one of the top business schools in the country, and they were quite sensitive to ensuring that the freshly-minted MBA’s they were shoving out into the workforce were actually delivering what their new employers were hoping for.

Lo and behold, they had discovered that in some ways, they were missing the mark.

The school had been great at producing experts who could analyze any business situation, produce alternative solutions, and recommend the best course of action.  There was no doubt about that aspect.

Where this school (and all others) was falling short, was in producing people who could actually implement the proposed solution.

You know, the priceless ones.

Bricks, Mortar, and a Mason

Regular readers recognize that metaphors and analogies are some of my favourite ways of communicating complex ideas.

I’ve borrowed the one about the difference between the bricks and the mortar from others, because it nicely illustrates the distinction between the two main physical components of a brick wall.

I also like to add in the part about the mason, or bricklayer, in whose absence no wall will be built.

The one who builds the wall actually “implements” the bricks and the mortar together to create the desired wall.

Stop with the “You Should Do This”

A few weeks ago, in Some Woulda Coulda Shoulda’s for Family Enterprises we looked at part of this question, and I suggested that instead of telling families what we think they should be doing, we might instead help them think about what they could accomplish together, and what the other family members would be up for trying to do together.

This gets right to the heart of what the family is actually interested and able to work on, as they think about the wall they want to build together, and hopefully has them working together to co-create something they will actually implement.

They will certainly need some special bricks supplied by experts along the way, and many of those will include important elements that they should be incorporating.

But the bricks are only a small part of the wall, and the experience gained by the family in building it together will have been priceless, as Mary Kay Ash suggested.

Another Flashback to a Different Analogy

Writing these missives every week is so useful to me because quite often I don’t know where they are going to take me before I begin writing each post.

For instance, I had no idea that I’d flash back to a blog from almost 4 years ago as I wrote this.

But Building a Bridge Versus Buying One instantly came back to me just now, and it’s the perfect place for this piece to land.

Going back to the title of this post, “Can the Family….”, I recognize that another verb, “Will the Family…” poses an equally valid question that should also be asked!

Please ask both!

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Facing Up to Addiction in Family Enterprise – 5 Considerations

Entering Uncharted Territory

This week we’re entering some new territory, in a number of ways. First off, I took up this topic based on a suggestion from a reader I’ve never met.

I received a LinkedIn message a while back asking me to talk about addiction and the role it plays, and was intrigued.

I also realized that this potentially huge topic can be a pretty big deal for some families who are trying to create and pass down a legacy, and yet I’ve yet to discuss it here, despite having written over 400 posts.

That all changes now, as I want to share my thoughts on what is also “uncharted territory” for many families, who are often unprepared for how they should respond when a family member has an addiction.

I decided to revisit a version of the “5 Things” blogs I’ve done over the years, much to the dismay of my wife, who wonders aloud why it’s always five things, and never four or six…

1.  You Cannot Change Someone Else

As much as we’d all like this to be different, you cannot change someone else. You can try, and many do, but true change really only occurs when the “changee” does the work.

This can be the most difficult realisation of your life, especially as a parent. 

When they have young children, parents can and do manage to create many of the changes they hope to with their offspring. 

Unfortunately, at some point, this ends. Then, the more a parent wants something, the less likely their children are to acquiesce.

If your instinct is to simply insist more forcefully, you’re barking up the wrong tree.

2. Look to Provide Help, Not to Punish

An initial reaction to a family member’s addiction might be to use some form of punishment to try to curb the unwanted behaviour.

Punishment, whether simply threatened or actually enacted, will often backfire and make matters more difficult to fix.

Nobody sets out to become addicted to anything. 

Yes, there’s often some behaviour involved that’s less than desirable, but by the time they reach the stage of addiction, it’s no longer an easily-solvable problem.

Offering help, in the form of support and understanding, will go much further, and hopefully get the addicted person to cooperate, as opposed to rebel, which is what punishment will often engender.

3. Set Realistic Expectations

There’s no magic wand that will make an addiction disappear overnight. 

These situations all vary, of course, based on what the addiction is, how long it’s been going on and how deeply affected the person is, and whether this is the first time or not.

Giving the whole situation the time required to be satisfactorily resolved is what I suggest, and it’s better to err on the side of planning for things to take more time (months/years) than less (days/weeks).

4. Work on Organizing the Rest of the Family

While the addicted family member seems to take up a lot of time and focus, you shouldn’t neglect the rest of the family.

In fact, I think it makes sense for most families to organize themselves to survive for the long term as if the addicted person will never get over whatever their particular affliction may be.

This is a variation on “plan for the worst” but also hope for the best.

If the addicted family member is putting the enterprise at risk, finding ways to minimize and eliminate those risks should quickly become the focus, and that means having different people assume certain key roles.

Making a plan that you can all work on together to get through this makes sense and should be a priority.

5. Bring in Outside Help to Manage It

Few families are well equipped to deal with such issues on their own.

Bringing in outside expertise makes sense for dealing with the addicted person, of course, but may also make lots of sense for the rest of the family as they deal with things in a new way.

I hold himself out as such a resource for families, so this suggestion shouldn’t come as a huge surprise to anyone reading this, of course.

But an addicted family member creates emotional reactions that need to be managed.

You need to reduce the “reactions” and instead focus on a constructive “response”.

Ignoring the issue and hoping it will disappear rarely works out well.

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Progressing Up the Family Governance Mountain

It’s Usually a Slow Journey to the Top

As the world returns to more in-person events, I’ve been playing catch up with occasions to be with like-minded colleagues. I’ve just returned from New York where I took part once again in the Institute for Family Governance’s annual conference.

I also got in some family time with my sister, my nephew, and my son, so that was a nice bonus.

Since family governance is about improving relationships among family stakeholders, this opportunity of combining the conference with personal family catch-ups was a big plus.

When thinking about a subject like family governance, I normally like to look at it from each individual family’s perspective, since no two families should approach it the same way.

However, meeting with colleagues who all work somewhere in this space allows me to also take the pulse of the professional community to see how the subject is understood and received in general, and I’m left with mixed feelings on that score.

Caring Enough to Understand

Some of those who showed up didn’t seem to care enough to try to understand the family relationship aspects that actually create most families’ governance challenges.

Perhaps I was jaded by some interactions at my lunch roundtable, but the subject of the families and their challenges in establishing some sort of governance seemed far from the radar of many colleagues.

Having self-selected to come to this conference and sign up for a table to discuss “Family Considerations when Designing your Family Office”, I had assumed that they’d care enough about it to try to understand better.

Or maybe they didn’t understand enough to care; maybe some of each (?).

Enough about the negative, because as usual, the presentations contained many positive nuggets worth remembering and sharing.

Some Random Nuggets to Share:

Josh Baron kicked off the morning discussing Owner Strategy for Family Enterprises, and he reminded us all how important the owners of any business are and the roles that they can and should play as owners.

The group of owners is much more than whatever it happens to say in their shareholder’s agreement, and he was encouraging them to work together with intentionality.

What Does the IRS Have to Do with This?

A panel after that shared a couple of nice take-aways, notably that it’s important not to let the IRS decide things for you. 

This underscores the need to make plans in advance of anyone’s death, although I suspect that for many, those plans are actually precisely about making decisions that are very much driven by the desire to deprive the IRS of any of the family’s dollars!

They also noted that there’s a serious lack of role models for generational stewardship for families to learn from. 

I think this is largely true, and hopefully changing for the better.

On Family Business Boards:

Brendan Wall then shared his lived experience in his eponymous family enterprise, discussing How to Design and Implement an Effective Family Business Board.

Keeping the Board fresh by rotating directors on and off was noted, as was the need to put the right people on the Board in the first place.

He also mentioned that the qualities of who should be on a Board differ widely when looking at outside independent directors versus family members who sit on the same Board.

A G5 Keynote to Remember

Matthew Fleming’s keynote on the Importance of Family Values was fantastic, as he shared stories from the heart about his family, who are now in G5 (the fifth generation of his family), and how their multi-family office maintains their family’s values at the center of the work they do with all the families they serve.

He shared their model of the Four Pillars of Capital, and also left us with an existential question:

        “Is your family office becoming a bigger problem than 

                      the problem it was designed to solve?”

Hmmmm, as any family office heading towards a generational transition knows, this is an important thing to consider, as a need to evolve to serve the rising generation will emerge at some point.

More Nuggets:

After lunch we were treated to some wonderful examples of families who Use their Family Fortune to Serve their Community, as well as trip down memory lane for sailing fans, featuring a member of a three-generation family who repeatedly won the America’s Cup.

Next years IFG Conference in NYC is set for May 3, 2023, and I’m looking forward to being there once again.

I hope we’ll all be a few steps closer to the top of the family governance mountain then.

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Can Communication Really Be Overrated in a Family Enterprise?

Aren’t the Three Rules “Communicate, communicate, communicate”?

This week I want to touch on one of the sacred cows of the family business space, and that’s the constant harping on the fact that improving communication is THE number one step that families need to work on.

Regular readers know that I fully acknowledge that most family enterprises are quite complex, and therefore the way that they communicate with each other can almost always be improved for the benefit of all.

This remains true, and almost surely will for as long as families choose to work together or share the ownership of assets as a group.

So I’m not planning on throwing communication “under the bus”, but I do want to shine a light on the way some people treat the subject, and simultaneously ignore a much less popular aspect of what it takes for relationships to be at their best.

So What Is It That’s Underrated?

Before I get to the underrated element, I need to give a shout out and a tip of the hat to the man who put this on my radar a couple of months back.

I discovered the Vermont Center for Family Studies almost a decade ago, when I was trying to figure out why people who work with business families should go through the trouble of learning about Bowen Family Systems Theory (BFST).

At the time, the head of VCFS, Erik Thompson, just happened to be launching a training program for people curious about BFST, so I jumped at the opportunity to dive into the Bowen pool.

I soon discovered that this pool doesn’t have a shallow end, which I suppose is a good thing, since I did dive in.

So perhaps you think that understanding family systems is underrated, vis-à-vis communication, and I guess you’d be partly correct, but that’s way deeper than where I’m going.

Making Relationships Work Better

Families who continue to work together from one generation to the next need to constantly work on their relationships, because those relationships are crucial to being able to continue to make decisions together for the benefit of the family group.

Good communication will of course contribute to such relationships, but there’s a lot more to it than simply more and clearer communication.

Thompson now holds regular free online events on Zoom where he shares ideas that come from his BFST training that he now uses with his leadership coaching clients.

It was during one of these recent calls that he said the magic words that inspired this post:

       “Communication is Overrated.  Self-Regulation is Underrated!”

Okay, so any regular reader will know that at this point I jotted those words down with a huge smile on my face, knowing that I had just landed myself a blog topic.

There Are Two Parties in Any Communication

Whenever there’s any communication, there are (at least) two parties, one who’s attempting to deliver the communication, and someone else, who’s the intended recipient.

On which end do you suppose the self-regulation comes into focus?

This is a bit of a trick question, I’ll admit.

Your first inclination might be to consider the receiver of the communication, and the importance of not overreacting to what was said (or written). And that makes plenty of sense.

But, and this is where Thompson was actually pointing, too often it is the people who are delivering the communication who could benefit from working on their self-regulation.

Communication as a Weapon

He then related a scenario that came from the “couple’s therapy” realm that some may be familiar with.

Two spouses are encouraged to work on the ways that they communicate. One dives in head first and begins reading up and studying and taking communication courses, so as to be better armed for the task.

However, lacking the requisite self-regulation, they now use this “one-up” position to lord this over their partner.

“I’m communicating properly, you’re not!”

Can you see how the communication “silver bullet” clearly missed the mark?

Can you imagine a similar scenario with family members who work together?

It’s Never as Simple as It Appears

This is yet another example where “how you are” (i.e. being) is more important that “what you do” (i.e. doing).

Self-regulation is the “being” part, while communication is the “doing” part.

Yes, continue to work on how you “do” communicate.

And, also focus on how you regulate yourself when you’re doing it.

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Leading the Family Conflict Dance

Some New Ways to Look at Conflict in Families

Anyone who’s ever been involved in a family enterprise knows that the potential for conflict is never far away. 

Those of us who work in an advisory capacity for such families have seen every sort of denial and attempt to pretend that “our family is different”, yet those are actually quite rare.

There isn’t necessarily anything new under the sun for me to share here, but I did come across a couple of new angles on this question recently, and I thought they were worth writing about, if only to spur more discussion on the topic.

A Recent FFI Session on Conflict

The Family Firm Institute hosted a recent half-day webinar on the subject of conflict, and since two friends and colleagues of mine were among those presenting, I thought I’d check it out.

They did a nice job of covering the territory and the feedback was great. My take-away tidbit, though, came from a comment from another experienced practitioner in one of the break-out rooms.

She’s someone who not only works with business families, but has also lived the family business experience, having followed her father into this work.

She recalled a quote of his, which was the initial inspiration for this post:

           “We don’t run from conflict. We dance with conflict”

“Ooooh, I like that”, I thought, as I jotted it down. “This will turn into a blog post”.  (Thanks KSM)

Something Good from Social Media

The second different angle that came my way followed in short order, when I wasn’t expecting it, from social media.

I love LinkedIn and have found many treasures there, initiated plenty of relationships there, and swear that there’s nothing else like it for business.

But my go-to “regular” social media is Twitter, which I use mostly for news, sports, and politics, because I’m a bit of a junkie for those subjects.

But every once in a while, I get a great nugget there too, and this was once such case.

I follow Dan Rockwell, a.k.a. LeadershipFreak, and he shared a tweet about conflict that included this magic line:

                         “Conflict Is a Leadership Opportunity”

If you go to stevelegler.com and use the “search” function and type in “conflict”, you’ll find blogs, videos, podcasts, etc. that discuss conflict in various ways.

But I’ve never, ever, heard it put this way, and it struck me.

One Plus One Equals Five

So now we have a couple of elements to work with, and you may already see where I’m going.

We’re talking about dancing and leadership, and when people dance together, ideally, in most cases, someone takes the lead, and it helps when their partner is a good follower.

This metaphor actually has some legs, and the feet at the end of them are wearing their dancing shoes!

And we haven’t even brought in the dance teacher yet, who, if they’re any good at their job, will always play the appropriate level and speed of music so the dancers can succeed.

Willing Partners as a Starting Point

In order for any family to deal with their conflict, they need to acknowledge that it exists, and then someone needs to have the courage to take the lead and put it on the table and insist that it’s high time that the family face it and manage it.

Notice I did not say “make it go away”, because that’s usually not a very realistic expectation and can be a bridge too far.

It’s rare for conflict to completely disappear, but acknowledging it can usually allow people to discuss it in ways that they can learn to make some changes in order to be able to manage it.

Or Maybe You Need the Teacher First

It’s great when the participants are ready to discuss the conflict and try to dance with it by themselves, but sometimes there’s an unwillingness to engage from someone, usually caused by a fear of making things worse.

In such cases, it can help if you find yourself a “dance instructor”, who can then convince the other party that you can learn how to dance with conflict together.

Or even if the parties aren’t all ready for the dance lessons, the motivated party might begin searching for someone who can hopefully lead them to some agreement down the road. 

There are opportunities for leadership whenever there’s conflict. Who will step up in your family?

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