Posts

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On Patience and Impatience in Family Transitions

Both Are Needed, But Not in the Same Places

So many issues that families face in transitioning their wealth from one generation to the next come down to questions around timing.

You’ve got people from different generations, so you automatically have different realities relating to their current life cycles, which naturally make them feel certain urgencies that others might not appreciate.

Somehow things often go better after everyone has had a chance to share their viewpoints in ways that others can suddenly understand, but that doesn’t happen often enough, so let’s talk about that here.

 

The Bigger Picture: An Upstream View

Most of my blogs are “evergreen”, meaning that they can be consumed at any point in time, because they don’t depend on current events or seasons.

I’ve diverged a bit this year, thanks to the pandemic that had me refocusing topics this past Spring, and lately there’s been lots of focus on my summer weeks at my cottage.

One advantage to a nine-hour drive to my cottage is the time it affords me to listen to audiobooks, which are my favourite way to make the drive productive and enlightening.

On my last drive there, I listened to Upstream, The Quest to Solve Problems Before They Happen, by Dan Heath.

It was great and I recommend it, because it actually gives some great perspective on Systems Theory, and an appreciation for how important it is to look at how things are connected.

 

The Time Element in Systems Theory

If this is feeling a bit like a déjà vu it might be because I wrote From Upstream to Downstream in the FamBiz a couple of months back, and there are only so many “stream” blogs one can write.

That blog concluded with my suggestion to get moving early on eventual transitions, and that segues nicely with this week’s message.

Towards the end of Upstream, Heath has a great line about where to be patient, and where to be impatient, which bring us right back to our timing issues.

He tells us to be:

 

       Patient for Outcomes, and Impatient for Actions

 

If you’re like me, you’ll want to pause the recording for a minute and make sure you got all of that.

Pre-Digested Wisdom

Well, this isn’t a recording, it’s a blog, so you don’t have to stop listening, rewind, grab a pen, and make sure you got it all, because I already did that work for you.

Plus, now I’m going to spell out the key take-away, which I’ll gladly do because Heath, who’s written and sold quite a few more books than I have, is saying something really important, and it also happens to fit right along with stuff I’ve been saying too.

Here’s the simplest reworking of this advice into my own words:

     “Hurry up and get started, but don’t be in a hurry to finish”

I’m reminded of a blog I wrote a couple of years ago, There Is No Destination, which was inspired by a quote I had recently read, “There is no destination, it’s ALL journey”.

 

Being Impatient for Actions

Procrastination is probably the biggest enemy of successful wealth transitions in families. Put simply, people wait too long to begin the work.

It’s funny because work itself is not usually something that families who’ve been successful in building a business are “allergic” to; they’ve typically got a strong work ethic, which is how they got to the point where they’ve accumulated enough wealth to make a difference in the lives of all family members.

I’ve stated this plenty of times, going back to my first book in 2014, SHIFT your Family Business, in which the word SHIFT is an acronym, where the “S” stands for Start!

It’s impossible to start too early.

 

Being Patient for Outcomes

Transitioning wealth is not an event, it’s a process.  And while some processes are better to rush through, this is one that is better when it takes longer.

The two (or three) generations need to take their time and incrementally move decisions and actions from the NowGen to the NextGen.

When you’ve started early, you give yourself time to change course, slow down as needed, and be flexible, (the F in SHIFT) without having to start from scratch.

 

Adjusting your Timing and Re-Calibrating

This is truly a process with no real end, because even after the elders have left this earth, their wisdom will remain, to be passed to successive generations.

And we should never be in hurry to finish that job.

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Great Expectations in Enterprising Families

Great Expectations in Enterprising Families

Writing this blog every week means I’m constantly on the lookout for interesting viewpoints to expound upon in this space.

I usually collect ideas and set them aside for a time, and while they germinate in my head (and in an email folder) sometimes a new slant comes up and allows me to almost kill two birds with one stone.

So it is this week, with a look at how important expectations can be in a family that’s in a position to transition significant wealth to the next generation.

 

PPI Strikes Again

I lost count a long time ago as to how many of my posts have been inspired by my participation in events and webinars put on by the Purposeful Planning Institute (PPI).

So once again in early July the thought leader guests (Coaches Mimi Ramsey and Stephanie Hardwick) did not disappoint when they brought up “expectations”.

The money quote, which I hesitate to qualify as a quote since I’m not sure I got it verbatim, was that “unmet expectations are the biggest source of conflict”.

Wow, so true.  Can you think of anything that causes more; I can’t.

 

Family Enterprises Are Rife with Examples

Anyone who works with business families is familiar with the common refrain that they need to work on improving their communication, and that’s certainly true in almost all cases.

What they neglect to point out is that very often some of the most glaring gaps in their communication are around the very subject of expectations of one another.

A related idea that fits right into this topic is that loaded word, “assumptions”; i.e. everyone makes their own assumptions about how things are, and what’s expected, without ever checking to see if other people view things the same way.

Expectations are typically somewhere high up on the list.

Great Expectations in Enterprising Families

When a New Slant is Actually an Old Slant

I noted off the top that I love it when a subject comes up from two different angles, allowing me to tie them together in one blog.

The part I just related, about unmet expectations and conflict, was quite recent, but the other angle has been simmering in the back of my mind for quite a while.

This piece is a bit more involved, and it also comes from someone I first met thanks to PPI, none other than David York.

If his name sounds familiar, it may be because I’ve mentioned him before, including two whole blogs, each devoted entirely to one of his nuggets of wisdom. See Doing Better than the 4 D’s and Family Wealth Dynamite: One Stick or Two? I’m clearly a big fan.

 

Three Key Questions for Building Stewardship

Wanting to make sure I got York’s three questions exactly right, to quote them here, as they are so simple and so fundamental, I looked through my accumulation of various slide decks from presentations and happily hit the jackpot when I found that one particular slide, which read:

 

                                    Six Keys for Creating Stewards: 

5. Remove the Ambiguity

                                         – What can I expect?

                                         – What should I not expect?

                                         – What is expected of me?

 

Rising Generation Family Members Want Clarity

I think that anyone who puts themselves in the shoes of a person growing up in an enterprising family, or a family of wealth, can agree that having clear answers to these questions would go a long way towards giving them clarity on some pretty fundamental topics that will affect their lives in so many ways.

When parents do not communicate the answers to these questions, they leave their children in a position where they each begin to make their own assumptions as to what the expectations are.

As you might imagine, the various assumptions will often be quite different from what the parents are expecting, leading to unmet expectations, which invariably lead to: conflict.

 

Turning Expectations into Agreement

Back to the coaches on the PPI call I began with; they noted that what families should aim for is turning expectations into agreement.

In order to do that, like York says, you need to have conversations to clarify what those expectations are, and, as he notes, what they are not.

And let’s not forget York’s last point, about what the parents expect of their offspring.

None of these things are automatically known, they need to be discussed, and these conversations are not always easy to have, nor obvious to start.

They cannot be ignored forever, and a coach can help you.

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Developing Capacity in your Business Family

Capacity vs. Capability

Sometimes when two words start with the same few letters, people get them mixed up, not noticing the nuances in their meanings.

A couple of words that certainly fall into that category are “capability” and “capacity”.

This week I want to explore them a bit, from a business family perspective.

 

From Ability to Capability

Before we even get to “capability”, we should probably back up a bit and start with “ability”, to make sure we grasp that simpler concept first.

Ability is about what you can do, which you know that you can do because you’ve already done it, at least once. 

Capability is more about potential to do something, and as we all know, even though you once were able to do something, that doesn’t mean that you’re still capable of doing it again now.

 

Ready, Willing, and Able

In some ways, capability can be summed up by the expression, “ready, willing, and able”. If I’m ready and willing to do something, plus I feel like I can muster the ability, then I at least believe that I have the capability to do that something now.

So if you know how to do something and you add some effort to that ability you’re now essentially ready to test out your capability, and can hopefully demonstrate that you can accomplish a task with a certain regularity.

With practice, you can hopefully get pretty good at it, to the point where others recognize that capability in you.  You’re off to the races, right?

 

What About Capacity?

I think that there’s another level that you’ll want to get to that’s higher than simply developing capability, and that’s to increase your capacity to do important things.

The part of the definition of the word “capacity” that I think we should concentrate on when thinking about this is the “volume” aspect.

When talking about a container, whether it’s an aquarium, an airplane, or a football stadium, we can ask about what its capacity is, when we want to know how much it can hold when full.

 

From Capability to Capacity

So if we go back to the capability discussion, we were getting good at doing something over and over, and now we want to see how much of it we can do.

But we don’t want to do this for everything, we really need to pick our spots and develop our capacity for doing things that are truly important.

And when we’re talking about business families, what’s more important than everyone knowing how to get along and work together?

Families who have succeeded in growing their businesses and wealth AND in transitioning them to the next generation have almost always developed that capacity to work together somewhere along the line, whether they realized that that was what they were doing or not.

 

Contagious Capability Grows to Family Capacity

The great thing about a family is that every member has different skills and abilities. 

It might not always be obvious how some family members can contribute to the business family, but if there are family members who are ready and willing, there should always be some effort made into finding a place for their abilities to contribute.

When you take the individual abilities, work on them so they become true capabilities, and then bring the people together with the right attitude to collaborate, you can develop the capacity for long term success.

The overall capacity of a family comes from the combination of all of its members’ capabilities, and that capacity can be way more than the sum of its parts.

 

Practice, Resilience, Guidance

Families who have succeeded at this almost never just stumble into that success.  Working together with family members can be wonderful, and it can be frustrating too.

It takes effort, and plenty of practice to get it all right.

There will be plenty of trial and error along the way, so the family will need to develop its resilience.

And, importantly, few families get this right all by themselves; they will almost always have someone from outside the family to guide them, especially at key stages.

Whether it’s a family business consultant, a facilitator or coach, it really doesn’t matter, and ideally it’s someone who combines these skills.

Successful multigenerational families have all developed their capacity to work together over time.

Can you?

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The Art of Conversation: The Key to Family Communication

When listing problems that business families face, communication is usually one of the first things people mention. 

 

Because it’s seen as a “big” problem, many people think that it requires a “big” solution. 

I beg to differ.

“100 One-Minute Conversations”

The initial idea for this post came from something I saw online recently, that talked about “100 one-minute conversations”, which in most cases are a better way to go than just having one, long, 100-minute discussion.

I wish I’d saved it so I could credit the source, because Googling it didn’t help me solve the mystery.

In any event, it lines up nicely with some of the other things I’ve talked about before, notably here: The Dimmer Switch vs. the On/Off

 

Clearing Up Any Illusions

My favourite quote about communication is from George Bernard Shaw, “The biggest problem with communication is the illusion that it has taken place”.

Let me spell it out just in case you didn’t get it.  

The biggest problem for people communicating with each other is when the person who says something believes that the receiver heard and understood them, and they’re wrong, but they assume they’re right.

Why did I take the time to spell that out? 

Because if I continued this blog while assuming that you understood what I meant, but you didn’t, then I would have been committing the exact faux pas that I was trying to explain.

The Art of Conversation: The Key to Family Communication

Conversations as a Subset of Communication

Of course communication comprises much more than verbal discussions, which are in fact only a small fraction of the entire communication “platform” that any enterprising family uses.

These families need to share lots of information to remain united enough to properly manage the assets they own together.

But while everyone can see what’s written in a family newsletter or on their Facebook page, I contend that it’s in the smaller groups, and the quicker, more regular conversations, that the most important communication actually happens.

Yes, you need to have the big formal, structural communication platforms, but, and it’s a big but, if that’s all you have, then there’s a lot missing.

 

Heart to Heart

The simplest way to make this point is to consider the expression “Heart to heart”. 

What makes family businesses different from other businesses is the family element.  Plain old communication might be sufficient for “regular companies”, but for a family business, being owned and run by a family, there needs to be a lot more heart.

I don’t think I’ve ever heard anyone talk about “heart to heart communication”, by I know I’ve heard people mention a “heart to heart talk”, or “heart to heart conversation”.

 

The (Lost) Art of Conversation

Speaking of expressions, we’ve all heard about the “art of conversation”, and I contend that in some ways all of the technology we’ve been using to communicate has made conversing together a bit of a lost art.

But here’s the good news, and I even just Googled it to make sure it makes sense.

You can get better at it, with practice. Yes, I just searched “do you practice art” to make sure, and I got plenty of hits.

Whether it’s playing music, or painting, or sculpting, one improves the more one practices their favourite art.

And so it is with conversations.

 

Small Groups, One-on-One

Conversations can happen all the time, mostly in small groups or even simply one-on-one situations.

They don’t necessarily have to be structured, scripted or planned in advance, and in reality, the more natural and free flowing they are, the better.

Sometimes the hardest thing about them is just making them happen, especially now that simply picking up the phone to call someone seems to rarely happen these days.

 

Conversations With Your Coach

One of my favourite ways of actually putting some structure to conversations is to have them be regularly scheduled.

I have a call over Zoom with my coach every week, and I have calls with my coaching clients typically every other week, which seems to work well.

Having things “on the calendar” might be the best way to make sure that you’re staying in touch enough.

 

Seven Years Later

Way back in 2013 I wrote Having Conversations, Not Just Communicating. And I guess it’s still just as valid today as it was back then.

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When the “Next Gen” Becomes the “Rising Gen”

This week we’re looking at an issue involving vocabulary because sometimes the particular words we use can have a big impact on how we’re understood.

Regular readers will already be familiar with the term “rising generation”, as I’ve been using it for about five years now, ever since I heard James E. (Jay) Hughes use it during the first PPI Rendez Vous I ever attended, in 2014.  The Rising Generation in Family Business

Hughes had explained that using terms like G1 and G2 (first-generation, and second-generation) was very limited and sometimes confusing, and suggested instead that we in the industry use the expression “rising generation”.

 

Look at the Life Cycle Instead

Here’s a paragraph from that blog from five years ago:

“So here comes the “Rising Generation” to the rescue. Hughes pointed out that when we refer to the rising generation, it helps keep everyone focussed on the fact that every person, and hence every family, and every business, has a life cycle.”

I couldn’t have said it better myself (see what I did there?).

So I started using “rising generation” or “rising gen” about five years ago, after some others like Hughes, but before many who have “caught on” more recently.

The field is evolving and so is its vocabulary, and “better words” can help people make important progress.

My favourite example of this remains “continuity planning”, which is slowly replacing the term “succession planning” which has way too many negative connotations, especially when it comes time to get people to have the conversations that are necessary. See: Continuity Planning: Who’s at the Table 

 

What About on a “Family Basis”?

Okay, enough with the industry vocabulary, let’s get into the more important aspects of this, i.e. in a particular family, when does the “next generation” actually become the “rising generation”?

I’m glad you asked, because it’s an important question.

And in many ways, it’s mostly a question of mindset. The interesting thing about a mindset, though, is that each person has their own mind, and therefore their own mindset.  The trick is to get the entire family to come to share the same mindset.

Let’s look at it from each generation’s perspective first, while recognizing that different people in the same generation will have slightly different mindsets, but that the most glaring contrasts are usually found when comparing the mindsets of the different generations.

 

Mom and Dad’s View of Their Offspring

Let’s start with the “NowGen”, who are the ones currently “in charge” of things, especially in the business, and typically even in the family.

When their offspring are young, little thought is given to their eventual ascendency to key roles in the business family. At some point, though, there comes a mental shift, where ideas about roles that these young ones might one day play, as their “human capital” matures, begin to take form.

But even then, those first thoughts are usually about them as the “next gen”, i.e. as people who will make a contribution “some day”, far in the future.  It’s almost like they are parked there, and one day, their parents will beckon them and they will arrive on cue.

 

The Rising Generation’s View of Themselves

Meanwhile, those offspring have their own views, and they are often more realistic, maybe because they are the main actors in this play.

As those actors think about their lives and potential roles, they are more likely to think of the progress that they have already made and will continue to make, because they are living the “action” of rising.

Their view of the process of the “rising” is truly “first person”.  They will more easily feel like they are on their way somewhere, and are hopefully well on their way to shaking off the label of “children”, which connotes being “stuck” at some age that typically starts with a “1” or worse, is a single digit.

 

When My Mindset Becomes Our Mindset

So here we are, back to the question of the differing mindsets in the family. My premise is that the rising generation’s mindset is the more enlightened one, and that it behooves them to do the work necessary to convince their parents’ generation of its validity.

The two key points there are these:

  1. The onus is on the Rising Generation
  2. It will take work to do it.

It won’t happen overnight, it’s a process. And it’s never too early to begin.

 

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The Sledgehammer Versus the Chisel

This week we’re back to an “A vs B” blog, which I love because the format fits so nicely with my way of explaining things and the nature of a weekly blog, where I share quick insights into various aspects of family wealth transitions.

There’s also a cool back story to the genesis of this idea, and, to top it all off, it involves a couple of tools that we don’t use every day.

Let’s get into the way this came up for me first, and go from there.

 

Searching for a Family Champion

About six months ago, I was looking for someone who fit the bill of a “family champion”, as I was planning, along with colleague Joshua Nacht, to lead a breakout session at this summer’s Rendez Vous of the Purposeful Planning Institute.

I should probably direct you to a blog I wrote around that time on the subject of the Family Champion, which is a term that still is not as well known as it should be. 

See The Unsung Role of the Family Champion

It was as a result of our search for someone to join us at the conference to better explain and demonstrate this concept and role that we came upon the perfect specimen.

Because people from business families typically prefer not to be written about in random blogs, I’m going to refer to the young woman we found (and co-opted) simply as “Terry” (not her real name).

 

Champions Are Motivated

It shouldn’t surprise anyone to learn that a family champion, like anyone who wears the title “champion”, not coincidentally, is typically a very motivated person.

When Joshua and I had our first Zoom call with Terry to start planning the details of our session, Terry impressed us both with her story about how she emerged and evolved into the champion role in her business family.

She shared some stories about how when she first began to ask questions of others in her family, and in the business, about how things were set up and how they were being run, she actually had a bit of a “sledgehammer” approach.

I love a great metaphor, so this one really resonated with me, and I made a note of it to make sure that she would mention it during the presentation. (I also made a note about it as a blog topic)

But the metaphor, as I would soon find out, was not yet complete.

 

Evolution to a Calmer Approach

As Terry continued to detail the progress she has made over the years at becoming a more effective family champion, she shared that she had to learn to soften her approach over time.

“Now, I find that the “chisel” can be much more effective than the “sledgehammer”” she said.

That combo metaphor just has to become a blog post, I thought.

Many Tools in Every Toolbox

My love of great metaphors is only enhanced when they also conjure up blog posts from the past, such as this one: The Tradesman and the Toolbox.

That blog was about how the person wielding the tool is usually a more important component in the success of the mission than the tools themselves.  And this is also the case for Terry.

It wasn’t that the chisel she was now deploying was sharper, or better constructed, it was that her approach to the task had her evolve to a place where she now recognized that using a chisel was a more appropriate tool than the sledgehammer that she had chosen at the outset of her journey.

 

One Tool Is Rarely Sufficient

This also brings up the question about the sequence and selection of tools.  Had Terry started out with just a chisel, we can be almost certain that she wouldn’t be where she is now, because at the beginning, the sledgehammer served its purpose.

Likewise, had she continued to swing the sledgehammer and never switched to a softer, more meticulous approach, I have no doubt that she would have run into different problems, and have only herself to blame.

 

Focus on the Process, Not the Content

 

She used different tools along the way, and will certainly need to deploy others going forward for optimal success.

Being proficient with the tools, and knowing when to use each, are more important than many realize.

 

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Behind the “Flawed” Family Constitution

Behind the “Flawed” Family Constitution

This week’s post is about the wonderful world of the “Family Constitution”.  I thought about doing a “5 Things to Know…” blog, but decided against it.

There’s a lot to get to, so let’s dive in.

 

Just Who Are “The People”?

As I searched Shutterstock for an image to accompany this post, I entered the word “Constitution” and was amazed (but not surprised) at how many of the pictures featured the words “We the people” at the top of an old document.

Those are of course the first words of the U.S. Constitution, and they really sum up the importance of getting the preamble right to set the context properly in the creation of any important document. 

See: Co-Creation and Values in the FamBiz

It’s not hard to deduce from the expression “Family Constitution” that “the people” here would be “the family”.

 

“The Family”; OK, Thanks, Now It’s Clear. NOT

That’s all fine, of course, until it comes to defining exactly who all the individual people are, especially as definitions of family continue to evolve.

If that were the only issue to resolve, this wouldn’t actually be that difficult.  We’d need to start with the family leaders and then expand the group slowly, and then work together to come up with definitions and rules, and come to a consensus on who’s included.  Surely not an insurmountable problem.

 

Putting the “Con” in “Constitution”

Having a family constitution can be a very useful thing for some families, assuming their governance has sufficiently evolved and the family members have actually been key players in its development.

For every “Pro”, there are also many “Cons”.

The inspiration for this blog came from an article I saw on LinkedIn a few months ago, by Professor Enrique Soriano, who works with families on their governance, mostly in Asia. I’ve never met him, but we have 174 common connections on that network as I write this.

His post, Elements of a Flawed Family Constitution, is essential reading for anyone truly interested in this subject, especially for those who see the Family Constitution as the “be all and end all” of things that every family “must have”. 

The fact that many of those who believe this also peddle their services to families, and offer to create these documents for them, should not be a huge surprise.

 

One Person is NOT “People”

As I wrote last year in Family Governance: From Filaments to LED’s, if one person writes the constitution, alone, without major doses of input from people from different generations of the family, it simply will not work.  

Sure, you can fool yourself that you’ve got something worthwhile, but it won’t last.

Similarly, if the document was largely put together by a consultant, or even a team of consultants, it will not serve its intended purpose.  And this is true even if you hire the best consultants and pay them a lot of money to do this work for you.

As I always say about family governance (of which a family constitution is but one possible component) it really needs to be FOR the Family, BY the Family.

 

Cultural Differences?

Soriano notes at one point that perhaps the phenomenon of “flawed family constitutions” is more prevalent in Asia, where he is based.  That may be the case, as there could be more of an attitude towards the forced creation of a document that everyone is then expected to abide by in those cultures.

But I don’t care what country you are in, unless the family members were heavily involved in its creation and implementation, no family constitution is going to be worth much.

 

My Own Pet Peeve

The one thing that I personally hate about this subject, is that it’s so often based on the assumption that keeping the business and family together forever is desirable and doable.

There may be some cultural biases in this aspect.

If the attitude behind the creation of a constitution is to “force” people to remain in relationships that they otherwise would rather not be part of, then trouble will likely be ahead.

 

My “Family” Bias

My bias is always to make sure that the family relationships survive for generations.  If that means that changes need to be made to the business and ownership, then let’s figure out how to make those and keep the family intact.

If a constitution that reflects that can be created, then great.

Of course any family with that attitude might never think they need one…

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The Secret to Success for Family Businesses

Family businesses by their very nature are very diverse.  No two families are alike, and the variety of businesses that they own and operate are likewise very different.

So as someone who writes a weekly blog that always comes back to families and how they work together, I think it’s normal that my inspiration for ideas to write about is also “all over the map” and quite eclectic.  

This one comes from something I heard on the radio, but it wasn’t a country song! (Please see Blame it on Cinderella and Humble and Kind for examples of those).

No, this time it was talk radio, on a sports station.  But for some reason, they had Larry King on as a guest.  I guess he was in town for something and he popped into their studio.

 

“You Know What the Secret to this Business Is?”

Larry King was a long-time TV show host on CNN (1985 to 2010) and so he knows a thing or two about the broadcasting business.

He was chatting with the guys who host the afternoon drive show and suddenly he said, “You know what the secret to success is in this business?”

You could almost sense the anticipation as they waited for the punch line in the studio.  As I was driving, I too was intrigued and awaited the next words out of his mouth.

“The secret is”, he continued, finally, “that there is no secret”.

And so it is, dear readers, with those of us who work with family business.

 

What Questions Should I Ask?

When I work with a family business or a family office, I try to steer clear of the business end of things.  I do this not because I’m not qualified to help them there, because if I chose to, I know that I could add value there too.

I just prefer to stick to the area surrounding the family members, because that is where there is typically a crying need for some outside input.

But when I run into other professionals who also work with families, but who concentrate on business matters, they sometimes think that the work I do on family dynamics is something they could easily do as well.

It doesn’t happen that often, but sometimes they will even ask me for some of my “secrets”. 

“So can you just tell me what questions I should ask?”

If only it were that easy.

 

Listen, Ask, Listen Some More

There are no “secret questions” to ask.  It’s much more about being truly curious when you ask whatever question you choose to ask, and then listening to the answers.

It’s about wanting to find out what’s important to the family members, and I’m not just talking about the family member or members with whom you have your business relationship.  

If it truly is a family business, then the other members of the family are also important.  This is true even if there are some family members who don’t work in the business, and even if they are not currently owners of the business.

To truly serve a business family properly, you need to understand the family.  And to understand them, you actually have to meet them, and speak to them, and get to know them.

This can’t be a secret, can it?

 

Regular, Clear, Transparent Communication

I was just talking about advisors who work with families, but what about the families themselves?  Are there any “secrets” to success for them? Once again, I don’t think there are any secrets per se, just lots of common sense.  

And in the same way I was telling advisors that they should take the time and make the effort to learn about the other family members and their thoughts about the business, it’s even more important for the family leaders to do that too.

But they surely already know that, right?

And nothing worthwhile ever happens without some planning and intentional effort.

Making an effort to instill regular, clear and transparent communications within the family group is a great idea, and always worthwhile.

More families should probably do it, and not enough of them do.

So maybe it still IS a secret.  You can start changing that, now.

P.S. That “11-year-old daughter” in the Blaming Cinderella blog just turned 18 and will be off to college in the coming weeks. 

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“Professionally Emotional” – A FamBiz Oxy-Moron?

Following up on last week’s post, Three Pillars of Family Governance from a Pro, in which I invoked the wisdom of Barbara Hauser, one of the veteran contributors to the field of family enterprise, I’m going to do something similar this week.

This time I’ve been inspired by Randel Carlock, a professor at INSEAD, who has also been a major contributor to this field for decades.

And whereas last week’s post came about as the result of my reading a piece from CampdenFB, this week it comes from a post I came across  from Tharawat Magazine.

Many of my blogs have their genesis in conferences I attend and interactions with families and colleagues, but these two websites have provided many sparks as well.

(LinkedIn and Twitter are great ways to stay abreast of things in this space, by the way).

 

Professionally Emotional

What struck me was this quote, from A Family Business on the Moon – Lessons from the Author, where Carlock says, “…we encourage families to become professionally emotional, which may seem like an oxymoron, but it works.”

As someone who loves to play with words and gets excited by the potential paradoxes in any oxymoron, this one ticked a few boxes for me.

While many people might feel like “professional” and “emotional” cannot naturally coexist, I think that those who inhabit the world of enterprising families will immediately recognize the possibilities this expression gives rise to.

Let’s take a closer look at what Carlock is driving at.

 

Professional Governance and Strategy

When it comes to the running of a successful business, it’s always important to have a professional approach to the strategy and the governance of the enterprise.  Few people will argue with that.

Of course, too many family businesses continue to operate with less than professional business operations and strategy, but that is a subject for another day.

In terms of running and guiding the company, “professional” is certainly the way to go, or at least something to aspire to.

 

Emotional and Caring Leadership

But family enterprises need to be a bit different than their non-family brethren in how they exercise their leadership.  

When you have several family members involved, and you therefore have more than a simple business relationship with the others around the table, other factors come into play as well.

It is in the leadership of these enterprises that the emotions and the caring need to be present.

So, “Yes” to the professionalism of the “what”, but also “Yes” to the caring about the emotional side of things in the leadership, or the “how”.

Parallel Planning Process

Carlock is encouraging families to work on their business and their family planning in parallel.  In fact, he coined the term “Parallel Planning Process” many years ago, in a book he co-authored with John Ward from the Kellogg School of Management at Northwestern University.

That book, Strategic Planning for the Family Business, details everything quite nicely.

Not only is it important to do planning for the business AND to do planning for the family and its members, a major point is that they are equally important.

And because they are both important, they need to be done in a coordinated and aligned fashion.  They are interdependent, so you need to make sure that they’re both progressing side-by-side.

 

Match the Speed of Evolution

What often occurs is that many plans are made, professionally, concerning the future of the business.  The focus continues to be on making the business strong, and having it continue to grow. The family can be an afterthought.

That’s when things can get out of sync with the family.  When there is business planning without regard to the family members and the human capital that they can offer, many possible contributors can get lost in the shuffle.

The other version can occur too.  How many of us have heard of family businesses that get sold to outsiders, because no family members want to take over?  Typically, the next generation have all become professionals and have great careers going, so coming back to the family business can seem like a step backwards.

All the more reason to try to keep the plans for the family and for the business properly aligned. None of this is necessarily easy to do, it takes effort and diligence.

That doesn’t mean it isn’t worth it though!

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