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Taking a Fresh Look at an Old Saying

This week we’re dealing with a subject that gets talked about a LOT by many of the people who work with family businesses, and that’s the adage that family businesses often fail, usually by their third generation.

Personally, I’ve always avoided this topic, because whenever I speak to anyone from an enterprising family, they never ask about these “statistics” and even when they do hear them they usually believe that their family will prove to be the exception.

But I guess it’s probably high time that I at least address this question, so that we can unpack it a bit and see what can be learned.


I’ll Tell You What You Can Do with Your “Shirtsleeves”

Everyone who works in the field of family business and family wealth is familiar with the old proverb “Shirtsleeves to shirtsleeves in three generations”.

And we’ve all heard that there are similar versions in every language and culture around the globe.

And, I’m pretty sure most of us are sick of hearing about it.

Of course, that hasn’t stopped many of the people who advise such families from trotting out that stuff at every opportunity, because, well, it works!

But what I mean when I say “it works” has much more to do with the fact that it works for solution providers, for whom this point of view helps them to sell their “solutions”.

A “solution” is easier to sell when you can point to a clear “problem”.


We’re Looking at the Wrong Question

The image I chose to accompany this blog comes from an ice storm that hit my region almost 25 years ago, in January 1998.

The tower that collapsed was one of dozens that could not stand the weight of the ice that had accumulated on the electric wires they carried.

The business my Dad had founded and for which I worked happened to have manufactured thousands of towers like these over the three decades we operated.

After that storm, people who knew we had been in that business would ask my Dad, “How come those towers collapsed?”.

His reply was always this: “You’re asking the wrong question; you should be asking ‘how did so many of the towers stay up’”.


Accentuate the Positive

I hope that my analogy is obvious enough, but just in case, allow me to share my point more explicitly.

While the ice storm that damaged so many of those towers was a “once in a century” type of occurrence, the challenges of keeping a family business (or any business for that matter) going for decades are a constant uphill battle.

In fact, I’d venture to say that family companies actually fare better than non-family businesses in general.

Do I have any stats or studies to back that up? Well, no, I don’t. 

But the “studies” that were done decades ago on FamBiz were not exactly done with the most scientific rigour either. 

That hasn’t stopped those who benefit from them from trotting them out at every occasion, however.


The Wealth 3.0 Version

I’ve felt this way since I entered this field a decade ago, and thankfully now some higher profile colleagues are leading the way to change the narrative around this subject.

Notable among them is Dr. Jim Grubman and the work he’s been doing via the Ultra High Net Worth Institute. See Wealth 3.0 and the Ten Domains of Family Wealth for much more background.

The crux of that viewpoint lies in the fact that creating structural “solutions” for the business is wrongheaded, whereas focusing on the human capital of the family is what we should be supporting families with.

More recent research has shown that concentrating on the family, rather than any enterprise they happen to create, makes more sense.

Because so many of the experts have traditionally been hired by the companies, though, it’s not surprising that the focus has been misplaced.

The more recent emphasis on the family is welcome and overdue, but not yet firmly implanted in the field of professionals who serve them.


Progress, Not Perfection

Progress continues to be made, however, and we need to be satisfied with making that continue, rather than lamenting that we are not yet at the “perfect” state of the industry.

See From Multidisciplinary Field to Interdisciplinary Ecosystem from a few weeks ago for more on this.

We need to continue to make this progress, one advisor and one family at a time.

The Essential Element Required

It can sometimes be difficult to explain the work I do to those who don’t happen to belong to a family that runs a business or owns assets together.

There are at least three interdependent sub-systems at work, between the family, the enterprise (businesses/wealth/assets), and the ownership group.

Just about every enterprise is in constant contact with outside experts for a variety of services from the outset.

But the family and the ownership typically take on more of a “behind-the-scenes” role and get much less attention.

The family circle happens to be where I do most of my work, and I’ve been developing a bigger appreciation for its overlap with the ownership group lately.

Focusing on “family ownership” and how important it is for the future of the enterprise is the focus of this week’s post.

For those in the know, you won’t be surprised that we’ll be talking about the essential role of a family champion.


Their Nebulous and Misunderstood Role

I first wrote about the concept of family champions back in 2019, in The Unsung Role of Family Champions.

Recently, I had the wonderful occasion of spending a day with a number of people who play such a role in their families, even if they weren’t all sure that they “qualified” for such status.

I led the opening discussion, where I shared the origin of the term and just how essential having at least one such family member has been for all of the families featured in Dennis Jaffe’s study of 100 family enterprises that had endured for at least 100 years

See Jaffe’s book Borrowed from Our Grandchildren

But just because Jaffe and Joshua Nacht, one of his researchers, came up with the term, that doesn’t mean it’s well understood, even by those who play this role in their enterprising family.


Will Every Family Eventually Reach Its Limit?

While certain family members often play a starring role as the CEO and perhaps others are some kind of rainmaker, the family champion is typically much more low-key, and out of the limelight.

Few families are able to maintain family ownership over generations, often because they lack someone motivated and interested in doing the work of keeping the family focused and organized ahead of important transitions.

Eventually the family often grows bigger than the enterprises that are meant to support the people, and choices need to be made.

While these choices occur infrequently, the idea of discussing whether or not continued ownership by the whole family still makes sense is usually a scary notion that is not easily put on the table.

But when it is raised, you can bet that the family champion played an important role in setting the stage for it.


Forever Asking the Key Question

A family that owns an enterprise together will likely assume that it can and will and should remain that way, and for a certain period of time, which may be measured in decades and even generations, it’s often true.

At some point, though, most families need to ask themselves if that is still going to be the case after the next generational transition.

Hopefully, once they get to the point where hard choices need to be made, they’ll be able to figure out how to make the necessary changes in a way that leaves the family intact.

The result could be to prune the family tree or maybe sell the enterprise and have a liquidity event. See Pruning the FamBiz Ownership Tree and Huge Liquidity Events – Great News, Right?

For someone like me, who considers himself a family specialist, my thoughts are always “family first”, and many families I know also adopt this attitude. 

There are exceptions, those who put the success of their business first, which sometimes has me shaking my head. I typically do not work with such families.


Who Is Looking Out for the Family?

So much focus is put on the business that the family owns, so it’s not that surprising that the family and the ownership areas sometimes get lost in the shuffle.

The business stuff happens at a much faster pace (see Varying Time Factors in Each of the Three Circles) and those who work in that area are put on the spot on a daily basis.

Meanwhile, though, there needs to be someone who is thinking about and talking about the family’s role in all of this, and who makes sure that the family and its ownership of the enterprise also get the attention they deserve.

A Road Well Travelled.

The idea of going to do your MBA in order to then come back and work in (and possibly lead) your family business has been around for a long time.

It has been repeated often with varying degrees of success over the past few decades, in many places, and probably in every industry, somewhere on the planet.

It can be the perfect next step to give an aspiring leader the extra tools, confidence, and respect from fellow employees that they’ll need to take that next step in moving up the ranks and eventually taking over.

And sometimes, well, not so much.

This week I want to look at 5 things that you should consider before taking that leap.

 

Learning and Growth, or Just the Letters, Please

Whenever anyone is making a big decision, like going back to school for an advanced degree in anything, I always encourage them to think the decision through, and especially make sure that they’re doing it for the right reason.

If all you really want are the letters “MBA” after your name, that probably won’t be enough to sustain you on your journey.

If, however, you are looking to learn and grow as a person and as a leader, then your chances of success, during your studies and long after, will rise markedly.

But please be honest with yourself during this reflection.

 

Is This the Missing Link?

Even if you do realize that you need some more learning and growth in order to increase your chances of success, is the MBA route truly what’s missing for you to advance to where you want to get?

In many cases the answer is still YES, but there are lots of other educational opportunities that may be more suitable to you, depending on what strengths and education you already have, what industry you are in, and what type of role you hope to grow into.

 

What Role Likely Awaits You?

And that brings us to the role you are looking to occupy. 

Since we are looking very long term here, you need to think about not only the next role you hope to grow into, but also any subsequent ones.

You may see roles that interest you now, and it may seem clear that they seem tailor-made for you (and you may be right).

But please, before making a big decision like going back to school, make sure that you have a number of discussions with other family members who are above you in the business hierarchy before you make any commitments.

 

Podunk State Vs. Harvard/Stanford/Wharton

Assuming you’ve thought through it all, discussed it with all important stakeholders, and are ready to take the leap. You need to figure out where to set your sights.

There’s a huge variability in the quality of the programs out there, their cost, their ease of qualifying, and time commitment and distance.

Assuming that you could qualify everywhere and cost is no object, it may well be worth reaching for the top schools for a better quality experience, as well as interacting with a higher level of other students.

That may not be realistic in most cases, so a detailed evaluation of schools and programs is worth the effort, which in this day and age is so much easier than it was decades ago, thanks to the web and Google.

There are even a number of schools that have specific offerings for those coming from family businesses, which didn’t exist when I was beginning this journey in the ‘80’s.

 

Build Your Network Too

I alluded to this above when noting the “higher level of other students” but no matter where you might end up, do not neglect the opportunity to create a network, not just of friends but of future colleagues on whom you can lean when you will need them.

Schools that emphasize family business education may be preferable for just that reason, as you are more likely to meet and get close to others whose career situation will better resemble yours, and with whom continued contact may be mutually beneficial.

 

Aren’t MBA’s “a Dime a Dozen”?

Doing my MBA was a rewarding experience for me, even though we sold our family business soon after my return.

These days, there are many MBA’s out there, and the experience can still offer a lot.

But think it through before committing.

A Big Question, Well Worth Considering

Given the number of family businesses out there, you’d think that the question in the title of this post is pretty common.

Unfortunately, it is not asked nearly as often as it should be, at least not out loud.

This is not to point fingers at those who never took the time to properly consider the question, because if I were doing that, the first person I’d need to point at is me!

I write about all sorts of topics relating to family enterprise here, and yet this one, which seems to involve a very important “go / no go” decision, isn’t one I’ve written a lot about.

 

Forced into the Family Business

I did write Forced into the Family Business back in 2018, and if this post interests you, you’ll likely want to read that one as well.

When I re-read it just now, this line jumped out at me:

      “This assumes that both sides are getting what they need out of it.”

That’s worth thinking about in this context, because if it isn’t going to turn into a win-win situation over the short-, medium-, and long-term, then the answer should probably be a firm NO.

You don’t want to end up in a situation where you somehow get stuck in a place that you cannot get out of, and believe me, it happens, probably more often than you realize.

Some people in these positions even have difficulty admitting it to themselves when it occurs.

(If this resonates, check out the book, Trapped in the Family Business, by my friend Michael A. Klein, PsyD).

 

Things to Clarify Before You Enter

Because you don’t want to end up stuck, you need to make sure that you clarify a lot of matters up front, before you commit.

I’m going to assume here that we’re talking about someone who is at least in their mid-20’s and who has already begun their work career with a job elsewhere.

Otherwise, please go and re-read Forced into the Family Business, which clearly lays out my thoughts on going to work in your family business as your first job, right out of school.

None of this is rocket science of course, and if you think about this choice just like you would consider and ask questions about any other job you might want to pursue, with any other company or organization, you’re already off to a good start.

The biggest problems arise when people “leap before they look”.

 

Employees and Ownership

A key consideration that cannot be overlooked is whether the family company has already decided on whether being an owner of the business, now or in the future, is contingent upon working in the business full time. 

Some companies are very firm on this and are well run because of it, and others sometimes end up in a situation where they wish they had imposed this rule. But it certainly isn’t pervasive, and is usually worth considering at some point for many families.

 

Responsibilities and Reporting

Among the key matters to clarify before joining the family business are what you will be responsible for (the “what”) as well as to whom you will be reporting (the “who”).

Make sure you discuss this in advance, and don’t just talk about your first job there, because presumably you will be there for a long time and handling different roles over time is almost surely part of the plan.

It’s also usually better for you to report to someone who is not related to you, inasmuch as that’s possible.

 

Is There Enough Room for Everyone?

Another question to consider is how many other family members are (or will be) also working there.

A situation that can arise is one where there are just too many family members involved and they start stepping on each others’ toes a lot.

Maybe it’s not a good idea to have “everyone” working together, even if you all get along well. Working together may change that, and not in a good way.

 

The Frog in the Boiling Water

Most people have heard the story about the frog who entered the pot when the water was cool and then couldn’t jump out when the water started boiling.

Most such frogs would probably look back and wish they’d asked a few more questions about the water temperature that they could expect going forward.

The time for asking questions and having deep discussions is before agreeing to work in your family business.

Business, Family, and Ownership Each Have Their Own “Clock”.

I’ve been a huge fan of the Three Circle Model since I first saw it almost a decade ago, and wrote about it almost instantly. See Three Circles + Seven Sectors = One A-Ha Moment.

It remains the simplest way to quickly get at so many of the issues that enterprising families face, in a way that just about everyone involved can quickly grasp.

That model from Tagiuri and Davis has been around for over 40 years now, and many people have commented on it, tried to modify it, added circles, changed the sizes of the circles, turned the circles into spheres, etc.

Rarely, however, have I seen much comment around the time elements that affect each of the three areas.

That will change today.


An Old-Fashioned Analog Clock Analogy.

Many of the posts I write here are inspired in one way or another by group discussions that I’ve been part of over Zoom, and this is yet another of those.

This one involved a number of local family business folks who have begun kicking around an idea to host an event next year to celebrate the community in some way.

The call included people from a local university, some practitioners who work with enterprising families (like me), and a few who run some pretty cool family enterprises, who I was happy to meet.

The discussion went all over the place and was all positive, and although I didn’t attend in order to find a blog topic….

When the academic on the call mentioned the Three Circle Model, my ears perked up, because I wasn’t expecting it to come up in this context.

And then he added the part about a clock, and the second hand, the minute hand, and the hour hand.

Bingo!


Flashback and Confusion, But No Time to Argue.

He shared that someone had pointed out to him that you could look at an old-fashioned clock and think of each of the circles as being represented by one of the sweeping hands.

I’m pretty sure I stopped listening at that point because my imagination had taken over

I’m not even sure which hand he had assigned to which circle, but that’s probably moot here. I’ve got my own thoughts on that and I’m not sure they agreed with his, but in this context there was no time to argue either.

It also caused a flashback to a post I wrote about ownership and how that’s the circle that changes the least often, so for me it would have to be the one that gets the “hour hand”.  See Clunky Ownership Syndrome in Family Business


What About the Seconds and Minutes?

So what about the second hand and the minute hand, to be assigned to the family and the business?

Well, more often than not, I’d be inclined to say that the business turns at a faster rate, especially when there’s an operating company with lots of employees working there, possibly for many hours every day, possibly even around the clock.

I’d say that the family circle would be best ascribed to the minute hand, because things change there more frequently than in the ownership, but there aren’t necessarily any noticeable changes happening on a frequent basis.

If you have a family genogram with everyone’s age on it, you could update it once a year and never be too far off.


Attention, Focus, and Intention.

You may be wondering what any of this has to do with anything, and if you are still left wanting, (and still reading this!) I’ll share my thoughts on the relevance of this.

Quite often, family members who also work in the business can become overly focused on the business, at the expense of the attention they pay to their family.

They follow that second hand around because it’s moving quickly, and in the time that the business went around the circle five times, the minute hand barely moved, so it’s easy to ignore.

Now extend this analogy to the ownership, and you can barely even notice that anything there needs to even be thought about.

But eventually….


Don’t Get Caught Watching the Clock.

It can be very seductive to pay attention to the fast-moving business circle and forget that the minutes and hours also continue to move along at their own, slower pace.

The other circles, most notably the family circle, also require attention, focus, and intention.

Don’t get seduced by the second hand.

Human Insights from a Family of Geese.

When people ask me about my favourite place to be, and I want to be really specific, I mention sitting on my kayak, on the Chockpish River behind my cottage in New Brunswick.

I’ve written posts about my time here over the years, notably Stuck in the Mud? Don’t Wait for “MayDay” about an incident that has stayed with me for a long time, as well as From Upstream to Downstream in the FamBiz in which I raised some wealth transition lessons from a natural phenomenon.

But today I’m writing this post after a fresh experience that I had early on a Monday morning as I paddled along and came upon a family of geese.

Most of my blog writing occurs on Fridays and Saturdays each week, so for me to be working on next week’s post this early, you know that something resonated with me.


Just Minding My Own Business.

I woke up early and decided that the combination of the weather, the tides, and a light calendar of Zoom calls offered me an opportunity to get out there an explore the river just after sunrise.

It was a rare trip already when I met an oncoming canoe in the first 10 minutes, and I jokingly mentioned to the couple and their dog that I didn’t expect so much traffic.

Little did I know at the time that I was foreshadowing lots of honking!

Onward I went, minding my own business, when I approached what shall henceforth be called “Goose Island” heading south.


Mother Goose Shows Wisdom – Father Goose, Not So Much.

A family of Canada Geese were all on this small island, and one of the adults, who I assumed was Mom, saw me coming from afar and began heading to the far side of the island and into the water.

She was eyeing me the whole time, and seven of her brood slowly got up and followed her into the water, heading away from me, the oncoming perceived threat.

Nicely done, mama goose, I thought.

Then a moment later, I notice another adult, Father Goose, I assumed, who saw me a bit later, and who had three of their youngsters in his charge.

I had hoped that he would lead them away from me as well, but if that would’ve happened, there would’ve been no goosebumps nor story to tell.


Honk, Honk, Honk, He Bellows.

Father goose, with his three offspring, Tom, Dick, and Harriet, all enter the water on the side of the island where I’m trying to simply glide past them so as not to cause any unnecessary fear.

The incessant honking has now begun, as father goose is likely trying to scare me and also alert the mother of their goslings that there’s a danger in their midst.

They continue swimming south, trying to outrace me, and the honking gets more aggressive.

I’m trying to speed past them to put any fear at rest, but instead I’m seen as more of a threat as I accelerate.

I try widening my distance, but the narrowness of the river prevents me from doing so.

At one point, Dad even starts flying to get further ahead of me.

And then, suddenly, something changed.


The Rising Generation to the Rescue.

I looked down at my leg and noticed goosebumps, and was struck by the irony that they were caused by a goose, which I guess gives me a story to share if ever I’m on Jeopardy.

Suddenly one of the goslings, likely Harriet, decided to do a 180, and began swimming northbound, you know, the other way!

Her brothers did the same, I was finally past them, and Dad finally gave me a final honk, which sounded to me a bit like “honk off!”


Some Morals from this Story.

Aside from the fact that the gender attributions I made are mere guesswork, and that the whole affair didn’t last any more than a couple of minutes, I do have some take-aways.

Parents don’t always make the best decisions for their families.

What is perceived as a threat is not always a threat, and I was riled up by this too, as I did not want to get goosed!

Sometimes a well-timed move by one family member can end up benefitting the whole family, and often that member is part of the rising generation.

Later, as I passed Goose Island on my return, they all just watched me intently, with nary a honk. Phew!

Family Governance Is the Ultimate Team Sport

Shortly after writing My “Role / Goal / Control” Life Hack last year, I came up with another rhyming word that I could have added to those three, and I made note of it so that I could someday write this week’s post about it.

Looking at the title I chose for this week’s blog, you may have already guessed that that word is “enroll”.

I’ll quickly recap the initial post, which highlighted a three step way of looking at a challenge one faces.

I suggested taking a moment to first consider the role one was playing in the particular situation, then to think about the goal they’re trying to achieve, and then finally being realistic in understanding that there are only so many elements that one can actually control in any set of circumstances.


Moving Away from the “What” Questions

You may have noticed that all three of those questions normally begin with the word “what”. What is my role; What is my goal; What can I control.

Today, I want to add a different question, and this one starts with Who.

As in “Who can I enroll in this project?”

Some tasks are best handled by a single person, but many others have a higher likelihood of success when a leader is able to enroll the support and participation of others.

I write about challenges that families face as they prepare to transition their wealth from one generation to the next, and so it shouldn’t come as much of a surprise that I think that overcoming family challenges is particularly well suited to such group involvement.


Going Far, Going Together

A family “project”, as I call it with some of the families I’m privileged to work with, is by definition something that works best when several people are involved in it.

I can’t believe it was over 6 years ago that I wrote Going Far? Go Together.

That remains one of my favourite blogs, and is based on the African proverb:

                            If you want to go fast, go alone. 

                           If you want to go far, go together.

Needless to say, if you want to have people join you on your quest, it helps if you’re able to enroll them in it.


Some Definitions Are Useful

As often occurs when I write these missives, I end up Googling important words along the way, to make sure I’m as precise as possible getting my points across.

With “enroll”, I came up with some interesting angles:

  • “officially register as a member of an institution or a student on a course”

That one wasn’t exactly what I was going for, but just below that I hit pay dirt:

  • recruit (someone) to perform a service.

I like the part about recruiting, because it highlights the fact that there is often some outreach required from the leader in order to attract other parties to the task.


In Service of the Family

The “service” is also part of it, although perhaps less noticeably.

The person who is attempting to enroll others needs to convince the others that the “service”, or what’s to be gained, is for the benefit of the others, and ideally the whole family.

When one member of a family begins to take this task seriously it typically feels a bit lonely and even overwhelming in some respects.

Once they’re able to enroll one accomplice, it gets easier, as I discuss in The Exponential Magic of Family Collaboration.

The secret to doing this is to not have high expectations that it will be quick or easy to get others on board.

It really is a marathon and not a sprint, and various family members will each take their own time to understand what’s involved and why their enrollment is important to the success that the family is hoping for.


This Is NOT for All Families

For many families, all of this work is simply a bridge too far, and for most families it’s more work than they’re prepared to do.

But, for some families, it is exactly what they need to be doing, in order for the wealth they have accumulated to be successfully transitioned from one generation of their family to the next.

It truly is for exceptional families, in the true sense of the word, i.e. they are the exception.

I write a lot about family engagement and family alignment, and a big part of both of those is family enrollment.

It takes a lot work and patience to get everyone on board.

Are We All Looking Forward to the Same Thing?

Recently while dealing with a family where some of the members kept wanting to rehash events from the past, it became nearly impossible for me to get them to concentrate on leaving old squabbles behind and instead try to focus on looking forward instead.

That got me thinking about how simple this can sound, yet still be hard to get people to buy into.

There are of course many reasons to look backwards on occasion, but if you drive your car while staring at the rear view mirror, you will run into trouble (or something else) relatively quickly.

So this week, I want to share some of my thoughts about the whole idea of looking forward as a family.

 

Setting the Past Aside – At Least for Now

I’m not suggesting that families never think about or talk about the past.

There are plenty of times and occasions and reasons to do that, but if you spend too much time there, when you really should instead be trying to work productively towards some common desired future, those looks backward too often end up usurping all of the positive energy you’ll need to make progress.

There are times when you need to agree to set the past aside, at least for now.

I wrote about this many years ago in There is No “Rewind” Button.

 

“As a Family” Changes Over Time

As we turn our focus to looking forward “as a family” I guess the first musing I have is that the idea of looking forward as a group of people can get a bit tricky, because each member of the group has their own pair of eyes with which they do their own looking.

So the group, the family in this case, needs to do some work to try to establish a common future towards which they are all looking.

This is important work that I think many families should undertake because the results will usually be useful in making sure that everyone understands where they are trying to go together, so all of their efforts can be aimed in the same direction.

Okay, so let’s say the family does that today and they all agree, are they then set for life? I assume you recognize a rhetorical question when I ask it.

Of course that common vision of where the family is looking to go needs to be revisited often, as each person’s view will also differ a bit over time as the family advances.

 

By Generation, By Individual

One way to try to tease out the variety of viewpoints is to look separately at members of the same generation, who at least are progressing through their life stages on a similar timeframe.

When the rising generation in a family enterprise is in their 30’s and 40’s, most of them will have at least some common views that will differ from their parents’, who are likely in their 50’s and 60’s.

However, fast forward a couple of decades, and those rising gen members will now likely view certain things in a way similar to how their parents saw things not that long ago.

And of course, each of the individuals in each generation will have their own unique things that they are looking forward to as well.

 

Re-Calibrating the Vision – It’s a Process

As any family sets out towards a future together, the simple passage of time, along with daily, weekly, and monthly events and happenings all combine to change where they are now.

Hopefully they will be closer to where they were planning to go, but things don’t always move forward as planned, nor do they always move in a straight line.

Figuring out if you are all still looking forward to the same thing requires frequent re-calibrating of that vision.

 

Looking Forward Together Regularly – Family Forums

Some regular readers may already see where I’m headed, and that’s to make sure that you don’t just have occasional, ad-hoc meetings as a family.

You need to develop a habit of having regularly scheduled meetings as a family, as noted in Live from the Forum – Successful Transitions.

Families who get together regularly (often quarterly or annually) can easily take stock of where they are, how they got there, and where they’re trying to go next.

Refocusing together also re-energizes everyone.

There’s always something to look forward to, and figuring it out together, over and over again, will help you all get there.

Searching for the “Goldilocks Zone”

These weekly missives have been inspired by a variety of sparks over the years, and this one is sort of a “mish-mash” because it comes from a number of places.

I’ve long wanted to incorporate a great quote from a colleague into a blog, and I’ll finally do it in this post.

I love it when some social media interaction on one of my posts creates a new spark, and that’s also the case here.

And, when I speak with potential clients about situations that concern them, that also makes me want to share my ideas here too.

So let’s dive into the deep end and look at some liquidity issues for families (see what I did there?).


An Old LinkedIn Post Gets a “Yeah-But!”

My social media folks schedule regular posts from my accounts on LinkedIn and Twitter, which weave in both my new weekly posts along with plenty of “recycled” content from days gone by.

I continuously create regular content, which I enjoy, but if you only post and repost the same piece several times over and over each week, it may not be as well received as when you share more variety.

Recently, a post about liquidity from a few years ago sparked a comment that seemed to take an opposite view to one of the points I made. See Liquidity Events in a FamBiz – Pros & Cons.

They took issue with the fact that I suggested that it can make sense to not share too much liquidity right after a business is sold, for a variety of reasons.

The alternate viewpoint is also quite valid, of course, as there are cases where a family has plenty of wealth and yet most family members will wait years or even decades before they will see any direct benefit from it.


“It’s Great That We’re Wealthy, But…”

This made me recall that great quote from my friend and colleague Travis Harms, another guy who regularly creates great content for this field.

He shared with me the way one family member put it to him: 

                    “Yes, thanks, it’s great that we’re wealthy. 

                         But, can we also have some money?”

Bang! Drop the mic! What a great way to summarize the way so many rising generation family members feel.

Imagine living in a town where everyone knows that you are part of the family that owns an extra-large enterprise.

Everyone knows that you’re wealthy, and yet they look down on you because you appear “cheap” more often than not.

Little do they know, you may own a portion of a large asset base, but you’re still working your butt off each week just to pay the mortgage on your modest house.


An Apple a Day – And Then the Orchard!

That brings me to a family I recently heard about, where the parents were quite wealthy yet were successful in keeping secret the extent of their wealth from their sons.

One son was being modestly supported to a certain extent due to some personal difficulties, yet he would eventually stand to inherit way more than he could reasonably spend in his remaining lifetime.

As I thought about a metaphor for this, I landed on getting an apple a day from your parents, because they didn’t want to spoil you.

You ate that apple every day, kept the doctor away, and then after the parent’s funeral, you discovered that you now own an orchard!

All along, you knew they had a few apple trees in the backyard, and assumed that was the extent of it.


Lots of Planning, Lots of Sharing, Lots of Transparency

The “answers”, if there are any, to these situations are never simple.

However, when there is a lot of planning, a lot of sharing, and a lot of transparency around what the leading generation is hoping to accomplish with the decisions they make, things generally go better than when the opposite track is taken.

When there’s no planning, no sharing, and no transparency, it’s a recipe for disappointment, mistrust, confusion, and conflict.


Taking Advice Versus Co-Creation

Too often, such parents blindly rely on the advice of certain professionals whose viewpoint is conflicted by their desire to remain part of the picture in managing the wealth of the senior generation.

Once the offspring are mature enough to understand what will eventually be coming their way, I recommend they also become involved in co-creating their future as stewards of the family wealth.