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Objective. Neutral. Compassionate?

Business families can often benefit from bringing in outside consultants or advisors to help them with certain matters. In addition to taking advantage of the expertise and experience of these resources, there is usually something else that is being sought.

The key feature that such an outsider brings along is an objectivity that people within the family just cannot have. Family members enjoy a deep connection and history, and while a lot of good comes out of these deep relationships, there can also be a downside.

When you think about the word objective, it is normal to contrast it with its cousin, “subjective”. To me, subjective conjurs up “subject to”, as in “subject to MY feelings”, as opposed to the more factual and objective, “how things really are”.

The word neutral is one that has slightly different connotations for me, as it brings up the part about not being partial, biased, or swayed by one side or the other, in a situation where people are in disagreement.

As someone who enjoys helping families sort through many of the “family issues” that arise around their businesses or wealth, being seen as neutral is one of the most important things I need to do to be successful.

Being perceived as “Dad’s guy”, hired to come in to deliver his message to the kids, has been the kiss of death for more than a few outsiders brought in to deal with intra-family affairs.

This fanatical desire of mine to work on my own neutrality has seen me search high and low for tools to achieve this goal, even while questioning whether true neutrality can ever be attained.

I am now halfway through the Third Party Neutral program (TPN) offered by the Canadian Institute for Conflict Resolution (CICR), having just completed my second of the 4 weeklong courses.

One of the things that has struck me thus far is that there is general agreement that becoming truly 100% neutral is an almost impossible goal. You would likely need to find a robot if you absolutely needed to find a completely neutral outsider.

The TPN program realizes this, and so their focus is on training people to become custodians of a neutral process. It is not the person who is neutral, but the process. The person serves as a guide, or facilitator, and works at getting the parties to follow the neutral process through to a resolution.

My favourite realisation regarding the neutrality of the process instead of the neutrality of the person comes back to my passion for this field.

I entered this field a few short years ago, in my late forties, in response to a calling to help families, because I have seen and heard too many stories about families who have made avoidable mistakes around their inter-generational transitions.

As the only son of an entrepreneur who built a business, and now the parent of two teenagers, I truly have seen both sides of things. Empathy is one of my strengths, but the problem in my head was how do I square the empathy with the neutrality.

The answer, which is slowly becoming more clear to me, lies in two areas.

The process: The process is neutral, and as the custodian of the process, I need to do my best to remain unbiased by one side or the other.

The family is the client: This has been one of my principles from day one, having learned it during the Family Enterprise Advisor (FEA) program. (www.IFEA.ca)

With a neutral process and the family as my client, I am now free to use my empathy and my passion without trying to hide them or feel the need to apologize.

One of the veteran instructors in the TPN program stopped by our class this week and spent a bit of time meeting all of the current students. I introduced myself to her and explained how I came to this field, which she referred to as “peace making”.

When I finished my intro, she summed me up in two words: Compassionate Neutral. It may sound like an oxy-moron to some, but you know what, I think it fits, and I like it.

 

Steve Legler “gets” business families.

He understands the issues that families face, as well as how each family member sees things from their own viewpoint.

He specializes in helping business families navigate the difficult areas where the family and the business overlap, by listening to each person’s concerns and ideas. He then helps the family work together to bridge gaps by building common goals, based on their shared values and vision.

His background in family business, his experience running his own family office, along with his education and training in coaching, facilitation, and mediation, make him uniquely suited to the role of advising business families and families of wealth.

He is the author of Shift your Family Business (2014), he received his MBA from the Richard Ivey School of Business (UWO, 1991), is a CFA Charterholder (CFA Institute, 2002), a Family Enterprise Advisor (IFEA 2014), and has received the ACFBA and CFWA accreditations (Family Firm Institute 2014-2015).

He prides himself on his ability to help families create the harmony they need to support the legacy they want. To learn how, start by signing up for his monthly newsletter and weekly blogs here.

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Hard versus Soft? Or Hard versus Harder?

It honestly makes me laugh sometimes when I hear people speak about the hard issues, like dollars and cents, as if they are so much more important than the soft issues, like relationships, emotions, and just getting along.

There is a huge disconnect in the family wealth industry over the relative importance of these issues.

Maybe it is because there are a lot more people working on the “hard” side of things, the things in found in the “business circle”, than on the “soft” side, which deals mostly with stuff in the “family circle”.

Maybe it is because the people working on the investment side, the securities, asset allocation, and Wall Street stuff seem to be paid much more than the folks who worry about the family harmony and communications.

Maybe it’s because it is often the Dad who works really hard and makes a pile of wealth for the family, while Mom worries about the kids, and tries to make sure that all the kids are treated fairly so they will always get along together.

In any case, hard business stuff seems so much sexier than the mundane soft family stuff.

I don’t know if it is because hard and soft are antonyms, and because another antonym of hard is easy. Something tells me that is part of it, but of course is all speculation.

The people who specialize in the soft side of things will all assure you that soft and easy are NOT synonyms.

Of course now that I brought up the word “easy”, I have to share with you one of my favourite sayings around the word easy.

Some people love to throw around the word “simple”. Losing weight is simple. Eat less, exercise more, and you will lose weight, it literally is that simple. Simple and easy are NOT the same.

To me, simple is about easily explained concepts, while easy is more about things that just about anyone can do, regardless of intelligence, experience, or effort.

This week I met with a man who works with his son, and the son has been slowly trying to force Dad out of all decision-making functions, and treating him like an over-the-hill impediment.

I have yet to meet the son, and there are always two sides to every story, but the person I spoke to did not seem like he was ready to be put out to pasture.

When I made a couple of suggestions to him about what he could do, the response was, “But it is so hard, because it is emotional”. I resisted the temptation to correct him and tell him that we were talking about something considered soft.

I think that there is some good news on the horizon for those of us who like to specialize in the family circle issues. The amount of research that shows that family wealth is more often destroyed due to family issues than money issues continues to multiply.

When you couple what is finally being acknowledged and understood with the demographics of baby boomers and the transitions that have already begun, I cannot help but believe that we are on the front edge of a wave here.

It may still take years before views like mine become mainstream, but that’s okay. The movement has begun, and it will continue to grow.

Those who want to continue to serve families of wealth by only dealing with the hard issues and continuing to ignore the soft issues (or, as you may have already concluded, the ones I consider the harder issues) do so at their peril.

Families don’t have a shortage of places to invest their wealth, or people who will help them do so.

What is missing is providers of holistic solutions that take into account the hard and the harder. Enlightened families are demanding help to make sure their wealth survives generational transfers.

If you want to help them get that right, you can’t just hope it happens by itself. There are emotional issues around family wealth in every family. Those who help their family clients navigate them will be the winners.

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The Tradesman and the Toolbox

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This week my Dad would have turned 80, so he is part of the inspiration for this post. He had apprenticed in Austria as a teenager, and when he arrived in Canada he got a job, bought tools, and went to work, all within a few days.

He knew a trade, and then bought the tools he needed to do the job. But it isn’t always that straightforward.

I learned a lot from my Dad, but very little of what he taught me had anything to do with tools.

True, before my first summer working in his steel fabrication plant, we made the obligatory trip to the hardware store (remember Pascal’s?) after which I was “equipped” to work, even though I had barely a clue what I would be doing or what each tool was for.

I still have that red toolbox, with the blue label on it, “91 S. Legler 91.” (My punch card number was 91). Those tools have been doing a lot of dust gathering lately.

The types of tools that I am coming across regularly these days are not the kind you find in any store, hardware or other.

And interestingly enough, I have not been looking for these tools. Instead, the people who are developing these tools have found me. So what kind of tools am I talking about?

It isn’t that easy to even categorize them, but let’s just call them technology platforms for families. Say what?

We all know and understand that the ways that people communicate in 2016 are far different than they were even a decade ago. The ability to connect with people has grown exponentially, which has many positive consequences.

Family communications can be improved in so many ways with these kinds of tools. And the lack of communication within families is one of the biggest contributors to the demise of family wealth.

So naturally, any tool or toolbox that helps families communicate should be a welcome addition, right.

Well, generally, yes, more communication is almost always better than less, so there is that. Where it gets a bit trickier is thinking that the mere existence of the tool will make the family communicate.

Think of the horse you lead to the water, if he isn’t thirsty (and some family horses are more like camels) he may not start drinking for a long time.

The nice thing about creating this type of tool is that you build it once, and then it gets used over and over again. If you build one thing, copy it virtually cost-free for others and sell it to them, well, the profit opportunity can be large.

Now let’s look at the tradesman. This person needs to learn the skills and the tricks of the trade in order to be able to go out and have some valuable help to sell.   It isn’t nearly as easy to replicate, as each person is unique and unfortunately not “clonable”.

But that doesn’t mean that the tools are not useful. What it does mean, from my perspective, is that the opportunity to come up with the “killer app” in the family wealth/family harmony space, may not be as profitable as some might expect.

First off, I am getting the feeling that the field is getting crowded.

Secondly, very few families realize that they could benefit from these tools. (Yes, there is a need for them, but that is not the same as saying there is a demand for them).

Maybe I am biased by the fact that I am a tradesman in this space, and I like to think that there is some magic in my words and the way I communicate with people in families, without much in the way of a toolbox.

Ideally, many families will benefit from qualified helpers and some of the great tools that are being developed.

My tendency would be to defer to a skilled person with a mediocre tool over someone with a great tool but without the proper training or skills.

As this field continues to evolve, I will continue to work on my craft, while incorporating the best tools I come across.

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 Does Father REALLY Know Best?

The expression “Father knows best” probably came before the TV show of the same name. But I could be wrong. I always thought that Yogi Berra was a nickname based on the cartoon character, but now I am pretty sure it was the other way around.

The subject of fatherly advice came to me this week as I listened to a presentation by a guest speaker, a well-known wine maker, at a Toronto client dinner hosted by JC Clark Investments.

I was invited to the dinner by the good folks at JC Clark as their guest despite not yet being a client of theirs. Not only that, I was lucky enough to be seated next to the speaker during dinner, and learned a good deal about the art and science of vinification.

Our speaker talked at length about the way he got where he is today, which was by no means a straight line, and how many times he relied on the same pieces of advice that he had received from his father.

His Dad had counselled him to always learn from the best, and to never be afraid to ask for help. He related a handful of occasions when these principles helped him make key advances in his career.

This also had me flash back to a time about a decade ago, when I was watching the stock market on a daily basis, and therefore also reading publications directed at investors like myself.

My favourite read was Richard Russell’s Dow Theory Letters. He was already well into his 80’s when I discovered him, and I can’t tell you how often he related the story about how he got started in finance.

His father, he repeated often, told him to go work for the banks. When he asked “why?” his Dad replied, “Because that’s where the money is”. This man then spent over 6 decades of his career based on some early key fatherly advice.

These days I have been putting some of my father’s advice into practice, and interestingly enough, there are some similarities with his words of wisdom and those of the speaker’s dad.

I recall when we went from being a steel fabricator that sent almost all of its finished products out to others to be hot-dip glavanized, to Dad’s ambitious move to design and build our own in-house galvanizing facility.

Steel fabrication is something he knew well, having apprenticed in that in Austria as a teenager. But setting up a plant around a huge tank to melt zinc (to over 800 degrees) to then dip the finished pieces of steel into a bath of liquid zinc was quite another endeavour.

One of his first moves was to join the American Hot Dip Galvanizers Association, an organization that connected him to many experts who knew the field much better than him, and he in turn learned from some of the best.

This idea of collaborating, getting help from others and in turn sharing knowledge with a larger group was something that came naturally to him.

I have followed that path myself over recent years. Just because I had worked in my own family’s business, did that automatically make me qualified to consult to other families in business? Some people do just that, but for me it was not nearly enough.

I have joined the Family Firm Institute, the Purposeful Planning Institute, the Canadian Association of Family Enterprise, and of course the Institute of Family Enterprise Advisors. In addition, I have taken courses in conflict resolution, coaching, and Bowen family systems theory.

Dad’s advice has been serving me well recently.

You may not have noticed that the men in the stories above were all following their fathers’ advice in situations where Dad had nothing personal to gain from their sons’ actions.

Unfortunately, in business families, there are still too many occasions where Dads (and Moms) give their children advice, but in many ways that advice is self-serving.

“Go find something you love to do” and “come and work for me, you will love it” may sound similar to the person speaking, but to the listener there is a huge difference.

Yes, huge.

 

 

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Judgement, Not Judgement

Writing a blog post every week forces me to constantly be on the lookout for interesting subject matter, so whenever I notice an interesting choice of words, my first thought is usually “how can I turn this into a good blog?”

Such was the case this past week, which I spent in Ottawa, partaking in the first of the four courses in the Third Party Neutral (TPN) training program, given by the Canadian Institute for Conflict Resolution (CICR).

Because I often deal with various members of a business family, to help them get through some of the sticky issues that they face together, remaining neutral is a huge plus. Even the perception that I am taking sides can quickly work against me.

When a family brings someone in from the outside to help them, it is the outsider’s objectivity that is usually cited as one of the biggest resources that they bring to the table. Unbiased, neutral voices are often not present when everyone who is involved has a lot at stake.

The interesting word choice that piqued my curiosity was taken from a list of the Principles of the Third Party Neutral process, principle 7 (of 9): Judgement, Not Judgement.

My first thought was about spelling, but this couldn’t be about whether we went with “judgement”, with the E, or “judgment”, without.

Dsimissing that, my mind quickly went to work to try to figure out what this was supposed to mean, and it soon became pretty clear, despite the ironic juxtaposition.

I like to think that I have good judgement, but then again, most of us self-identify that way, in the same way that studies show that a large majority of people consider themselves to be better than average drivers.

The first use of the word “judgement” in the TPN Guidelines was clearly a reference to this version of judgement, i.e. using your judgement, thinking before acting, giving things proper consideration before deciding, that kind of stuff.

The second “judgement”, the one that follows “Not”, is the bad kind. Whereas the first one, the good one, the one you are supposed to have and use, makes you think of the quality of being “judicious”, the second one is all about being “judgemental”

While doing my CTI coaching courses a few years back, one of the first things we learned was the importance of listening. We talked about “active listening” and “level 3 listening”, but the biggest take-home message for me was that we needed to master the ability to “Listen without judgement”.

Let’s look at some definitions I found online for “judicious” versus “judgemental”.

Judicious: having, showing, or done with good judgment or sense

Judgemental: having or displaying an excessively critical point of view.

Most business founders who have been successful in building a company have been blessed with the quality of being very judicious.

Unfortunately, sometimes the success that they have achieved leads them to believe that they are also blessed with the gift of knowing what is best for others, and some become judgemental as well.

They don’t necessarily go around and tell everyone what they should be doing. They don’t have time to do that with everyone, so they concentrate on those close to them. You know, the ones that they love; their family.

Therein lies one of the reasons that the founder of the family business is not often the one who sees the need to bring in an objective third party.

You may think that this comment from me comes off as judgemental of business founders, and I would not likely successfully refute that argument.

Being neutral is hard work, especially for humans. The TPN program is all about being the custodian of a Neutral Process, lead by a human who has been trained in guiding that process.

The best way for me to be of service to these families is to check my biases at the door, and I am constantly working on the skills required to do that.

In the coming months I will be doing the TPN 2, 3, and 4 training, and I will be sharing more about this subject going forward.

Questions, comments? sl@stevelegler.com

 

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Vermont, a Global Hub? What the FECC?

Burlington Vermont is not a place most people think about when globalization is the subject. But once a year, that all changes, and people involved in Family Business congregate there in January for a one-of-a-kind experience.

The Global Family Enterprise Case Competition (FECC) just wrapped up this weekend, and the fourth annual edition was better than ever. The folks at the Grossman School of Business at the University of Vermont can truly call their event “Global”.

I had the privilege of serving on the judging committee at this competition for the third year in a row, and as always, it was an enriching experience. So how global is it?

Well on Thursday I served on a panel with another Montrealer, but he happens to hail from Mexico (as did a couple of the Undergraduate teams participating). That same panel featured a woman from Switzerland, who was born in Czechoslovakia (which is now 2 countries!)

There were 24 student teams competing, with 16 in the Undergraduate section and 8 in the Graduate portion, and these teams hailed from 10 different countries, but if that weren’t enough, the students themselves came from even more diverse geographic and cultural backgrounds.

I don’t have vital stats for all of the participants, but from just the eight teams that I saw, here are a few examples:

A team from Sweden featured at least 2 competitors who were German, which they clearly used to their advantage on the case of the Juchheim company, which, suprisingly (or not) was about a Japanese family enterprise.

Another team, from Texas, featured students with both Latin American and Asian roots, and a team from Spain featured one presenter with a Middle Eastern background.

I could go on, but I think that I have already given you a flavour of what the event is like, and I have probably already used some terms that will have offended some people who are more politically correct than me.

So what is it that makes Family Enterprise such a great field for a global competition? That’s an easy one.

The languages and the culture change from country to country, but the prevalence of family business is pretty well widespread around the world. And not only that, what parents want and hope for when they go into business with their family members is not very different from one location to another.

Furthermore, the issues that come up in family enterprise situations that you can find in one country will invariably show up in just about every other country too.

The good news here is that you can learn a lot about the big issues and how you may want to handle them simply by studying what has gone on elsewhere. You know, learn from other people’s mistakes.

The field of family business as a discipline, to be studied, researched, and taught in schools is still relatively new. The related field of family business advising is also still considered pretty new.

What this means is that the families who are eager to get involved with examining their own situations by opening their eyes and themselves up to what is going on with other families, are still part of what one would term the “early adopters”.

Family Business is not yet seen as “mainstream”, and is not taught as a separate discipline in very many business schools yet.

Likewise, many people like me who call ourselves Family Business Advisors are still looked at as a little bit odd (OK, I confess, you got me there) and we are sometimes met with questions like, “Is that a thing?” when we describe ourselves as such.

Things are changing, slowly but surely, in the right direction. If you have any interest in the field of Family Enterprise education, I invite you to check out the FECC at UVM and get involved in next year’s 5th annual edition. I know that I am already planning a return trip.

 

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Kermit on my Mind

When I was a kid I watched Sesame Street, and then during my teens, the Muppets moved into prime time. We hadn’t seen a lot of Kermit and his pals lately, until ABC brought them back this fall.

They have some new characters to complement many with whom we are already familiar, including my favourite, Chip the tech guy, but Kermit is still the star in my books. And for some reason I have had frogs on my mind lately.

This week, over coffee with a colleague, we were talking about the types of families who make up my “ideal client” base. I really don’t like the terms used in the wealth management space, like HNW and UHNW (high net worth, and “Ultra” HNW), but they are part of the lexicon.

The truth is, though, that if a family’s wealth isn’t into the eight-figures range, they aren’t likely to bring in someone like me to work with them for a few months to a couple of years to help them set up their family governance and get everyone on the same page.

It was then that I said to my colleague that I understood that I needed to “kiss a lot of frogs”. And then I felt like an elitist A-Hole for using that expression.

I have been working on and reflecting upon how best to take my unique life experiences, my newly discovered passion for helping families prepare for multi-generation success, and my ever-expanding network of like-minded professionals, and put them all together to “serve”.

And then I re-read that last paragraph and hope it doesn’t come across in a way that makes people gag, and think of me as a snob who laments having to “kiss frogs”.

I hope that by sharing my feelings about this, my real humility will come through.

Then today, while thinking about the frog kissing comment, I flashed back to something I heard about a year and a half ago. It was at the 2014 Rendez-Vous of the Purposeful Planning Institute.

The speaker was none other than James E. (Jay) Hughes, who is one of the most respected authors and speakers in the field of family wealth.

He was talking about the importance of each generation developing their own interests and passions, and not getting sucked into the “black hole” of the business of the previous generation’s dream. I very much agree with his premise.

But during the Q & A, he brought up the old story about the frog and the pot of boiling water. It goes like this: If you have a pot of boiling water on the stove and you drop a frog into it, the frog will instinctively jump out.

However, if you put a frog into a pot of cool water, and slowly raise the heat, the frog will end up getting cooked. And then Hughes added that it was impossible to get out of that black hole, or that pot of water.

I took exception, but only internally. I wish I would have gone and spoken to him afterward. I believe that if you turn off the stove in time, and allow the water to cool down, the frog can jump out and find his own passion and successfully leave Dad’s black hole.

I believe that I am “Exhibit A” for this. It took around 20 years for my water to cool down and for me to discover my passion for helping other families with these kinds of family business and family wealth issues.

And I will gladly help and kiss lots of frogs along the way, not just Kermit, or the ones who have enough wealth to afford me for my “full service” option. There are plenty of families who can use guidance to help them figure out how to make decisions together, communicate better, and solve problems together.

Or maybe just to encourage them to let their offspring find and live their own true passions.

In 2016, I resolve to better communicate how I can serve them all, and continue to preach about the important role of family harmony to support family legacy.

 

 

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“Know How” Vs. “Show How” in FamBiz Advice

“Know How” Vs. “Show How” in FamBiz Advice

One of the things I enjoy doing occasionally is revisit parts of my eclectic professional career and find subjects that can help me explain things in areas around my most recent incarnation as a family business advisor.

Exactly 20 years ago, I was studying Intellectual Property Law in New Hampshire (Franklin Pierce Law, now part of UNH). During a class on patents, the terms “know how” and “show how” were discussed.

The MIP (Master of Intellectual Property) program was aimed mostly at international students, many of whom came from Asia, to get a one-year intense dose of American IP Law. A classmate from Colombia, whose English was still not great, asked me to explain the difference between the two terms.

We were standing in the student lounge at the time, and there were some vending machines nearby. I always love the challenge of taking complex issues and finding ways to explain them in terms that everyone can understand.

So I started with Know How, and suggested to my friend that if he were thirsty, he should go to the machine, put some money in it, and press a button. He looked at me intently, and said, “Okay…(?)”

Then, I walked over to the machine with him, and said, “Show How: Put your dollar bill in this slot here, and make sure you flatten it out. Slide it in until the machine picks it up. Now, look at the choices and decide which drink you want. Press that button. See, this is where it comes out. Don’t open it yet, because it just dropped and might make a mess because it got shaken. Get your change out of this slot. Show How.”

He smiled and nodded. Mission accomplished. So what does this have to do with family business?

If you are looking for Know How on subjects surrounding family business, and more importantly business families, there is no shortage of it out there. Just ask my friend Google, and he will lead you to more content than you could read in your lifetime.

But just as you could look up and read millions of patents and still not be able to put the inventions into practice, most of the FamBiz content you find really would fall more into the Know How category.

I read stuff every day on the subject, much of it coming from my Twitter addiction, and there are plenty of great ideas for things that families should be doing to make sure their intended transitions from one generation to the next go smoothly.

My problem with so much of what I read is that I believe that very little of it will ever be acted upon.

This may or may not be the fault of the writer of the piece, but I often picture the reaction of someone like my father, or my father-in-law, both of whom started with almost nothing and built successful family businesses, and I simply can’t picture either of them ever putting the advice into practice.

The lack of action by many families has a couple of components to it, of course. Lack of time or urgency is usually one part, and so is insufficient belief in the worthiness of the expected benefits. I can’t help believe that not having enough “Show How” is a very big part of it.

If someone reads that having family meetings is important, they may think that it could be worthwhile, but then might get hung up on how to go about that. What is on the agenda, who gets invited, how often should we do them, how formal, what is the goal, how do we make “ground rules”, do we keep minutes, ah just forget it. Maybe next year…

Many ideas sound great when we hear them (or read them), but then we stumble when we try to implement them, because of some uncertainty in how it is supposed to all work.

There are people who can help show you how, but not nearly as many as there are out adding the vast store of know how out there. You just need to find them and reach out.

 

 

 

 

 

 

 

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Getting Brothers on the Same Page

Getting Brothers on the Same Page

This week, I was approached by a colleague about a pair of brothers, who are operating a business together, who are approaching a crossroads. My colleague asked me for some input on what kinds of issues they would be facing, and how he might offer to assist them.

(This made me flash back to a blog from April 2014, about another pair of brothers who worked together).

He didn’t give me too much to go on, and I’m not even sure how much information he had himself, so I will have to fill in some of the blanks with my own assumptions. This is fine because anything I offer here cannot be prescriptive, nor should it be overly directed to the specific facts of their case.

So here is a scenario, including my assumed facts:

Two brothers, in their late 50’s, co-own their company, which they have grown over the past 30 years or so. Both have children, but they are too young to take over right now. “Frank” has a vision of somehow keeping the business in the family, while “Sam” just wants to sell.

As usual, I have many more questions to ask before being able to supply any useful answers. Here are a few that come to mind immediately:

– Are these paths mutually exclusive?

Not necessarily. If Frank has an interest in staying on and eventually bringing his kids into the business, there are certainly ways that this can be done. If Sam wants out, they would need to come to a negotiated agreement on the sale price, including the terms and conditions, which would allow Frank to buy his brother out.

Frank would need to be sure that the leadership and management roles that Sam had assumed would be covered off by someone, and they would need to come up with a financing arrangement that would allow Frank to purchase Sam’s shares over time so as not to put the company at risk.

–  Can the business be run by a non-family member?

If Frank is not the type to run the business by himself and if it will be a number of years before his kids would be ready to assume key roles, the option of hiring professional outside management can also be an interesting idea.

Not all family businesses pass directly from parent to child; often some trusted managers assume top roles for a number of years while the next generation completes their years of preparation to take over the top job.

–  Has an outside buyer been identified?

If an outside purchaser has been identified, a sale of the business, whereby both brothers actually cash out, could be a blessing in disguise. Sam can close the book and move on, and Frank would be free to do as he saw fit with his proceeds.

–  Could Frank help his kid(s) run another business?

Some parents love running a business and long for a relationship with their children in which they can pass on that love to their offspring. But many times the particular business of the parents is not in a field that captures the imagination of their kids.

How about taking the proceeds and finding a business opportunity in a field that the children are attracted to, and helping them start their own business in that area?

–  Where should the brothers begin?

Ideally, Frank and Sam can discuss all of these options before going too far down the road with any particular option.

–  Beware the advisor who only carries a hammer!

Too often, guys like Frank and Sam are not sure where to turn, and they take the first piece of advice that comes their way if it sounds plausible. Remember the saying about a man who only has a hammer, who looks at everything as if it is a nail?

Business advisors, most of whom specialize in one particular area, are also prone to this type of reflexive advice. For big decisions like these, taking the time to look at ALL of the options makes the most sense.

 

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Lessons from Estée Lauder

I recently read a very brief piece on Estee Lauder, who was described as a “family business icon” by the Family Firm Institute (FFI). They also stated that her motto was “I have never worked a day in my life without selling. If I believe in something, I sell it, and I sell it hard.”

I found her motto very interesting, especially the second sentence, where she mentions selling something in which she truly believes. Obviously if you do not believe in what you are selling, it is very difficult to do a good job of selling it.

It also struck me because the word “sell” has a variety of meanings and connotations, which have also evolved over the decades since she likely came up with her motto. And as someone who despises coming across as a “salesman”, it forced me to think through her motto to try to find a way to make it work for me.

There is also the part about the difference between selling a product like cosmetics versus selling a professional service, like family business advising. The sales and marketing contexts and processes are very different. But I was determined to find the “gold” in her motto in a way that could be useful to me.

As a solo practitioner, what I am selling is myself, in many ways, and some people are over-the-top when they talk about themselves, while others are “under-the-bottom”, if you will allow me to invent such an awkward antonym.

Since I am someone who lives at the lower end of this scale, it is always a stretch for me to “sell myself”. When someone seems to be trying to hard to “sell me”, it is a huge turn-off, so I naturally assume that others also hate this tactic, and I try to avoid it, and sometimes I try too hard, to my detriment.

Back to Lauder’s motto, though, she states “if I believe in something, I sell it”. She did not say somebody, so for me, the take-home message is to focus less on the “who” and more on the “what”.

For those of you who are regular readers (thanks!) you may recall that a few weeks ago I wrote about “who I am” being more relevant and important than “what I do”, so the trick is to try to find the right balance, and to come up with the proper messaging of what I can to do help business families, along with the personal branding of the guy who delivers those services.

I am so much more comfortable selling an IDEA, as opposed to myself, but I also understand quite clearly that nobody would buy the stuff that I am selling if they were not convinced that I am someone that they can trust to work with some of their most precious valuables, the members of their family.

When speaking with others who do this work, I often bring up the phrase “spreading the gospel”, so allow me to attempt to lay out what this gospel is, because that is what needs to be sold.

Let’s start with a tag line that I recently came up with, which is still a work-in-progress:   “I help business families turn their transition dreams into a workable plan”.

For a family, this is hard work, and if they don’t start early, learn to work together, and have the crucial conversations that they need to have to do the work well, there are lots of negative consequences that will likely arise, not just for the business, but also for the family.

Very few if any families will undertake this work on their own, without professional external advisors. We do exist, but the families are not always “ready” for the hard work to begin, often until it is nearly too late.

If you are such a family, or if you currently advise such a family in another professional capacity, please reach out to start a no obligation conversation.

 

 

 

 

 

 

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