Over the past 8 months or so, I have taken on a renewed interest in family businesses and what makes them different and what makes them tick. I have enrolled in courses that do a great job of teaching what family business is all about and how and why they are special.

The courses have covered some in-depth ideas like having a family mission statement, holding regular family meetings, setting up a board of directors with non-family members, getting advisors from different fields to work together harmoniously, facilitating meetings and helping with conflict resolution.

But the single most important thing that I learned was right at the beginning of each course. And it is still the most powerful place to begin any discussion with a family businessperson. It is called the Three-Circle Model. It is SO simple, yet we kept coming back to it during the courses.

The Three-Circle Model (TCM) has only been around for twenty to twenty-five years or so. I am not sure who gets the credit for it, and I would not be surprised to learn that its exact origin is disputed. I recently read an artice from the 1980s that was still talking about family business from a “Two Systems” point of view, which leads me to believe that the TCM evolved afterwards.

(Note from 2016: Please see http://johndavis.com/three-circle-model-of-the-family-business-system/ for more on the origin of the model)

Without further ado, the 3 circles are, “Family”, “Business”, and “Ownership”. F-B-O, a simple Venn diagram of three overlapping circles.

The premise is this: Most people look at a family business as one thing, one entity, one system. But upon closer inspection, there is a LOT more going on there. So in the 80s they started to look at how the Family and the Business were different, and needed to be looked at separately. Later, it was determined that Ownership was also worth spinning out as its own circle.

So part 1 of my equation above in the title of this post is the TCM. What about the seven sectors? Glad you asked. When you draw the TCM as a Venn diagram, you get seven different sectors. Picture yourself asking a three-year-old with a box of Crayolas to colour each portion with a different crayon; they would need seven of them.

So why is this important to Family Businesses? Well mostly because the people who inhabit some of those sectors aren’t even part of the family business. Some of them are part of the Business Family!

People who are only in one circle (the 3 sectors without any overlap) will look at the family business much differently than those who are in one of the three sectors within a two-cirlce overlap.

And then there are those in the middle sector, who are part of the Family, who work in the Business, AND who are also part of Ownership. They often lament the fact that everyone else doesn’t see things the same way as they do!

People who inhabit different sectors will view things in different ways. It is only natural.

Once you learn to view any family business through the TCM, it is like turning on a floodlight. All of a sudden some things that were difficult to comprehend become more easily understood.

And then when you realize that the four sectors where there are overlaps are the ones you need to really concentrate on, you can start to make a lot of progress. I like to think of this as the “flashlight” stage.

The TCM was the floodlight that allowed us to see many things in a new way. Shining the flashlight into the nooks and crannies of the overlapping sectors will help uncover the key areas that will need to be monitored and worked on going forward.

For a visual perspective on all this, please visit my website: click here

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.

 

 

 

About half of my lifetime ago, while working for the family business, the key managers and myself were forced into taking an in-house course on goal-setting. We met once a week for a few months with some guru-type who made us do all sorts of exercises and tried to get us to form new, better habits.

One thing we had to do each week was to set some work goals and some personal ones. Then, when we got together again, we took turns reporting our successes. One time, “Gerry”, who came to us after we had acquired his family company, announced to us with glee, “I finished my book!”

Wow, we all thought, none of us had even realized that Gerry was writing a book. “What is your book about?” someone asked. “Um, I didn’t write a book, I finished reading a book”, he replied, sheepishly.

All this to say that everyone looks at books a bit differently. Most people rarely even read them, and very few people write books worth reading. But great books can be so inspirational.

I go through phases with my reading. Using my Kindle, and now my iPad, I will often have 3 or 4 books on the go at the same time. My normal method is to read a chapter of one book, then a chapter of another, rotating through them. Some of the people to whom I have mentioned this method look at me like I am crazy, as they only read one book at a time.

Different strokes for different folks. With today’s technology there is almost no excuse NOT to read though. You can finish one book from an author and immediately download the sequel or another in the series.

These days I find references to books through Twitter and will often download a book that sounds like it will be useful or inspiring. The trouble often comes when I have so many books piled up to read (figuratively, since they are electronic) that I know that I will never get through them all.

I have recently started to do more skimming or speed-reading just to be able to get to them all. But I still feel guilty that I might miss some nugget somewhere when I do that. I am trying to convince myself that it is better to read about 50-75 % of 20 books than to read 100 % of 10 books. It depends on which books, of course.

If I have books on the brain this week, it is because I had a visit from a friend this week, who told me that he is working on the third edition of his book, and he asked me about whether or not I would ever write a book. Hmm, not sure, I replied. But my mind started spinning.

The very next day I had a phone meeting with someone that I had only met once, briefly, a couple of weeks ago. We were talking about my re-branding as I make the move from the family office space, over to the field of family business advising. He is currently working on a book himself.

Then he mentioned,“You know, when you start to write a book, you would be amazed at how it changes your focus and helps you put things into a new perspective and helps you figure out what is important” (paraphrasing, I wish that I had written it down so I could quote him verbatim).

So this week two different people who are each working on books (writing, not just reading) mention writing a book to me. Neither one said, “Steve, YOU should write a book”.

But that is what I heard.

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.

La semaine dernière, j’ai écrit dans ce blog (en anglais) un texte sur le Family Enterprise of the Year Award présenté par CAFÉ, le Canadian Association for Family Enterprise. Dans ce texte, je mentionnais que je trouvais cela décevant que CAFÉ n’a plus vraiment une présence au Québec.

Nous sommes aujourd’hui la fête des pères, et, pour moi, elle est devenue une journée d’émotions mixtes. J’ai deux enfants qui sont trèèèès importants dans ma vie, et qui y prennent beaucoup de place. C’est également la cinquième fête des pères que je vis sans mon père, qui lui, aussi, avait pris beaucoup de place dans ma vie.

Notre compagnie familiale était devenue membre de CAFÉ dans les années 80, et j’ai assisté a quelques-uns de leurs évenements avec mon père. J’ai trouvé ça génial qu’il existait une place où on discutait ouvertement de situations et de questions que nous vivions dans notre famille.

J’ai vu en mon père un esprit de coopération avec les membres de son PAG (Personal Advisory Group) pour essayer de développer des systèmes chez nous pour mieux intégrer “famille” et “business”.

Je suis devenu membre affilié de CAFÉ dernièrement, mais je n’ai aucune position officielle avec eux, donc j’ai la possibilité de parler sans restriction et sans partie pris.

Je sais que les activités d’un groupe comme CAFÉ on beaucoup de potentiel pour aider les familles d’affaires dans le ROC (Rest of Canada) comme au Québec. Je sais qu’il existe, au Québec, des organismes qui oeuvrent dans des domaines connexes.

Je sais qu’au Québec, c’est toujours différent, et j’ose dire que je comprend un peu pourquoi c’est le cas.

Mais ayant discuté dernièrement avec les hauts dirigeants de CAFÉ, incluant le Chairman, le Vice-Chair, le D.G., etc., je peux dire qu’il y a une ouverture à revenir au Québec, et je crois qu’ils sont tous prêts à regarder toutes les options.

Quand je pense aux “autres organismes”, il y a le CIFA à HEC, et il y a aussi le Groupement des Chefs d’Entreprises. Il y en a sûrement d’autres que je ne connais pas encore. Peut-être que CAFÉ devrait explorer des alliances avec de tels groupes?

Mais au Québec la question de langue revient toujours, et pour cause. Mais quand la volonté est présente, la langue n’est plus un obstacle majeur, surtout en sachant que la grande majorité des participants sont bilingues (surtout à Montréal).

J’ai aussi noté de plus en plus des rencontres bilingues dans d’autres organismes. C’est-à-dire, des occasions où le monde s’interchangent entre eux en anglais et/ou en français, sans se sentir obligé de traduire, en sachant que tout le monde (ou presque) a compris.

Je suis certain que je ne suis pas le seul qui change de poste lors des speechs politique pour ne pas être obligé d’entendre un interprète.

Deux dernières idées, et ils pourront peut-être se marier ensemble. Le D-G de CAFÉ m’avait mentionné la possibilité de recommencer au Québec avec un PAG, et voir où on pouvait se rendre.

La deuxième idée est la mienne, et parvient du domaine de l’agriculture. Je n’y connait pas grand chose, mais je sais que l’UPA (Union des Producteurs Agricoles) est présent partout au Québec, et ils ont un comité dans chaque région.

Mais en plus, ils y a un comité “English”. Je le sais puisque mon père était membre pendant des années.

Si CAFÉ revenait avec un ou des PAGS, en anglais, pour débuter. Entretemps, des alliances avec d’autres organismes pourront aussi être explorées?

Peut-être qu’on verra une autre instance de “if you build it, they will come”.

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.

Saturday night, June 8, 2013. The place to be was the Sheraton Conference Center in Toronto. The occasion? CAFÉ’s annual Family Enterprise of the Year Awards (FEYA).

CAFÉ (Canadian Association of Famliy Enterprise) is celebrating its 30th anniversary in 2013, and I recently joined as an affiliate member, given my renewed interest in the family business area. I had not realized that CAFÉ began in 1983, but found it interesting because my previous involvement with them was in the mid-80s, as they were just getting started.

At that time I was the second-generation (G2) son who was about to enter the family business, and someone got my father interested in CAFÉ. That was where he learned the importance of getting the family more involved, even those who did not work in the business.

He actually set up a family retreat, which I remember mostly because it was the only one we ever had. Not that it went badly, but running the company was more urgent, and nobody stepped up to make sure that the event became a regular part of our calendar.

We learned a few things from CAFÉ, not all of which were applied, of course. I vividly recall Dad telling me about how they recommend that kids work somewhere outside the family business for at least 3 to 5 years before even being allowed to come into the family company. Made sense to me, but Dad felt it did not apply to our situation.

So back to the FEYA event on Saturday.The best part of any CAFÉ gathering is the sharing of stories. Family businesses are all unique, yet there are always things that you can learn from others, especially how they have handled the intersection of the family with the business.

The three finalist families were all in attendance, each with about a dozen or so people there, representing two or three generations. They each had a little speech prepared, as well as a great video that the CAFÉ folks obviously put a great deal of effort into producing.

Not surprisingly, the families were all very thankful that they had become involved in CAFÉ, as the interactions had helped them figure out some things that they would not likely have picked up anywhere else. The stories were all very different, but each was touching in its own way.

A key benefit for families who join is the PAG (Personal Advisory Group) network. My father referred to his as his “CAFÉ Buddy group”. They used to have regular meetings, alternating whose family/company they would discusss. It became an informal board of sorts, where he could share stories, ideas, and problems with others who were undergoing many similar issues.

Even after selling our operations, he continued to meet with his PAG. After he passed away, a couple of his former PAG friends invited me to their annual Christmas gathering, which was really cool, as we spent the time reminiscing and sharing stories about him.

CAFÉ can be very powerful. Unfortunately, it is not nearly as powerful as it could be. That is not meant to be an insult, as I know that the board is working hard at making CAFÉ become an even more important part of the family business scene in Canada. They had just concluded some board meetings and were quite pumped at what they were working on.

There was even a bit of talk about Quebec and its lack of presence in CAFÉ. How could they find ways to get more invloved there? Apparently there was a new member from Quebec who was keen on helping mobilize things.

That would be me. If you are in Quebec and also interested in “another round of CAFÉ”, please reach out to me, and let’s see where we can take this

J’imagine que mon prochain blogue sera en français et devrait toucher sur le même sujet, mais du point de vue québecois. À la semaine prochaine…

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.

When we think of family businesses, many of us picture the Mom and Pop operation, or the hard-driven entrepreneur who spends long hours at work for the sake of his family. It certainly is a reality for a large number of traditional first generation (commonly called “G1”) companies.

As some of these grow, expand, and mature into what we would normally call SME’s (Small and Medium Enterprises), they become more of what we might call true family businesses in the sense that some members of G2 will often start to assume positions in the company.

The bigger the business gets and the more family members are involved, the more fun for everyone. Or that is the hope. Of course it does not always work out that way in the end.

There is an analogy that some use to describe how each generation differs as the business ages and goes from G1 to G2, and then from G2 to G3. I do not know the exact origin of it, but I learned it in the Family Enterprise Advisor program in which I am currently enrolled.

It is a sports analogy that goes like this. The G1 is a tennis player. Tennis is an individual sport, they are all alone, them against their opponent. They are responsible for their success or failure.

G2 is a different sport. Mom or Dad the tennis player is not what works best anymore, although many hope to find a son or daughter who is just like them to take over, believing that that is what is required. But now the game is basketball, a team sport with a few players playing, as a TEAM. And the leader is not even a player anymore, but the coach.

Playing tennis and coaching basketball are not that similar. When we go from G2 to G3, the analogy continues, we get to what is commonly called the “cousin consortium” stage, where there may be various branches of the family involved. The game changes once again.

Basketball has only five players on the court at a time. The G3 cousin consortium is soccer or football. There are a lot more moving parts that need to be coordinated if the team is going to succeed. Look at the sidelines at a football game, and you will see lots of coaches, with one head coach who must coordinate them all.

We are pretty far from the tennis player and the one-man show now. My Dad was the prototypical entrepreneur and I was very diferent from him. He worried about that and deep down I am sure he had his doubts about how I would be able to succeed him. In the end we sold our operating company and that was fine with me since I did not have the passion for that end of the business.

Generational differences show up in other ways as well. G1 may be more about growth and G2 may be more about maintaining the wealth. Or G1 may be more about growing slowly with little risk, and G2 prefers to pile on risk and grow too fast.

This week I was fortunate to be invited to attend a local gathering at which 3 local family businesses received awards for having successfully transitioned their businesses to another generation. I got to speak with a couple of people who were at the G2-G3 stage in their businesses.

I sensed that just by their presence at this event, they were much more in tune with what is involved in these transitions than those who are in G1 and preparing for G2. It is a lot of work and very complex, and the G3’s seemed to really appreciate how fortunate they were to be in the positions they are in.

Here is hoping that many others get to this stage as well.

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.