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R.I.P. my Old Friend

As much as I struggled to find the right title for this blog post, I know that I will likely struggle more writing it, as the tears are already welling up in my eyes just contemplating the topic.

Thankfully, this writing is actually a bit therapeutic for me.

Bosco was a Golden Retriever who had been with us for the past 8 and-a-half years, after spending his first two years with another family, who unfortunately went through a divorce. It was unfortunate for them, since they could not agree on who got to keep him, but very lucky for us.

Our kids were just 5 and 6 at the time, so it is no exaggeration to say that he has been a part of most of their childhood family memories, with the series of annual Christmas photos as a reminder of how they grew up as he grew old.

He had slowed down considerably over the years, but still seemed to be in decent health considering his sedentary lifestyle and his propensity to hang around the kitchen, you know, just in case some food happened to fall on the floor.

But on Wednesday this week, my wife was out of town and I was at an event downtown. The kids were at home with the pets (Bosco plus another dog and 3 cats), and things went bad unexpectedly and quickly.

My daughter texted me around 5 PM saying something was wrong with Bosco, so I called her to see what was up. Difficulty breathing, and inability to even stand up, hmmm, I thought, I better head home quickly.

By the time I got to my car not even 10 minutes later, she texted me to say that she feared the worst. I got home and sadly realized that she was right. Sad enough to have an old friend pass away, but sadder still that it happened in front of my kids, without their parents there.

My son helped me load him into the car for one final trip to the vet, where we said goodbye one last time, and we both cried all the way home.

After sleeping on it a few nights, I am very thankful for the quickness with which he scheduled his ultimate departure, if not the exact timing. How many stories have you heard about people whose pets get sick, and they then have to make choices between expensive veterinary procedures and letting nature take its course.

I will now try to carefully draw a parallel between the case of a pet and that of a parent. I say “carefully” because I recall an instance when my aunt passed away, and my father suggested to her widower husband that he get a dog.

Dad was making what he felt was a constructive suggestion to help his brother-in-law through some of the grief and loneliness, but I know that some people took it wrongly, as if he was suggesting that my aunt could be “replaced” by a dog.

The story I wish to convey is about my Dad, and how he left us relatively early, yet not so quickly as to leave us scrambling.

My mother recently related to me that when she and my Dad used to go and visit his mother during her long battle with Alzheimers, on the drive home, Dad always said to her, “If I ever get like that, please shoot me”.

The cancer saved us from having to go through that, and Bosco’s passing, also likely from cancer, saved us a lot of tough times and extra heartache.

And the title for this blog? I borrowed it from my 13-year-old daughter’s Facebook post about the loss of her “old friend”.

Sometimes sad events allow us to appreciate how quickly our kids have matured while we were paying attention to other things.

Goodbye Bosco. It is better to have loved you and lost you, than to never have loved you at all.

 

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Solid Wealth Vs. Liquid Wealth.

While in Philadelphia with my teenage son this past summer, we visited the Franklin Institute and checked out some of their great science exhibits. They have a huge variety of things to see, as well as some live demos scheduled throughout each day.

I always make sure that we come up with some kind of a plan to see the most important stuff in some kind of a coherent fashion, and the last demo we saw really stuck with me.

It was about the changing nature of water through a range of temperatures, from ice to water, and then from water to steam. The guy doing the demo was the same man we had seen earlier in the day showing kids some cool stuff involving liquid nitrogen, and we both enjoyed his way of getting the little kids into it, and garnering a lot of laughs along the way.

I can’t say that either of us actualy learned anything new, but for some reason an important analogy popped into my head. As usual for me, the only way to do it justice is to write a blog about it.

Of course the ice-to-water-to-steam concept also applies to many other forms of matter, but I started thinking about how it applies to wealth, and more specifically family business wealth.

An established business, that is profitable and well run, represents a form of wealth that most people consider solid. When a family owns such a business, they often try to find the best way to pass this solid wealth on to future generations, as they see the value and potential permanence of the wealth that it holds.

Passing a business from one generation is often quite tricky, as the statistics surely bear out, but the stories of those that succeed are an inspiration to those who are attempting a similar feat.

In many cases, and for many reasons, passing the wealth down in the solid form of a business is not possible or practical. In many of these instances, the business is sold off to others instead, in what is often dubbed a “liquidity event”. How convenient for my analogy, that the wealth has gone from solid to liquid.

Liquid wealth has its own pros and cons, of course. The biggest advantage is the flexibility that it affords its owners, especially as far as diversification and asset allocation are concerned. Sounds great, so what are the cons?

My simplest reply is that the business, much like real estate, is viewed as solid, especially by the expected heirs, who expect to benefit from the profits, income and/or dividends it throws off, but very few members of the next generation ever consider the idea of selling pieces off in order to get their hands on the wealth.

Going back to the ice-water-steam analogy, here is how I think most of the senior generation members view this situation.

A business is solid, like a block of ice. If you can keep it in the freezer, it will last a long time, and it can even just sit there in a block, on a shelf. And you can even lock the freezer. Once it is liquid, you don’t have to keep it in the freezer anymore, and you can use it for more things.

But, it is also easy to spill, and you need some kind of a container to keep it in. And you need to beware of thirsty people coming by and asking for a sip. The related problem is that it is now subject to evaporation, one step closer to steam, and much more difficult to control.

The generation that is currently in control understands how easily it can disappear, and they struggle with how they can be sure that some of the wealth will be available to their grandchildren and future generations.

Keeping a family together around a business is one thing, keeping them together around money is much harder.

 

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The Importance of Offering an Informed Choice

Editor’s note: This blog post is essentially a translation of last week’s post that was written in French

Recently I have had the opportunity to reflect on the subject of offering an “informed choice”. It began while I was taking a conflict resolution course in which I had the chance to act as a mediator between opposing parties, in a variety of scenarios.

The course used “interest-based negotiation” as its foundation, and one of the instructors noted that one of the goals of the mediator is to ensure that the parties make what he dubbed “an informed choice”.

I had never thought of it in that way, so I actually wrote it down, in ink, in my course binder, and added the word “BLOG!” beside it. (I actually turned it into two blogs; or a “blogue” –last week, in French- and this blog).

Now taking notes in class is not something that I do very often, since I believe that if something is really important, I will remember it, and if I don’t, it probably wasn’t that important anyway.

But the idea that one of the roles of a mediator is to make sure that the parties choose to accept or reject any offer ONLY after having understood all of the issues and consequences, well this was new and almost revolutionary to me.

Those who know me well know that I believe that communication is the most important subject for business families. Too often the lack of communication and poor communication become sources of major problems for such families.

The result of these communication errors is that people end up making decisions based on perceptions of the facts that are far from informed and clear, but rather erroneous and misinformed hypotheses.

When I work with families that are not at the point of requiring mediation, I encourage them to share their ideas and points of view, and to communicate regularly on these points.

This is always done on the premise that the best choices and decisions are made after reflection, in a situation where each person can say that they are acting with all of the information available, and that they are in fact making a fully informed choice.

Hidden somewere in this whole area is another important point. In many typical situations that require mediation, the parties are unrelated, and one party or the other may have a certain advantage when it comes to the information they have, their understanding of the situation, and the alternatives available.

When dealing with members of the same family, I feel that it is even more important to ensure that each individual has the opportunity to make a choice based on the same facts.

I recently listened to a presentation on the web by a Toronto colleague of mine, Jeff Noble of BDO, on shareholders’ agreements. In it, he mentioned a stunning statistic, saying that according to some lawyers, 80% of shareholders’ agreements prepared by these lawyers are never signed! But why not?

The goal of his presentation was to convince business families to work out their agreements in cooperative fashion, together, while sharing each other’s perspectives. This way, they can arrive at an agreement that each person will actually sign, willingly.

And that is why I title this blog “The Importance of Offering an Informed Choice”, and not simply “The Importance of an Informed Choice”.

What is both very important and sometimes very difficult is to make sure that all parties actually have the proper attitude and the spirit of cooperation necessary to arrive at these truly durable decisions.

You may believe that when you are dealing with members of the same family, it will always be very easy to achieve this, but unfortuately it is not always the case.

Thankfully for those families, there are people trained in mediation, coaching, and facilitating family meetings who are available to help.

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L’importance d’offrir un choix éclairé

Dernièrement, j’ai eu occasion de réfléchir sur l’importance des choix éclairés, ou avertis. En réalité, c’était en anglais, et l’expression “informed choice” était utilisée, et j’étais donc confronté avec le choix entre “éclairé” et “averti” comme meilleure traduction.

La semaine passée, je prenais part à un cours sur la résolution de conflits, où j’ai eu la chance d’agir comme médiateur entre des partis opposants, dans plusieurs scénarios.

La méthode préconisée était basée sur des principes de “interest-based mediation”, ou médiation fondée sur les intérêts. Un des enseignants avait mentionné qu’un des buts du médiateur était de toujours s’assurer que les partis puissent faire un choix éclairé.

Je n’avais jamais pensé à cela de cette façon, mais je l’ai pris en note, avec mon stylo, dans mon cartable. Je l’ai aussi encerclé, et ajouté le mot “BLOG!” à côté.

Je ne prends pas souvent des notes, puisque je crois que les leçons importantes vont rester dans mon cerveau, et si je les oublies, elles n’étaient peut-être pas si importantes après tout.

Mais l’idée que le rôle d’un médiateur était de s’assurer que les partis fassent le choix d’accepter ou non une offre, mais seulement après avoir compris tous les enjeux, c’était révélateur pour moi.

Ceux qui me connaissent bien savent que je crois que la communication est le sujet le plus important parmi les membres d’une famille en affaires. Trop souvent le manque de communication et la mauvaise communication sont des sources de problèmes majeurs parmi les membres de telles familles.

Le résultat de ces erreurs de communication est que les gens prennent des décisions qui sont basés sur une perception des faits qui est loin d’être éclairée ou avertie, mais plutôt érronée et basée sur des hypothèses farfelues.

Quand je travaille avec des familles qui ne sont pas au point d’avoir besoin des services d’un médiateur, je les encourage de partager leurs idées, leurs points de vue, et de communiquer régulièrement sur ces points.

C’est toujours axé sur l’idée que les meilleurs choix et décisions sont pris après réflection, dans une situation où chacun peut dire qu’il agit avec toute l’information, et que ce sont des choix éclairés et avertis.

Caché derrière ce sujet, il y a un autre point très important, et c’est que les partis dans une médiation typique sont souvent déconnectés les uns des autres, et donc il existe parfois un avantage pour un des partis concernant l’information, la compréhension de la situation, et les alternatives disponibles.

Quand il s’agit des membres d’une même famille, je crois que ça devient encore plus important de s’assurer que chaque individu ait la chance de prendre sa décision avec les mêmes faits.

Hier j’ai écouté une présentation sur le web donnée par un collègue de Toronto, Jeff Noble de BDO, qui parlait de convention d’actionnaires. Il avait mentionné une statistique étonnante, disant que d’après des avocats, 80% des conventions entre actionnaires que ces avocats ont rédigées ne sont jamais signées! Mais pourquoi?

Le but de sa présentation était de convaincre des familles en affaires de développer leurs conventions de façon coopérative, ensemble, en partageant leurs perspectives. Comme ça, elles pourraient en arriver à un document que chaque personne signerait.

Et c’est pour ceci que j’avais décidé de titrer ce blogue “L’importance d’offir un choix éclairé, et pas seulement “L’importance d’un choix éclairé”.

Ce qui est à la fois très important et très difficile, c’est d’assurer que chaque parti agit avec l’ouverture d’esprit et l’attitude de partage qui est nécessaire pour arriver à des décisions durables.

On pourrait croire que dans les situations avec des membres de la même famille, ça serait plus facile, mais malheureusement ce n’est pas toujours le cas.

Heureusement pour ces familles, il existe des gens formés dans la médiation, le coaching, et l’animation de rendez-vous de familles qui peuvent les aider.

 

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