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5 Things you Need to Know: Family Alignment

Bird on a Cords aligned together

5 Things you Need to Know: Family Alignment

This week it’s time for another installment of the “5 Things you need to know”, and the subject is one that I consider to be tremendously important: Family Alignment.

I’ve written about Family Alignment a number of times in the past, but I decided to attack it again just because it needs to be better understood.

Much of the content of this post comes from a “Quick Start Guide” (“white paper”) I wrote on the subject in 2016. If you want a broader and deeper look at Family Alignment, please feel free to read and share it.

Without further ado, here are:

5 Things you Need to Know: Family Alignment

 

  1. There are 2 Parts: “Intra” and “Inter”

The first thing to look at is making sure that the family members are aligned amongst themselves. I call that the “Intra” part.

I’m talking about general agreement on the family’s values and goals, along with the important questions regarding whether or not they really want to continue to work together.

Once you’ve answered that one, then there’s the all-important element of aligning the family with its external partners.

Here is where we want to make sure that the family is working with and investing in businesses that are aligned with the values and goals that everyone agreed on in the first part.

 

  1. Do the “Intra” BEFORE the “Inter”

It’s important to work on the “intra” part and make sure the key family members are all on board with each other first.

If you haven’t worked out what you all agree on, there will be issues that could derail things going forward.

The term “collective responsibility” is one I heard recently that conveys this well.

The family members need to develop a consensus that they are responsible to each other, and only then decide on what outside businesses, causes, investments and partnerships they’ll work on.

 

  1. Starting Down the Road to Governance

Governance is kind of a loaded word that I’ve written a lot about, and it still has some negative connotations when people hear it.

To me, family alignment and family governance go hand in hand. Working on getting a family aligned necessitates getting into the questions around family governance.

Working on family governance is a good thing, and it’s actually THE key to any family being able to successfully transition its wealth to the next generation.

It’s impossible to have an aligned family without some governance, and, by the same token, it’s impossible to institute governance in a family if there’s no alignment.

 

  1. It Takes a Lot of Time and Effort

Nobody ever said this stuff was going to be easy. It isn’t, and it takes lots of time and lots of effort.

You know those stats you always see about the high failure rates around intergenerational wealth transfer? This is why.

Most families aren’t willing to do the work required to make sure that family members figure out how they’re going to make decisions together, how they’re going to communicate clearly and regularly, and how they’re going to solve problems together.

I’m actually talking about a considerable amount of time, not just in terms of hours, but in terms of months and years too.

For a family to figure out all this stuff is actually a pretty big project. Those who undertake it seriously soon learn that it really is hard work, BUT, they usually see great progress quickly once they begin.

 

  1. Process is Much More Important than Content

Unfortunately family alignment isn’t something you can just buy off the shelf. It isn’t some piece of “content” that you can pay your lawyer and accountant for.

The process of figuring out the answers to all of the important questions, together, as a group of relatively equal family members, is the most important thing.

If the Smith family has a beautiful family mission statement and a 50-page family constitution, but they haven’t had a meeting in years because one half of the family isn’t speaking to other half, that’s nice content with zero process, and a disaster waiting to happen.

If the Jones family meets regularly, has great exchanges during which they work together to define and achieve goals as a group, even if they don’t have anything in writing, then they’ve got the process down nicely.

Which family will succeed in passing the wealth down?

The family that is aligned and has taken the steps to determine its governance will have better odds.

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“Yellow Light Family” – Proceed with Caution

Traffic Light in Family Business context

“Yellow Light Family” – Proceed with Caution

Last week’s post (Happy to Be Wrong on FEX) talked about the great symposium I attended in Halifax earlier this month.

If you’re a regular reader (thanks!) you know that one of my best sources of blog material comes from these kinds of events.

I often do some sort of “Top 10” of things I picked up, but I’m going to devote this blog to one specific presentation I attended.

In coming weeks, I’ll likely dig in to a few other memorable sessions from the FEX conference.

 

Green, Yellow or Red Zone?

The symposium had a good mix of sessions; a couple for families only, others just for advisors, but most were open to all.

In this advisor-only session, Jim Grubman of Cambridge Family Enterprise Group presented “Green, Yellow or Red Zone Clients”.

He introduced the concept of the “Two-Axis Model” of wealth advising, with technical issues along the X-axis (horizontal), and personal and family dynamics on the Y-axis (vertical).

In each case, the model ranges from low complexity to high, from left to right and from bottom to top.

The colour-scheme was reserved for the family dynamics axis; green at the bottom, yellow in the middle, and red at the top end.

 

Technical Bread and Butter

Grubman mentioned that as you go from left to right on the “technical axis”, more complexity is usually seen as a positive for advisors.

A family with complex technical needs is often a plus, in that it allows you to showcase your abilities to solve their issues, and to charge accordingly.

The more people, entities, trusts, and jurisdictions a family has to deal with, the more the advisors will relish the task. At least the best advisors do.

 

The Family Dynamics Axis

The vertical axis, on the other hand, where family complexities increase, can be a very different story.

This is where the “traffic light” comes into play.

The low complexity families, with little of no conflict, anxiety, addictions, etc. are where most advisors prefer things to be.

Green is good, because there’s no family stuff to trip you up.

As you begin to see any of those issues, you leave the safety of the “green zone” and get into the yellow territory. At this point many who advise on technical issues (legal, tax, trusts, accounting, cross-border, etc.) quickly feel like they’re out of their depth.

Sometimes it doesn’t take much to raise the proverbial red flag, and get the advisors to scratch their heads wondering if they will be able to resolve the family issues.

 

Break It Down

Here’s where the real value of the presentation came for me. Rather than simply looking at the family dynamics question globally, Grubman breaks it down into several components.

In many cases, one thing sets off alarm bells, but others are hardly any concern.

For example, the sensitive issue could be the family’s level of conflict, their communication style, addictions, perceived fairness, or lack of governance systems.

When you can put your finger on it with greater detail, you’re much better placed to deal with it.

It can also help to look at “state versus trait” variables. There could be a situational factor at play, which may just be temporary. (Traits are fixed, while states are transitory)

 

Isolate the Issues

When the advisor team can share their views using this type of breakdown, they can pinpoint the issue more easily.

A family that looked red, or “very yellow” can look much less daunting once you see that there is really one key issue that is flashing, and that the others are pretty green.

 

Coordination and Collaboration

Now I’m gonna switch from what Jim Grubman was saying to Steve Legler’s take.

No single advisor will be able to handle a family with any complexity above green, on either axis.

Technical professionals work together to solve the family’s asset-related issues. On the family dynamics side of things, the same should also be true.

Families will benefit from advisors who can coordinate their activities at a minimum, and hopefully even collaborate.

 

Inter-Disciplinary Fluency Helps

FEX’s FEA Program helps advisors develop the inter-disciplinary fluency they need to properly serve families.

Knowing what families need, and how the pieces all fit together, is key. And so is being able to work together.

Tools like Grubman’s help us all do a better job for families.

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Family Business: How do Values Fit In?

Values of a family owned and operated business

Business people often have a tendency to concentrate so much on their day-to-day business that they end up losing sight of some pretty important basic matters, like their values.

Values form the unconscious base of everything we do, and they impact so many of our regular decisions without us even realizing it.

Business consultants love to use “values” as a buzzword that they lump in with “vision” and “mission”, often without a good grasp of the differences between them.

This topic area is potentially very broad, so I will keep this post focussed on values, and I will look specifically at the role they play in family businesses.

 

What are Values?

Values are a person’s principles or standards of behavior; one’s judgment of what is important in life”, according to a definition I just Googled, which is good enough for our purposes here.

A business’s values usually reflect those of the owners, executives and leadership. Some values that people brag about include ones that are so basic that they’re almost meaningless.

Any business that brags about integrity and honesty almost makes me wonder why they felt the need to spell those out as important. I’d hope that they were a given.

 

When Does This Matter?

Values are always important, but they’re usually running in the background and aren’t really noticed, until there’s a clash somewhere along the line.

I mentioned that a company’s values emanate from its leadership, and so the critical time to examine them is when anticipating a change in leadership (management and/or ownership).

A business built on hard work, collaboration and diversity won’t likely do well if the incoming leadership espouses none of those same core principles.

 

Why Are Values So Important?

Because values operate largely unnoticed or in an unspoken way, it sort of makes them the “operating system” behind the culture of the organisation.

A small group can run well without giving this much thought, but in a large or growing group of people, having some general agreement about the values that drive the group is essential.

People talk about alignment a lot these days, and rightly so. What they don’t always mention is that the alignment of values is really at the base of much of this work.

 

Family Values vs. Business Values

Now, you may be inclined to believe that business values should guide the business, while family values should just “stay in the family” and should never have an influence on how the business operates.

I would suggest that this type of thinking is not conducive to long-term success. Eventually, something has got to give.

When a family owns and leads a business, then that family’s values are important for the business. There doesn’t necessarily need to be a 100% overlap in family values and business values, but the more overlap the better, and ideally you want as much overlap as possible.

 

How Do We Get This Right?

Lots of consultants who work with businesses have tools and exercises that they use with teams in the business, to help them discover and align around key values for the business.

If your business has already done that, that’s great. But, please don’t stop there. And, please resist the temptation to bring the results of that business values work to a session on the family’s values.

 

The Values Two-Step

Any values exercise needs to have two components:

  • Individual values section
  • Group values section

These can be run one after another, or, sometimes better, after a break that can range from a couple of days to a couple of months.

Group values work needs to start with the individual values of the group’s members, and it needs to involve only those values of the members of the group.

 

Purity of Values

In a family values exercise, you may even want to do the exercise with members of only one generation at a time, so that the elders don’t unduly influence the younger participants.

Most importantly, do NOT begin with a list of values that comes from elsewhere, like the business, or the founder. The group values should be generated by the individual values of the participants in the exercise.

If the group values list you derive is to have any “value”, it needs to come “purely” from those in the group.

 

Take-Away:

Do the Values work, but take the time to do it RIGHT.

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5 Things you Need to Know: Professionalizing your Family Business

Personalizing your Family Business meetings

Most family businesses start small and are run rather informally, usually with one or two people calling the shots. As the business grows, more people are brought in, and things can go along for years without much in the way of any formal procedures or written rules.

When one person can no longer stay on top of everything, their ability to delegate will largely determine how much the business can grow.

As the next generation joins the business, a certain level of informality may be part of the culture as well. That isn’t necessarily a bad thing, but behaving at the office as you do around the dinner table can have its drawbacks.

Many people recommend “professionalizing” your family business, and with good reason. But what exactly does that mean, and how do you do it?

I’m glad you asked…

1. Education

An obvious place to begin is with the education level of the next generation of family members entering the business.

If your children have the ability to go to college or university and get a degree, that’s a plus.

If they can get an advanced degree, that’s better.

If they can do that AND go and get a few years of work experience working for an unrelated business, that’s best.

If you are inclined to hire your kids right out of high school, I urge you to rethink that plan, as their future and that of the company will likely be limited by that choice.

If it’s “too late for that” in your family, there are plenty of education opportunities that last anywhere from a few days to a few months that are probably worth looking into.

It is never too late to learn new things and to upgrade one’s skills and abilities.

2. Hiring Non-Family Employees

The quickest way to professionalize any business is to hire people who are professional in the way they operate, hopefully also bringing along some work experience.

Aim to bring in outsiders who are MORE professional than the people you currently employ, treat them professionally, listen to their ideas, and learn from them.

You can only go so far without great non-family people on your team.

3. Outside Professionals

Every business needs and has outside professionals that they deal with, like accountants and lawyers. They often began with friends or whomever they could afford when starting out.

As the business grows, it is sometimes necessary to move up the ranks and switch to professionals who are at the level you require.

It is quite possible that your business has outgrown your professional advisors, and an upgrade will be needed. It isn’t always easy to cut these ties, but can be necessary.

4. The HR Department

During the growth of any business, the need to begin to treat Human Resources as its own department becomes key. The sooner you acknowledge this, the better.

Your business can only grow as quickly and as far as the ability of your people to grow along with it.

A real HR department will think twice (hopefully) before agreeing to blindly hire a family member and put them into a role for which they are ill suited and unqualified.

This issue has tripped up more family businesses than you can imagine, as mistakes like this cost not only the department where the person works, but can get everyone shaking their heads about what is important to the business.

The biggest part of this comes down to attitude. Have you realized how important humans are to your company, as a resource?

Finding, onboarding, and keeping great people is a must for just about every business. And so is having the right people filling all key roles.

5.   Board of Advisors

Last but certainly not least is the company’s board. I know that even fathoming a true Board of Directors is a complete non-starter for most small family businesses.

So why not start small and informally, with a board of advisors?

The outside perspective alone is worth it, even if it is only to help you look at your own family members more objectively.

Bringing in independent advisors (preferably NOT your current lawyer and accountant) can be the single biggest step to professionalizing your family business. Just ask anyone who has done it.

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Progress vs. Perfection

Progress of family business

ProgressCropSS

This week I was in Denver for conferences by the Purposeful Planning Institute, one of my favourite organizations. I’ll attempt a recap next week.

On Tuesday I noted the expression “Progress is more important than perfection” during one of the sessions. “Oh, I like that one, I’ve even used it personally”, I thought to myself.

Trouble is, due to the number of presentations and my less-than-stellar note-taking, I completely forgot the context in which it was raised, so I am kinda flying blind here.

So instead, I will share the contexts in which I have heard and used the concept before, and then get to its importance in the realm of transitioning family business, wealth, and legacy.

Now it also brought to mind another, seemingly contradictory expression, and I wrestled with that, so I will try to square that circle too.

 

Coaching courses

When I began taking coaching courses years ago, the idea of simply trying to help people get “unstuck” really resonated with me. Just making a bit of progress and overcoming inertia can be huge, because when you feel stuck, anywhere but where you are seems like a step up..

In contrast, you aim for perfection, but spend so much time with aiming the rifle that you never actually fire any shots. (I’m not a big fan of guns, but I just spent a week in the Wild West, please forgive this analogy).

We all know people who put things off forever, waiting for the perfect time to act, which never arrives.

Zig Ziglar had some great schticks about this, talking about people who live on “Someday Ilse”, and giving people a round piece of cardboard with “To It” written on it, so they could finally do all of the things they promised to do when they “got a round ‘to it’”.

 

Family transitions

Families who are looking at how they are going to transition their business, wealth, and legacy to the next generation will often fall into this trap too. It is rarely the “right time” to begin doing this work, so delays in getting started are quite common.

A proper, well-thought-out transition will usually take years, so that “perfect state” is really far off, and the time it takes to see the finish line can discourage families along the way.

Good advisors are constantly reminding their clients of how far they have come, that they are moving in the right direction, and how important realistic expectations are.

On a personal level, I’ve used the progress/perfection concept to keep myself motivated in my own long-term project, that of getting to a healthier weight.

Neither family transitions nor weight loss will typically follow a straight line, so being satisfied with some progress can be a huge element in encouraging “stick-to-it-tive-ness”.

But then I thought about this other expression: “Don’t let ‘good’ be the enemy of ‘great’”. Hmmm… I like that one too, but it feels like a contradiction to “progress vs. perfection”.

 

Action orientation

Good vs. Great is more about being satisfied with something mediocre and therefore never trying to get to something great. The big differences to me are the time element, and the sequence.

In a static situation, good/great is about being satisfied with something sub-optimal and being too lazy to try for something better. The family is getting along “OK”, so why try to improve things, we may just make them worse? You’ll never get to a better state, due to inertia and fear.

In a dynamic context, like a project, it is no longer about getting started, it is now about not getting discouraged into stopping along the way. “We’ve tried to get the kids to work together well, and they still aren’t doing great things together, so why bother?”

Well, if they had not even been on speaking terms for years, and can now be in the same room and speak to each other civilly, can we agree that that’s an improvement?

The small steps need to be recognized and celebrated as important progress. Then you need to keep at it. Now that things are “good”, try to make them great!

Progress is good, but keep going for great.

 

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It’s NOT about the Money

It’s NOT about the Money

No Money bag sign icon. Dollar USD currency symbol. Red prohibition sign. Stop symbol. Vector

 

In some ways, this blog has been a long time coming. It feels like an obvious topic for me, I am almost surprised at myself for not having addressed it yet.

I am not sure what triggered it now, but here goes, let’s see if I can turn this question into something useful and entertaining.

Money has a huge impact on all of us, and working with business families and those in the UHNW space (Ultra High Net Worth) it is obviously top of mind much of the time. But for people who have a lot of money, is money all that they talk about, think about, and worry about?

 

What else is there to talk about?

In my experience, those who have plenty of money prefer to talk about other subjects. Maybe it is because they don’t have to worry about where their proverbial next meal is going to come from, or maybe it is because they are tired of listening to all the financial experts in their lives, who seem to talk about little else.

I arrived at this calling of working with enterprising families after a couple of decades managing a small family office that was created after a liquidity event in my family when I was in my twenties.

I quickly learned that when you are managing your family’s wealth, it is much better to lay low, or else you will become a target for anyone and everyone peddling their wonderful solutions to problems you never knew you had.

I guess one of the reasons I am writing about this now is that I have noticed an uptick in the number of these financial solution peddlers hitting me up lately. You see, when I decided to enter the world of family advising, it made much less sense for me to lay low, and in fact I needed to do a 180 and try to make a splash.

The curious thing is that these peddlers are contacting me repeatedly now, and I find very little compelling in what the vast majority is offering. For everyone who claims to offer something unique, I could literally find five to ten others offering something quite similar within a few block radius in any major city.

Before I look at how you plan to take care of any money that I might allocate to you, I need to feel comfortable with you and learn one whole heckuva lot more about you, and your firm, AND know that you have taken at least a bit of time trying to understand ME and my family.

 

Do I need ANOTHER financial solution provider?

Most families don’t need another financial solutions provider. They are almost literally available on every street corner.

Families who own significant wealth will more likely need help figuring out how to treat all family members fairly, whether they grew their assets by 5% last year or by 10%.

They will more likely appreciate help in deciding how to think about, plan, and communicate their legacy decisions, as they imagine how the things that they have worked for all of their lives will play out as the wealth gets transitioned to the next generation.

Oh, and that NextGen group? Yeah, well they probably have lots of questions for their parents too, not they they feel comfortable asking them. What kind of questions?

You know, the ones about fairness, controlling their own destiny, having a clear understanding of all of the “dreams and plans” that their parents have for them and their wealth, but that have not been discussed or written down anywhere.

If bragging about how your fund beat the S&P by 2 percent last year is what you wanna sell, good luck with that.

 

That Pie is pretty big!

Once the family pie reaches a certain size, making it bigger ceases to be the focus. Figuring out how to enjoy it as a family together over generations takes over as a priority.

Families have a pretty good idea of what they want to do, and why they want to do it. They usually need help with the HOW. The how involves family dynamics, and that can be a scary subject.

Can you help a family with that? If not, you better find someone who can.

 

 

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What Are You Leaving Them?

Family Inheritance

1yWhat are you leaving your Family - Curling Game

Just about every parent gets to a point in their life where they cannot help but think about just what they will be leaving their children when they die.

Among the things that they think about are both the tangible, like money, property and other valuables, and the intangible, like life lessons, values, unforgettable life experiences and a true sense of their family legacy.

“What” is not the only question that comes up of course, there is also “why” and “how”. And let’s not forget the sub-parts of “what”, like “when”, “where”, and “who”, but they’re well beyond the scope of one blog post.

The “why” and the “how” are pretty important to work out, because they are so often the root cause of family conflict afterwards, when children are unclear as to why their parents arranged things as they did.

When I ask these questions of parents, the “what” is the easiest place to start, and I always begin with the tangible stuff. We are not ignoring the important intangible things, just delaying them until we get a better handle on stuff that everyone can see and agree on.

I’ve always been a sports fan, and maybe even a bigger fan of analogies, and plenty of sports analogies come to mind on the topic of “what you are leaving”.

In rugby, when a team scores a “try” (similar to a touchdown in football), they get to kick a convert for more points, but unlike in football, the spot of the kick depends on where the player downed the ball in the end zone.

So if a player scores a try near the sideline, he (or his teammate) needs to attempt a much more difficult convert than if he scored in the middle of the end zone.

Moral: The details of what you leave definitely affect others and their likelihood of success.

In hockey, the difference between a good goaltender and a great one is often their ability to control rebounds. A good goalie stops the puck, a great goalie will not only stop the puck, but also make sure that it ends up in a location that makes it more difficult for the opposition to score on the rebound.

Moral: It is important to think not only about what you leave your loved ones, but also what you do NOT leave to others.

In billiards, a good player will sink the ball in the pocket, and then see what the next shot will be. A great player will plan her shot so that she leaves the cue ball in a good spot for her next shot, or at least not in a great spot for her opponent should she miss.

Moral: Sometimes you need to decide what to leave, without knowing what comes next.

In curling, you always know that your opponent will be throwing the next stone, and once again there is a huge difference between good players and great ones. Also, curling is the ultimate team sport.

A good team will make their shots and hope for the best with what happens next. A great team will always consider a number of things before even choosing which shot to attempt:

  • What is the score?
  • What are we trying to do with this rock?
  • What will the other team likely try with their next shot?
  • Where do we ideally want all of the rocks to be when they all come to a rest?
  • What happens if we miss, and how can we miss in a way that still gives us an OK result?
  • What are we planning to try on our next shot?

Moral: Complex decisions always entail a number of questions, and the best decisions come when the members of the team know each others’ abilities, trust each other, and have a clear idea of what they are trying to do together.

The curling analogy fits best for me, as each player contributes to each shot, and a great team needs to have great players and be well coached.

Your kids are part of your team, aren’t they?

Who is coaching your family?

 

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The Languages of Family Legacy

The language of family business

Foreign language study concept background - stack of dictionaries isolated on white background

Having grown up in Montreal, a bilingual city, has been a wonderful boon to me. But the daily exposure I have had to both French and English has some benefits that many local friends take for granted.

Starting first grade, my Dad had decided to send me to French school, for my own good, but mostly because he wanted me to be well prepared to take the reins of the business that he was building.

In my 20’s, I took a vacation to Mexico and felt really ignorant because I did not understand the language, so when I got back, I headed to the YMCA for Spanish courses.

Facility with language learning is not something everyone has to the same degree, but having exposure early in life certainly helps one have the confidence needed to learn a new language when needed.

So what does this have to do with family legacy, you ask? Let the analogies begin.

Dealing with your family legacy requires getting used to some new language, or at least some new vocabulary and new ways of expressing yourself, to develop common understanding.

Just like learning a new language, you don’t just decide to learn Spanish one day and become fluent the next.

These days there are new methods like Rosetta Stone that take advantage of technology and a better understanding of how people learn languages best, but let’s just break it down into some simple levels.

For many, reading a new language is the easiest way to begin to understand, because you can take your time and look at each word. Hearing people speak the words and understanding them in real time is more difficult.

To speak and be understood is again another level, and writing something coherent in an unfamiliar language is not advisable until you are much further along.

My point is that there is a progression through different levels, a need to move up gradually to develop a vocabulary, a comfort level, and the confidence to speak and use the new language.

In a family trying to preserve its legacy, to transition from one generation to the next, many important questions arise, like:

  • Who does the work
  • Who undertakes the leadership
  • Who keeps things on track

When families fall apart, it is almost always because somehow things fell through the cracks or people did not get along and agree. Often, nobody really ever understood and bought into the plans in the first place.

For the members of the rising generation to buy in, there are some things that are almost indispensable to have in place, to one degree or another.

The siblings (or cousins) need to share at least some level of financial fluency. Like a language, nobody just decides to learn it and gets there really quickly. But if a group of people is expected to work together on a big project, it helps if they all have a basic level of understanding of the subject being discussed.

But if basic financial fluency was all that was required, that could be remedied easily enough, assuming a willingness to learn.

The harder part is learning how to work together. The family interaction part is where so many plans go off track. Once again, a phased leaning process can help.

Let’s look at what makes people progress faster when learning a new language:

  • A teacher who knows the language AND how to teach it
  • Lots of opportunities to practice
  • The ability to give and accept feedback
  • A helpful, “can do” attitude of those learning together
  • A safe environment so nobody is afraid to make a mistake

Preserving a family legacy for future generations is no easy task, but if the people you are counting on to make sure it happens all speak the same language, it sure helps. If they helped each other learn it together, even better.

People can learn to work together, but first they must all be aware of just why it is so important for them to do so. Some basic family harmony is required, and unfortunately, it doesn’t usually happen all by itself.

Comprenez-vous?

 

 

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SFTU versus STFU

Fake Dictionary, Dictionary definition of the word understand.

The year 1989 was an important one for me, as it was the year that I quit smoking, and more importantly also the year that I first met my wife. If you ask her, had I not quit smoking, I would not be her husband today.

But 1989 was also the year that one of the most important books of the last 50 years came out, and I am sure that most of you will recognize it, and many of you will have read it as well.

I not only read The 7 Habits of Highly Effective People, but a few of those habits have become cornerstones of how I have tried to live my life ever since. I hope that this will not lead to an analysis of just how effective I have been, but I do want to share with you my favourite habit of the seven.

Now there are a couple of the habits that are more easily recalled than my favourite, because they have become part of our vocabulary, partly thanks to the success of the book, which sold over 25 million copies.

“Think Win-Win” and “Be Proactive” have become sayings that most people will have heard before, and “Put First Things First”, and “Synergize” are also kind of cool, but still not number one on my list.

Is it “Sharpen the Saw”, or “Begin with the End in Mind”? No, but I like those too. My favourite is habit number 5, “Seek First to Understand, and Then to Be Understood”.

I like to abbreviate things, so I will just call it Seek First to Understand, or SFTU. The first time that I jotted it down using just those four letters, I was struck by how closely it resembles another 4-letter acronym, STFU. For the uninitiated, STFU is short for “Shut the Hell Up”, or something close to that.

The reason that I found this so relevant is that STFU is actually almost the exact opposite of SFTU, especially in the arena of family business and family leadership.

The old fashioned, autocratic parenting style that many of us boomers lived through was very much “this is how things are going to be”, and if anyone dared to question Dad, we were often told, essentially, to STFU, and get in line.

Nowadays, thanks in some small part to the popularity of Covey’s book but also in large part to societal changes, people have mellowed somewhat, and active listening is actually something that many leaders are taught to do.

But Seek First to Understand is not just about listening, of course. Yes, you often need to listen, and watch and read, and interpret, but the goal here is understanding.

And please note that the habit is not called “Seek to Understand”, but Seek FIRST to understand.

That little nuance is the key, because that is where the leader needs to have the maturity to admit that they do not necessarily have all of the answers, that they have the curiosity to learn about the ideas and opinions of others, and have the courage to ask and listen to what others have to say.

Those who advise families in business who are hoping to transition their business, their wealth, and ultimately their legacy to the next generation will almost all agree that clear, frequent and open communication is an absolute necessity if you want to have any chance of success in this endeavour.

Obviously, I agree. The point of this blog is to remind people that good communication is predicated on the people communicating having the right attitude so that a true exchange of ideas can be had.

I love the old quote attributed to George Bernard Shaw, “The biggest problem with communication is the illusion that it occurred”. People assume that because they said something, the other person heard and understood them. They often go even one step further and assume that the person agreed!

Please try to Seek First to Understand, and Then to Be Understood. It will be well worth it. It is a habit, so that means that it can be learned.

And it sure beats the hell out of STFU!

 

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Simplifying Complexity and Ethical Wills

Simplifying Complexity and Ethical Wills | Blog on Ethics in Family Business

Writing Last Will and Testament. Closeup shot

A few weeks ago I came across a blog post by the Blunt Bean Counter on Ethical Wills that I liked, and I encourage anyone interested in this subject to check it out. Perhaps I can whet your appetite with my take on the subject here.

The man behind the blog and the website is Mark Goodfield, who is an accountant from Toronto. I would not necessarily call him an old friend of mine, but we did meet professionally last summer at a BDO SuccessCare course, “The Role of the Most Trusted Advisor”.

We spoke about blogging one day at lunch, and it was thanks to some of his comments that I undertook a rebranding and reworking of my online presence, for which the feedback I have been receiving from some of you has been gratifying.

An ethical will is essentially a letter that you write to your loved ones, outlining your wishes, which they can refer to and reread after you have passed away.

As Mark so nicely states, some examples of what people convey in an ethical will include:

  1. Your values
  1. Your hopes for your family
  1. An explanation of decisions made in your will
  1. Providing or asking for forgiveness

This is one of those ideas that seems to make so much sense to me, but that for many reasons is not as easy a sell as it appears on the surface.

It reminds me of Tom Deans’ great book, Willing Wisdom, in which he implores people to share the contents of their will with their beneficiaries. I get it, I love the idea, I encourage people to do so as well, but at the same time, I also know that he gets a whole heck of a lot of pushback whenever he gives a speech about the subject.

Now the title of this post mentions simplifying complexity, and that is where I want to go now, so please join me. This was its own separate blog post idea, but I often need to combine ideas because I seem to get way more than 52 ideas a year, and I vowed to keep these to once a week.

Whenever someone dies, the remaining family members are left to sort things out and move on. We have all heard stories about people who died without a will, or before ever having taken the time to put their proverbial affairs in order.

Let’s call that one “Simple Life, Complex Death”.

There is an alternative, but it takes some work, some foresight, and some courage. It’s all about doing the complex work up front, while you are still alive and of sound mind.

If you are willing to share the information about your decisions with your loved ones, you can make things as complex as you like. You do the hard work yourself, and then when you are gone, everything will be so much simpler for your family.

My father liked complexity more than most. He bought a farm as a retirement project, then bought more land from neighbours over time. When he was diagnosed with cancer, I feared that I would be stuck with the task of disposing of all these different acreages.

One of the greatest gifts he ever gave me was the fact that he sold the farm, in no less than four separate transactions to four different buyers before he died. All I had to do was go to the notary’s office four times to sign the papers and pick up the cheques.

But of course before doing any of that, we had a family meeting, during which we discussed whether or not we wanted to keep the farm in the family.

We knew what he wanted us to do after he died, because the day of his diagnosis, he went home and hand wrote a multipage letter to us, which I later dubbed his “manifesto”.

Little did I know it at the time, it was his Ethical Will.

During subsequent family meetings, we have referred to it often, mostly early on, less so now.

With Father’s Day around the corner, I wanted to say, “Thanks again Dad”.