Key Prepositions for Business Families

By, For, With

Most people don’t give much thought to prepositions as they go through their day-to-day lives.

Of course, I’m not “most people”, and neither are you!

I recently noticed some places where these short words actually carry a lot of weight in the world of business families, and so I thought I’d share them here.


For the Family

Regular readers know that when I talk about family businesses, I typically move quickly over to the point of view of the business family, where “family” is the noun, and carries more importance.

So don’t be surprised that I lean towards thinking about doing things “for” the family.


By the Family

The main thing I typically emphasize when talking about doing things for the family, is that it always helps when those things are also done by the family.

Now just to be clear, there are actually two distinct important parts to my “by the family” mantra.

The first one is that something for the family ideally comes from within the family as opposed to coming from outside. Not that I have anything against families hiring outsiders to do some of the work with them.

As long as the outsiders aren’t doing that work for them, meaning that the outsider does it instead of them doing it themselves.

The second aspect is that it’s better when the work isn’t just done by one family member, but rather by a group.

If one person does all the work, you can’t really say it was done by the family.


Who Is the Outside Advisor there FOR?

Let’s get back to the idea of bringing in an outside person to work with you as a resource for some of this important and complex work.

You really all need to figure out who that advisor is there for.

If they were hired by one person, ostensibly to work for the family, there can be some difficulties going forward.

If they are working with the family, they need to be working for the family.

Some advisors really get this, in their brain and in their heart and in their spirit. Some others, well, not so much.

Please be on the lookout for this.


Can an Advisor Work for Just One Person?

Now we’re getting to a slightly different question. In the context we’ve been discussing, my thoughts are pretty clear as outlined above.

And, I’d also like to share with you some recent experiences where I have been successfully working with one single person from a business family.

The work I began a little over a year ago to get my coaching certification led me on a path to find some one-on-one clients to satisfy the minimum coaching hours for the program.

This also led to some eye-opening for me, about the power of this kind of relationship.


Changing a System

One of the first things we need to understand is that for a system, such as a family, to change, the change may very well come from a change in just one person, at the outset.

A single person who is a part of a system of people, can change the system, if they make a change and hold to their new way of being with the other members of that system.

Holding to that change can sometimes be difficult, because the other members of that system will try to force that person back to their old ways, in order to maintain the previous homeostasis, or equilibrium.

One way for a person to gain the strength to make and hold such changes, is for them to work with an outside coach.


Some Caveats

I’m sure you can see that this can get tricky, and can really only work well if both the coach and the individual client agree at the outset that they would be satisfied if their relationship never progressed further, such that the coach would eventually work with the entire family group.

If it’s seen as a “foot in the door” to a larger eventual arrangement, there’s a risk that the important work they can do will be rushed or not be done seriously.


With You, For You, For your Family

Getting back to our prepositions, a coach is such situations is there “with you” and “for you”.

The underlying assumption is that you are doing what you are doing “for your family”.


Who’s Ready to Get Started? A Key FamBiz Question

Who’s Ready to Get Started? A Key FamBiz Question

Let’s get started, shall we?

I often begin these posts with a preamble, and later on segue into “getting started” with the real meat of the blog.

This week, I thought I’d tee it up differently, because the subject is actually “getting started”.

Although it has likely always been so, it seems that lately the ability to overcome inertia and to get moving has become more salient lately.

Families Are Groups of Individual People

The subhead just above is clearly one of the most obvious statements I’ve ever written, and there’s a reason why I chose to state it here nonetheless.

Too often, whether we’re part of a family or have a family that is our client, we sometimes think of that family as a self-contained unit, or somehow monolithic.

In reality, when you’re trying to make progress as a family or with a family, you quickly realize that not everyone moves at the same speed.

We think and talk about getting people “on the same page” and “going in the same direction”, recognizing that these are worthwhile objectives, and they are.

But even if the people are moving in the same general direction, some want to sprint while others may be stuck in the mud and enjoy it there.


So, Who’s Ready to Get Started?

The most important question sometimes becomes “who’s ready”, when attempting to get any family to make important progress together as a group.

For a “family system” to change, one way to accomplish this is for one person to change, thereby “forcing” the others to change along with them to attain a new equilibrium.

This generally requires some leadership on the part of that one person who’s willing to stand up and act in a new way, but if they do make such a stand, and are able to maintain it, change will come.


But Didn’t You Just Say….

Let me share a little crisis of confidence I had recently, after deciding that this idea was something I’d blog about.

My social media folks control my content posting and while all the content is mine, I usually have no idea when things are set to show up on my Twitter and LinkedIn feeds.

Now, imagine my thoughts as I prepared to write about “being ready to move” and then this quote shows up on my feeds:


“Don’t just do something, stand there. 

If your family is struggling with where 

to go next, allow yourselves the time 

and space to gain clarity before acting”


My first reaction was “Ooops.”  

But upon further reflection, I realized that this would not be a case of saying “Hurry up… Take your time…”, even though it somehow felt that way.


Where Is Your Family Going?

If the family in question “is struggling with where to go next”, taking the time to figure it out, without rushing, and making sure there’s a clear path that people understand and agree on makes plenty of sense.

The thing is, many families are already pretty clear about where they’re going AND what they need to do to begin the journey, BUT they don’t necessarily feel ready to start.

And that’s where finding someone who IS ready can make a lot of sense.

A journey of a thousand miles begins with a single step, as they say, and a family journey often begins with one person saying “I’m ready”.


The Slowest Common Denominator Issue

Any family journey or family project of the type I’m speaking about here needs to be something that is “for the family”, meaning the vast majority of the people are involved, and hopefully everyone.

And, unfortunately, if you want to be nice and wait for even the slowest person to get on board, the journey is at risk of never taking place.

You don’t want to have to settle for the “slowest common denominator”.


Start Where You Are

I’ve long been a fan of the saying:


Start where you are

Use what you’ve got

Do what you can

And I think I have a useful addition to it, for times when you are working with a group of people: Start with whomever is ready.

When working with a family system, keep in mind that a change in one person will eventually effect change in the entire system.

Making improvements needs to begin somewhere, with someone.  Finding the one who’s readiest to start can often be the key.

Family Engagement and Family Alignment - Chicken and Egg Which Came First?

Family Engagement and Family Alignment – Chicken and Egg

Which Came First?

This week we’re looking at one of those “which came first?” situations, so as you’ve probably guessed, it’s kind of a trick question. 

The good news is there’s no wrong answer!

I’ve written quite a bit about family alignment in this space, most recently in On Family Alignment and Family Alliances last fall.

But this’ll be the first time I’m dealing with family engagement, and in some ways it’s long overdue.


Coming Up Again and Again

Maybe it just feels overdue because the idea of alignment and engagement being two sides of the same coin came to me a couple of months ago, and ever since, it keeps on jumping up and hitting me in the face, seemingly at every turn.

I’m working with one client who’s drafting her family’s first ever “family charter”, which will essentially be the first written version of the guidelines for their “family council”, which doesn’t really exist yet.

The “writing it down” part is all about the alignment, but the work my client has been struggling with is in getting input from other family members, because she wants to make sure she’s capturing things correctly, and that’s all about engagement.


Getting the Rising Generation Interested and Involved

Another client with whom I’m working has taken a family business he bought from his father and grown it significantly, and he’s now working out the details of how to get his children and nieces and nephews interested and involved.

This is the type of engagement issue that lots of family businesses face at various stages in their evolution.  

But they can quickly go from low engagement to high, and then suffer from issues around their alignment, because the people who just got interested all see things in a different way.

All of this is quite normal, and possibly a good problem to have.

A Regular Governance Problem: Balance

You may have encountered the same issue in other, non-family governance situations, whether it’s the board of a non-profit or even a committee that you’re a part of.

I’ve seen it up close in each of those situations, although I really noticed it more recently, since this idea began to crystalize in my head.

But like I said, it’s a good problem to have, and there’s no wrong answer.

You can start working on one, and it’ll help you with the other, and it works both ways.


Leadership and Collaboration

Before I get to a couple of examples, I want to highlight that a similar idea hit me a few years ago and has stuck with me.

I’d read a book about collaborative leadership, where the point was made that people who are collaborative are exhibiting leadership, and the people who are leaders are collaborating with their followers almost by definition. 

It’s almost circular.

It was one of those things that took a bit of time to sink it, but now that I’ve internalized it, it seems to be there for good.

And so it is now, with alignment and engagement, especially in the family business context.


Start Where You Are

Wherever your family is, start there.  Sounds obvious, but, like common sense that isn’t really common, it isn’t.

If a family is engaged, work on continuing to develop that, and you’ll quickly get to a point where some possible “mis-alignments” pop up.

Great, now you have something to work on that’s a bit different, solving that alignment issue.

If, however, the family seems nicely aligned, start there and “push” that further. You’ll likely hit a point where some might disengage, and then you can work on engaging them again.

In so doing, you’ll almost naturally find yourself tweaking the alignment again.

Incremental, Iterative Progress

The good news, again, is that this is all part of progress.

Families who hope to transition their business or wealth to the rising generation need to have engagement, and they need to be aligned, if they want things to work out right and to have the results be durable.

As you work on developing one, alignment or engagement, you’re also making progress on the other.

It may not feel like progress because it doesn’t move quickly. It’s incremental, one tiny step at a time.

And, as I hope I’ve shown here, it is also iterative, as the family keeps rolling along forward.

One hand washes the other, and two hands are better than one.

Goldilocks Advises a Family Business – Part II

Goldilocks Advises a Family Business (Part II)

Last week we looked at advisers who work with business families, bringing the perspective of an outsider to a family system. 

That perspective allows them to see things that the family members themselves have difficulty noticing.

With time, such advisors can learn enough about the family’s workings to also begin to benefit from the knowledge of the family insiders.

Of course, there’s a fine line to be struck here, and it’s one that experienced family business practitioners clearly recognize and constantly try to manage.


Getting Too Close

Much like when Goldilocks tries one of the bowls of porridge and finds it too hot, she gets burned, consultants can also be too quick to act and get too close to the situation to properly maintain their objectivity

This can happen very early on in situations, especially where there’s some conflict between family members.

Any outsider needs to be extra mindful of how they enter the family system, in order to maintain an objective stance towards everyone.

If one sister “brings me in” to a situation with her family, and there’s an issue with her sibling, it won’t take very long for me to be branded as “her guy”, and then my chances of being seen as neutral will be lost.


Who Hires FamBiz Consultants, Anyway?

A few years ago, in Notes from a Great Keynote, I related some statistics from Craig Aronoff, one of the founders of FBCG, about the percentage of families that actually hire an outside consultant at some point.

He stated that somewhere between 2% and 4% of family businesses actually avail themselves to what he called “private lessons” from an outside party.

That means that 96% to 98% of families never hire an outside consultant to work with them, which seems high to me.


Not as Easy as It Looks

Part of the reason the numbers are so low comes from the fact that this work is not easy to do

Family businesses are very common, all over the world, but that doesn’t mean that they’re simple, or that there’s some magic formula to the business model.

When I’m invited into a family’s inner circle, it’s always a privilege and an honour to be there, in a place they do not typically allow just anyone to enter.

And when you’re there as a “process person”, there are plenty of things that you need to be on the lookout for.


Watch Out for the Hornet’s Nest

There are potential hornet’s nests around every corner, and if you aren’t careful, you might accidentally kick one and cause more of a stir than you had planned for.  So it’s best to tread slowly and carefully.

In addition to being mindful of not being seen as one person’s “guy”, it’s also important to develop and maintain individual relationships with each of the key family members, even those who might appear to be “less important” at the outset.

In a family, every person is important, even though they may not all appear outwardly to be, and even if some members act as if they are more important.

In fact, outsiders who work at these relationships on the “lower rungs of the ladder” will eventually be rewarded.

Another Way to Go: Just Coach One of Them

Being on good terms with all family members can be a balancing act, and some consultants master it better than others.

There is another way to go that I’ve been discovering and liking more and more lately, and that’s to just work with one person from the family, as a coach.

Last week I mentioned that a family is a system, of interdependent people. 

A system typically finds an equilibrium, but if one person changes, the system will necessarily change too, eventually, assuming the one person has the strength to maintain the change themselves.


One Family Leader Can Make a Huge Difference

In many ways it’s a much easier starting point, because getting the agreement to work with a single person is typically quicker and the learning curve is shorter when you’re only dealing with one person.

Naturally when I coach a member of a business family, I learn about all the other members too, but I’m not the one who interacts with them.

It’s still all about process, only I’m working with the “family leader” on the best way for them to interact with the rest of their family.

And in the end, sometimes that’s “just right”.

Goldilocks Advises a Family Business (Part I)

What Could Go Wrong?

Metaphors have always been one of my favourite ways to explain things, but sometimes, admittedly, I can twist things a bit too far.

I hope this won’t be one of those occasions; apologies in advance if it is.

So be forewarned that this is not actually a story about a young blonde girl who advises a family business (or a family of bears).


Insiders, Outsiders, Goldilocks?

The genesis of this post is actually an introduction I heard on TV about an upcoming guest on a show I happened to be watching.

It was an American show, and the guest was an Irishman who spends half his time in the USA, and half his time in Ireland.

The host proclaimed that this gives the man, 

   “The knowledge of an insider, and the perspective of an outsider”

Bang, there it was. I actually paused the TV, rewound, and made sure I had the quote right.


Finding the Right Balance

I instantly thought about situations where a family business, or more specifically, a business family, calls in someone from outside the family to work with them.

Of course that’s because this is exactly the kind of work I love to do, when I’m not writing about fairy tales.

Many families are loath to bring in anyone from the outside, preferring to keep everything in-house, within the family, for fear that outsiders cannot be trusted, or believing that nobody else could ever understand “our family”.

They’re wrong on both counts, and we’ll get to the reasons why, but for now, let’s look at this “insider / outsider” dynamic.

Perspective of an Outsider

We’ll start with the perspective piece, because this is truly the biggest reason to enlist the services of an outside family business consultant.

Any person who is not a part of the family is also not part of the “family system” as those who use a systems theory lens would say.

The family system is called that because of the interdependent nature of the relationships that the different members have on one another, thanks their many common goals, and to the way that they interact on a long-term, repetitive basis.

An outsider, especially one trained in this kind of work, can instantly offer that family system the benefit of their outsider’s perspective, precisely because of what they are able to see, thanks to the fact that they are not part of the system.

When I peer into my aquarium, I see that the fish are all swimming in the tank.  I’m pretty sure that the fish don’t see things the same way.


Knowledge of an Insider

Naturally the person who isn’t a part of the family won’t have the knowledge of an insider who’s been a part of the family their whole life.

But that doesn’t mean that, with time, they can’t come to know the individual members of the family, and how they work together, pretty well, all the while maintaining their outsider’s perspective, which is so valuable.

In fact, a good outsider knows the limits of how far inside they want to go, knowing that if they ever lose their outsider’s perspective, they suddenly become a less valuable resource to the family.

Special Case: In-Laws!

We’ll get back to this Insider / Outsider stuff next week in Part II, but we need to acknowledge a special category of people who happen to exist somewhere in most business families, and who somehow live long periods of their lives in this “twilight zone”, in between insiders and outsiders.

Often the in-laws try desperately to be included among the insiders of the family, with varying degrees of success.  Somehow many of them are never truly accepted as insiders, and sometimes for good reason.

It also occurs that the efforts made to become insiders can negate any outsider advantages they might have had to begin with!

In-laws each have their own reality to face, and some learn to live with the cards they’ve been dealt better than others. 


Looking Ahead

Next week, in Part II, we’ll look at what percentage of business families actually hire outside consultants, as well as things that outside advisors need to be aware of, as they are welcomed into the sacred world of a business family’s inside workings.

As Goldilocks taught us, not all situations are “just right”.

Due Diligence for the “Soft Stuff”

Writing a weekly blog and being one’s own editor can involve making some interesting choices at times.  This week I decided to use a term in my headline that’s actually one that many of my colleagues try to avoid.

But, the term “soft stuff” (and its derivations “soft skills” and “the soft side”) does in fact nicely convey the stark contrast between the work that we do compared with that of others, including many folks with whom we often collaborate.

There’s no shortage of words I could’ve used to make my point, but I settled on the Soft/Hard contrast here, for reasons I hope will be appreciated.

The “Normal” Uses of Due Diligence

Actually, my choice to go “soft” was mostly related to its contrast with the other phrase in the headline, “due diligence”.

And thanks to Google, we can quickly type in “due diligence meaning” and get this:

  • Reasonable steps taken by a person in order to satisfy a legal requirement, especially in buying or selling something.
  • A comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish its assets and liabilities

Those definitions seem clearly aligned with what most people would agree are “hard stuff”, or quantifiable, legal matters that all businesses need to consider, especially when looking at a company’s ownership transition.

What About “Emotional & Interpersonal Due Diligence”?

Let’s start with a hat tip to Ron Reece, a US colleague I met recently as part of an FFI Course that’s part of their Advanced Certificate Program

As the FFI faculty member, I reach out to all the students in the course to arrange a Zoom meeting early on, to get to know them and where they are in their journey. 

The course is about Family Governance, and everyone in the class comes to it from different angles, so it’s truly a privilege to learn about their personal experiences.

During my intro call with Ron he shared a term that he’s been using to make his point about the importance of the work he does with families.

He told me he calls it “Emotional and Interpersonal Due Diligence”.  

“Wow”, I replied. “I’m gonna have to write a blog about that”.

Chess game

The Most Important Due Diligence?

Ron’s a psychologist, so he can pull off this kind of lingo better than most, but even guys like me who come from a business background can see how this can actually be the most important part of any due diligence process.

In fact, it deserves to be highlighted, especially in cases of family business succession, precisely because there’s likely to be less of the “regular” due diligence going on because the “transaction” is probably more of a “family transition”.

I’m having an A-Ha moment as I write this, so bear with me as I flesh this out.

Transactions Require Regular and Thorough Due Diligence

Transitions Require Emotional & Interpersonal Due Diligence

That thought wasn’t in my head when I started writing this, which is why I blog every week, for moments of clarity like this.

Some Important Work Needs to Be Done

If you are going to sell your business to someone, the buyer should/must/will conduct some form of due diligence before completing the transaction.

So when the business is going to go from one generation of a family to another, would it not make sense for some similar form of work to happen, to make sure that everything is going to work out as planned?

They need to be made to fully aware that a failed deal will come back to haunt them, and only some “soft side due diligence” can clear that up in advance.

Is the Shoe on the Other Foot?

What makes this trickier is the fact that every outside buyer would insist on due diligence and it will happen or else there’s no deal, BUT, in a family business situation, the “buyer” is often in a position of feeling like they are getting a favour, so the seller typically calls the shots.

And that’s precisely where (and why) things so often go wrong.

When there’s a group of related acquirers, who are beholden to the one who’s divesting, not enough attention is given to the cohesion and interpersonal relationships of the group of new owners.

What If It Doesn’t Work Out?

If the leading generation (seller) is in charge of the deal, they don’t want due diligence to screw up their deal.

They need to be made to fully aware that a failed deal will come back to haunt them, and only some “soft side due diligence” can clear that up in advance.

No, We Aren’t “There” Yet

In some ways the new realities we’re all facing during this pandemic are starting to feel like a really long car trip.

“Are we there yet?”, ask the kids for the umpteenth time.

No, unfortunately, we don’t seem to be “there” just yet.  

And it may be another few hours, if we don’t have car trouble.

Finding Gratitude

As hard as it is though, it could be worse. In fact, for many people, it is worse.  

Lately whenever people have asked how I am, I reply that if I took 100 random people around me, and ranked them by how much they now have to worry about compared to before, I would rank somewhere near the bottom of the list.

I try to remind myself of that on a regular basis.  It’s good to have things for which we are grateful. 

Gratitude, being thankful for what we do have, is an important habit that more of us would do well to adopt.

Comparing to Other People, and to Other Times

So we can compare ourselves to other people who have it worse, and admit that we have less to worry about than most of them; I suspect that most readers of this blog are in similar positions.  

Business families, and those who advise them, are often part of the upper middle class, if not also part of the proverbial “1%”.

So what if we compare this pandemic to how it might have been to live through something similar in a previous decade.

Imagine a real car trip from your childhood, where you were in the back seat, bored to the point of playing “licence plate bingo” or some other lame distraction.

Back then, we were truly left “to our own devices”, whereas today’s kids typically each have their “own device”!


Still Getting Things Done

Many of us are continuing to “get things done”, even if we need to modify how we do it.  

Many of us are “zooming” or using other online platforms to meet, and getting better at it all the time.

We better get used to it, because there doesn’t seem to be anything that will magically happen that will get things back to the way they were a few months ago.

And so if things will remain uncertain for a while, what can we do?

Plan for the Worst

I think that hoping things get resolved quickly and continuing to do very little else is likely the worst course of action.

The old adage of “Plan for the worst; Hope for the best” still holds.

I heard a business owner on the radio recently, who happens to be a former client, who runs a manufacturing operation with a large and growing online B2C business.

He said that they are working on the assumption that things will remain as they are now for the next 18-24 months, and they are acting accordingly.

I knew he was a wise man when he hired me a few years ago, but he proved it again just there.

Doesn’t it make sense to plan for a long period of this, and then you can hopefully unwind it early, rather than to simply patch things as you go, and hope things will come back next month?


Family Issues to Be Addressed?

Meanwhile, these past few months have likely raised some issues in the family circle in addition to the business circle.

In some ways the question “Are we there yet?”, when asked about a family’s governance, might also have a clear “No, not yet” answer.

Some of these family aspects, now that they have surfaced, may be worth revisiting, before they get worse.

Individual Development for “When We Get There”

And as long as there’s still some more time to go until we “get there”, isn’t this an ideal opportunity for some of the individuals who are part of the business family, to work on themselves to develop whatever capacities they need to work on, to be even more ready for the day when they’ll be expected to take on more responsibility?

This new, unconventional situation we are living is full of questions, but not all of the answers are negative.

There are positives and opportunities here, available to those who have their eyes open and who have the right attitude.

We may not be there yet, but we will get there.

Doing vs Being vs Feeling in the FamBiz

Where IS everybody?

One of my recent Zoom calls began with someone asking “Where is everybody?”  

It wasn’t someone having a problem with technology and experiencing trouble with her screen. She was actually asking a much deeper question.

You might think of it as a modified version of “How is everyone”, which it likely was, but in these tumultuous times, it likely was more about “where” we each were along this journey we’re all on right now.

And make no mistake, even though most of us are confined and sheltering in place much of the time, we are all on a journey.

Stumbling Around in the Dark

Now the question “Where is everybody?” could also be something we say when we venture outside these days. 

There isn’t as much “doing” going on out there for us to see, so a lot of people are now concentrating more on their “Being” rather than just their “Doing”.

When our world gets shaken up, there’s a natural tendency to look inward and reflect, and spend some time thinking about what’s truly important to us.

Even that question from earlier “How ARE you” is very different from “What are you doing?”

And even though we may not be on a physical journey, many of us are on a journey to what’s next, even as we stumble around in the dark, not knowing what lies around the next corner.


Who Do You Want to BE?

As we get a bit more introspective, we sometimes begin to think more about who we want to be, instead of simply what we are going to do.

It’s somewhat more of a long-term view.

To me, the things that we do, over and over, are a huge part of who we are, and especially who we become.  It’s all part of the habits that we get into that make us the kind of person we are.


Girl standing and raising her hands over sunset

How Do You Want to Be Remembered?

Let’s now bring this back to the subjects we normally deal with in this space, enterprising families, and their challenges in attempting to transition their wealth from one generation to the next.

There comes a time in the lives of family business leaders when they start to think about how they want to be remembered

Hopefully they begin this process early enough in the arc of their lives to still make some changes in their focus.

The current crises (that’s crisis, plural, because there are several going on, even if you haven’t separated them in your head yet) may be forcing people to think more about who they are and how they want to be remembered. 

And that’s a good thing.


Legacy Definitions Vary

How you will be remembered is part of your legacy, in fact, some would say that that’s the essence of your legacy, the basic definition.

There are variants, of course, and different versions of the definition of legacy resonate better or worse with people, depending on a host of factors.

I’ve always liked this version: “Legacy is how people feel when they hear your name”, although I’m not sure where I got it. I just typed it into Google to see if I could find the source and nothing quite matched.

Perhaps my version makes more sense if we add “after you are gone”, but I prefer to think that one’s legacy need not wait until after their death.

I know that “how people feel” about me is also important to me while I’m alive too!


Maya Angelou Version

One quote that did come up during my Google searches is from Maya Angelou, and I think it fits into my conclusion”:


                “I’ve learned that people will forget what you said

                       people will forget what you did

               but people will never forget how you made them feel.”


At a time when there is so much uncertainty in all of our lives, I think it makes sense for many of us, especially those of us in the second half of our lives, to begin to shift more towards this kind of focus.


Doing, Being, Feeling

Working with family members typically get emotional, so our feelings are never too far away.

That doesn’t need to be a bad thing, if we can focus on what’s important, and making sure we remember how what we do and who we are will always affect those feelings.

The Crisis as a Test of your Family Governance

The Crisis as a Test of your Family Governance

As we continue to move through these unprecedented times, some things are beginning to get a little bit clearer. 

There are still so many unknowns, of course, but for many family enterprises, they’ve succeeded in “putting out the fire”, and now a different kind of work is needed.

During this preliminary stage of the current transition to the “next normal”, most families have begun to learn a lot more about each other. 

Sometimes they’ve learned positive things, and other times they may have been disappointed.


People and Relationships

As much as they’ve discovered about other people in their family, what some families may have also started to notice is that the way they had their relationships set up before just might not be optimal anymore.

Let me give you the background and proper credit for this idea and how it came to me. 

If you’re like me, you’ve never received more invitations to webinars than you have in the past few weeks.  Some of them are actually worthwhile.

The idea for this blog came from one of those, sponsored by Family Enterprise Xchange (FEX), of which I am a proud member, as their FEA Program was what made me discover the world of working with business families in the way I now do.


A Friend and Mentor

In light of the new reality we’re all now living in, FEX recently hosted a webinar featuring guest thought leader Jim Grubman, who I consider a friend and definitely kind of a mentor to me, as he always has time for me, and I definitely look up to him.

Towards the end of the Zoom call, during the Q & A if I’m not mistaken, Jim noted that this current crisis is serving as a test of family governance for many families.  

He kept going for a bit, but as far as I was concerned, he could have dropped the mic right there.

Bang, it was so clear to me all of a sudden.  

Families who work together or manage assets together are feeling the shockwaves of the pandemic and its associated economic and societal fallout in interesting ways.


Are They Passing the Test?

At a time when everything is getting shaken up, systems and their limits get tested.  

When a system is well prepared, and is able to adapt quickly, the relationships between the people in the system will likely survive relatively unscathed.

But what about systems (families) where things don’t go so well, adapting doesn’t happen as some expected, people second guess each other, and contingencies that some assumed were in place don’t operate in the way they were expected to?

Jim is correct that underneath all of these relationships lies the family’s governance, whether they know it or not, whether they see it or not, and whether their governance is formalized or not.

That family governance is being tested these days, and some families are realizing that they’ve got work to do.

Students sitting in class and stressed

Character Building Events

Any crisis can act as a character-building event, and this one is no exception.  Things that were going “okay” just a couple of months ago are suddenly no longer okay.

For families who are working together, a crisis like the one the world is seeing now can be seen as a test of family character.  

Any shortcomings, that may have been hidden by the “good times” we were in, are now suddenly exposed.

If you’re having trouble picturing what I’m getting at, imagine any business being run by siblings or members of different generations of a family (or both). 

Now, throw in some new kinds of decisions that need to be made as a result of the new reality.


Decisions, communication, problem-solving

Family governance is all about how family members make decisions together, how they communicate, and how they solve problems together.

There’s nothing like a crisis, caused by a pandemic, to bring these into a sudden sharp focus, largely because some new kinds of decisions need to be made.

Ideally, everyone agrees not only on the right decision, but on who gets to make the call!  See: Who Gets to Decide Who Gets to Decide

The answers aren’t always obvious, and situations can get complex pretty quickly.


Self-Reflection Question

So, how’s your family governance doing? 

Is it passing the test?

If the answer is “No”, you’ve got work to do….

Pandemic Creates Spectrum of Opportunities for Enterprising Families

From Societal Transformations to Intergenerational Transitions

Thanks to the pandemic, there’s no denying that the whole world looks very different today than it did just a few weeks ago. 

Few could have predicted how quickly and profoundly things could change, and so far, most of what we’ve seen has been for the worse.

But while most of us haven’t figured out what it’ll all mean in the long run, some families have already started making some big moves to try to get out in front of the tectonic shifts that are happening.

From societal changes that are happening in plain view of everyone, right down to key transitions within families, it seems like everything is in motion right now.  

As a family enterprise advisor who lives and breathes the world of business families and their family offices, I want to share some of what I’ve already been noticing.


Broad Societal and Industry Moves

Let’s start with the things that we’ve all been seeing on the news. 

With shortages of necessities like personal protective equipment (PPE) for medical personnel, hand sanitizer and ventilators, many companies, including plenty of family businesses, have begun to shift their production from their usual products, to helping fill the sudden demand for what frontline responders need right now.

There are examples, big and small, from all over the world, because every country is being affected by the current pandemic. 

On a more local scale, many family-owned restaurants and grocery stores are moving to deliveries to deal with the new reality of the “lockdowns”, as well as getting food to overworked medical personnel and to food banks having trouble keeping up with local needs.


Family Offices and Impact Investing

At another level, looking at things with a longer lens, family offices are already lining up future investments in industries poised to be part of the long term solution and new realities that the world is suddenly facing.

This crisis is presenting all sorts of opportunities, not only from an investment perspective, but also for the betterment of society. 

The field of impact investing, often a favorite of the younger generation of successful intergenerational enterprising families, is also rightfully excited by the chance to get involved on the ground floor of some of these widespread changes.

This ties in nicely with a piece I wrote last year on the natural fit between family offices and impact investing.  See Family Offices and Impact Investing: A Great Fit

Pandemic Creates Spectrum  of Opportunities  for Enterprising Families

From Macro to Micro

Within any given family, as much as the societal and industry shake-ups affect their businesses and the assets they own, there’s typically an upcoming generational transition that’s never more than a decade or so away.

Enterprising legacy families always need to look at the long term trends in the world at large, while making sure to never lose sight of the life cycle realities in their families.  

They need to look at the macro world and its opportunities with one eye, without forgetting about the micro reality and potential threats that might present themselves if they don’t sufficiently prepare the members of their own family to be ready to take the reins one day.

As the world faces major shifts, it becomes more important than ever for families to seize these opportunities while proactively involving the younger, rising generations of their family.


The Strengths of Each Generation

While the senior generation has the experience, wisdom, and patience to run the operations, the next generation of the family will normally be much more tech savvy, have more energy, and be well connected to peers all over the world.

Yes, the generations have different strengths, but in many ways, they have even more things in common.   See: Is There a Generation Gap in Business?

While the MIT-Sloan article above isn’t aimed at #FamBiz in particular, the similarities between members of various generations are even greater when we consider members of the same family.

There are so many opportunities to mentor and “reverse mentor” each other in such families.


Opportunities Abound – Will Your Family Capitalize?

This pandemic will create some enormous opportunities for those families that are poised to capitalize on them.

Families in business together can move into action more quickly than most corporate entities, because they’re more flexible, they aren’t focused on the next quarter’s results, and they understand the values that have made them successful over generations.

These crazy times are turbulent for everyone, and smart family enterprises are already beginning to capitalize on them.