Family Business in london

Everything Is Something

The post’s title is a three-word expression I heard from a colleague several months ago, and my goal is to turn it into something entertaining and useful for people who work with enterprising families.

Let’s set the context a bit.  I got this “everything is something” line from a colleague last October in London at the annual Family Firm Institute conference.

I’m pretty sure it took place at the reception for speakers and sponsors.  I’m not exactly sure what we were talking about but at one point my friend said “everything is something” and I gave her that look.

What look?  It’s a look that combines surprise, gratitude, and inspiration.  She had seen this look before, as she’s inspired at least one other previous blog post. (Thanks, MM!)

 

A Coaching Term (?)

After we got through the obligatory “Hmmm; I like that…  There’s a blog in there…”, she told me that this was an expression that her coach uses with her.

Now that I’m writing this, part of me wishes I’d asked her to expound on this and maybe give me an example from her coaching conversations for me to relate here.  But alas, I didn’t do that, since my mind was already beginning to think of some of the many possibilities the expression presents.

 

The Family Business Angle

As usual in this space, I now need to pivot my story into ways in which it applies to business families.  Even though the inspiration came at a conference for people who work with family firms, that doesn’t make this an obvious leap.

There was, however, a reason that this expression hit me square in the face.  It all comes down to the different perspectives that people in a family have when they think about and talk about their family situations around their business or their wealth.

Rather than starting with “everything”, to clarify what I meant, let’s look at a simpler example, like “any one thing” instead.

So, any one thing, be it a comment, a situation, an event, a payment, an email, a story, or whatever, that seems to one person to be “nothing”, or at least “nothing special or noteworthy”, has the potential to be “something”, and often “something really BIG” to another person.

 

Assumptions and Misunderstandings

Far too often in cases where family members interact with each other closely around important and sensitive subjects, the differing viewpoints of the different players are ripe for these sorts of misunderstandings.

Some of the biggest possible irritants occur when something seems so inoffensive and even irrelevant to one person, yet to another person it’s actually a huge deal.

When these things occur infrequently they can often blow over pretty quickly, but when they begin to pile up in rapid succession, look out.  There can be a cascading effect that can quickly erupt.

When I assume that something I did, said, or wrote is benign and inconsequential, yet the receiver or even another “bystander” views it much differently, often because of a simple misunderstanding, that can be sufficient to create a highly combustible pile of kindling.

 

Just Add a Spark

When there’s a lot of kindling, a simple spark can start a fire that can then turn into a raging inferno.  So if we continue with this analogy, there are two things to avoid: the kindling, and the spark.

The kindling is made up of misunderstandings or assumptions that have not been verified.

The way to avoid those things happening is to make sure that the communications channels are clear and used regularly.  You want to avoid having these things pile up.

 

Clear Things Up Regularly

Some families do this really well, getting together frequently and talking openly about important matters, even when some of them are sensitive.

Other families are less good at this, and I will usually encourage then to meet more frequently.

But then there is also the need to avoid those sparks we mentioned before.

 

High Anxiety and Possible Sparks

When things are going well, there’s a lower chance of sparks happening.  But when things are stressed, and anxiety is running high, sparks will typically occur more frequently.

My conclusion is that when things aren’t necessarily going perfectly well, then it’s even more important to communicate clearly and frequently, to clear up any misunderstandings.

Because in a family business, everything is potentially something.

guy riding a bike in ireland in the late afternoon

Riding a Bike: Assumptions and Promises

Readers who also get my monthly newsletter are possibly aware of a recent professional development program that I’ve signed on to in order to up my one-on-one coaching skills.

I’m now a little over month into the 6-month long professional coaching certification program with CTI, and loving every minute of it.

Included in the work, in addition to time spent coaching clients, is a regular weekly Zoom call with the other 8 coaches in my “pod”, with our course leader.

In preparation for our first call, we were asked to prepare a response to two queries about our expectations for the program.

What Are Your Assumptions?

The first thing we were to consider and expound on was our assumptions about the journey on which we were embarking.

Now my particular situation was quite a bit different from that of the average participant, because a long time had elapsed from when I took all of the prerequisite courses to when I began the certification program.

I completed those in 2014, and a five-year gap is far from standard.

So my response to the assumptions question was that it would be like riding a bike, meaning that despite the time lag, the coaching would all come back to me quite quickly.

 

What Promises Are You Making?

The next question was completely different, but I felt compelled to tie my answers together.

We were asked what promises we were making to ourselves about our participation in the program.

I thought about that one for a while, before being sparked into jotting down: “If I fall off my bike, I’ll get right back on and keep riding”.

I felt so clever in the moment, and I was pumped to share my answers the next day.

 

Change of Plans

Now imagine my disappointment when we actually began our introductory call and our leader went off script and asked two different questions instead!  Ah, crap!

I managed to answer his prompts on the spot, but my replies weren’t nearly as memorable as the ones I’d prepared.  Oh well.

But then, in my regular session with my own coach, Melissa, I relayed the story to her.

“Hmmm.  You seem excited about this subject.  Maybe there’s a blog in there for you?”

And here we are.

 

The Family Business Angle

You all know that I love to relate stories, and now the trick is to turn this into something worthwhile for families who are planning an eventual intergenerational wealth transition.

So let’s start with Assumptions and then move on to Promises.

 

Assumptions in an Enterprising Family

This part is actually pretty simple for me, because assumptions are at the heart of many of the key issues that families face.

In fact, a large part of the role that I play when working with families is to have them recognize the assumptions that they hardly even realize they are making.

Once they recognize them, they can start to deal with them.  And by deal with them, I mean that as a coach, I will challenge them to actually verify that their assumptions are in fact valid.

girl and guy riding a bike

My Kingdom for a Forum

The main reason that assumptions persist in not being “aired out” is that families don’t have a forum in which to have the important discussions necessary to clarify that everyone has a common view on important matters.

I talk a lot about the importance of family meetings, and the key is always to have a series of meetings, where the date of the next meeting is always set before the end of the current meeting.

Please See: 5 Things you Need to Know: Family Meetings

 

Promises in an Enterprising Family

The idea of promises in an enterprising family is a bit less clear to me.  Obviously when working with family, we often feel much closer to each other and there’s an inherent promise to do what is best for the group as opposed to ourselves.

But I think that my “take home message” on this should go along with what I wrote about assumptions.

While you are meeting and clarifying everyone’s assumptions about the future of your family enterprise, why not also make it a point to also enunciate the promises that you’re all making to each other?

 

Get Back On the Bike!

In closing, I recognize that some families start these meetings and then lose momentum.

To them my message is simple: Just get back on the bike and ride again!

 

Doing Better than the 4 D’s

Doing Better than the 4 D’s

This week I want to talk about the “4 D model” that I’ve heard David York speak about on a few occasions.

Now, lest you think that the word “model” is being used here in a positive sense, as in “a model that you should follow” or “role model”, please erase those thoughts immediately.

And furthermore, if you think that I’ll be arguing against York’s views, again, that ain’t it either.

York coined the term “4 D Model” to describe what has been going on for far too long, and we are in full agreement that there is a better way to go.

 

Background and Context

I first met David York in Denver a few years ago, at the annual Rendez Vous of the Purposeful Planning Institute (PPI).

Regular readers know that PPI is one of my absolute favourite organizations and that the Rendez Vous in July each year is the one gathering each year that I never miss.

I personally see York as one of the rising young stars in this field and love the way he conveys his important message.  This TED Talk of his is a great example.  His books are great too.

 

Traditional Estate Planning

York has long described the traditional “4 D Model” as follows:

Dump, Divide, Defer and Dissipate.

He’s also well aware that many of his estate planning attorney colleagues continue to follow this model.  Let’s look at the 4 D’s one by one.

DUMP

This is the part where the assets of the parents are transferred to their offspring upon death, usually after the second parent has died.   Little is done to transition any wealth while the parents are still alive, because that might require some real thought.

DIVIDE

This refers to the fact that upon death, those assets will be automatically divided equally between the offspring, regardless of any other circumstances, like ability, needs, etc.

DEFER

The deferring is mostly about trying to avoid paying any taxes until absolutely necessary.  So delaying any transfers of assets is part of that strategy too, because if you can’t avoid paying taxes, deferring them as far off into the future is the next best thing.

DISSIPATE

The final D is mostly about the results, as the family’s wealth dissipates after applying the first three D’s.

When the wealth has been treated in this way, with financial wealth as the sole issue of concern, and where no effort was ever made to involve those who would inherit it, it shouldn’t be surprising to learn that in many instances, that financial wealth will be handled by the inheritors in ways that could be described as sub-optimal at best.

 

More Purpose, Please

So far we’ve spent lots of time on how NOT to do the work necessary to transition wealth from one generation of a family to the next, and now it’s time to look at some positive moves a family could make to do a better job.

Notice that I said “moves a FAMILY could make” because ultimately the onus is on the family to do what is right for them.

Unfortunately, most families rely on outside experts to help them with this important work, and if a majority of advisors are stuck in the “old ways”, it can be very difficult for families to get the kind of help they really need.

Truck dumping grabbage

Involving More Parties – Inside and Outside

If the Four D model has survived this long, it’s largely because it’s very efficient.  It’s quick and relatively easy.

Making purposeful plans involves a lot more people so it naturally takes more time.

The first group of extra people are the other family members.  How can you make important plans for the next generation without involving them?

I don’t know, but most families have done it that way.

 

Multidisciplinary Advisors

The other group of extra people that need to be part of the solution are the advisors.

Every great plan will need to include input from a variety of outside specialists.  Ideally they will collaborate for the good of the family.

But most importantly, most of them should only be brought in after the family has figured out the most important questions around how they want the wealth to serve the following generations of the family, not before.

Rendez Vous 2019 will feature a breakout session featuring David York as well as one featuring Steve Legler and Joshua Nacht.  We all hope to see you there.

Roles and Rules for Enterprising Families

Back in January after the Institute for Family Governance’s third annual conference, I noted in Family Governance: One Step at a Time that that one day would end up being the source for a number of future blog posts.

I’ve officially lost count already, and here’s another one.

Its inspiration was the second presentation of the day, by John Ambrecht and Michael Whitty, entitled “Governance Structures that Actually Fit a Psychological Model of Human Behavior”.

Looking over their 75-page slide deck some 10 weeks later, there was a LOT of information in their talk.

 

From Roles to Rules ©

The psychological model they referred to is detailed in a 2004 paper that was published in the California Trusts and Estates Quarterly titled “FROM ROLES TO RULES©:† A NEW MODEL FOR MANAGING FAMILY DYNAMICS IN THE ESTATE PLANNING PROCESS”

I’ll leave it to the most curious readers to examine this in more depth, and I’ll simply talk about family business roles and the importance of eventually making rules that everyone needs to learn to abide by.

 

In the Beginning…

When family businesses start, things are usually rather informal, with few real rules and with poorly defined rules, if any.

As the business grows, the division of work necessitates that roles become clarified, and many family companies have some difficulty even with this roles component.

When that man tells me what to do, is he my boss, or is he my Dad?  (Of course the answer to that question is “Yes”)

Role Clarity and Making Rules

You may be thinking that in order to properly define each person’s role, making some rules around things would make a lot of sense. And I think you’d be correct.

While Ambrecht and Whitty suggest that there’s an evolution “from roles to rules”, they certainly don’t mean that you finish with roles completely and then arrive at the rules stage.

It’s more of a change in emphasis as the family business matures.

 

Formality is your Friend

Regular readers will recognize the expression “formality is your friend” as one I return to from time to time, and this is another such occasion.

Both roles, when they are well defined, and rules, when they are clear and are actually enforced, certainly help out with formality.

I hope that you noticed that I just added some conditions to both roles and rules there.

If the roles are poorly defined, they won’t do much good, and if the rules aren’t clear, or worse, if they aren’t enforced, it may be worse than not having any rules at all.

 

Rules Lead to Governance

Sticking with the formality, that feels like it fits really well with the rules idea.  And as a family makes more formal rules, they can (hopefully) eventually end up in the wonderful world of family governance.

Recall that this post began with a mention of a conference devoted to the subject of family governance.

As I wrote a couple of years ago in Family Governance, Aaaah!, my personal views and feelings around the “G-Word” have evolved.

Families will often have a negative view of governance because it sounds way more formal that what they are ready for and for what they think they need.  And they are often right about that.

 

How Are We Going To…..

When someone explains to them that family governance doesn’t have to be that complicated, and that it really involves answering three simple questions, people can get on board more easily.

Those questions are:

  • How are we going to make decisions together?
  • How are we going to communicate?
  • How are we going to solve problems together?

Three questions that can have some pretty long answers, agreed, but still only three categories to worry about.  And the third one is really mostly a repeat of the first one, but with an added emphasis on trickier situations.

 

Back to the Roles and the Rules

While governance feels like it’s more about rules, it is also very much about roles too.

All those decisions that need to be made will be made by people, and the bigger and more complex the family’s wealth becomes, the more important it is that they find ways to make those decisions in ways that satisfy the family group.

Business decisions can often appear much simpler than those that affect the family.  Please see The Unsung Role of Family Champions for more on key roles in enterprising families.

As families approach key generational transitions, it becomes especially important to pay close attention to these ideas.

 

Buildings and corporate offices

On Enterprising Families and Family Wealth

Today we’re going to look at a couple of subjects that have been brewing in my head for a while.

I’m going to combine some elements of vocabulary and evolution, which may sound a little more arcane than what I have in mind.  So let’s get going.

 

 

Family Business: Been Around Forever

We all recognize that family business has been around since the beginning of mankind.

Centuries ago, out of necessity, the family used to be even more of a “unit”.

As economies developed, they also became an “economic unit”, as it was natural for families and tribes to work together for their own advancement.

 

 

Business Families: More Recent

More recently, as society has evolved and as economies have advanced and matured, we’ve seen more and more “business families” emerge.

There often comes a time when the people leading a family business actually make a shift to thinking of themselves as more of a “business family” than simply a family business.

There are a couple of elements at play here:

  • Prioritizing the family over the business
  • Working ON the family, instead of IN the business

This shift usually comes only after certain success has been attained in the business that allows its leaders the luxury of time to make this shift.  (Many never make it this far.)

Lots of family businesses remain a family business forever, and of course still serve a great purpose for their members and for society.

See my 2014 book: SHIFT your Family Business: Stop working IN your Family Business, Start working ON your Business Family

 

 

Enter the Family Enterprise

Once a family achieves a certain amount of success with their business, all sorts of possibilities open up.

From growing the original business into more geographic locations, to vertical or horizontal integration, to developing completely new lines of business, the combinations and permutations are literally infinite.

The common thread is often a family, for whom all this wealth is being created.

When a family is involved in more than just its original business, the term “family enterprise” is often the one that describes them best.

This can also be the result of a liquidity event, where a major business is sold, and the proceeds are reinvested into other ventures.

It can be very important for a family to get to a point where they can view any of their businesses as simply another asset that the family owns.

 

Cartoon showing people standing on coins

Enterprising Families

We’re getting into vocabulary and semantics a bit, but there’s a good reason.

Finding the right label for something is often a key to getting members of a group to develop a common understanding of who they are, what they are doing, and where they are going.

I mentioned off the top that we’d be looking at evolution as well.  Let me expand on that now.

Just as a family can go from concentrating on one business during it’s family business stage, and then “evolve” into more of a business family, there can be a similar evolution to the enterprising stage.

These “stages” of evolution often take decades, and can coincide with generational transitions as well.

A recent edition of the FFI Practitioner highlighted a couple of case examples you may be interested in.

 

 

Family Firm Institute – Business or Wealth Focus?

In the same way that any family may evolve from one stage to the next, the organizations of professionals who serve enterprising families have also evolved.

The Family Firm Institute began over 30 years ago, and in the beginning their target was essentially family businesses.

In the intervening decades, they have also concerned themselves much more with family enterprises as a whole, including the world simply defined as “family wealth”.

 

 

Designations and Certifications

FFI now offers certifications in Family Business Advising and in Family Wealth Advising.

In Canada, FEX, through its FEA program, offers the designation “Family Enterprise Advisor”.  Thanks to their “later mover advantage”, they were able to use the more holistic term “family enterprise”, which became more current in this century.

The common thread through all of these is the existence of a family with enough wealth and complexity to worry about.

 

Different Labels, Similar Issues

Families evolve from one decade and generation to the next, and the industry that serves continues to get more sophisticated.

Working together, we are trying to get better results for families everywhere.

And those who can figure out the family dynamics usually make out best.

 

 

 

Questions Don’t Always Require Answers | Family Business Guidance

Questions Don’t Always Require Answers

I sometimes use this blog to talk about abstract ideas that seem only tangentially related to the fields of family business and family legacy.  This will likely be one of those posts.

The genesis of the idea for this piece came back in October in London, at the FFI conference, when I was speaking with a friend and co-presenter about the role she plays on a family business’ board of directors.

During that conversation she related some feedback she got from the family patriarch, who told her that he liked the fact that she “asks great questions”, and, here is the good part, she “often doesn’t even care what the answers are”.

Of course I quickly thanked her for a great blog idea!

Reasons for Asking Questions

This of course got me to thinking about why people ask questions in the first place.

There are plenty of different reasons that people ask questions, depending on lots of different elements, and the context in which said questions are being asked.

But simple logic would seem to dictate that when someone asks a question, they are interested in the answer!

Indifference Versus “Not Caring”

This brings us to an important nuance in what I’ve written above.  First of all, I’m not sure that my quote from the patriarch is verbatim.Questions Don’t Always Require Answers | Family Business Guidance

But more importantly, I want to make it clear that neither he, nor she, nor I, believe that she truly doesn’t “care” what the answers are.  It’s more about the fact that she is indifferent to the answer.

And that of course makes me think about how often people ask questions where they have a predetermined expected answer that you will either get “right” or “wrong”.

Coaching Questions

When you ask someone a question, there are literally an unlimited number of ways you can phrase it.  And we won’t even get into the tone of voice and other non-verbal aspects, because that could be a whole other blog, or even a book.

Those who have taken coaching courses have learned that there are certain types of questions that typically yield better results, and I’m pretty sure that these are the kinds that my colleague uses in her role on the board of that family business.

Most people have heard about the idea of avoiding questions that can be answered with Yes or No, i.e. open ended questions.  That’s a great start, and it also requires that you then listen to the answer, which will then be longer than a single word.

Don’t Ask Why

Another “rule” that I try to hold myself to is not to ask questions that start with “Why”.

Even though it’s not always the case, very often the person hearing a question that starts with “Why” will feel put on the defensive, and feel the need to “explain themselves”.

When people answer questions from a defensive stance, it doesn’t necessarily add to a productive discussion.

If you truly want to understand what someone was thinking, because you are curious, and not simply judging them, there are better ways to ask these types of questions.

What and How

Simply abolishing the word “why” and replacing it with a much softer “what” or “how” can make a surpringly big difference.

“How did you come to the decision to do that?” or “What was going on at the time that lead to that decision” are not that much different in terms of the insights that the asker of the question wants to know.

But these last two questions will likely land much more softly, and in turn yield a more useful answer, that can then send the conversation into a more positive direction.

Past Versus Future

A board of directors will normally spend much of their time looking to the future rather than dwelling on the past, and this is where some really interesting opportunities for questions can arise.

Some of the best will start with “What if…” and they bring up many possibilities that make people think about what could be.

Whatever the circumstance or context, the best questions are usually driven by real curiosity, and not with any judgement.

This is sometimes easier said than done, but like most things, practice makes you better at it.

The curious attitude of the questioner usually comes through loud and clear.

Family Business Meeting Advice

Calm, Clear, and Connected

Each week in this space, I talk about things that affect the world of family business and family wealth, especially for families who are planning for a successful transition to the next generation.

This week’s subject is family meetings and three ways to assess them after the fact.

My premise is that you should strive for “calm, clear, and connected” meetings.

Let’s take them one at a time.

 

 

Keep Calm and Carry On

I’ve written a couple of blogs on the subject of calm, including Calm is Contagious earlier this year, and Calm-fident Advice for your Family in 2016.

When a family can meet calmly and discuss important matters while everyone remains composed, the results are usually much more satisfying than when voices are raised in anger.

It is normal for some contentious subjects to arise, on occasion, where things get a bit louder and more animated.

When the loud and angry meetings outnumber the calm ones, it’s usually not a good sign.

Ideally, there can at least be some calm parts of each meeting where the family can truly benefit from everyone’s best thinking and ideas.

 

birds flying in a V-shaped form

My Kingdom for Some Clarity

Another subject that I talk about regularly is clarity and the need for things to be clear.

Most people think that they have a clear picture of things in their own head, and that’s probably a good thing.

When we talk about a family though, it’s also important for everyone to have the same clear picture, and that’s very rarely the case.

There are many valid reasons why different people have different pictures of what they believe to be the reality.

Problems will arise when people who are working together to make decisions about important matters don’t have a common understanding of what they’re dealing with.

And a huge underlying issue here is that people often simply assume that their view is not only correct, but also that the others share their view.

One of the benefits of having an outside person present at family meetings is that this person can ask the “stupid questions” that the others would likely be afraid to ask, because they don’t want to risk appearing ignorant.

Of course, this presupposes that you can find an outsider who is prepared to act this way in the interest of clarity for the family.

I laid out some of the questions that you might ask in I Can See Clearly Now in 2016.

 

 

Connected: The State of the Relationships

The third element that I think is important for family meetings is connection.  I realize that this one may seem a bit less obvious to some, but please stay with me here.

Families work best when everyone is on the same page and everyone has an opportunity to be heard.

When I facilitate family meetings a big part of my role is to ensure that each person has the opportunity to speak and contribute.

You may wonder about my choice of the word “connected” here, and I guess I must confess that part of the reason I chose it is that “calm, clear and connected” evokes the old “cool, calm and collected” expression most of you are probably familiar with.

But the connection angle also stems from my understanding of the importance of family systems theory.

 

Family meeting

Interdependent Parts of a System

The members of a family are all interdependent parts of the family system.  I actually try to focus more on the relationships between the people than I do on the people themselves.

I try to notice all the non-verbal cues that I can when sister speaks to brother and son speaks to mother, and so on.

When everyone relates well with everyone else, meetings are more productive and the decisions that are made are more likely to stick.

 

 

Recap: Calm, Clear and Connected

No meeting is ever perfect. In fact, the focus shouldn’t be on any single meeting, but on having a series of regular meetings.

Try to get better from one meeting to the next, as the process evolves.

More calm is generally better than less calm.

More clarity, even if it takes a bit longer to make sure everyone understands things the same way, is better than less.

And when everyone actually connects with everyone else in meaningful ways, that’s ideal.

Think back to your last family meeting.  How did you do? Where can you improve?

2 kids drawing on a kitchen table

“Arts” and “Crafts” in Advising Families

This week I want to look at a couple of different concepts in the domain of family enterprise advising.

They are two separate ideas that happen to also be related, and I want to see what we can learn from the intersection.

 

 

Art AND Science

In 2014 in Family Business Advising: Art vs. Science I wrote:

 “What it comes down to in many ways is that it is an art to deal with the family, while dealing with the business is more of a science.

To be a good family business advisor, you need to be able to bridge both of these, art AND science.”

 

I’ve repeated this often since then, and still believe it today.

Many people who work with family businesses have a preference for the art aspect or the science side, and I think that’s only normal.

 

 

Honing your Craft

While constrasting art versus science is pretty easy for most people to grasp, the other idea may be less clear, and that’s the idea that advising families is a “craft”.

When I first heard this from a respected thought leader in our field, I tilted my head to the side to consider it, and then began nodding in agreement.

 

Arts and Crafts

Arts AND Crafts?

So the intersection of “art” from the world of “arts and science” and the concept of a “craft” that one hones over a career, has been simmering in the back of my mind for a while now.

Ergo this blog post on “Arts and Crafts”, which is a pretty common term, but from a completely unrelated area.

Could it be that working with families on transitioning their wealth to the next generation is akin to “arts and crafts”?

 

 

“OK Google, What’s a craft?”

According to Google, a craft is:

noun, “an activity involving skill in making things by hand”.

While I like the first part about the need for skill, the second part, about making things by hand, may not fit with where I thought this was going.

How about “craft”, the verb?

There, we get “(to) exercise skill in making (something)”.

Again, there’s an emphasis on what the craftsperson is making, which brings up a whole other set of issues when the subject is family enterprise advising.

What are we trying to “make”, a harmonious family?  (That may be a future blog post.)

 

 

How About an Artisan?

What if we switch languages?

A “craftsman” in French is an “artisan”, which also happens to be a word used in English.  Maybe we’re on to something.

An “artisan” is a worker in a skilled trade, especially one that involves making things by hand. Hmmm, feels like we’re back at the same place, until we see the next line:

Artisan (of food or drink): made in a traditional, or non-mechanized way using high-quality ingredients.

I think I finally found what I was looking for!

The “non-mechanized way” that an artisan does something is essential to it being a craft.  Let’s run with that.

 

Arts and Crafts

The Non-Mechanized Art

The art of working in the family circle has always felt to me like there was some sort of “flying-by-the-seat-of-my-pants” quality to it.

I always liked that aspect of it, being confident in my ability to respond to whatever presents itself in a meeting with a group of family members in a way that promotes calm, clarity and connection.

The “non-mechanized” aspect of a craft just adds to that understanding.

There is no checklist or flowchart that tells me what to do next.

 

 

Arts and Crafts = No Accident

Bottom line, I guess I had never thought of arts and crafts as being a part of what I do.

Then again, I have been fascinated by another French/English term that I have heard used in recent years; Bricolage.

My primary schooling was in French, and on Friday afternoons we did plenty of “bricolage”, while friends of mine going to English schools were doing “arts and crafts”.

So, from oxforddictionnaries.com,

          Bricolage: noun, construction or creation from a

                                diverse range of available things.

 

 

Developing Family Governance

When I think about what it takes to support a family through the efforts of developing their custom-made family governance systems and structures, the term “bricolage” actually fits pretty well.

There’s lots of art, and also plenty of craft.

And if the family was involved in it, they will like the result, even if it isn’t beautiful to outsiders.

Building a Bridge vs. Buying One

Analogies have long been one of my favourite ways of trying to convey interesting ideas to audiences.

Most are quick “one-shot-deals” that come up in a conversation and never get used again.

Others have more staying power, and become part of my “go to” arsenal of tales I use to get important points across.

Today’s blog should become part of the latter group, as I will surely find opportunities to use the story behind it with plenty of families, and their advisors, going forward.

 

 

Team Building Exercise

The setting for this story is a campsite in the woods, the week before school starts up again in the fall.

The main characters are 10 High School Seniors, along with a few adult chaperones from their school.

The students had been chosen by their classmates, and approved by school staff, before summer break, to act as prefects for the coming school year.

The trip itself was designed as a team-building exercise above all, and included a major project: building a bridge together.

 

 

Inside Info and Unplanned Events

I was not part of this trip, but I did have someone close to me who provided me with inside information about it, after the fact.

As a parent, I had known about the trip in advance, but the details of the project only came up afterwards, thanks to a number of bee stings that my daughter and a few others had the misfortune to experience.

If you have teenage kids and you’ve ever tried to get information about an incident they were involved in, you know how these discussions go.

“You got stung?  Four times?

How did that happen, what were you doing?

A bridge? In the woods?

Why the heck were you building a bridge in the woods?”

Train crossing a bridge with a steam coming out of it

 

Photographic Evidence on Social Media

A few days later, the school tweeted out a photo of the students and their handiwork.

I’ve gotta say, the picture I had in my head before I saw the tweet was of a more “substantial” bridge.

But it was technically a bridge, so I can only assume that it met whatever expectations had been set.

More importantly, by all accounts the experience they went through together, including the unplanned parts, did have the desired effect.

They’ve been working together and leading all sorts of school activities since then, and while everything doesn’t always go perfectly according to plan, that trip, and the bridge project, did serve a very useful prupose.

 

 

The Magic of Co-Creation

The end result was not so much a bridge in the woods, but a cohesive group of people who knew how to work together.

If they had really needed a bridge, the school could certainly have found other ways of getting one built.

But the overall goal was to have the teens work together on making decisions, communicating, and solving problems together.

The entire exercise was one of co-creation and teamwork.

 

 

Similarities to Governance

If you’re a regular reader, (thanks!) then you may recognize the three elements that I just outlined above:

  • Decision-making
  • Communication
  • Problem-solving

They are of course the main elements that we include when we define governance.

Family governance is something that can and should evolve from within the family group, and it is best done with as many of the key family members as possible.

Please see: The Evolution of Family Governance for more.  (That blog also includes links to previous posts on the topic.)

Girl with a backpack crossing a bridge

 

Can’t We Just Buy the Bridge?

If your family has recently decided that governance is an important part of your intergenerational wealth transitions, I urge you to heed the lesson here.

Yes, you probably could “buy” some elements of a governance plan from some professional advisors and consultants.

There are those out there who are willing to sell you a “family constitution” or a “family charter”.

Be forewarned that you may be buying a “bridge to nowhere”.

 

 

It’s All About the Experience

Like our teens in the woods, it was never about the bridge.

Families often need the experience of building

something together more than they need a bridge.

Once again, I’m arguing that process is more important than content.

The key family members who will have to live with the agreements they make over the next few decades need to be key actors in their design and construction.

Even if they do get stung a few times along the way.

money disintegrating

Stopping the Disintegration of Family Wealth

I’m writing this blog on US Thanksgiving weekend, and it strikes me that one of the things I’m most thankful for is this weekly project of mine, which has forced me to keep my antennae up, so that I can share fresh thoughts every seven days.

I began this habit in 2012 and while many of the early posts have been dropped as my website moved from one place to the next, this process has been nothing but beneficial for me.

I can selfishly say that even if nobody ever read a single one of these posts, I know that simply writing them has been a useful exercise for me, because it has been essential to the way I integrate everything that I’m learning, reading, and thinking about.

It’s also nice to be my own editor and publisher, giving me free reign over all subjects and how I present them.

 

 

Just One Word as Inspiration

As I’ve done at times in the past, today I’m writing a post that was inspired by one word.

Well, actually, it’s a pair of related words, and it’s the juxtaposition of the two words that created the A-Ha moment that became the spark for this blog.

Those words are:

Disintegrate and Integrate

A few weeks ago I was on a long drive, listening to an audiobook to make sure that I stayed awake, and there it was.

I’m not even sure which book it was anymore, and I don’t know if it was the way the author wrote it or simply the way the reader pronounced the words, but I was struck.

 

 

Cartoonish Disintegration

Something about the word “disintegrate” that had never ever registered in my head was the fact that it is the opposite of the word “integrate”.

Hunh…

I had always had a mental image of disintegration that probably came from watching cartoons.  Picture someone with a ray gun, pointing it at an enemy and pulling the trigger, and they’re reduced to a pile of dust.

If you wanted to put them back together, presumably you’d need to integrate them, or maybe re-intergrate them (?)

 

Family Wealth Disintegration

I typically write about family business and family wealth, and the issues that come with transitions from one generation of a family to the next.

One of the biggest concerns of the Now Generation is always that the Next Generation will not be able to grow or maintain the wealth sufficiently, and that the wealth will eventually disintegrate.

They may not use those words, but that’s a common thread that runs through just about every family whose concern is wealth continuity.

Their top concern may lie in the lack of ability of rising generation family members, it may be that the family is growing faster than the wealth, it could be a stagnating business, entitlement or family discord.

 

 

The Opposite of Disintegration

Back in 2014 I wrote Solid Wealth vs. Liquid Wealth, where I talked about wealth that was “locked in” to an operating business and contrasted that to a post-liquidity event and the challenges around managing liquid wealth.

While I still like that analogy, I think that disintegration vs integration can give us a bit more to sink our teeth into.

So:

If we’re worried about disintegration, why don’t we 

consider ways that we can use integration to counter it?

 

A boat in the water

FOR the Family, BY the Family

A favourite saying of mine is “FOR the Family, BY the Family”.  Let me explain the context of that.

If a family is going to have any chance of having their wealth continue for generations, then they can substantially increase their odds of success by involving as many family members as possible in the plans for how that is going to happen.

In short, the family members need to be integrated into the planning.  That means having conversations with them, which includes more listening than talking.

 

 

Co-Creation Makes Better Plans

I’m not saying that this path is easier than simply dictating all the terms and conditions to them.  I’m saying it has better odds of succeeding.

You cannot expect that this process will all happen quickly or without any bumps along the way either, that’s also true.

But how important is this to your family, after all?

If you fail to integrate those for whom you are planning into the exercise of that planning, you can expect the wealth to disintegrate.