Celebrating the Global FamBiz Community

Celebrating the Global FamBiz Community

I’m writing this post from a park bench in London, the morning after the conclusion of the annual FFI Conference, (my fifth).

The Family Firm Institute has been around for a little over 30 years, and I feel privileged to be a part of its truly global community.

The word “community” created the most resonance while reflecting on an angle for this post-conference blog post.

 

Global in Scale

Here I was, a Canadian in London, checking in to the conference on Wednesday, where I meet Richard, from Australia. As we chat, Xavier from Spain arrives, so I introduce them.

How would I ever have made such a variety of connections if not for these annual trips during which I have built and nurtured this group of friendly colleagues?

From Washington in 2014, to London 2015, Miami 2016 and Chicago last year, I was back in London again.

Regular readers know that I also make an annual pilgrimage to Denver each summer for the PPI Rendez Vous, and also attend the FEX symposia closer to home.

But the global reach of FFI is unique.

 

Let Me Count the Countries

Over a dozen Canadians were there, most of whom I already knew. And because FFI was founded in the US and remains headquartered there, the American presence is quite significant. But its scope goes far beyond North America.

Just last night I was out throwing darts with a Venezuelan who now lives in Brazil, another Australian living in the UK, a couple of Norwegians and five American colleagues.

Others I met along the way hailed from South Africa, Denmark and Switzerland, plus too many European countries to count.
Word has it that 40 countries were represented in all.

Special mention goes out to Edvard, who told me that he and his colleagues have been using my Family Continuity BluePrint all over the Netherlands, after he saw me present it last year in Chicago.

 

 

So Much to Share

Along the way over the three days, so much great information was shared, and so many ideas were presented in the many breakout sessions.

It was a pleasure to join great friends and colleagues Natalie, Elle, and Mairi as we got to lead one session from the front of the room, as we celebrated the Practitioner’s Spectrum.

Our discussion was about the variety of styles we use as practitioners when working with clients, from Counselling and Coaching, to Facilitation and Mediation, to Mentoring and Consulting.

 

The Big Deal about Community

As I stated at the outset, I was thinking a lot about the aspect of community this week.

A few months ago, upon returning from Denver’s PPI conference in fact, I also wrote about that subject, in part, in Wanted: Purpose, Passion and Community.

And as I wrote there, a big part of community is that the people need to want to spend time together.

Towards the end of any of these meetings, discussion invariably moves to “so, how was this conference for you?”

My reply usually includes a favourable rating, adds a few minor complaints, and concludes with the fact that I wouldn’t want to miss it.

 

Building Something TogetherGroup of people walking with yellow background

Between FFI, PPI, and FEX, it feels like we’re on the front edge of a wave of progress and change.

The worlds of family business and family wealth are facing important challenges, as families do the work of transitioning their assets to succeeding generations.

I love coming together with others who work in these areas, to share ways that we can all do a better job. We all want to be reliable resources for these families who are trying to do things better.

It truly does feel like we are building something together, not just for our lifetimes, but for those who will succeed us.

 

 

Many Parallels

There are many parallels between us, and the business families we serve.

We come together regularly because we enjoy doing so, and we have a common cause we are working for, which will likely outlive us all.

Many of our family clients feel as if they are the only ones experiencing their family issues, which of course is false.

As practitioners, we can also feel a bit lonely at times.

Getting together with like-minded colleagues to share ideas and re-energize only makes sense for us as well.

Why not join us?

See you in Miami, October 23-25, 2019.

Dog Holding leash in-front of the door

Ready to Lead > Ready to Leave

Certain topics come up over and over again in the world of family business.

Today we’ll be looking at two of them, although when you get right down to it, maybe it’s really just one, because they’re often wound pretty tightly together.

As you may’ve already gathered from the title, I’m talking about a changing of the guard at the top.

Some Batons Are Sticky

As I wrote in my Quick Start Guide on this subject, Sticky Baton Syndrome(Ask Prince Charles) there are plenty of cases where the person at the top of a family business is just not ready to leave.

There are all sorts of excuses that are typically mentioned as to why they must remain in place.

Some of them are even true, and some of them are actually good reasons. Many, however, are just excuses, given by people who are simply scared to face certain realities.

bird leading other birds

The Father of the Three Circle Model

In September I was in Niagara-on-the-Lake for the annual Family Enterprise eXchange (FEX) symposium, featuring John A. Davis as one of the keynote speakers.

If you don’t know who Davis is, he’s one of the co-creators of the Three Circle Model, of which I am a big fan.

See: Three Circles + Seven Sectors = One A-Ha Moment

He regaled the crowd with a presentation about the “Future of Leadership” and then led a discussion with Philippe DeSerres that was also very well received.

But my take-home message from his talk was something he only mentioned briefly in passing, right near the end, which was the inspiration for this post.

The Money Quote

He was talking about getting the timing right when it comes to transitioning the leadership of a family business.

He noted that more and more these days, and from his decades of experience as a leader in consulting to this field, there is one factor that trumps the other.

According to Davis, it makes more sense to make the leadership transition of a family business when the rising generation is

Ready To Lead,

than to wait until the current generation is

Ready To Leave.

Notably, he took the time to spell it out, i.e. “lead, l-e-a-d” and “leave, l-e-a-v-e”, just to be sure we all understood him.

I understood. I hope you do too. But just in case, I will continue…

A man leading other people

Too Soon or Too Late

At the outset of this blog, I noted that these two topics are often connected.

The biggest way this happens is that the current leaders will sometimes subconsciously hold back on giving the rising generation the opportunities to show what they can do.

And one of the major reasons that they do this is because of their own desire to remain important.

What Else Is There?

So many business leaders attach so much of their identity to their role as the leader of their business.

I like to think that this might just be too narrow a viewpoint.
Let me explain. The key to this lies in the Three Circle Model.

Note that the Business circle is only one of the three systems that intersect, and that the “big picture” also includes Family, and Ownership.

Step Back to See the Whole Picture

If the leader of the “business” steps back and looks at the whole picture, including the Family and Ownership systems as well as the Business system with which they are already intimately familiar, they will see many other, greater, opportunities.

If the business is a huge success, yet the family falls apart and the owners end up in a dispute that has various family members “lawyering up” against each other, then just how important will the business success have been in retrospect?

Three Circle = Three Systems = Three Leaders?

If you’re trying to create a true multi-generational family business, you cannot neglect any of the circles.

Each circle ultimately needs its own governance structure, and likely its own leader, or leaders. Someone needs to foresee all of this and line up and prepare those future leaders.

There comes a point in the life cycle of any business leader when their focus should shift from running a successful business to overseeing a complete enterprising family (i.e. all 3 circles)

So you built a great business, congratulations.

If you want it to continue to survive as a family enterprise for generations, you’ve still got more important work to do.

Stop working IN your family business,
Start working ON your business family.

Suggestion box

From Suggesting to Managing in the FamBiz

Being fluent in more than one language has many benefits, most of which are quite obvious.

Having lived in Montreal my whole life, I experience this daily. Not a day goes by where I don’t use both French and English.

Facilitation = Making Things Easier

Every language has words that come from other languages, and when you’re fluent in both, some things can seem obvious to you that others might miss.

Years ago in the Family Enterprise Advisor program that I was taking in Toronto, we were in the module on “facilitation”, and some of my unilingual colleagues were a bit unclear on the meaning of the word.

I shared my take, which is that the word “facile” in French typically translates to “easy”, so facilitation is simply “making things easier”.

Some Are Less Obvious

Examples like that one are pretty easy to spot, but others are less striking, such as the one that inspired this post.

The genesis was a documentary I watched this past summer, in French, about Felipe Alou, who hails from the Dominican Republic.

Alou had a great career in baseball, first as a player and eventually as the manager of the Montreal Expos.

Promotion to Manager

Alou started the 1992 as the “bench coach” for the Expos, essentially the “assistant” to the rookie manager, Tom Runnells.

Runnells was the boss, and Alou was there to support him.

But this manager was in over his head, and often sought input from Alou, who was older and had much more experience.

When Runnells was fired less than two months into his first season, Alou was given the top job as many fans had hoped.

Giving Suggestions

Here is where the language thing comes in. The documentary was in French, but most of the interviews were in English, so there were French subtitles.

Alou was explaining, in English, how things were at the start of the season, when he was second in command.

He mentioned that he was suggesting things to Runnells, but then suddenly he was managing the team himself.

The French verb “to suggest” is “suggérer”.

And the French verb “to manage” is “gérer”.

Wait, what?

So, is “giving suggestions” tantamount to “sub-managing”???

male and female business people talking

Sub-Titles as a Visual

If it were not for the sub-titles I was reading (for no real reason, actually, since I understood spoken English!) it would not have hit me.

But there it was for all to read, about the big step Alou had to take to go from “suggérer” to “gérer”, from suggesting to managing.

Stepping Up, One Step at a Time

Now is the time for me to bring this blog into the family business realm. I trust that some readers are already with me here.

Let me relate my recollection of some of my own story as I worked with my Dad, decades ago.

Initially, my suggestions on some subjects were welcomed. As my ideas proved to be good, they were agreed to without much debate.

From Talking to Doing

At a certain point, some of the implementations were also left to me, as I demonstrated that I could be trusted.

Sure, at the early stages, I would clear things with him first before acting, and then eventually I would act and relay the information afterwards.

Eventually, I would do what needed to be done, and sometimes not remember to even inform him.

In many ways, I took the “suggesting” to “managing” steps as Felipe Alou did, but over a longer period of time.

I was afforded this longer timeframe because my Dad and I had planned for a longer overlap.

male and female business people talking
Radical Changes: In Case of Emergency Only

The firing of a baseball team manager is not at all like a family business succession, at least in terms of the way it should be done.

Except in cases of sudden death or accident, a family business will hopefully have the timeframe required to go the slow route.

“They Aren’t Ready”

We hear a lot about the leading generation being unwilling to let go of the reins (see Sticky Baton Syndrome –ask Prince Charles)

Sometimes those who have been running things just don’t know how to get started?

Handing things off to the younger ones needn’t be done in one step.

Accepting suggestions, and even asking for them, could be a great first step. It’s never too early to begin, either!

The longer the overlap, the easier it is to make it a smooth transition.

From Family Business to Family Office

Welcome to a new theme here at Shift your Family Business, (the website). In some ways it’s long overdue, and in others, well, it’ll be more of the same.

 

I’ve begun to realize that I haven’t written nearly as much about the Family Office space as I have about Family Business.

 

Of course there’s a huge overlap of topics that suit both areas, and these have been covered here at length.

 

But for some reason, I get way more questions from families about operating their businesses than from those who’ve made the transition to managing and transitioning their wealth.

What’s the Difference?

If you stop anyone on the street and ask them what a family business is, everyone will give you some kind of answer that would score at least a few points on any grading key.

I daresay that if you asked “what’s a family office”, a lot more people would ask you to repeat the question, or would have only some vague idea of what you were asking about.

I consider myself to be pretty good at explaining complex things in simple terms, and this one is a big challenge.

In the simplest explanation, a family office is a formal structure set up by a family to manage the family’s wealth and everything that goes with it.

Family Business Office People Working
I’m Too Sexy for my Wealth

In the last decade or so, the term “family office” has been discovered and co-opted by many professionals who work in the area of wealth management.

I come across examples regularly that make me shake my head, where I see this very broad term used as a label to describe a very narrow service offering.

The image I have in my head is of a hot dog stand with a sign that says “smorgasbord”, where you can have your hot dog with mustard, or ketchup, or both!

OK, but where’s the rest of it?

Not for the Mass Affluent

Financial institutions typically like to attract the clients with the most wealth, and they also have products and services geared to lower levels of wealth too.

There are terms that get used in their industry to segment different wealth levels, and they kind of make my skin crawl when I hear them.

There are the “mass affluent” with “only” a few million dollars, then you get to HNW (high net worth) and eventually UHNW (ultra HNW!)

Who qualifies for what level of services varies over time and from one institution to the next.

Let’s just say that family offices have historically been for families in the upper reaches of society, and so anyone who markets their services as “family office” is trying to be seen as more “big time”.

That, and the hope that families will use their services because then they can talk about “their” family office at cocktail parties, I guess.

How Do They Get There?

Historically, family offices are set up once a family has achieved a certain level of liquid wealth, and/or a certain level of complexity.

Liquid wealth is money that can be quickly transferred from one asset to another, like cash, stocks and bonds.

Family operating businesses and real estate are usually considered “illiquid”.

The most common way a family arrives in the land of a family office is after a liquidity event, i.e. the sale of a family business.

See: Liquidity Events in a FamBiz: Pros and Cons Part 1 and Part 2

 

Custom Made Mystery

But every family is different, and so every family has different needs.

Most families are not 100% sure of what they need, and they have an over-abundance of providers who are trying to convince them that “I am your solution”.

There’s an expression in family office circles that “If you’ve seen one family office, you’ve seen ONE family office”.  There are no two the same, nor should there be.

Family Office

Demystifying Family Offices

From discussions with families, acquaintances, and peers, I realize that some demystification is overdue.

So look for more frequent posts on this fascinating subject in this space going forward.

 

Looking to get a head start?

– See chapter nine of my book

SHIFT your Family Business, (the BOOK),

Chapter 9: Towards a Family Office Mindset

  • See this article by Jaffe and Grubman

“Development Stages of a Single Family Office”

The Importance of Family Vision

The Importance of Family Vision

It’s been over a year since I wrote about Family Vision specifically, so I think I’m due.

(5 Things You Need to Know: Family Vision)

 There are of course more than five things that anyone could say about every subject, and family vision is one that I think should be discussed more broadly, more deeply and more frequently.

But first I’d like to go back to the first keyword in the title that I decided to put on this post, i.e. “Importance”.

Questions Around Importance

A natural place to begin would be to ask “why” family vision is important.

But since this is my blog and I make the rules here, I’m going to “zag” instead of “zigging” and answer a few different questions instead.

I hope that no one thinks I’m acting like a politician when I answer a different question than the one that was asked.

My Dad used to say “You can do whatever you want, but don’t become a politician, because then even your friends will think you’re an a**hole”.

(My son recently reminded me of this, so yes, I have passed it down!)

 

– For Whom is Family Vision Important?

Making sure there’s a clear family vision isn’t an important consideration for every family.

In fact, I’d bet that most families have never even thought about this at all, and that’s OK.

But I don’t write these blogs for most families. I’m reminded of something my Aunt said to my Mom after she read my book, SHIFT your Family Business. “Oh, that’s a book for rich people”.

Well that isn’t the word that I would’ve used, but she isn’t wrong either. Most of what I write is geared towards “the 1%”.

I like to think that my ideas are just as valid, generally, for all families, but realistically, the higher up the wealth spectrum the family is, the more likely my thoughts will resonate with them.

 

– When Is Family Vision Important?

Just as family vision is not necessarily important for every family, neither is it important at all times.

Years and even decades can pass during which it never becomes salient. So when is it likely to become important?

Essentially, as soon as more than one generation of adults is involved, I believe that it is high time to think about working on a family vision.

As soon as the wealth that has been created goes from being the wealth of its creator to the wealth of the creator’s family, having a family vision becomes important.

When the wealth creator goes from thinking about “my wealth”, to “our wealth”, the paradigm has shifted.

 

2 kids walking down a road

– Where is Family Vision Important?

So assuming that a family is actually one for whom family vision is important, and that they are now at a point where the wealth is considered to be “family wealth”, where does the vision actually fit into things?

Discussions about family vision usually begin in the context of a family meeting.

If a family fits the profile based on the first two questions (“for whom” and “when”) but still hasn’t begun to have regularly scheduled family meetings, then that’s the most logical place to begin.

When starting out, I always suggest that families identify the smallest logical group of people to convene, usually the parents and their adult children. In-laws and children can be added later.

When I say, “regularly scheduled”, that doesn’t necessarily mean frequent.

Having a regular annual meeting will often suffice, and that’s preferable to having a few ad-hoc meetings over a few months and then not getting together again for three years.

– What is Family Vision Anyway?

Just what goes into a family vision will vary from one family to the next. No two families will go about figuring theirs out the same way, either.

The actual “content” or result of the vision is less important than the process the family goes through to define it.

If the family can answer the question “Where are we all hoping to go together?” I think that they’re well on their way.

Is it a family credo or motto? Yes, possibly. Is it a mission statement? Yeah, maybe that too.

Is it carved in stone? Well, maybe, eventually, but I’d suggest writing it down in pencil first, just in case.

So when’s the next family meeting?

Video version of (5 Things you Need to Know: Family Vision)

guy wearing suite holding hand up

Lonely at the Top of the FamBiz

Lonely at the Top of the FamBiz

This week we’re going to look at something that many family business leaders face, and that often makes them feel powerless.

While they appear so powerful to others, deep down inside, well, maybe, not so much.

 

Life Imitates Art

I was a big fan of the TV Show The Sopranos when it first aired on HBO, and it became appointment TV viewing in our house.

Tony Soprano was a mafia boss, and he had a family, but he wasn’t the prototypical family business leader.

We have a promotional poster for the series in our basement, that shows Tony in the center, with his wife, mother and kids on one side, and his “work family” on the other.

It reads:

“Meet Tony Soprano:

If one family doesn’t kill him,

The other family will”  

I still get a kick out of it every time I see it.

Not Just for Business Leaders

The Soprano quote below that inspired this blog post came from a story I read a couple of months back about David Chase, which ran in GQ Magazine.

The story was about Soprano’s head writer David Chase, and it examined some similarities between Chase and the Tony Soprano character.

The end of the story included this quote:

(Some of the letters have been replaced by ***, but I think you can still get the gist of it):

 

“All due respect, you got no f***ing idea

what it’s like to be number one.

 

Every decision you make affects every

facet of every other f***ing thing.

 

It’s too much to deal with, almost.

And in the end you’re completely alone with it all.”

 

Does It Have To Be So Lonely?

 Let’s look at some options that the person at the top has as possible outlets or resources.

 

     Spouse

Tony, of course, had Carmela and they spoke quite often about many important issues. But deep down, Tony knew that there were many things that he couldn’t and shouldn’t burden his wife with.

An understanding spouse who is a good listener can be very helpful but is rarely sufficient to relieve the loneliness burden.

 

     Top Management

Some of the most memorable scenes from the show were ones that included Tony and his top management. Paulie and Sylvio were the mainstays, and Christopher was a rising star in the group.

But much like the spouse, these people are so tied in with the decisions, that it becomes difficult to broach subjects that affect the group.

 

     Peer Group

The closest thing Tony had to a peer group was the other top mafia bosses from other territories.

We occasionally got glimpses of this, and they sometimes offered an opportunity to exchange with others who faced similar challenges and decisions.

The nature of their business on the show, however, added a dangerous element that discouraged too much sharing.

Real family business leaders usually have lots of opportunities to join peer groups, through organizations like FEX, TEC, Vistage, etc.

 

     Rising Generation of the Family

Tony’s kids were too young, and AJ, his only son, did not seem to have the “right stuff” for the line of work his father was in.

For real leaders of family businesses, there are plenty of opportunities to share what one is going through with their offspring, especially those who work in the business with them.

This is an area that I think is underexplored by most people.

Maybe it’s because they don’t want to appear to be playing favourites by sharing with one child more than others, or maybe it’s an effort to avoid putting a burden on them.

My belief is that some sharing, in appropriate amounts, at the right age and stage, and in the proper way, can be a win/win, because it also helps prepare the future leader(s).

 

     Trusted Outside Advisor

Tony’s frequent visits with Dr.Melfi, his shrink, were a recurring theme throughout the show’s run.

Mental health practitioners are a potential outlet, but so are other trusted professionals, like your accountant and lawyer.

There are also plenty of executive coaches and family business advisors that could certainly play a role too.

 

     Board of Advisors

The ultimate solution, just shy of having a full-fledged “Board of Directors” would be to set up a less formal “Board of Advisors”.

This takes time and effort to set up, but those who have done it swear by it.

Tony Soprano probably should have had one too!

 

 

2 people disagreeing and looking in the other direction

Choosing Sides in a Family Business

Choosing Sides in a Family Business

I sometimes write about conflict management and resolution, because family businesses are rife with opportunities for clashes of personalities and ideas.

(See: Embracing Conflict in Family Business & FamBiz: Conflict is NOT an option)

But this post will be a bit different from others I’ve written in the past.

Today I want to get into a family conflict and ask readers which side they would choose in a fictitious war between two sides in a family.

 

The Guerrero Family

Vince and Walt Guerrero are the two oldest brothers in the family that owns a specialized factory in a mid-sized northern town.

Their father, Guillermo, started the business some 40 years ago and is preparing to retire, leaving the business to his four children.

Sabrina and Teresa, the two youngest siblings, used to work in the business as well, but both left because there was just too much conflict.

 

Vince’s Side or Walt’s Side?

Vince and Walt don’t exactly see eye-to-eye on many things, and each of them wants to be the new President when Dad finally retires.

Sabrina and Teresa get along very well with each other, and they both love their brothers equally, and the boys are constantly trying to get their sisters on their side of every issue.

Which side should they choose?

 

A Common Scenario

While the scenario I just described is actually quite typical, the question that I’m asking you is not.

Of course, there isn’t enough information to give a reasonable answer to the question, and I already spent a couple hundred words describing it.

It’s actually a really stupid question because I’m asking you to “choose sides” when there really aren’t any sides to choose!

 

Study Group Example

One way that this post is different from my usual format is that I usually start out by giving some context to the genesis of the post, but this time I’ve saved that for here, in the middle.

I’m part of a peer study group through the Family Firm Institute (FFI) and we had a meeting recently where some of us got together to discuss a variety of topics, including some real case examples we are dealing with.

 

Conflictual Family Drama

One group member spoke about two siblings who were always in confrontations and how the other family members were always trying to decide which one of them to support.

We have a long-term FFI member who acts as a mentor and moderator on our calls, and she made a statement that resonated with me, so I wrote it down, intending to use it for a blog.

Nancy said, “Oh, so they’re choosing sides when there really aren’t any sides to choose!”

“Bingo!”, I thought.

 

Whose Side Are You On?

The point Nancy was making (I think!) is that while the combatants are trying to make it about “my side” versus “his side”, anyone else who looks at it that way is falling into a trap.

Taking sides is usually a false choice.

Oh, I get that this happens in family businesses, and it still happens far too often.

Family members who work together or manage assets together won’t always see things the same way and will often try ot get others to come to their side of every argument, but that doesn’t mean the other family members need to oblige!

 

Interests versus Positions

If you’ve read even a little bit about negotiation, you’ve likely heard about the difference between “positions” and “interests”.

Fisher and Ury’s “Getting to Yes” was the first place I recall reading about this, and that was in the 1980’s, so this isn’t anything new.

If each side simply holds to their position, the negotiation will likely remain a zero-sum game, where any gain by one side is a loss for the other.

 

Digging Their Heels In

Sometimes in a negotiation, both sides really dig their heels in, usually because there’s some emotional aspect to the conflict that prevents them from letting go.

And yes, sometimes in family businesses people get into conflicts that are complicated by emotional issues.

 

Get Past their Positions

In order to have a better chance at a successful resolution, you need to get past their “positions” (My way / I’m right) and get to their interests.

Then, when you can find the common interests that both sides have, there’s something to work with.

Can the other family members avoid taking sides, and look for common interests instead?

I sure hope so!

conflict between family member in an office enviroment

Embracing Conflict in Family Business

Embracing Conflict in Family Business

Last week I mentioned the Family Firm Institute’s annual conference that I attended in Chicago in October, and how I came home with many weeks’ worth of blog material.

So today I’ll take one of the sessions that I enjoyed and build this post around it.

Here’s the title of the presentation in question:

 

“Can Embracing Conflict Spur Positive Change?”

Joe Astrachan and Carrie Hall were the presenters, and they based much of their discussion on a recent survey of some of the largest family businesses in the world.

Here is a link to their report.

Often when people like me get called into a business family, it’s because there’s something going on that could be described as “conflictual” in nature.

One of the first pieces of “good news” from the conflict is that it has heightened the sense that there’s a need to call in an outsider to help get the family to a better place.

Now, if that outsider is open-minded, well trained, and comfortable with a high conflict environment, then why couldn’t the conflct actually spur positive change?

What’s the Alternative?

Too often families will avoid conflict, or even any semblance of conflict, at all cost. Certain family cultures simply don’t “allow” any expressions of confrontation, negativity, or even challenges to authority.

Unfortunately, that often masks important differences that actually really NEED to be expressed, brought out, and dealt with.

One of the first pieces I recall reading about this, the one where you could say I had my “A-Ha moment” on this subject, was “The Invaluable Gift of Conflict”, by Matt Wesley.

 

Two Main Components

The presence of conflict, aside from it resulting in the arrival of an outsider to assist in moving the family forward, is also that visible conflict is preferable to simply having issues simmer quietly under the surface.

The consequences of unexpressed issues can be bitterness and dissatisfaction that lasts for years (decades?) before finally exploding. Unaddressed issues will often only get worse with time.

But the second “good news” aspect of conflict in a family business is the “energy” that it can create, and that energy can be harnessed, for “good”.

 

Stagnation and Apathy

One of the side effects of having people who are displeased in key positions (in the business or in the family, if not both) is that it can breed apathy and a feeling that things will never change, or that they’ll only change far in the future, and only when their perceived “problem person” is gone.

That apathy and feeling of resignation can turn into stagnation very quickly.

Conflict that erupts and becomes visible can be much healthier because at least you can see it and you’re forced into action to deal with it.

 

“One Story”

Back to the presentation by Astrachan and Hall.  The biggest “take home” message for me was their idea of creating “one story” for the family to tell.  Some background and context are necessary here.

They described a situation where there was a severe rift in a family, yet a couple of the branches of the family managed to come back together.

One of the keys to making it all work, was to come up with the “one story” that the family would tell (to themselves and to the world in general) about the business and the family history.

 

Singing from the Same Hymn Book

Any family business that has lasted more than a few decades will do well to compile and tell their story, if only for the “marketing” power that this can have.

When it comes time to “inculcate” younger members of the family into the business’s culture, these history lessons are pretty important too.

But in the case of a family “coming back together” after a rift, the part of the story dealing with the cause of the rift, and more importantly, the way the family overcame it, can be huge.

 

Positive Change

The presentation (and this blog) are about positive change, and getting the story straight can have more of a positive influence than many people will realize.

The first step may just be to learn to “embrace” the conflicts that you can actually see.

You can only get through difficulties when you actually put things “on the table”. And if you need outside help, then get some.

Horse shoe with a 4 leaf clover and a lady bug

Genetics, Luck, and Karma: Secrets to FamBiz Success

Genetics, Luck, and Karma: Secrets to FamBiz Success

People ask me where my blog ideas come from, because I find something different to write about each week. My answer: “anywhere and everywhere”.

This week it’s from watching Jeopardy, and one of Alex Trebek’s brief interviews with the contestants.

 

Top 5 of All Time

A bartender named Austin Rogers had a fantastic run recently, running up over $400,000 in winnings in just over two weeks, which placed him in the top 5 of all time Jeopardy winners.

After he had accumulated some sizeable winnings, Alex asked the likeable young man from New York to what he attributed the success he’d been having on the show.

His honest reply struck me as quite refreshing:

“Genetics, Luck, and Karma.”

 

Fits with Family Business Success Too

 I couldn’t help think how nicely these three elements fit with family business success too.

I realize this isn’t necessarily obvious, but hey, that’s why I write these blogs, to share my thoughts on just this kind of thing. Let’s take them one at a time.

 

Genetics

The family business angle fits pretty clearly with the genetics comment. “He sure seems to take after his Dad”.

Yes, indeed, we do inherit many traits from our parents, and in a thriving family business, the hope is usually that the next generation will have many of the same positive characteristics that made the parents successful.

Problems can arise though, when the children have different positive traits, and clashes can happen when the generations don’t see eye-to-eye on everything.

 

Luck

Luck is a bit harder to get agreement on. Successful people like to think that they alone are responsible for their company doing well, and in most cases that’s true, but it’s only part of the formula.

I can’t help think that luck has more influence on how things turn out than most people acknowledge.

Yes, I’m quite familiar with the expressions “You make your own luck” and “The harder I work, the luckier I seem to get”, and they resonate nicely with me too.

But, for every business person who blames failure on “bad luck”, there’s probably another who should be thanking “good luck” for their success.

 

Karma

If you think that luck was a difficult concept to grasp, let’s move on to karma, and try our luck there.

Let’s start with a quick Google search, which turned up this nugget:

          Karma (car-ma) is a word meaning the result of a person’s actions as well as the actions       themselves. It is a term about the cycle of cause and effect. According to the theory of Karma, what happens to a person, happens because they caused it with their actions.

That wasn’t exactly what I thought my search would turn up, but who the heck am I to argue with Google? That might not bring me good karma. (See what I did there?)

A lot of different things come to my mind when I think about karma. The “Golden Rule”, and “Do unto others” are a couple of them.

I also think about humility, and not acting like you’re better than everyone else, because that probably won’t create good karma.

 

Humble and Kind

The Karma idea made me flash back to a blog post from June 2016, Humble and Kind, in which I wrote:

And if you do start out humble and kind when you are young, how did you get that way? My guess is that most of it comes from your parents and the example they set.

When family businesses fall apart, it is usually in large part because of family conflict, so what happened to the humility and the kindness?

When I first thought about Karma and family business, I thought about in the ways that the business interacts with customers, suppliers, and competitors; you know, the outside interactions.

But now that I’ve re-read the excerpt from that blog, it makes me realize that the internal Karma, within the family, is probably even more important.

Teaching your children about karma brings good karma.

 

Something to Think About

Back to Austin, our Jeopardy contestant. He eventually lost a game and was dethroned, but his reaction seemed to fit with his penchant for keeping the karma gods happy.

He was last seen laughing and high-fiving the woman who beat him.

His luck might’ve run out, but his karma was going strong.

Bird on a Cords aligned together

5 Things you Need to Know: Family Alignment

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.