Conference in Miami

Selected Notes from FFI’s 2019 Conference in Miami

Selected Notes from FFI’s 2019 Conference in Miami

I’ve just completed an intense few days in Miami with some fantastic colleagues and friends.  The Family Firm Institute puts on an annual conference every October, and once again I’m so glad I made the trip.

I don’t typically take many notes at such events, but I do jot down little tidbits to use as blog material going forward.  

My blog calendar going out to late December is already full, so I’ll just share some random take-aways that I noted over the past 3 days.

 

Money In Motion

I spent some time with friend and colleague Kirby Rosplock, who mentioned on more than one occasion that there’s “more money in motion right now than ever before”.

I thought that was a nice way to expand on the old “largest wealth transfer in history” that some of us are getting tired of hearing, while also adding in the aspect of the moves being made by firms and professionals who are forever positioning and re-positioning themselves to benefit from said transfer.

 

Emotional “Investment” and Emotional “Ownership”

When people talk about family businesses, as they do constantly at FFI, the subject of “emotions” is never far away.  I heard a couple of expressions containing the word “emotional” in similar but different ways, and as usual, that caught my eye.

In one session, the presenters spoke about the difference between “real” (i.e. legal) ownership of a business, and family members who (simply) have “emotional ownership” by virtue of being family members.  These folks are often dubbed “stakeholders”.

That was not necessarily a new term for me, but then in a later session, I noted the phrase “emotional investment” being used to talk about rising generation family members, and whether they were ready to make the required efforts to take leadership roles in the business.

“Are they willing to make the emotional investment?” was how it was put.  It was much more about energy and effort than money.

 

Getting Value Out of Values

Peter Englisch of PwC made some interesting points around family values and how they can be important to a family business.

Values alone aren’t enough, he noted.  Here’s the money quote:

     “You only get value from the values if they’re communicated!”

It’s great to work out what the key values are in the family, but then the effort must be continued to communicate those values, both internally to employees, and then externally, to customers.

 

Hire Slow, Fire Fast

There was another great nugget from that session that I thought was worth sharing, and it has to do with finding key employees who share the family’s values.

Family businesses should Hire Slow, and, when required, Fire Fast.

There’s a tendency to do the opposite, especially with tight labour markets we’re seeing today.  But for family businesses, you need to make sure that candidates share the values of the family, and that can take time.

Likewise, if you discover that someone does not share certain key values, you need to hasten their exit, immediately.

 

Inspiration = Breathe!

I attended a session on Spirituality in Family Business Advising, given be friends Natalie McVeigh and Mette Ballari.  There were plenty of fellow meditators in the full house crowd, and it was inspiring.

In fact, as regular readers know, I love to point out interesting language facts, and I’m almost ashamed to admit that I did not see this one before myself.

Natalie noted that the word “inspiration” that we are all familiar with, actually means “breathe”.

In French, “la respiration” is made up of two parts, the breathing in “l’inspiration” and breathing out, “l’expiration”.

There are a few places we could go with that, but we’re out of race track for this week.

 

NYC in October 2020

I am already looking forward to coming together with this exceptional group of friends and colleagues from around the globe next year.

We will be doing it in the Big Apple, New York City, from October 28-30, 2020, right in the heart of things, in Times Square.

 

What I’ve shared here is less than 10% of what I got out of attending, and I’m still digesting much of it.

Advising family businesses in still very much a niche field.  As such, in order to bring together a large group of like-minded colleagues, a global group is needed.

Nobody does that better that FFI.

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.

 

 

 

Guy sitting in his office facing a window

Putting “Family” in the Family Office

Back in September in From Family Business to Family Office, I finished up by noting that I’d be writing about the family office space more frequently going forward.

I diligently followed that up four weeks later with another post on the topic, Family Office: “WHAT” vs. “HOW.  But that was more than two months ago, so this is slightly overdue.

Coincidentally, I just came across an article from a recent issue of The Economist on the subject, which I found interesting, called: How the 0.001% invest.

 

 

An Investment Vehicle

An important angle of that story is evident from their secondary title:

“The family offices through which the world’s

wealthiest 0.001% invest are a new force in

global finance that few have heard of”

The story makes the point that some of the giant family offices from around the world are making waves in the financial markets like never before, which is causing them to be talked about even more.

I typically don’t talk about the “0.001%” very much, on the assumption that they are already quite well served, and because they constitute a tiny fraction of people who could ever use my services.

 

Where is the Family?

I typically write about things that actually concern the families themselves, even though most people care only about their money.

The number of people who would bend over backwards to cater to the “super-rich” to manage their wealth is huge.

The number of people like me who want to be a resource to those families as they manage the family aspects of their intergenerational wealth transitions is comparatively tiny.

So it’s up to me to ask the question, then, “Where is the family in the family office?”

 

 

Family Members as Clients

Well if the story from the Economist is any indication, nobody really talks much about the family members themselves, preferring to concentrate on the family’s wealth, and ways to increase it.

This also happens to be where most of the professionals make their money, by helping the family office make money.

The members of the family, for whom all of this work is ostensibly being done, are rarely mentioned.  They are, though, the “clients” of the family office.

Because every family office is unique to the family it serves, it is hard to know how many of them actually have deeper levels of family involvement in the work the family office does.

 

 Meeting room for family

Values, Goals, Mission, Vision

Because many family offices come about as the result of liquidity events in family businesses, many of the same issues are often found there.  Some are simpler than those in an operating business, while others are more complex.

See: Huge Liquidity Events – Great News, Right?

Hopefully, the family office is not simply making investments based on maximizing returns, if those investments would go against the values of the family.

Ideally, the goals of the family would also be taken into consideration too, not to mention the family’s mission and vision.

This, of course, pre-supposes that the family has worked together to define their values and agree on the goals, mission and vision of the family.

I’d guess that very few family offices are currently benefitting from that kind of guidance from family clients who’ve done that important work.

 

 

Family Office as a Catalyst

Regular readers know that I like to harp on the importance of having someone “with a different last name” around the table at meetings.

It’s important for family meetings to run well, and so having a facilitator who is not a family member is the best way to go.

Someone from the family office could be well placed to handle such a role.

 

 

Multi-Family Office Opportunity

For large single-family offices (SFO) there’s really no excuse for not doing the important work of involving the family and preparing the rising generation.

For multi-family offices, (MFO) the idea of offering assistance with family meetings is an opportunity to differentiate their services from those who are strictly investment managers for high-end clients.

 

 

Check Before you Sign

This is not a new idea, of course.  Many firms tout their assistance with family matters on their websites and in their pitches to potential family clients.

There is, however, a huge variation in the service levels that different firms out there can offer their clients in this area, so if part of the reason you are looking into an MFO is for help with family dynamics, be sure to ask LOTS of questions first!

 

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.

Bulb light

Family Governance: From Filaments to LED’s

Family Governance: From Filaments to LED’s

When it comes to “Family Governance”, there aren’t many bigger fans than me.

I’ve written several blog posts specifically on the subject on this site, and there’s even a chapter in my book, Shift your Family Business, titled “Governance, Ugh!”

That exclamation –ugh- makes it seem like I don’t like governance, but in the book’s context, it’s clear that I do.

For any family to have a realistic chance of their wealth surviving over generations, they’ll absolutely require some form of governance.

 

Family Constitution? Yes, but…

The form and structure of that governance, as well as how it evolves over time, is where all the many important questions and decisions come into play, of course.

My advice is to always start small and take it slowly.

You’re looking for a durable “solution” to last generations, so there should be no reason to rush something through in weeks or even months.

One place that I would almost never choose to

begin is with the writing of a family constitution.

And that’s especially true if it’s one dictated by the wealth creator and patriarch, by himself, without consulting any other family members.

 

Misguided Ideas

One of the peer groups in which I participate with other family business and wealth advisors recently tackled such a case.

Here’s a bit of the background provided by a colleague I’ll call Nelly.

A family patriarch, “Jack”, who was also the wealth creator, was approaching his 80th birthday, and one of his financial advisors had spoken to him about succession and transition planning.

Somehow the idea of a “family constitution” came up and Jack loved it. He then sat down and began to draft it by himself.

 

How’s That Working Out For You?

As Jack shared his progress with family members, he began to become concerned with their lack of enthusiasm.

The financial advisor who initially mentioned the idea of the constitution was way out of his league to be of use to Jack now, but thankfully, he called in Nelly’s firm for help.

As Nelly shared with our peer group, she was slowly encouraging him to involve other family members in the creation of their constitution.

After several repeated suggestions, he actually started to warm up to the idea.

As Nelly shared with us, there was a light bulb going off from time to time, maybe with only “one or two filaments flashing”, but she was starting to get through to him.

 

Input from the Rising Generations

Of course, a couple of filaments do provide some light, which is better than complete darkness.

But it’s 2018, and those bulbs harken back to Thomas Edison and aren’t exactly “current” anymore.

I pointed out that perhaps what they needed here was some LED lighting, not more filaments.

Jack was preparing to leave his wealth to his children and grandchildren, but he was missing out on the opportunity to have them involved at this key stage of planning.

 

For the Family, By the Family

I’m not sure what became of Nelly’s work with Jack and his family, although I suspect it’s ongoing.

I’m not saying that involving the family is simple or easy, because it’s not.

But I am saying that it’s more than

worth the effort when done right.

Jack created the wealth, so he can technically do what he wants with it, and even give it all away to charity.

But he has expressed a desire to pass it on to his family. So what he’s actually trying to do is transform his personal wealth into family wealth.

The best way to do that, is to create some form of governance, for the family, by the family.

 

And What IF He Does It “His” Way?

If Jack rejects Nelly’s ideas and simply ploughs ahead with authoring the constitution himself, I predict one of two results will occur after Jack dies.

If the family gets along and the wealth is structured rather flexibly, the family will make whatever changes they see fit, using his constitution as a mere guideline, which will fade away over time.

Or, more likely, if the family does not get along well, or if the structures are very rigid, the family squabbles will begin right after Jack’s funeral.

Jack has a choice, but I sure hope he listens to Nelly.

Grandpa’s filaments won’t be quite as useful in his grandkids’ world of LED’s.

 

Name tag with prepared written on it

5 Ways FamBiz Rising Gens Can Prepare

5 Ways FamBiz Rising Gens Can Prepare

People in and around family businesses everywhere spend lots of time worrying about the rising generation of the family, wondering if and when they’ll ever be “ready” to take over from their parents.

There are as many variations of the situation as there are families and businesses, but there are some things that many have in common.

Those who are not content to just “wait their turn” can do a lot more than simply “be patient”.

With that in mind, here are…

 

“5 Ways FamBiz Rising Gens Can Prepare”

 

  1. Get Mentored

A mentor is usually someone older than the mentee, typically by more than a decade (and often two or three decades older).

The most important detail for a rising generation family business mentor is that they NOT be the parent, or any family member who is ultimately their boss.

A mentor can be from within the company, or from an outside organization, and will have some life and career experience that can be shared, on an occasional basis, over lunch, coffee or by phone or Skype.

 

  1. Create and Lead a Project

Up-and-coming family members in a business often have difficulty carving out their own leadership abilities, separate from those of their parents.

Creating their own project, either within their department, or as something new and intrapreneurial, is a way for them to show that they are able to make something happen on their own.

Of course they need to do more than just conceive an idea, and actually lead the necessary steps to do the work and bring it to a stage where the project can be deemed an accomplishment.

 

  1. Work on Sibling Unity

Unless the person is an only child, they will need to continue to deal with their sibling relationships for many decades to come.

Whether their siblings are working in the business or not, and even if they seem to display no interest in the business, those relationships should not ever be taken for granted.

Especially when there are siblings who never work for the family company, it behooves the ones who do to continually over-communicate what’s going on.

This should be done as “matter-of-factly” as possible, and never as bragging about one’s accomplishments or complaining about how tough it is to work for the parents.

Siblings may not be part of the business circle, but they are always part of the family circle, and don’t forget that they’re likely long-term ownership circle partners too.

 

  1. Build Your Network

While it is very important to get to know the people from outside the company who currently deal with the leading generation, from bankers, to customers and suppliers, having their own network is also beneficial.

Joining peer groups and making sure that they develop connections in their own age group will pay dividends down the road.

When their turn comes to take the lead on things, they’ll want to be able to call on their own contacts and people that they trust, and these relationships take time to develop.

It’s never too early to begin to cultivate a network of people you know and can trust.

 

  1. Round Yourself Out

Most people come into the family business from a certain specialty like finance, accounting, or marketing.

It is great to have a big strength on which to build your career, but the higher up the organisational ladder you go, the more that you can be a “generalist”, the better.

So if they’re known for their skills in one particular area, it may be a good time to work on building some skills and getting experience in another area where they’re currently less strong.

Once they get to the top, they’ll need to be able to properly relate to everyone, from a position of strength.

 

And Don’t Do This

The five ideas above are some ways that they can begin to take important and useful steps to ensure an eventual smooth transition.

Here is what they probably want to avoid.

  • Complaining to anyone who’ll listen that the current leaders are hanging around too long.
  • Whining that nobody takes them seriously
  • Bad-mouthing key employees
  • Being a part of “the problem” rather than bringing solutions
  • Displaying work habits that make them appear entitled

There are plenty of positive things they can do while they wait, and that includes some of the ideas outlined above.

Good luck!

Nuggets of Gold

Great Nuggets from Denver

Great Nuggets from Denver

Regular readers of this blog know that there’s one annual event on my calendar that I look forward to more that most.

I just got back from Denver, where I spent most of the week trying to milk as much as possible out of the conferences put on by the Purposeful Planning Institute (PPI).

Rendez Vous is the one time each year that I “fill up” with great ideas and input from other members of my “tribe”.

Working with families on the difficult tasks of transitioning their wealth from one generation to the next can be lonely work for some, so getting together with others who do similar work is energizing.

 

One Nugget at a Time

This was my fifth time at Rendez Vous, and after each one in the past I’ve used this blog space to capture and share some of my thoughts and take-aways.

(There are links at the end to those posts if you’re interested.)

For 2018 I’m taking a “random” approach, sharing some nuggets from my notes from at least a dozen of the thought leader speakers and breakout session leaders.

Here goes…

 

– Difficult Subjects: 

From Emily Bouchard, two of the biggest subjects in everyone’s lives are also two of the most difficult to discuss: Money and Death.

This work involves both of them, so it’s no wonder that bridging those subjects with clients is difficult.

But that doesn’t mean we shouldn’t take up the challenge.

 

– Business Exits:

From John Brown, transitions usually involve owners exiting their business. But the owners want and need to exit on “their own terms”.

If we want to be useful to them, we need to recognize this, and focus clearly on “owner-centric” exit plans.

 

– Financial Transitions

From Susan Bradley, wealth transitions usually present a lot of confusion to those affected. Within that confusion also lies an opportunity.

Each person needs to “figure it out”, and that often necessitates time and help. If we want to help, we need to recognize that everyone figures it out at their own pace.

 

– New Vocabulary

As usual, John A. Warnick, the founder of PPI, had plenty to share with his tribe, including an update on the new vocabulary required to advance how we work with “Legacy Families and Families in Business”.

He’s working to compile, clarify and disseminate a primer on the words we use in this space, to improve our ability to work with such families more consistently.

 

– Five Voices

From Mark Hartnett, I now know about Giant Worldwide’s Five Voices tool, and that based on it, I’m a Connector, as well as a Nurturer.

And my nemesis is the Pioneer, perhaps because that was my Dad’s main voice.

 

– Don’t Try to “Change” Families

From Matt Wesley, I better understand the folly in trying to “change” any family.

Any attempts to “violently homogenize” a family to fit into a particular way of being is bound to fail.

 

– Book Club Benefits and Bird Language

 From Amanda Weitman, I learned that creating a simple “Book Club” within an organization can have benefits far beyond what anyone could ever had predicted in advance.

From Jon Young, I learned that those who master an understanding of bird language also discover the secrets to sensory integration.

 

– Appreciative Inquiry and the Importance of Voting

From Courtney Pullen, I learned how quickly one can go from “I have a problem” to “I AM the problem”, and how appreciative inquiry can help resolve that uncomfortable situation.

From Ian McDermott, I better understand the importance of how I “vote” with my Time, Money and Energy, and that “Trusted Advisors” become so when they “trust themselves”, making them “congruent”.

 

– Adult Development Levels

From Cathy Carroll, following up on Christine Wahl, I now realize that one can only properly advise others up to our own level of adult development.

 

– Purposeful Planning as a Career

From Michael Palumbos’ panel of industry veterans (Bradley and Pullen, plus Bruce DeBoskey and Kristin Keffeler) I know that we need to keep showing up “dynamically”, should avoid billing for our work by the hour, and not expect many referrals from lawyers or CPA’s.

 

– Last But Not Least, Jesus  

From David York, a perennial favourite PPI speaker, I know that Jesus is considered one of the greatest teachers of all time, yet, according to the bible, he asked many more questions than he answered.

And his most frequent question was “What are you looking for?”

If you’re looking for a tribe to support you in this kind of work, come join us in Denver next July.

 

 

My blog posts from previous Rendez Vous:

2017    Sharing Some Rocky Mountain Kool Aid

2016    Sweet Secluded Rendez-Vous 

2015    Rendez-Vous with a Purpose

2014    The Rising Generation in Family Business

2 adults sitting on a couch

Rest in Peace, While You’re Still Alive!

Rest in Peace, While You’re Still Alive!

Every so often I have an “A-Ha” moment as a result of seemingly random discussions that occurred weeks apart.

Writing this blog allows me to process these in some sort of useful way.

Today’s subject is “Peace”, which came up in conversations with my coach, Melissa, even though we typically don’t spend much time on that subject.

 

Inner Peace Through Meditation

After months of hearing good things about meditation, I brought up the topic during one of our weekly coaching sessions.

Melissa mentioned an App called Insight Timer that she’d been using for a while, and suggested I try it out.

A good coach will mention plenty of ideas that a client might want to look into, and then it’s up to the client to act on them, or not.

I did act on this one, downloaded the App into my phone, and tried it out.

Long story short, I’m a big fan, and maybe even an addict.

 

What Was I Looking For?                                  

A few weeks later, I mentioned that I was using Insight Timer a couple of times a day, and I was enjoying the ways it was making me feel.

Melissa noted that she thought it was pretty cool that I was working on finding “inner peace”.

“Wait, what?”

I never said that I was looking for inner peace (did I?).

The truth is, I didn’t know what I was looking for when I decided to try it, and I’m not sure that I know what I found either.

 

Mr. Legler Is Resting in Peace

Weeks later, as we were starting our weekly call, she asked me something along the lines of “So, how is Mister Legler doing this morning?”

I pulled out the old “Mr.Legler? That was my father!” line that I often use when I feel like someone is being more formal than necessary.

“And, he died in 2008, so I guess he’s resting in peace”.

There it was again. Peace. “A-Ha”.

 

Seek and You Shall Find

So many questions were now bouncing around my brain, and, as usual, that meant that I’d eventually blog about this.

Did Mr. Legler need to die to find peace?

Did he find it there? Or did he find it before?

What about me, am I finding it?

Was it even what I was looking for, don’t I already have it?

Do you need to seek peace in order to find it?

Do some people search for it and never find it, while others just sort of have it without much searching?

 

Multi-Generational Peace Process

As usual, I’ll now attempt to take the subject of this post and introduce the family business angle, because that’s the area in which I claim to have some subject matter expertise.

Business families, almost by definition, involve people from different generations.

One of their goals is typically to find ways for the family business and/or wealth to move smoothly from the senior generation to the rising generation.

Okay, so what does “peace” have to do with all this?

 

Everything and Nothing

The quick answer is that peace has nothing to do with this at all. It’s the easy answer, and the one that many people would prefer.

Of course, that means that I’m interested in the other side, the one that says peace has everything to do with it.

Many families struggle with the important discussions and planning that are necessary to effectuate successful inter-generational wealth transitions.

 

Peace, Love, and Harmony

Families too often delay talking about how they will handle all the details around who will get what, and who will do what, precisely because they are worried about upsetting the peace and harmony that exists in the family.

In fact, they’ll do anything to avoid upsetting the peace.

In many cases, however, the harmony that seems to be there is actually rather fragile, precisely because of the uncertainty around what’s going to happen after the senior generation has passed.

 

Settle it Now, Reap the Peace Dividend

The lack of discussion leads to lack of clarity and adds uncertainty to both generations.

Those who take care of these things in advance reap what I’ll call the “peace dividend”

I like to think that Mr. Legler found peace while he was still alive because he had put his affairs in order and communicated everything to his family well in advance.

Don’t forget that peace dividend is shared by both generations.

You Matter

Caring, Mattering and Meaning in Family Business

Caring, Mattering and Meaning in Family Business

This week I’m going to stay with my recent philosophical slant and write about three related subjects I’ve come across, that all deal with the human aspect of business families.

 

I Don’t Care How Much You Know 

I have some “go to” expressions that I’ve picked up over the years and I sometimes have a tendency to think that they’re universally known.

Then when I pull one out in conversation, I get a reaction that makes me realize how useful it really is.

I used one recently regarding the way experts are sometimes dismissed by their target clients as being too much of a “know-it-all”.

The expression I love for that is:

“They don’t care how much you know
 until they know how much you care”

 

Stakeholder Lives Matter

A few weeks later, I was reading the weekly newsletter of the Family Firm Institute, The Practitioner, which featured a piece aimed at trustees who serve on boards of directors, by Patricia Annino.

The following quote jumped out at me:

“Human nature tells us that if you can’t matter in a positive way, you will matter in a negative way because what is most important is to matter”.

I’m not sure that I ever heard it put that way before, but it really struck me.

The next sentence is also worth quoting, because I don’t think I could paraphrase it any better:

Human nature also tells us that most people strive for recognition. Having voices heard and questions answered are critical to the ongoing dynamic.”

 

Part of the “One Big Happy Family”

Being part of a business family can be tricky at times.

There’s a group of people, with a common family bond, each with different interests, talents and abilities.

There are also lots of roles to play, in the business, in the family, and for some people, in both.

And at the end of the day, every single one of them

wants to, and even needs to, matter, in some way.

 

Purpose and Meaning

A few weeks ago I heard Kevin McCarthy, author of a number of books about “Purpose”, speak at a conference about family wealth.

He had a great quote right off the top of his presentation that struck me too. Here it is:

“The Enemy of Wealth is Meaninglessness”

Wow.

For some reason another expression that came to mind immediately was this one:

“The opposite of love is not hate, it’s apathy”

 

“Frenemies”?

I don’t know that I fully agree with the word “enemy” in McCarthy’s quote, but I know what he was getting at.

And that’s the fact that people without meaning will quickly destroy wealth, if they have access to it. So in that sense I guess “enemy” works.

But if we look at some opposites, would that make “meaningfulness” the “friend of wealth”?

I’m not sure I’d want to have to make the case for the correlation between meaning and wealth.

 

Wealth OR Meaning?

What happens if we look at the question of which one people would choose, if offered a meaningful life without wealth or a life of wealth without meaning.

I’m tempted to guess that many would quickly opt for the wealth without giving the question much thought.

I’m also inclined to think that many people who made that choice would soon regret it.

 

And For Your Offspring?

Sometimes things can be clearer to us if we remove ourselves from the equation, and instead ask what we would choose for our children instead.

So if you could offer your children a life with lots of meaning, or one with lots of financial wealth, which would you choose for them?

Of course, most people would hope that their kids would end up with both, but I think that too many people likely believe that if you have the financial wealth, the rest will take care of itself.

 

Not So Fast

I know for a fact that there are many members of families that are very comfortable financially who do not feel like they have a lot of meaning in their lives.

Those same people likely also don’t feel like they matter that much to their family.

And if that family has advisers who are great at their specialty, those family members likely don’t care how much they know.

Financial capital is always the biggest focus, but families should worry much more about their human capital.

discernment street signal

Questions of Discernment in Family Business

Questions of Discernment in Family Business

 

Discernment: Noun

  1. The ability to judge well
  2. Perception in the absence of judgement with a view to obtaining spiritual direction and understanding (in Christian contexts)

This week’s blog is sponsored by the word “Discernment”.

Okay, so that’s not literally true, as there are no sponsors of this blog. Maybe I just had a little Sesame Street flashback, and should have said that it’s “Brought to you by the letter D”.

I keep a file of blog ideas and every couple of months I put together a calendar of topics. This is the first time that I’ve noted my subject idea with a single word, i.e. discernment.

 

Bowen Family Systems, Spring Conference 2017 

Discernment first popped onto my radar screen over a year ago, in Washington DC at the Spring Conference of the Bowen Center.

Murray Bowen’s theory has eight concepts, but the one he called “Differentiation of Self” is both the “biggest” one, and one that people have the most trouble truly understanding.

Some Bowen fans, myself included, tend to explain it to newcomers as “emotional maturity”.

At this conference though, some speakers proffered the word “discernment” instead.

Hmmmm, maybe they were on to something. But I also wonder if most people “get” discernment right off the bat.

(See: A Systematic Business Family? for my blog on that event.)

 

Definitions

I began this post with the definition that I got when I Googled “discernment” and found it both sufficient and interesting.

“The ability to judge well” is a great start to understanding what I’m getting at, and I feel like it fits with the “emotional maturity” part too.

Number 2, “Perception in the absence of judgement” almost threw me off at first, but then it made me flash back to my post “Judgement, Not Judgement” from back in 2016.

The take-home message there was that having good judgement is laudable, but being “judgemental” is not.

The spiritual and Christian angles also intrigued me.

 

Questions to Help Understand Discernment

In order to get a handle on discernment and how it applies to business families, let’s look at some basic questions and examine them from a discernment angle.

I’ll start with questions requiring low levels of discernment, and then move along to those that call for higher and higher levels.

 

– “WHAT” Questions

Asking about “What business are we in?” or “What markets should we look to enter?” are simple and relatively straightforward for any business.

They are also necessary to consider from time to time.

They require good business sense, but don’t necessarily require much in the way of discernment.

 

– “WHO” Questions

Then there are questions about people, like “Who should we hire?” and eventually “Who should take over when Dad retires?”

Now the need for discernment gets ratcheted up a bit.

And in some sort of “meta” way, we are looking at judging people about their judgement!

Once you get into questions about people, things usually get a bit trickier, and emotional maturity is often called for to make the right choices.

 

– “WHEN” Questions

Those “Who” questions can be tough, but so can those around timing, like “When should we start working on succession?” and “When should we start having family meetings?”

Regular readers will quickly recognize my bias around these topics, and that’s okay too.

As long as we’re on the topic of my biases, let me be clear that my preferred answers to those questions is always sooner rather than later.

There’s a certain maturity required to start tasks that have been kicked down the road long enough.

Combining “Who” and “When” questions, well, now we are getting into the area of “How”.

 

– “HOW” Questions

To me the types of questions that require the most discernment are about “How”, like “How do we make sure we include everyone?” and “How de we make sure we follow through on all our plans?”

I’m reminded of the expression “Ideas are a dime a dozen”, which is all about simple “What” questions.

Execution and implementation are the key to making any idea work, and that’s where you need people with discernment.

A “good sense of judgement” requires plenty of maturity and wisdom around the all of the “Who”, “When” and “How” questions that are part of getting things done.

 

Whose Discernment Are You Counting On?

If you’re a family business leader, and you’re hoping for your family and business to be successful in the long run, finding people high on the discernment scale should be a priority.