The Real Secret to Success for Families
As a child growing up in Montreal, home of the famous Montreal Canadiens hockey team, I heard the word “forum” hundreds of times before I had any idea what that word really meant.
You see, the arena where the Canadiens played their home games for the first 3 decades of my life was called the Montreal Forum.
As a child, when my Dad managed to get tickets to a game, it was always a treat to go there, because the team was always very good and the games were always sold out, so tickets were tough to come by.
What Other Forums Are There?
It was a bit of an eye-opener when I later learned that there was also a Forum in Los Angeles. I recall thinking that they had “stolen” our name.
Of course this blog isn’t about arenas, it’s about families and the challenges they face in trying to transition their business or their wealth to the next generation.
And so you might be wondering what a forum has to do with that.
I hope that you’re intrigued and that you’ll always remember this idea, in part because of the way I’ve presented it here.
More Than Just a Meeting
Before we go much farther, let’s look at a definition that came up when I Googled “forum definition”.
“a place, meeting, or medium where ideas and views on a particular issue can be exchanged”
Many people who work with business families profess that the single most important thing such families should do is to make sure that they have family meetings.
I agree that having family meetings is very important, and I want to go a step or two further.
What I’m suggesting is that more than just having meetings with family members, you should strive to have family forums.
The Importance of Open Discussion
Looking at other definitions of “forum”, I came upon one that included the following:
a public meeting place for open discussion and a medium of open discussion or expression of ideas
When I talk to clients or potential clients about these meetings, or forums (fora?) I always stress the importance of making sure that all voices are heard.
The absolute worst way to have a family meeting is to have one person, typically a guy named Dad, telling the family what he expects.
Monologues of any kind are the best way to kill any family meeting.
Striving to be a Family of Affinity
The bottom line is that you want to make sure that any family meeting is something that all family members will look forward to attending.
The kinds of families who are successful at transitioning their wealth to the next generation are ones who enjoy being together. Some refer to them as “tribal families”.
Jay Hughes sometimes uses the term Family of Affinity. Just for fun I Googled that term and found this:
People with or without blood ties or legal ties, feel they belong together and want to self define themselves as a family.
There’s a lot there and for many families this is a pretty high hurdle
Discussing Things That Matter
I want to share one other tidbit I found while looking at definitions, before closing with what may be the most important item.
Forum: a meeting in which people can talk about a problem or matter
There aren’t a lot of words there, but they say a lot.
“Can talk about” makes me think about how important it is that everyone feel safe sharing their viewpoints, and things that matter means we need to discuss more than just the weather or last night’s game.
When Is the Next Forum?
Having teased something very important above and quickly running out of race track, here we go.
A Family Forum is NOT a “one and done” deal.
You need to continue to have them, over and over again. Maybe you do it once a year, maybe more often
But you need to make this a regular thing; it needs to become a habit.
Family members need to learn what kinds of things they can bring up at these meetings, and then as they learn about each other, they will need to revisit subjects again.
Always schedule the next forum before everyone leaves. And if you can get a few of them involved in planning the next one, that’s even better.
Yet Another Label for Generations
This week we’re looking at the challenges faced by one particular generation in many families.
While we’ve previously discussed topics related to the “rising generation” in a family (a.k.a. NextGen) and on the leading or senior generation (a.k.a. NowGen), we’re going for something a bit different this time.
Most people are familiar with the term “Sandwich Generation”, based on the everyday challenges people in this position face no matter which socio-economic strata they inhabit.
I want to examine some of the special aspects of being in such a situation in an enterprising (a.k.a. affluent) family.
The Meat in the Sandwich
The term “sandwich generation” comes from being caught in between two other generations, much like the meat in a sandwich.
With increasing life expectancy, combined with couples having children later, more and more people in their 40’s and 50’s find themselves in this unenviable position.
Their offspring still rely on them and they’re rightly concerned with that following generation properly launching into independent adulthood.
Meanwhile, their parents have reached a stage in their lives where they also require care and attention.
This segment of the lives of the sandwich folks also happens to overlap with the most important years in their careers, and thus their work responsibilities, only adding to the challenges.
Patience Has Its Limits
A few months back, in On Patience and Impatience in Family Transitions, I wrote the following:
“The two (or three) generations need to take their time and incrementally move decisions and actions from the NowGen to the NextGen.
That might sound like a very simple thing to do, but in reality it’s quite difficult.
This came home to me recently when my social media team put a podcast interview I’d done a while ago back into circulation.
On a 2018 episode of The True Wealth Project Podcast, which I recently re-listened to, I was personally stumped by a question about my own personal legacy planning vis-à-vis my children.
One Generation at a Time
The host asking me about my own family brought home the realization that I myself was one of these sandwich dwellers, and I knew that I was not alone.
In fact, when I wrote “The two (or three) generations” in that previous post, it should have been clear already.
Perhaps when I had written that, where the context was a family who were actively working on clarifying their legacy so that it would be successfully passed down, I was assuming that the generation in the middle would see themselves as part of the process and therefore not an afterthought.
But as I reflect on this, I can’t help but think that people in this position really need complete clarity of what is coming to them before they can think about how they’re going to eventually leave it to their offspring.
When Will Things Be Clear?
As I write these words and process them at the same time, it’s dawning on me that I’ve been confounding two separate issues: timing and clarity.
Last week, when I wrote How to ACE your FamBiz Succession Planning the “C” in ACE stood for “Clarity”, so I was unintentionally foreshadowing this point a week in advance.
But things don’t necessarily have to have already happened for them to be clear.
Perhaps the fact that I married into a family with little clarity has affected my view on this topic.
Don’t Wait for the Triggering Event to Ask Questions
Some families just never talk about things that are in fact inevitable, such as the eventual death of one of the family elders.
They don’t want to talk about such subjects because they don’t want to be disrespectful or seem like they are rooting for something to occur in the near term.
Meantime, any planning for the future gets put on the back burner, because of the lack of clarity mentioned above.
Somewhere in a legal document lie the answers to many of the questions that are on the minds of many family members.
But nobody wants to ask the questions.
Coach, Coach Thyself
Every family is different, and some members are more comfortable in rocking the boat and bringing up uncomfortable subjects.
The expression “physician, heal thyself” comes to mind now, for me.
I’m not a doctor, but I am a coach, and maybe I need to think of myself as a coaching client and see if there are any ideas I might want to be pursuing myself, as I search for some clarity.
Or maybe not.
Don’t you Mean Continuity Planning?
One of the most popular topics in the area of family business is always succession planning. I’ve known this for a while, yet I rarely use that term in my writing, especially not in the headline.
So in order to prove that I can “zag” as well as I can “zig”, I did it this week. Why the change?
I’ve just spent several weeks refreshing my website, and my “web guy”, who is really good at what he does, told me that I needed to write about succession planning, because that’s what a LOT of people are searching for.
Yeah, But….
When I explained that there’s a better term that people like me now use, “Continuity Planning”, he patiently nodded his head and reminded me that if people are searching for one thing and you continue to call it something else, many of those people will never find you.
Alas, I acquiesced.
It kind of feels like I went back to build a worse mouse trap, hoping that the world would now beat a path to my website. I guess we’ll soon see if new folks find me.
So You Want to ACE It
So in the spirit of writing something newish, catchy, and useful about family business succession planning, I decided to share a mnemonic way of thinking about it.
A few months ago, in Family Engagement and Family Alignment – Chicken and Egg I shared the idea that engagement and alignment were two sides of the same coin, and two of the most important aspects of getting a family’s planning and governance on track.
Since engagement starts with an “E” and alignment starts with an “A”, I knew I had the makings of something. A good mnemonic should be something that spells a short word, so vowels carry a premium.
I just needed the right consonant to hold everything together.
Clarity to the Rescue
After kicking around a number of other options, I finally settled on “clarity” to complete my catchy word, “ACE”.
I was tempted to use “communication”, which would have given me the same word, and communication is, of course, crucial to family business success over generations.
But bringing things right back to the “succession planning” angle I was going for, I thought that clarity was a better word.
So let’s look at how this ACE holds together.
Does the Order Matter?
What I’m hoping people take away from this post is that family business succession planning can be a success IF you concentrate on the three items in the ACE mnemonic: Alignment, Clarity, and Engagement. That’s it.
Now, are they in the right order?
No. Or Yes. I’ll settle for a hard Maybe.
Does it matter? Definitely not.
Succession planning is not an event, it’s a process. And because it is a complex process, it’s definitely NOT linear.
You don’t do “Step 1” and then “Step 2”, etc.
It’s NOT an Estate Plan
Some people may want to argue this, and I think that most of those folks are probably confusing family business succession planning with a related process, that of estate planning.
Estate planning is a specific subset of succession planning, and it can certainly be much more of a “linear” operation.
When we talk about family business succession planning, there’s a LOT more at stake, and it MUST involve those who will be expected to play future roles.
Engaging and Aligning, with Clarity
Whereas an estate plan is mostly about who’ll be the legal owners of specific assets after their current owner passes away, a succession plan is more about who will do what.
It’s about how a group of people will interact and decide things together, for the common good of the whole family.
That means that these people need to be aligned in their thinking. They also need to have a common and clear understanding of everything that’s at stake.
This stuff definitely doesn’t just happen by itself, which is why you also need to have everyone engage in the process.
Incremental Iterations Work Best
You need to constantly go from engaging to aligning, and back again, while making sure to always strive for more clarity.
This happens over time, as the family members learn to work together and understand that they are interdependent.
Small gains add up over time, and incremental is a good word to keep in mind.
Keep at this over time, and you will ACE it.
Surprising Word Choice Proves Revealing
Regular readers know about my penchant for word play and finding lessons in unexpected places thanks to vocabulary, grammar, and translation issues.
If that kind of blog is up your alley, you should enjoy this one since there’s some of each of those on tap this week…
A few months back in Social Capital in the FamBiz World we looked at the human need for connection.
Since then I’ve realized the importance that social interaction plays in my life, and I’ve also developed a new level of gratitude for the social capital that I enjoy.
Joining Yet Another Group
I’m a member of a number of groups, mostly with peers, that get together over Zoom from time to time for various forms of discussion and interaction.
Most of them actually pre-date this pandemic, so I feel like I had a head start on many people in learning to get the most out of this way of meeting.
I recently joined a new group, and one of the first meetings we had was the source of inspiration for this week’s post.
Unlike all my other groups, this one conducts its business in French, which is my second language, but being a lifelong Montrealer, I’m sufficiently fluent, and I speak it both professionally and socially on a daily basis.
Colleagues Learning from Colleagues
Our facilitator, Jessica, was setting up a discussion and at one point I thought I knew what she was about to say but then she went in a different direction and it threw me off a bit.
We were talking about choosing the kinds of things advisors might decide to specialize their practices in, and as she was listing ways to make such choices she began to mention “Dans quoi on est…” which translates literally to “In which one is…”
My mind jumped ahead and filled in “bon”, which is French for “good”.
Of course, we want to choose to do things that we are good at, right?
But then, instead of saying “bon”, she said “bien”, which means “well”.
There’s a Lesson (or Two) in There
Jessica was making the point that we should concentrate on doing things that we’re “well” at, or, as a better translator might say, things that make us feel well.
Could she be on to something, suggesting that things we can feel good about doing and that make us feel well and good is even more important than concentrating on things that we are good at, i.e that we execute well?
And although we were sharing ideas amongst advisors to family enterprises, what are the implications of such a “discovery” for the members of the families we work with?
Doing Versus Being
This is all about the difference between “doing” and “being”, which are two really different yet related ways of looking at oneself.
And, interestingly, the way they interrelate evolves over time. The more you practice doing something, the more it becomes part of who you are.
Of course this also brought back memories of a piece I wrote last year, Ikigai: a Four Circle Model of Human Capital.
That was about finding the true sweet spot of things we do well, things we like to do, things the world needs, and things we can get paid to do.
Examples for Legacy Families
While reflecting on these questions is important for professionals who work with families, they can take on even more significance for members of those families.
And, they give rise to another aspect of belonging to such a family, as I noted earlier this year in Where Do You FIT in your Business Family?
I think it’s interesting that I noted at the beginning of this piece the importance of social interaction in my life, as I continue to figure out where I fit in this wonderful world of working with enterprising families.
Feeling Well and Doing Good
Being part of this evolving field and making whatever contributions I can makes me feel good and I think that I’m doing a decent job.
Members of legacy families can often minimize the importance of finding activities for which they get paid, by virtue of the fact that they may have other assets off which they can live.
When I work with families, part of what I’m hoping I can help them achieve is that each person can do some good for the family while also feeling good about their place within the group.
That’s often way more important than money.
Who Can Work in the Business, and When
There are a number of subjects that come up again and again in the wonderful world of family business, and sometimes it feels like I’ve written about most of them here already.
Still, when there’s a confluence of happenings over a short space of time that puts one of them back on my blog radar again, I like to revisit them.
Such is the case this week, as the subject of rules for working in a family business has come up a few times, from different directions, in my interactions over the past few weeks.
So let’s take a fresh look at the subject of “rules of engagement” for FamBiz.
Let’s Start with a Flashback
It’s not as if I’ve written about this recently either. In the summer of 2018, I wrote Forced into the FamBiz, which was about the fact that I believe that it makes sense to “force” one’s offspring to work in your family business when they are young, as a summer and/or part-time job.
It also clearly states that I’m a proponent of making a rule that families should not hire their children for fulltime jobs in the business until they have successfully obtained and held a similar job elsewhere, for a certain number of years.
This was an idea my father had heard about, but had decided unilaterally didn’t apply to his family (and therefore me).
I’ve recounted this many times since beginning my work with other business families.
I was an undergraduate business student at McGill, and my Dad told me he’d listened to some consultants explain why there were many reasons to forbid hiring family members until they’d demonstrated the ability to get a job on their own, without using their last name as leverage.
“But We’re Not Gonna Do That”
After I looked at him with some hope in my eyes (as I recall it, anyway) he stated “But we’re not gonna do that”.
Having not had to live by such a rule is now one of the main reasons I now endorse it.
But let’s get to the occasions where this came up recently. The first was on an FEX webinar where some family business leaders were sharing stories about how they got through the worst of the pandemic.
One business leader from western Canada related that her son had joined their business recently, and that this went against their family’s rule against allowing family members to come on board until they had worked elsewhere for 10 years. (10 years seems excessive, but alas, that was their rule).
As it turned out, every department of the company was now fighting to have him join them, thereby signaling that he had proved his worth despite the shortened period of working elsewhere for very long.
Family Business Collaboration
I recently joined a nascent group that pulls together members of family businesses and consultants who work with them. Family Business Collaboration
On a Zoom call recently, someone noted that his FamBiz had a rule about working elsewhere for 3 years.
I asked how long that rule had been around in his third generation company, and I found his reply interesting.
He noted that he was the first person to be “the beneficiary of that rule”, since his grandfather had not applied it to his father at the time.
Isn’t in interesting that a father who didn’t have to live by a rule went on to implement it, and his son, who was subject to it, found he was a beneficiary of it. I get it.
A “Lessons Learned” Video
So when a respected colleague and friend (and mentor) asked me if I could share a brief video of myself for a family business conference she will soon be giving, this all came in handy.
She’s now asking several people involved in the FamBiz space about lessons they’ve learned along the way.
Would you be at all surprised to learn that the lesson I shared was all about the idea that there are many reasons why demanding that young adults work elsewhere before joining their family’s business makes a lot of sense, and that I wish my Dad had instituted such a rule?
I hope not.
I have few if any “hard rules” that I recommend to my family clients, but if I did, this would be it.
Since 2014, one of the highlights of my year has been a trip to the annual conference of the Family Firm Institute each October.
It recently wound down for this year, and for a change I didn’t have to fly anywhere or check into a hotel. Alas, it was held virtually for the first time, and I’d be lying if I said it was virtually the same.
Oh well, all we can do is do our best, and I was still able to consume a huge amount of content relevant to those who inhabit the family enterprise space like me.
Worldwide Leaders Coming to Share
This space can often feel like a real niche, and so in order to find a critical mass of others who do similar work, a global network is actually almost a requirement.
While family businesses dominate the economy of almost every country on the planet, the vast majority remain typically small enterprises, who don’t necessarily require much special attention.
At the larger end of the spectrum, however, where we look at multi-generational family dynasties, spanning several countries, held up by complex family groups, the needs of families do warrant special attention and specialized professionals.
Source: https://digital.ffi.org/ffi-global-conference/
The Rising Generation as a Focus
There were a couple dozen presentations over two days, and often two sessions running concurrently, so there was literally something for everyone present.
There were over 300 people registered, from dozens of countries and six continents, and while cultural variations in the family enterprise world exist, there are more common elements present, making global sharing worthwhile.
One theme I noted was a focus on the rising generation in families. There were sessions on family culture, family engagement and family learning, that all spoke to the importance of getting the younger family members interested and involved.
There was talk of “values based investing” that brought all generations to the table, and a focus on having younger family members get their “Operator’s Licence” to begin running things in the family business too.
Complex Family Dynamics Always at Play
Aside from the focus on a particular generation, there was also a good deal of discussion around complex family dynamics that never seem to be far away when talking about family owned and operated enterprises.
There were sessions on family meetings, ethical dilemmas in families, and mediation for families who have conflicts that are difficult to resolve.
There was even some reflection for advisors to consider how comfortable we are with conflict, so we can assess whether or not we are the best person to serve our clients in such cases.
There was a great session on mental incapacity that left me with some great take-aways.
Repeated Messaging for my Own Good
As part of a number of different organisations that serve parts of this field, I’m privileged to cross paths with a number of great leaders who tirelessly share their thoughts in various forums every year.
The messages can feel a bit repetitive at times, but I’ve learned that even though I’ve heard someone on a subject before, I still learn something by attending again, because surely I didn’t catch everything the first time through.
The first example was Jim Grubman on mental incapacity. I’ve heard Jim discuss it before, but this time something really stuck with me.
We’ve all known people who’ve begun to lose their ability due to age-related mental decline, and it can cause enormous complexity for a family to deal with.
Grubman highlighted part of the reason for this, and it hit home for me.
Legal, Medical, Business, Emotional, and Ethical Views
The reason they are so complex is that they are viewed differently through a variety of different lenses.
A person whose mental decline has begun raises issues in law, medicine, business, family emotions and ethics.
No wonder these things are so hard to deal with!
Dennis Jaffe Delivers Again
A few weeks ago I wrote about Dennis Jaffe in Legacy Families Rely on a Generative Alliance. He was the closing speaker at FFI, and even though I’ve seen him present many times, I still got something new out of it.
I was also pleased to have been featured myself, as Dr. Mariana Martinez and I kicked things off during the first day’s early morning session with Bowen: From Theory to Practice. Thanks to all those who gave me great feedback!
Looking forward to FFI 2021 in London next year; fingers crossed that it will be in person!
Probably NOT What You’re Thinking Though
This week we’re looking at a metaphor that came into my head a couple of months ago, and that’s been on the back burner of my mind ever since.
I’ve been trying out different versions of it, and kept on returning it for more simmering, because it didn’t seem ready yet.
I hope it’ll finally be tasty enough for consumption now, and also nourishing.
The Cottage by the Water
I purchased a few acres of land on a river about 10 years ago, with the goal of eventually constructing a summer home there.
As it turned out, there’s a “pre-fab home” manufacturing plant nearby, “Kane Homes”, and so I eventually decided to check them out, took a plant tour, and was instantly sold.
“When we’re ready, I want to order our house there”, I told my wife.
So a few years later, we dropped in for a visit, assuming that we could order our house from the factory.
Nope, that isn’t how it works, we were told.
Metaphor Preview…
Before I lose you in this story, I want to give you the equivalent of that visit to the house factory in my parable about a family who wants to make sure that they succeed in creating and preserving their family legacy.
My normal blog topics deal with families who are concerned with transitioning their wealth from one generation to the next.
One thing that I often lament is that many such families, when they decide that they need to take some action to achieve that goal, will contact an attorney and make an appointment to discuss their estate plan.
While the house factory quickly dispatched us to an appropriate avenue to order our home, most lawyers are only too happy to begin writing up the estate documents at the family’s request.
There’s a Lot More to a Home than the House
Back to the house purchase. Kane Homes directed us to one of their dealers instead, “Sullivan Homes”.
OK, so just like you don’t go to GM to order your car, we had gone to the wrong place first.
The good folks at Sullivan Homes didn’t want to simply sell us a factory-made house, they were interested in helping us construct our dream home.
They were the ones who were going to take care of pouring the foundation, drilling the well, putting in the septic system, bringing in the electricity, and even making sure our long driveway was wide enough to bring in the house on two giant trailers.
The Work that Nobody Sees
When you arrive at our place now, the main thing that you see is still the house that was built in the factory, but without the foundation, septic system, water, and power, it certainly would not be as useful or comfortable!
In a similar way, yes, you surely will need a qualified attorney to properly write up the legal paperwork to make sure that what you want to happen is properly and legally captured.
And, if you are proactive, you will also engage with the right people to make sure that everything else works the way you want it to.
Kane sells a standard house to anyone who wants one, but thankfully they only do so while working through one of their dealers who makes sure that everything fits and works for the family who buys one.
Process Versus Content
My analogy is admittedly a bit of a clumsy one, especially as I now pivot to the process versus content part.
The factory-built house is the key piece of content which involved a lot of man-hours to complete, but the work that was done on site, was done by various specialists who did everything that was needed to make sure the house actually “worked” for us.
That work was much more about process, and it involves the flow of water and power into the house, as well as drainage out of the house.
An Estate Plan is Great, But Not Sufficient
If you’ve decided that you want to ensure that everything you’ve worked for all your life gets properly passed down to the next generation of your family, then you’ve got work to do.
If you think that a visit to an estate planning attorney will take care of it all, then you are mistaken.
Many of those other things are discussed in other blogs here, so please, help yourself!
What Are We FOR as a Family
Let’s Point in the Right Direction
It can often be way too easy to concentrate on things we don’t want, and some personality types are really good at finding fault and complaining.
While strictly speaking the negative and positive are simply two different sides of the same coin, I find that accentuating the positive can make a huge difference.
This is true with individuals, but especially with groups of people.
Families who are trying to find ways to continue to work together over the long haul, i.e. into the next generation (and beyond) would do well to heed this advice.
Reframing to the Positive Angle
Of course it’s fine to talk about what we don’t want, for a time, because sometimes that’s actually much more clear.
Eventually, as you work with someone who is looking to grow, improve, or change in some way, you need to focus on what they do want, and what they need to do to get that.
And as I mentioned, with a group, this takes on an even more important role.
Negativity can be contagious, and if a group of people are supposed to be working towards a common goal, one nay-sayer can quickly enroll others and creating positive momentum will become more of a challenge.
Start with One Person
The good news here is that it really can all start with one person.
A family’s values or vision begins by asking each person to share their own values and vision, and then working with the group to try to shape some consensus on common vision and values that they can all agree on and get behind.
When things bog down, either in such exercises or other scenarios involving a family working towards some common goal, the way through is typically achieved when someone feels strongly enough to verbalize some strong feelings.
The leadership that such a family must exhibit almost always channels some positive view of what they see FOR the family, as opposed to what they don’t want.
Look for Exponential Magic
That leader can be the spark that the family needs to make progress. But, one person can only get so far all alone.
As I detailed in The Exponential Magic of Family Collaboration, if that person can find another family member to see the light, they can really begin to make progress.
And once they enroll a third, they can start to roll forward with some momentum.
Not that any of this necessarily moves quickly, but there is usually a certain natural progression involved.
Important Support Along the Way Too
Because this can be a frustrating and lonely time for that family leader, sometimes called the “Family Champion” (but typically only in retrospect), it can be important for that person to have some outside support.
As I wrote about a few months ago in Coaching for Current & Future Family Leaders, coaching is really made for situations like these.
Furthermore, coaching is also made for times like these, and by that I mean during a pandemic where so many things are up for discussion and the future is as uncertain as it’s been in a long time.
Coaching Only One Family Member Works Too
One of the things I’ve recently noticed, since doing my coaching certification last year, is that a coach can help a family make a lot of progress, without ever meeting them.
Okay, so as I re-read that sentence, I realized that it can actually be taken in a couple of different ways, so let me unpack it a bit.
What I set out to say was that by working with only one person from a family, a coach can increase the effectiveness of that family leader to effectuate change and make progress with the rest of the family system.
The second way one could take that previous sentence is to note that a coach can work with a client without ever meeting them in person.
Indeed, I have several clients I’ve never been in the same room with.
What Am I FOR, What Are We FOR
Circling back to the topic of the week, the coach will concentrate on supporting the clients as they work towards getting their family aligned towards things that they can all be FOR.
That family leader will already usually have some ideas of what they are FOR, individually, and with their coach they can then work on ways of strengthening the family relationships so as to get the family ready to embark on the journey as well.
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