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When the “Next Gen” Becomes the “Rising Gen”

This week we’re looking at an issue involving vocabulary because sometimes the particular words we use can have a big impact on how we’re understood.

Regular readers will already be familiar with the term “rising generation”, as I’ve been using it for about five years now, ever since I heard James E. (Jay) Hughes use it during the first PPI Rendez Vous I ever attended, in 2014.  The Rising Generation in Family Business

Hughes had explained that using terms like G1 and G2 (first-generation, and second-generation) was very limited and sometimes confusing, and suggested instead that we in the industry use the expression “rising generation”.

 

Look at the Life Cycle Instead

Here’s a paragraph from that blog from five years ago:

“So here comes the “Rising Generation” to the rescue. Hughes pointed out that when we refer to the rising generation, it helps keep everyone focussed on the fact that every person, and hence every family, and every business, has a life cycle.”

I couldn’t have said it better myself (see what I did there?).

So I started using “rising generation” or “rising gen” about five years ago, after some others like Hughes, but before many who have “caught on” more recently.

The field is evolving and so is its vocabulary, and “better words” can help people make important progress.

My favourite example of this remains “continuity planning”, which is slowly replacing the term “succession planning” which has way too many negative connotations, especially when it comes time to get people to have the conversations that are necessary. See: Continuity Planning: Who’s at the Table 

 

What About on a “Family Basis”?

Okay, enough with the industry vocabulary, let’s get into the more important aspects of this, i.e. in a particular family, when does the “next generation” actually become the “rising generation”?

I’m glad you asked, because it’s an important question.

And in many ways, it’s mostly a question of mindset. The interesting thing about a mindset, though, is that each person has their own mind, and therefore their own mindset.  The trick is to get the entire family to come to share the same mindset.

Let’s look at it from each generation’s perspective first, while recognizing that different people in the same generation will have slightly different mindsets, but that the most glaring contrasts are usually found when comparing the mindsets of the different generations.

 

Mom and Dad’s View of Their Offspring

Let’s start with the “NowGen”, who are the ones currently “in charge” of things, especially in the business, and typically even in the family.

When their offspring are young, little thought is given to their eventual ascendency to key roles in the business family. At some point, though, there comes a mental shift, where ideas about roles that these young ones might one day play, as their “human capital” matures, begin to take form.

But even then, those first thoughts are usually about them as the “next gen”, i.e. as people who will make a contribution “some day”, far in the future.  It’s almost like they are parked there, and one day, their parents will beckon them and they will arrive on cue.

 

The Rising Generation’s View of Themselves

Meanwhile, those offspring have their own views, and they are often more realistic, maybe because they are the main actors in this play.

As those actors think about their lives and potential roles, they are more likely to think of the progress that they have already made and will continue to make, because they are living the “action” of rising.

Their view of the process of the “rising” is truly “first person”.  They will more easily feel like they are on their way somewhere, and are hopefully well on their way to shaking off the label of “children”, which connotes being “stuck” at some age that typically starts with a “1” or worse, is a single digit.

 

When My Mindset Becomes Our Mindset

So here we are, back to the question of the differing mindsets in the family. My premise is that the rising generation’s mindset is the more enlightened one, and that it behooves them to do the work necessary to convince their parents’ generation of its validity.

The two key points there are these:

  1. The onus is on the Rising Generation
  2. It will take work to do it.

It won’t happen overnight, it’s a process. And it’s never too early to begin.

 

My Planning “Preposition Proposition”

My Planning “Preposition Proposition”

Choosing the best title for a blog post can be “hit and miss” at times, as I’ve learned over the past 350 weeks or so (!)

Today’s topic sounded a bit lame when I looked at my notes, so I kicked around some headline alternatives to add some punch.

On the surface, the main subject seems a bit basic, but it’s so important that I felt the need to address it again in this space. 

And I felt like I needed to try to find a way to make it stand out, hence the alliterative title I chose.

 

Lots of “Planning FOR” Going On

In the world of family wealth transition planning that I work in, much of the time and effort spent by both families and their professional advisors involves activities that would fit nicely under the heading of “Planning FOR”.

Parents go see their advisors to make plans for their eventual wealth transition to their children.  They then typically make plans FOR the wealth, FOR the children.

 

Is Planning FOR the Best Approach?

As a hint of where this is going, keep in mind my promised “preposition proposition”, and see if you can guess where I’m heading.

A few weeks back, my social media folks posted a blog on LinkedIn that I wrote in 2018, called “Family Governance: From Filaments to LED’s”.

One of the unexpected benefits of having another person write the text of those content re-posts on Twitter and LinkedIn is that the word choices they make are often better than those I would have made on my own, because they see things in my writing in new ways.

That post, which included a link to that blog, was neatly set-up and prefaced with the question: 

When planning for the next generation… shouldn’t you involve the next generation?”

 

LinkedIn: Where it’s Safe to Read the Comments

That question then elicited the following question, from Ian Marsh, with whom I often exchange comments on that platform: 

 

                    Marsh: “Planning for versus planning with?”

 

I replied that his simple reframe had likely inspired a future blog post, and alas, here we are.

 

Proposing a Preferred Preposition for Planning

So while planning FOR has been most people’s default approach to this important subject, I hereby propose a new preferred preposition.

The first order of business for every family should instead be, planning WITH.

This idea also conjures up other blog memories for me, because I’ve stated this viewpoint numerous times before, notably here, in 2015,

“Successful Planning: Who Should Be Involved?”

 

Hurricane Survivors, Meet Family Members

That post from four years ago featured a quote from the aftermath of Hurricane Katrina, that was painted on the outside of a damaged house that was partially under water.

It read: 

“Plans that are about us, but don’t include us, are not for us”.

It seems that many government officials had been scrambling around to do things for those affected by the disaster, but had neglected to ask the survivors what they really needed, or involve them in any of the solutions.

If you still need me to draw the parallel with the way most families prepare their wealth transitions, I’ll suggest that you just try a bit harder.  It’s right there.

 

Too Much Hard Work

I’ve spoken about this subject with enough people to know that this message is typically met with great skepticism.

This is not for every family.  The vast majority of families do not have the complexity or level of wealth to warrant the work that goes into this type of “purposeful planning”.

But even for those families for whom this type of planning could be and should be done, there is still a great deal of hesitation to embrace this approach.

It is hard work.  It does take time and effort. And it takes leadership.  Most families are lacking in at least some of those.

 

What’s It Going to Take?

I know that my “preposition proposition” will feel a little too “out there” for most families, and like I said, I know this isn’t for every family.

And even if you, as a solitary person who is a member of a business family, would be interested in this, how would you ever get the other family members to “see the light”?

I wish that I had a simple, “silver bullet” answer to that, but I don’t, and I don’t think anyone else does either.

But if nobody starts talking about it with the others, you can be sure it won’t happen!

 

Street in New York With Buildings in the background

Efficient Vs. Effective Continuity Planning

This week we’re talking about Continuity Planning, which regular readers will recognize as the newer and preferred term for what many formerly called “succession planning”.

Too many still use the old term, but I’m doing my part to change the vocabulary, to change the conversations.

 

Efficiency: Let’s Get This Done

My bias is pretty clear, I find that far too many people look at continuity planning as something they’d rather not spend too much time on.

Especially for families who are running an operating company, which will normally have more than its share of fires to extinguish on a regular basis, taking time away from these urgent matters is typically a low priority.

It’s no surprise then, that when these families finally do agree to spend some time on the less urgent matter of continuity planning, their focus is usually on getting it over with as quickly as possible.

But just because something isn’t urgent,

that doesn’t mean it isn’t important.

 

Effectiveness: Let’s Get This Right

In contrast to focusing on getting something over with, some families rightfully prefer to concentrate on making sure that their efforts produce a positive result.

A quick Google search of the word “effective” reveals this: “successful in producing a desired or intended result”

This sounds like a much more worthwhile goal to pursue when a family undertakes this important work.

So why do so many families NOT get this right? Let’s go through some of the main obstacles.

A sign saying Effective & Efficient

Time & Cost

We’ve already mentioned that doing this right takes time, and we all know that “time is money”.

Furthermore, in order to make sure that your continuity planning will “produce the desired result” you’ll need to involve more people and “their” time too.

Many of those people will be family members, while others will be professional experts, again making time and cost factors that could stand in the way.

 

Professional Bias

I don’t love harping on colleagues who work in this space because ideally, I’ll work along with them to get the family to co-create the best plans for their circumstances and needs.

But so many of the experts that families rely on have their own biases that they have rightly developed over their careers.

You probably wouldn’t want to work with a lawyer who didn’t already have some pretty good ideas about how you could best go about creating your plan.

But that doesn’t mean that you should just turn the whole thing over to them either.  Or blindly follow all of their suggestions.

 

Touchy Subjects

The very idea of continuity planning necessarily brings up subjects that most people try to avoid.  We’re talking about death, money, and who will be put in charge of what.  Pretty heavy stuff, to be sure.

Of course, you could just be very efficient, draw up the plans you think are best and let the chips fall where they may.

But that seems so “20th Century” to me.  There are ways that will give you a far better chance of success.

These involve getting the people who will be affected by your decisions together and making them part of the process to make sure that your “intended result” actually has a good chance of working out as planned.

 

How Do We Do That?

It really needs to begin by figuring out, as a family, what that “intended result” could look like.

This can’t be done in a vacuum, and it can’t be done in one meeting.  There really needs to be a series of meetings, involving both generations of the family.

See: Successful Planning: Who Should Be Involved

 

What If Our Plans Are Already Made?

Now you may be thinking, “it’s too late for us, our plans are already made”.  Well, not so fast!

Do all the family members who will be affected by those plans know what’s coming?  If so, congrats, go to the head of the class.

For the other 90% of you, that would be a great next step.

See: Pre-Mediated Planning? Sounds Good To Me

 

The “Intended Result”

The final destination, or the intended result, should not be something that is dictated by the leading generation.

It needs to be based on the family’s values and their vision for the future.

That will take time to work out, but it will be well worth the effort.

If doing this important work means that you need to bring in an objective outsider to help facilitate the discussions, do it.