Baby bird

A Pitcher, a Golfer, and a Baby Bird

A Pitcher, a Golfer, and a Baby Bird

Whenever I hear a really good analogy, something in my brain gets triggered, and I want to find ways to remember it, perfect it, and share it.

When people ask me how I come up with blog ideas every week (for over 250 weeks now, and counting) I usually note that the difficult part isn’t in having enough ideas, it’s having too many.

So when I hear the same analogy coming from two completely different areas, I take notice, and I try to find ways to combine them into one blog.


The Pitcher

Last week I was watching a Cubs game on TV, and Jake Arrieta was on the mound. The colour commentator was John Smoltz, a former pitcher himself, and a Hall of Famer too.

He was talking about issues Arrieta had been having with control, and Smoltz mentioned that he was working on finding the right grip on the ball in his hand as he threw his pitches.

“You’ve got to think of the baseball as if it’s a baby bird”, he said (I’m paraphrasing here) “You don’t want it to fly away, but you don’t want to squash it either”.

This sounded very familiar to me.


The Golfer

Years ago, when I still played golf (or rather “tried” to play golf) I was having issues with a really bad slice.

A slice is when you aim the ball at the green, and you hit it and for the first second that you watch it, you’re really happy, but then the ball just decides to take a right turn, often into the woods.

I don’t recall exactly where the advice I heard came from, but I absolutely remember reading or hearing the story about the bird.

“Think of the golf club like a baby bird, you don’t want it to fly away, but you don’t want to squash it to death either”.


Business Family > Family Business

So what the heck does all of this baby bird stuff have to do with family business? I’m glad you asked.

When people think about family business, they usually think about the business part of it. In the term “family business”, the word “business” is the noun.

My preference is to talk about the “business family”, where the word “family” is the noun.

I think I’ve been pretty consistent with this, as even the secondary title of my 2014 book, SHIFT your Family Business, is “Stop working on your Family Business, Start working on your Business Family”.



When I meet with members of a business family, it usually doesn’t take very long for issues to come up that have a lot more to do with “parenting” than they do with “business”.

And it’s the parenting part that brings us back to the baby bird analogy. As a parent myself, I too have struggled with the temptation to grip the bird too hard.

As a former child, I can tell you that at times I felt like I was a little too “directed” in my life. Being “directed” is a close cousin of being “squashed”.


If you love someone…

It saddens me when I meet people in their 40’s or 50’s who work in their family business, and it becomes clear after a short time with them that they’re not really there because they want to be.

If they could hit the “rewind button”, they would have made different choices. Unfortunately, there is no “rewind button”.

These issues almost always stem from the baby bird being gripped too tightly.

Instead of just throwing more balls than strikes, or too many lost golf balls, the consequences are much worse.


Go Fly Now

When the baby bird is held in your hands for too long, it will never learn to fly on it’s own.

Even worse, when the time comes that the bird HAS TO fly, and it can’t, because it never got the opportunity to learn to fly on it’s own, parents will often criticize them for not having what it takes.


Too Loose > Too Tight

While you may think that it’s simply a matter of finding the right balance between gripping too loosely and gripping too tightly, that may be true for the golfer and the pitcher.

For the parent, gripping too tightly causes far more problems.

Family standing on the side of the river with their kids pointing at something

5 Things you Need to Know: Family Vision

5 Things you Need to Know: Family Vision

A few weeks ago in Family Business: How Do Values Fit In? I touched on the idea of a “Family Vision”, and I’ve been meaning to get back to it, so here goes.

I’ve decided to make this one of my occasional “5 Things” pieces, much to the chagrin of my wife, who wonders why five is always my go-to number. (It just is, Dear, it just is.)

  1. Values Should Come First

Before you do any work on a family vision, it really makes a lot of sense to do the values work first. The vision is about the future and where you want to go together.

“Oh cool, the future!” you might think, and you may be tempted to jump right in and skip over the values part, but I recommend against it.

The values are about where you are now, and hopefully what all family members agree on about where they are together.

It’s kind of important to know that before you try to figure out where you’re going to go together.

  1. Common Vision Is What You Need

Just as it is important to understand the values that family members have in common, it should go without mentioning that a family vision is supposed to be a “common vision”, for the family, by the family.

But I am mentioning it, because sometimes there is someone in the family who needs to be reminded of this.

A family vision that comes from one person only, and that has been carved in stone by its sole creator, will not be worth the stone tablet it is printed on.

  1. It’s about Discovery and Co-Creation

Once you’ve figured out the values and committed to the concept of the common vision, it really becomes an exercise in discovery and co-creation.

One key is just being curious about where different family members see possibilities, which can open up discussions that you hadn’t thought of before.

Discovering areas where younger family members have passions and finding ways to create a vision together can be very powerful.

If you’ve built a particular business that may or may not excite the younger family members, wouldn’t it make sense to at least hear their ideas and try to find ways for everyone to have a stake in the family’s share assets?

    4. You Can’t Rush This Stuff

One of the bigger misconceptions about any of this values and vision work for families is how long it takes to actually do it in a thoughtful way.

It may sound tempting to try to schedule a few hours or even a day to do all of this. Yes, you could do it that quickly and you could conceivably get some value out of such an exercise.

Ideally, and for best results, this kind of work is NOT done quickly, or in one shot. My preference is to do the values work in two separate sessions first, before even getting to the vision.

Also, the larger the family group, the longer you should expect it to take.

Remember, “If you want to go fast, go alone, if you want to go far, go together”, as I wrote last year (Going Far? Go Together).

    5. It Doesn’t Happen by Itself

One of my favourite expressions is “these things don’t just happen by themselves”, and that’s certainly the case here too.

There can actually be quite a bit of work involved just in getting a family together, and then to get them all to understand the importance of the task at hand.

Depending on their ages and their previous involvement in important family discussions, it may take some convincing for them to actually believe that their input will be welcomed and heard.

The word “intentional” really fits well here. There needs to be an intention to do the work that needs to be done to discover and co-create a family vision.

Make the Investment

In my book SHIFT your Family Business, the letter “I” in SHIFT stands for “Invest”, and it’s all about investing the time necessary to do this important work.

Of course there is a financial investment that goes along with this, but for families with considerable wealth it’s a drop in the proverbial bucket.

The time required is the biggest investment, but those who take the time to get it right will be rewarded by the resulting legacy.

Traffic Light in Family Business context

“Yellow Light Family” – Proceed with Caution

“Yellow Light Family” – Proceed with Caution

Last week’s post (Happy to Be Wrong on FEX) talked about the great symposium I attended in Halifax earlier this month.

If you’re a regular reader (thanks!) you know that one of my best sources of blog material comes from these kinds of events.

I often do some sort of “Top 10” of things I picked up, but I’m going to devote this blog to one specific presentation I attended.

In coming weeks, I’ll likely dig in to a few other memorable sessions from the FEX conference.


Green, Yellow or Red Zone?

The symposium had a good mix of sessions; a couple for families only, others just for advisors, but most were open to all.

In this advisor-only session, Jim Grubman of Cambridge Family Enterprise Group presented “Green, Yellow or Red Zone Clients”.

He introduced the concept of the “Two-Axis Model” of wealth advising, with technical issues along the X-axis (horizontal), and personal and family dynamics on the Y-axis (vertical).

In each case, the model ranges from low complexity to high, from left to right and from bottom to top.

The colour-scheme was reserved for the family dynamics axis; green at the bottom, yellow in the middle, and red at the top end.


Technical Bread and Butter

Grubman mentioned that as you go from left to right on the “technical axis”, more complexity is usually seen as a positive for advisors.

A family with complex technical needs is often a plus, in that it allows you to showcase your abilities to solve their issues, and to charge accordingly.

The more people, entities, trusts, and jurisdictions a family has to deal with, the more the advisors will relish the task. At least the best advisors do.


The Family Dynamics Axis

The vertical axis, on the other hand, where family complexities increase, can be a very different story.

This is where the “traffic light” comes into play.

The low complexity families, with little of no conflict, anxiety, addictions, etc. are where most advisors prefer things to be.

Green is good, because there’s no family stuff to trip you up.

As you begin to see any of those issues, you leave the safety of the “green zone” and get into the yellow territory. At this point many who advise on technical issues (legal, tax, trusts, accounting, cross-border, etc.) quickly feel like they’re out of their depth.

Sometimes it doesn’t take much to raise the proverbial red flag, and get the advisors to scratch their heads wondering if they will be able to resolve the family issues.


Break It Down

Here’s where the real value of the presentation came for me. Rather than simply looking at the family dynamics question globally, Grubman breaks it down into several components.

In many cases, one thing sets off alarm bells, but others are hardly any concern.

For example, the sensitive issue could be the family’s level of conflict, their communication style, addictions, perceived fairness, or lack of governance systems.

When you can put your finger on it with greater detail, you’re much better placed to deal with it.

It can also help to look at “state versus trait” variables. There could be a situational factor at play, which may just be temporary. (Traits are fixed, while states are transitory)


Isolate the Issues

When the advisor team can share their views using this type of breakdown, they can pinpoint the issue more easily.

A family that looked red, or “very yellow” can look much less daunting once you see that there is really one key issue that is flashing, and that the others are pretty green.


Coordination and Collaboration

Now I’m gonna switch from what Jim Grubman was saying to Steve Legler’s take.

No single advisor will be able to handle a family with any complexity above green, on either axis.

Technical professionals work together to solve the family’s asset-related issues. On the family dynamics side of things, the same should also be true.

Families will benefit from advisors who can coordinate their activities at a minimum, and hopefully even collaborate.


Inter-Disciplinary Fluency Helps

FEX’s FEA Program helps advisors develop the inter-disciplinary fluency they need to properly serve families.

Knowing what families need, and how the pieces all fit together, is key. And so is being able to work together.

Tools like Grubman’s help us all do a better job for families.

Father’s Day Introspection 2017

That Time of Year

Every year when Father’s Day rolls around, I get mixed emotions. Being a father is truly the greatest joy of my life, and this weekend will be my 18th as a father, but also my 9th without my father.

When I work with members of a family, I like to help them see things from each other’s points of view, and asking them to project forward or backward many years comes naturally to me, stimulating conversation through curiosity.

Asking a father to think back to when he was at his son’s current age will naturally shift his viewpoint.

Likewise, having a son project to when he will be his Dad’s age and imagine what that could be like, forces him to adopt a different mindset.


My Own Journey

For the first few decades of my life, I only saw Father’s Day from one perspective.

When our son was born, I developed a new appreciation for the third Sunday in June, as I was now a father too. Having my father still around then, I got to experience the “dual roles” of son and father.

I didn’t get to enjoy too many of those, unfortunately, as my father was struck down too soon by cancer, so now I am back to only one way of experiencing this special day.


Father–Son Experiences

This past week I was in Halifax for the Family Enterprise Exchange’s (FEX) Symposium, where there were plenty of father-son teams and stories.

(There were of course mothers and daughters too, but this is my Father’s Day blog and I’m a guy, so please excuse the gender slant this week.)

Whether it was a father and son on the stage, recounting the evolution of their relationship, or members of a family at my table during one of the sessions, I couldn’t help comparing what I was seeing and hearing to my own experiences.

It felt like most of the relationships I witnessed were healthier and more open than the one I had with my father, and much closer to what I feel like I’m living with my son (and daughter).


Objectivity Problem?

I can’t be sure of my biases here, but I think I’m being pretty objective.

Were these isolated examples of great family relationships?

Was my view of them skewed by their efforts to show “good behaviour” in public?

Was it a sign of the times that younger generations have got the father-son relationship figured out better?

I can’t be sure, but I do know that the fact that my Dad and I were in a family business together certainly DID have an effect on our relationship.


“We’re Not Gonna Do That”

I shared a fundamental story of ours many times during the FEX Symposium, one that I wish had turned out differently.

In the mid 1980’s my Dad had joined CAFÉ (Canadian Association of Family Enterprise, forerunner of FEX) while I was completing my Bachelor of Commerce studies at McGill.

Those studies were part of what I understood to be my “duty” as his only son: to fulfill my “destiny” as his successor.

One day he told me that many of the advisors who had spoken at CAFÉ events were very much against the idea of hiring your kids right out of school and straight into the family business.

I recall looking at him with a hopeful twinkle in my eye (which he clearly didn’t read the way I had hoped), waiting for the next line.

At that point he put his hand on my shoulder and “reassured” me with, “But we’re not gonna do that!”

Once again, he decided for we.


Wait, Why Not?

My hope is that modern day sons would have the courage to say, “Wait, why not?”

I really wish that I had, and if my son were faced with such a situation, I hope he would too. But I don’t plan on ever putting him in that kind of situation.

And for any other father-son team experiencing this question, please resist the temptation to taking this short cut to working in the family business.


Worth the Wait

If it’s right, it’ll be even more right, later.

Let your kids become their own selves first, outside their parents’ shadows.

It is worth it for them, and it will be for the business too.

Father and Daughter playing

Is Your Family “In Line”, or Aligned?

The subject of family alignment is near and dear to my heart, and it has been for a few years now, probably since I first heard it.

Family alignment can mean different things to different people, but in the arenas of family business, family legacy and family wealth, it seems to be more and more common, and recognized as increasingly important.

The first time I tackled this subject, last year, I didn’t just write a blog on it, I created an entire “white paper”. However, since I kind of despise that term, I called mine a “Quick Start Guide”. Link here: Family Alignment – What it IS, Why you NEED it, How to Build It.

Part of what prompted this blog now is my newfound interest in the subject of family governance.  Well, it’s not really a newfound interest in that subject, it’s more of a newfound appreciation for the word governance, especially as it applies to families.

Back in January, my blog, “Family Governance, Aaaah!” recounted how I had come to terms with my revulsion of the “G-word”, thanks to repeated exposure to it from more and more respected places.

Collaboration and Leadership

Around the same time, I read the book “The Collaborative Leader”, and another light went on.  In that book, authors McDermott and Hall talk about two words that seem to have a symbiotic relationship (my words, not theirs).

They explained that the words “collaborative” and “leader” are actually very difficult to separate, because one is almost always used to describe the other. There is almost an implied nature of each within the other, so to speak. (Again, my clumsy words, not theirs)

To collaborate requires leadership, and to lead requires collaboration.

Hmmm, interesting, I thought to myself.  I wonder if I can think of other pairs of words like that.


Alignment and Governance

So naturally, my thoughts lead me to alignment and governance, admittedly, two much less common words.

My thinking goes like this.  If you want to align your family, it needs to be governable, and if you want to govern your family, it needs to be aligned.

Now if you really want to pick holes in my arguments you certainly can, and maybe not just small holes, but bear with me here.  And let’s agree to take a 2017 perspective, not one from 1987 or 1957.

Just as the definitions of collaboration and leadership have evolved, so have those for alignment and governance.


Getting Everyone in Line

Decades ago, having everyone in your family “in line” had a different meaning, likely much more autocratic and “top down”. I think we can all agree that that horse has left the barn.

In the same way that leaders today need to be collaborative and collaboration needs leadership, today’s governance structures exist best in situations where there is alignment.

It seems like this would be true in any situation, not just in the areas of family governance and family alignment.

Where do you Start?

The good news with these pairs of words is that in order to get moving, you can start working on whichever one resonates more.  If you want to help someone with their ability to lead, but they don’t really see themselves as leaders, you can work on their collaboration.  And vice versa.

If you have an aversion to family governance, you can work on family alignment, and for those who think family alignment is too “touchy feely”, maybe you can convince them to work on family governance.

Are You Feeling Lucky?

If you’re lucky, your family (or the families that you work with) will automatically have leaders who love to collaborate and people who “get” governance and are easily aligned.

Most people aren’t that lucky. Most people need to work at these things.

My favourite expression in this regard is “Things don’t just happen by themselves”.

Some of the current buzzwords that I hear and like on this subject are the following:

  •  Deliberate
  •  Intentional
  •  Purposeful

Please recall that your legacy comes from both people and assets, and your wealth and legacy won’t preserve themselves.

Bottom Line: You can work on better alignment through governance, or better governance through alignment, but you need to work on them. Intentionally.

Personalizing your Family Business meetings

5 Things you Need to Know: Professionalizing your Family Business

Most family businesses start small and are run rather informally, usually with one or two people calling the shots. As the business grows, more people are brought in, and things can go along for years without much in the way of any formal procedures or written rules.

When one person can no longer stay on top of everything, their ability to delegate will largely determine how much the business can grow.

As the next generation joins the business, a certain level of informality may be part of the culture as well. That isn’t necessarily a bad thing, but behaving at the office as you do around the dinner table can have its drawbacks.

Many people recommend “professionalizing” your family business, and with good reason. But what exactly does that mean, and how do you do it?

I’m glad you asked…

1. Education

An obvious place to begin is with the education level of the next generation of family members entering the business.

If your children have the ability to go to college or university and get a degree, that’s a plus.

If they can get an advanced degree, that’s better.

If they can do that AND go and get a few years of work experience working for an unrelated business, that’s best.

If you are inclined to hire your kids right out of high school, I urge you to rethink that plan, as their future and that of the company will likely be limited by that choice.

If it’s “too late for that” in your family, there are plenty of education opportunities that last anywhere from a few days to a few months that are probably worth looking into.

It is never too late to learn new things and to upgrade one’s skills and abilities.

2. Hiring Non-Family Employees

The quickest way to professionalize any business is to hire people who are professional in the way they operate, hopefully also bringing along some work experience.

Aim to bring in outsiders who are MORE professional than the people you currently employ, treat them professionally, listen to their ideas, and learn from them.

You can only go so far without great non-family people on your team.

3. Outside Professionals

Every business needs and has outside professionals that they deal with, like accountants and lawyers. They often began with friends or whomever they could afford when starting out.

As the business grows, it is sometimes necessary to move up the ranks and switch to professionals who are at the level you require.

It is quite possible that your business has outgrown your professional advisors, and an upgrade will be needed. It isn’t always easy to cut these ties, but can be necessary.

4. The HR Department

During the growth of any business, the need to begin to treat Human Resources as its own department becomes key. The sooner you acknowledge this, the better.

Your business can only grow as quickly and as far as the ability of your people to grow along with it.

A real HR department will think twice (hopefully) before agreeing to blindly hire a family member and put them into a role for which they are ill suited and unqualified.

This issue has tripped up more family businesses than you can imagine, as mistakes like this cost not only the department where the person works, but can get everyone shaking their heads about what is important to the business.

The biggest part of this comes down to attitude. Have you realized how important humans are to your company, as a resource?

Finding, onboarding, and keeping great people is a must for just about every business. And so is having the right people filling all key roles.

5.   Board of Advisors

Last but certainly not least is the company’s board. I know that even fathoming a true Board of Directors is a complete non-starter for most small family businesses.

So why not start small and informally, with a board of advisors?

The outside perspective alone is worth it, even if it is only to help you look at your own family members more objectively.

Bringing in independent advisors (preferably NOT your current lawyer and accountant) can be the single biggest step to professionalizing your family business. Just ask anyone who has done it.

Liquidity Events in Family Business

Liquidity Events in a FamBiz: Pros and Cons

Part 1 of 2 – The Pros


The expression “liquidity event” is not necessarily well understood among the general population. Let’s take a look at it from the Family Business point of view.

Essentially, a liquidity event takes place when the owners of a business, in this case a family, sell a substantial portion of their business (either shares OR assets) to an outside party, for cash or another form of asset that can more readily be turned into cash quickly.

Read more

Lessons from a drowned phone

Lessons from a Drowned Phone

Happy New Year?

The first week of a New Year seems destined to bring up a challenge for me. Last January I was involved in a car accident that resulted in a concussion, and 2017 started with me accidentally drowning my phone.

I must admit that given a choice for 2018, I would sign up for stupidly putting my phone in the washing machine over innocently getting rear-ended at a red light.

Even though I have nobody to blame but myself for the phone fiasco, I must admit that this year is off to a better start than last. And of course the drowning of my phone has given me a juicy blog subject to boot.


The Incident

Last Friday when I finally found my misplaced phone in the “last place I looked”, i.e. the pocket of my jeans, in the washing machine, well into its wash cycle, I was relieved that at least I had solved the mystery of “where the heck is it?”

The thrill of finding it was quickly extinguished of course, as I had already concluded that it was now merely a paperweight.


Now What? 

Saturday morning I went to my phone service provider with it, holding a glimmer of hope that it might still be useful. No such luck.

I purchased a new phone, and then came the time to transfer what I had in my old phone. There is a great app you can use to transfer stuff (photos, contacts, apps, etc.) from an old phone to a new one. But it doesn’t work when the old one is dead.



My work is all about helping families define and preserve their legacy, which includes very important steps that I explain to client families, which they cannot skip if they want to keep the odds of success on their side.

My old phone had lots of important stuff in it that I wanted to continue to benefit from. But it was now dead, and I had not done what was necessary to preserve what was in it by backing up everything.

Now, recreating what I had, became a much bigger challenge. In fact, some stuff, like photos, was gone for good.

Most of those photos weren’t critical, but they did have some value, which was now lost. Likewise, much of what the senior generation members have in their heads is not truly critical for the survival of the family, but it can often rise to a level above simply “nice to have”.

In case my analogy has been lost on you, allow me to spell it out more clearly. If you wait until after people have died to try to have a valuable relationship with them, it is MUCH harder to do.



What about contacts? The way things turned out for me, thanks to technical ineptitude and the lack of foresight on my part, when my contacts updated on my phone, I got hundreds of names and email addresses from everyone I had ever emailed through my Outlook account, a majority of which are useless now.

The cell phone numbers that I actually wanted and needed were nowhere to be found.

I now have to delete a whole bunch of useless stuff, and I need to email a bunch of people and ask them for their cell phone numbers again.

So I got a lot of stuff I don’t want, and the stuff I want, I need to actually work to get, even though I already had it before.

This is kind of like having to go through all of the files and documents of a deceased relative, while never having had the benefit of the personal introductions to people who were important to the family.


Lesson Summary

  1. Whatever happens, it could be worse. Phone issues are preferable to concussions
  1. To have a back up, you actually have to DO a back up.
  1. Sometimes you don’t know what you’ve got ‘til it’s gone.

Please realize what you have and figure out how to preserve it. And I’m not just talking about your phone.  There are so many things that the NextGen and the NowGen need to work at transfering.

Better get started today.

Family Business Decision Making

So Maybe it IS the Highway

Highway traffic in sunset, travel concept background

“It’s MY way, or the Highway”

That expression is familiar to most people, and if you have ever been around an old-fashioned founder of a family business, it may hit especially close to home.

It’s interesting to note that as recently as a few decades ago, the default reaction to someone making this exclamation has probably changed.

What I mean by that is that in the middle of the last century, a family business leader who demanded that everything be done their way would more often than not succeed in getting everyone to do as they pleased.

In the early decades of this century, however, I would venture to guess that more often than not, they will have difficulty in getting everyone to buy into the “MY way”. So much so that fewer people will even dare utter that phrase.

So what has changed? Well there are a whole bunch of societal changes that have been occurring over the past few decades and it is important to be aware of how they are affecting business families.


Two Kinds of Life Expectancy

People are living longer, and staying productive and healthy for many more years than in the past, and the typical business founder has some difficulty letting go. Decades ago, their offspring could join the family business with the expectation that they would get to a point where they would inherit the business while still young enough to get to do things their own way. Not so much today.

The other kind of life expectancy is a term that I coined here myself, just for this blog. When invited to join the family business, more and more Next Generation members are thinking hard about what they expect out of their life.


Education = Options

Many families who have successful businesses will encourage their children to get a great education, but while they are getting educated, they are also getting exposed to the world of opportunities that such an education affords them.

What often happens is that a number of great options become hard to resist. If the choice is to return to the family fold and fall in line with a parent’s, “My Way”, or to go out and forge your own path, well, at least one of those paths is usually more tempting.

It can be understandably disappointing for parents to discover that a business that they built “for the family” does not seem to have any interested “takers”.

Families with means encourage independence in their offspring, and then lament the fact that they are no longer able to interest their children in being involved and taking over.


No Magic Bullet

At the risk of disappointing readers expecting me to provide a magic bullet solution, “sorry”. But I will offer some words of advice just the same.

It is true that there are more and more good “highways” out there, and if your “former chidren” have found a career for which they have a passion, then that’s probably better than having them come work for you and hate Mondays.

Also, if you have built a sustainable company and do not have any heirs who want to work there, all is not lost. Have you thought about having the family continue to own the business, even after you retire, having it run by professional, non-related management?

If you want to be involved with your children and they have an entrepreneurial spirit that they inherited from their parents but they are not exactly enthralled by your business, have you thought about helping them get started in a business venture in a field that they are passionalte about?

These last two ideas, long term family ownership of the business and starting a new business with and for your kids, are just a couple of ways to avoid the old question of My Way OR the highway.


The Family > The Business

If you have an open mind, and some creativity, you can look for ways to do things “Our Way”, and try a few different highways.

When thinking about the next generation, I always encourage people to be a great parent first, and think about the business second. I hope you see the wisdom of that approach.

How the family Governs the family Business

Putting the “Own” in Ownership

I am a big fan of the three-circle model and I have been since I first learned of its existence a few years ago.

As the story goes, it was actually derived from the two-circle model that preceded it, which was already groundbreaking in its own way because it was an attempt to separate the “family” and the “business” circles, while acknowledging their overlap.

When Renato Tagiuri and John Davis added “ownership” as the third circle, they had created a model that has stood the test of time for three decades now.

Ownership remains the circle that is hardest to grasp for many people, despite the fact that it sounds pretty straightforward on the surface.

People who do not have any relationship to a family business probably have a better grasp on the meaning of the word ownership, because anything that they own is likely pretty clear to them.

This week I attended an event where a woman from the third generation of a business family related that when she became an owner of her family’s business, she was not even informed until a year after the fact.

This reminded me of an event that I lived with my father many years ago. It was back in the 1980’s when CAFÉ was going strong in Montreal, and we attended a workshop together. In preparation, the organisers sent out a questionnaire to all attendees, asking for the percentage ownership in their family business.

My Dad had left this task to me, and I noted that he owned 67% of the company, and I owned 11%. He had set things up with two holdco’s, his, with 2/3 ownership, and his 3 children’s, with 1/3.

During the event, he saw the questionnaire that I had filled out for the first time, and he asked me point blank “What’s this?” I told him essentially what I just noted in the previous paragraph. “Oh, yeah, I guess you are right” was his reply.

Clearly he still considered himself the 100% owner, and I guess my sisters and I did too!

So ownership can be a little nebulous from time to time, and I know of at least one family business advisor who says that he only works with clients on ownership governance matters and avoids working with business founders, who so often have difficulty understanding the three circles.

A couple of weeks ago at the Family Business Summit in Halifax, I participated in an interactive exercise led by Doug Bolger of Learn2, who had the entire room working together and discussing succession matters.

At one point I had another “A-Ha moment”, and I always try to share those in this blog. We were discussing “ownership”, and then someone mentioned members of a younger generation wanting to do their “own” thing.

I had never realized that the word “own”, as in “my own” was part of the word “ownership”. I raised my hand and shared this realization with the group, and based on the reaction, I was not alone.

There is a new initiative being launched by the Business Family Foundation (BFF) this fall that recognizes that members of the rising generation in families seem to be more interested in doing their “own” thing more and more frequently these days.

They have created the “Initiative Intrapreneuriale” which will begin in Montreal in September, in French. As one of their “ambassadors” on this project, I would like to share why I think the idea behind this program is one “whose time has come”.

Intrapreneurship is not a new idea, many companies have benefitted from it, often without even calling it by this name.

What the BFF’s program is designed to do is to help spark business families into intrapreneurship as a way to get younger family members to join their family’s business AND do their own thing.

Enterprising families recognize that businesses have life cycles, and know about the importance of renewal. So why not encourage younger members to come up with their own business, and have it “grow up” within the existing family firm?

Sounds like a win-win proposition to me.