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Family Business Meeting Advice

Calm, Clear, and Connected

Each week in this space, I talk about things that affect the world of family business and family wealth, especially for families who are planning for a successful transition to the next generation.

This week’s subject is family meetings and three ways to assess them after the fact.

My premise is that you should strive for “calm, clear, and connected” meetings.

Let’s take them one at a time.

 

 

Keep Calm and Carry On

I’ve written a couple of blogs on the subject of calm, including Calm is Contagious earlier this year, and Calm-fident Advice for your Family in 2016.

When a family can meet calmly and discuss important matters while everyone remains composed, the results are usually much more satisfying than when voices are raised in anger.

It is normal for some contentious subjects to arise, on occasion, where things get a bit louder and more animated.

When the loud and angry meetings outnumber the calm ones, it’s usually not a good sign.

Ideally, there can at least be some calm parts of each meeting where the family can truly benefit from everyone’s best thinking and ideas.

 

birds flying in a V-shaped form

My Kingdom for Some Clarity

Another subject that I talk about regularly is clarity and the need for things to be clear.

Most people think that they have a clear picture of things in their own head, and that’s probably a good thing.

When we talk about a family though, it’s also important for everyone to have the same clear picture, and that’s very rarely the case.

There are many valid reasons why different people have different pictures of what they believe to be the reality.

Problems will arise when people who are working together to make decisions about important matters don’t have a common understanding of what they’re dealing with.

And a huge underlying issue here is that people often simply assume that their view is not only correct, but also that the others share their view.

One of the benefits of having an outside person present at family meetings is that this person can ask the “stupid questions” that the others would likely be afraid to ask, because they don’t want to risk appearing ignorant.

Of course, this presupposes that you can find an outsider who is prepared to act this way in the interest of clarity for the family.

I laid out some of the questions that you might ask in I Can See Clearly Now in 2016.

 

 

Connected: The State of the Relationships

The third element that I think is important for family meetings is connection.  I realize that this one may seem a bit less obvious to some, but please stay with me here.

Families work best when everyone is on the same page and everyone has an opportunity to be heard.

When I facilitate family meetings a big part of my role is to ensure that each person has the opportunity to speak and contribute.

You may wonder about my choice of the word “connected” here, and I guess I must confess that part of the reason I chose it is that “calm, clear and connected” evokes the old “cool, calm and collected” expression most of you are probably familiar with.

But the connection angle also stems from my understanding of the importance of family systems theory.

 

Family meeting

Interdependent Parts of a System

The members of a family are all interdependent parts of the family system.  I actually try to focus more on the relationships between the people than I do on the people themselves.

I try to notice all the non-verbal cues that I can when sister speaks to brother and son speaks to mother, and so on.

When everyone relates well with everyone else, meetings are more productive and the decisions that are made are more likely to stick.

 

 

Recap: Calm, Clear and Connected

No meeting is ever perfect. In fact, the focus shouldn’t be on any single meeting, but on having a series of regular meetings.

Try to get better from one meeting to the next, as the process evolves.

More calm is generally better than less calm.

More clarity, even if it takes a bit longer to make sure everyone understands things the same way, is better than less.

And when everyone actually connects with everyone else in meaningful ways, that’s ideal.

Think back to your last family meeting.  How did you do? Where can you improve?

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.

Building a Bridge vs. Buying One

Analogies have long been one of my favourite ways of trying to convey interesting ideas to audiences.

Most are quick “one-shot-deals” that come up in a conversation and never get used again.

Others have more staying power, and become part of my “go to” arsenal of tales I use to get important points across.

Today’s blog should become part of the latter group, as I will surely find opportunities to use the story behind it with plenty of families, and their advisors, going forward.

 

 

Team Building Exercise

The setting for this story is a campsite in the woods, the week before school starts up again in the fall.

The main characters are 10 High School Seniors, along with a few adult chaperones from their school.

The students had been chosen by their classmates, and approved by school staff, before summer break, to act as prefects for the coming school year.

The trip itself was designed as a team-building exercise above all, and included a major project: building a bridge together.

 

 

Inside Info and Unplanned Events

I was not part of this trip, but I did have someone close to me who provided me with inside information about it, after the fact.

As a parent, I had known about the trip in advance, but the details of the project only came up afterwards, thanks to a number of bee stings that my daughter and a few others had the misfortune to experience.

If you have teenage kids and you’ve ever tried to get information about an incident they were involved in, you know how these discussions go.

“You got stung?  Four times?

How did that happen, what were you doing?

A bridge? In the woods?

Why the heck were you building a bridge in the woods?”

Train crossing a bridge with a steam coming out of it

 

Photographic Evidence on Social Media

A few days later, the school tweeted out a photo of the students and their handiwork.

I’ve gotta say, the picture I had in my head before I saw the tweet was of a more “substantial” bridge.

But it was technically a bridge, so I can only assume that it met whatever expectations had been set.

More importantly, by all accounts the experience they went through together, including the unplanned parts, did have the desired effect.

They’ve been working together and leading all sorts of school activities since then, and while everything doesn’t always go perfectly according to plan, that trip, and the bridge project, did serve a very useful prupose.

 

 

The Magic of Co-Creation

The end result was not so much a bridge in the woods, but a cohesive group of people who knew how to work together.

If they had really needed a bridge, the school could certainly have found other ways of getting one built.

But the overall goal was to have the teens work together on making decisions, communicating, and solving problems together.

The entire exercise was one of co-creation and teamwork.

 

 

Similarities to Governance

If you’re a regular reader, (thanks!) then you may recognize the three elements that I just outlined above:

  • Decision-making
  • Communication
  • Problem-solving

They are of course the main elements that we include when we define governance.

Family governance is something that can and should evolve from within the family group, and it is best done with as many of the key family members as possible.

Please see: The Evolution of Family Governance for more.  (That blog also includes links to previous posts on the topic.)

Girl with a backpack crossing a bridge

 

Can’t We Just Buy the Bridge?

If your family has recently decided that governance is an important part of your intergenerational wealth transitions, I urge you to heed the lesson here.

Yes, you probably could “buy” some elements of a governance plan from some professional advisors and consultants.

There are those out there who are willing to sell you a “family constitution” or a “family charter”.

Be forewarned that you may be buying a “bridge to nowhere”.

 

 

It’s All About the Experience

Like our teens in the woods, it was never about the bridge.

Families often need the experience of building

something together more than they need a bridge.

Once again, I’m arguing that process is more important than content.

The key family members who will have to live with the agreements they make over the next few decades need to be key actors in their design and construction.

Even if they do get stung a few times along the way.

People standing as a group watching sunset

Improving Together in a FamBiz

Writing these blogs each week for six years, my weekly habits continue to evolve.

I still get questions from colleagues about the source of ideas to write about, and my answer remains consistent: I write one blog a week, but I usually get at least two new ideas.

Sometimes the ideas come from somewhere unexpected, and sometimes they morph from one thing to another along the way.

Such is the case this week.

Better Investors

I’m guilty of spending more time than most people on social media.

I like to know what’s going on in the world and Twitter and LinkedIn allow me to follow the people and sources that I like and trust, on a variety of subjects that interest me.

A few weeks ago I saw a post on Twitter from Carl Richards (@BehaviorGap)

“It turns out our job is
not to find
great investments,
but to help
create great investors”

A Blog Idea Is Conceived

My first “A-Ha” came right then and there.

An “Investment” is a product or a piece of content, and it is the thing that many professionals in the investing space specialize in selling.

But as Richards points out, that focus is misplaced.

An “Investor” is a person, and such persons are better served by those who will help them with the entire process of the whole scope of being investors.

 

Teach Them How to Fish

It comes down to the old Bible story about not simply giving a person a fish, but instead teaching them how to fish for themselves.

Do you want to feed them for a day, or for a lifetime?

That’s supposed to be a rhetorical question, but unfortunately many of the business models still followed by many professionals, seem to prefer feeding on a day-to-day business, and being paid for it over and over as well.

Process Over Content

So the thing that grabbed me, as far as this idea being good fodder for a blog post, was the whole Process Over Content question.

It’s certainly not a new idea for me to discuss, but it was from a different angle.

The content pieces that I often deal with are things like legal or accounting structures or trust vehicles, or contracts such as shareholder or partnership agreements.

Strategy of Tactics?

The process part of putting all of these tactical pieces together into a strategy will often be given short shrift.

Too often the concept of making sure that all these pieces will fit together properly is either completely ignored or simply assumed to be sufficient.

In reality, though, this is where many plans fall apart.

 

Blogging Brings Clarity

So here is where this post took a bit of a turn.

I was set to write about the “process” part, but then realized that there was a “people” component that I simply couldn’t ignore.

My blog title was still a big question mark too, and then it came time to search for an image to accompany the post, with a surprise of its own.

A-Ha # 2 – Improving Together

I’ve been using Shutterstock for a while and am usually quite satisfied with the results I get when I search for the right image to go with each post.

This time my search actually kicked things up a notch, as it created another A-Ha moment for me.

I was looking for something using “process” and “people” and there it was…Improving Together.

Holy crap, that’s even better than anything I had come up with so far.

Families Learning Together

When Richards was talking about investors, I imagine that he was referring to singular people, or perhaps to a couple.

My work is always about families, whether I’m actually working with all family members directly, or working with one person, helping them organize and coordinate their family.

The key to finding success for most families, is for them to find reasons, ways, and opportunities to work together and learn together, so that they can eventually get really good at deciding things together.

Co-Creating the Family Strategy

The families who are most successful at transitioning their wealth to the next generation are those who have mastered the practice of involving as many family members as possible in the process.

The co-creation of the strategy is what ensures the buy in, so that the plans actually work.

The time and effort required are always worth it.

Celebrating the Global FamBiz Community

Celebrating the Global FamBiz Community

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

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

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

 

Global in Scale

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

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

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

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

But the global reach of FFI is unique.

 

Let Me Count the Countries

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

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

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

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

 

 

So Much to Share

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

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

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

 

The Big Deal about Community

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

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

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

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

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

 

Building Something TogetherGroup of people walking with yellow background

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

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

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

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

 

 

Many Parallels

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

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

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

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

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

Why not join us?

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

Dog Holding leash in-front of the door

Ready to Lead > Ready to Leave

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

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

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

Some Batons Are Sticky

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

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

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

bird leading other birds

The Father of the Three Circle Model

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

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

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

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

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

The Money Quote

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

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

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

Ready To Lead,

than to wait until the current generation is

Ready To Leave.

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

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

A man leading other people

Too Soon or Too Late

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

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

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

What Else Is There?

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

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

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

Step Back to See the Whole Picture

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

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

Three Circle = Three Systems = Three Leaders?

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

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

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

So you built a great business, congratulations.

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

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

marshmallows-and-filet-mignon

Marshmallows and Filet Mignon

This week we’re looking into one of my favourite subjects, and we’re going to do it from a couple of different angles.

We’ll start with some psychological research done at Stanford University about five decades ago, and we’ll end with a real life example from my own experience.

The subject is delayed gratification, and I have long maintained that it is the secret to success for most people.

 

I Want It Now

The average attention span of people has been shrinking for decades, and this has only added to many people’s expectation that everything be there for them the second they want it.

I will not get into any debates about young people these days being worse than we were at their age.

I believe that every generation has people from across the spectrum and I have no desire to kick any of these proverbial hornets’ nests.

 

Who Wants a Marshmallow?3 marshmallows on a pink table

Walter Mischel was a psychologist at Stanford who came up with the “Marshmallow Test” back in the 1960’s.

Mischel passed away a few weeks ago, which has resulted in renewed interest in his work, so if you Google his name and the word “marshmallow”, you will surely come across lots of interesting things to pursue (once you’ve finished this blog, of course).

His subjects were children around 5 years old.  The “test” was constructed this way:

Children were brought into a room and given one marshmallow and told that they could eat it now.

Or, if they could wait 15 minutes while the experimenter left the room, and NOT eat it, then they would receive a second marshmallow as a reward.

 

Not As Easy As It Sounds

Apparently only about 200 of the 600 subjects managed to hold off on consuming the treat for the 15 minutes (which surely seemed like an eternity for those who succeeded).

There are lots of interesting videos you can find showing how the kids struggled with the temptation while alone in the room, mostly from more recent versions of the experiment, conducted to replicate the initial results.

 

The Take-Home Message

If you’ve understood that delayed gratification is not easy, that’s great, but you’d still be missing out on the larger message of the research.

You see, they followed up on the kids over the years and tracked their success in life, and they discovered something that I hope you’ll really get out of this story.

The kids who were able to restrain themselved for those agonizing 15 minutes also happened to live much more successful lives, on just about every dimension they measured.

If you can delay your need for immediate gratification, that will help you for your whole life.

 

Good Things Come to Those Who Wait

So where do you think that those young subjects got that ability to be patient and resist temptation?

I won’t get into the specifics because I’m not a social scientist and so much of this ground has been covered by those much more capable than I am in this area, but I have a very short answer of my own.

 

Their Parents.

Now I can’t say if it’s in their DNA or if they learned from observing the behaviours that their parents modeled for them,  (or both) but they got it from their parents, one way or another.

 

The Steak Versus the SizzleFilet mignon - Steak

Here’s my real world example.

Years ago, my Dad had retired to a small farm where he raised breeding cattle.  He hired some of the locals to do much of the work.

He paid his employees nicely and also got into the habit of giving them an annual bonus, paid in meat.

Every year, a couple of animals would “fall into the freezer” as he liked to put it.

 

Did You Try the Meat Yet?

My Dad and I were very much on the same page with many things, but our viewpoints were also quite different.

But when he was making a point, I could usually see him coming a mile away.

One day he relayed this story, about an exchange with one of his workers, the day after they had picked up their side of beef from the butcher.

 

The Look of Dismay

Dad asked if they had a chance to try the meat.

“Oh, yeah, it was great.  We had the filet mignon”.

I can still see the look of dismay, and Dad shaking his head in disbelief.

Family Office: “WHAT” vs. “HOW”

Family Office: “WHAT” vs. “HOW”

A few weeks ago, in From Family Business to Family Office, I mentioned that I’d start writing more about the family office world. Being a man of my word, here we are again.

I had a bit of an issue choosing my blog title, though.

I began by thinking about the idea of “Strategy” versus “Tactics” in the family office space.

But my bias is to try to stay away from “jargon” terms and use the simplest possible words, at least most of the time.

 


A Thousand Words

Of course when it came time to select a photo to go with this post, terms like “strategy” and “tactics” garnered more interesting search results from Shutterstock than “what” and “how”.

At the end of the proverbial day, though, whether we use the simple questions or the business jargon terms, we’re talking about the same issues.

Ten Years Flew By

The most important idea here is this:

You need to recognize the difference
between the strategy (the “what”)
and the tactics used to accomplish
that strategy’s goals (the “how”).

If you get nothing else out of reading this, my Dad would’ve been pleased. What does he have to do with this, you ask?

It has now been 10 years since he lost his final battle with cancer, and I cannot count the number of times his wise words have been summoned to the front burner of my brain.

“Let’s figure out what we’re trying to do first, and then we can figure out the best way to do it.”

 

Family business office

 

The Family Office (The “Who”)

A family office is typically composed of people, from one to a handful, or sometimes even dozens. (Key variables include the size of the family, the amount of wealth they control, and the level of complexity involved)

The employees of the family office should be working for the benefit of the family, and so they should be concentrating on the tactics, the “how”, and be less involved in the strategy.

Ideally, the strategy will have been worked out by the family, before the family office people get too far down the road of implementing the best tactics.

 

It’s Complicated

I used the term “ideally” because I know that this is often not the way it works in the real world.

But that typically isn’t the fault of those who work for the family office.

Much like the ideas I wrote about in FamBiz: Management vs. Governance, different groups of people have different roles that they should be playing.

When the people who are supposed to play those roles don’t play them, then others will invariably step in and assume those roles.

 

Benefits Come with Responsibilities

Families that have a family office (FO), or who are clients of a multi-family office (MFO), have set up this relationship so that the FO or MFO can serve the needs of the family.

The decision to go this route may have occurred last year or last century, and it may have been decided by this generation of family leaders or by their parents or grandparents.

The fact remains that it was done for the benefit of the family members.

And as we all know, with benefits come responsibilities.

Family business Work

Where Are We Going?

I’m going to take a guess and say that most readers are fine with what I’m saying here, but that they may be wondering what my point is.

So here’s where I’m going.

I think that relationships between families and their family offices tend to be out of balance, or off-kilter.

My anecdotal evidence suggests that family office employees often control not just the tactics, but much of the strategy too.

This can be mitigated when the FO includes family employees, but that can also make things worse.

 

Family Alignment: The Missing Link

As I stated above, this is not typically the “fault” of the family office, but usually that of the family.

They need to intentionally work at getting the entire family aligned together, in order to make the decisions that the family office should then be executing.

 

The WHAT, the HOW, and the WHO!

Getting a family aligned so that they can effectively drive the strategy of their family office does not just “happen”, all of a sudden, or all by itself.

It begins with the recognition that it is necessary for the long term good of the family and its legacy.

Recognize anyone?

See also: The Exponential Magic of Family Collaboration

 

Suggestion box

From Suggesting to Managing in the FamBiz

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

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

Facilitation = Making Things Easier

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

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

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

Some Are Less Obvious

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

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

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

Promotion to Manager

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

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

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

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

Giving Suggestions

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

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

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

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

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

Wait, what?

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

male and female business people talking

Sub-Titles as a Visual

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

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

Stepping Up, One Step at a Time

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

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

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

From Talking to Doing

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

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

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

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

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

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

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

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

“They Aren’t Ready”

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

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

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

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

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

Evolution within a family

The Evolution of Family Governance

Lately, I’m becoming enamoured with the term “Family Governance”, as some regular readers may have noticed.

In fact, I wrote a post just a few weeks ago relating to this subject, “Family Governance: From Filaments to LED’s”.

The subject has undergone an evolution of sorts in my mind.

I’m looking at it in new ways as I learn more, work with more families, and adapt my thinking to the ways other related subjects also continuously evolve.

 

The Family Governance “Field”

 

I’m not sure if we’re yet at the point where we can say that Family Governance has evolved into its own “field”, but I know we’re moving in that direction.

In fact, the field, as it stands, also feels like it is evolving in its own right.

If you’re interested in it, or even curious, please join me in New York City in January for the 3rd annual conference of the Institute for Family Governance.

I’ve attended the two previous editions, and my blog on the 2018 version can be found here: Realistic Family Governance Goals.”

 

How to Make Family Governance “Stick”

So in terms of the evolution of family governance, we’ve already got the fact that the term has been growing on me and evolving in my mind, and the fact that the field is also evolving.

But the main point of this post that I’d like to make is how important it is for Family Governance to evolve within a family, if it is to have any chance of “sticking”.

Yet as more people discuss a certain topic and it seems like it’s growing legs and becoming “a thing”, there are always some who try to figure out how to sell the idea to others, with a view towards making money at it.

I supposed that’s to be expected, much as I mentioned last week when we discussed the family office space and the “business opportunity” problem there.

 

FOR the Family, BY the family

From my perspective and experience, when governance is thrust upon a family, either by one family leader from above, or by “experts” from outside, it is likely doomed to failure.

My go-to expression for this is “FOR the family, BY the family”.

Notice that I did not say for the family by one family member, or even for the family by experts chosen by the family.

You cannot buy governance off the shelf; it is not a product.  Of course, that doesn’t mean that there aren’t people who will try to sell it to you.

The Evolution of Family Governance

No Stone Tablets

Any family that’s interested in successfully transitioning their wealth from one generation of their family to the next will need to invest some time and effort into developing the governance structures and systems that will help them achieve that goal.

Unfortunately, there’s no set of “stone tablets” that Moses is going to arrive with, listing the Ten Commandments of family governance.

I hear you, “OK, Steve, so it needs to evolve. But from where, and how???”

 

Start with a Family Meeting

 

You really need to call a family meeting and throw the subject on the table.

Someone from the leading generation, (usually “Dad”) has to call everyone together and make it clear that they want to make sure that the family will be prepared to eventually take over the family wealth in all its forms.

They should explain that they’d like to ensure the smoothest transition possible and that this is the beginning of a series of regular meetings that will be used to establish the “who, what, when, where and how” all that will happen.

The first meeting needn’t be long, because family members will need time to adjust to this news.

But please don’t leave until the next meeting has been scheduled for a couple of months down the road.

 

Start Where You Are

Governance is all about three major questions:

  • How will we make decisions together?
  • How will we communicate?
  • How will we solve problems together?

Don’t expect the answers to just materialize without any work.

 

The Good News?

The good news here is that just figuring out where to begin and how to start the governance process, so that you can see how it all evolves, is the best way to ensure that it will actually work.

It’s a PROCESS, and how you get there is even more important than where you get to!

Get moving, keep going, and watch the evolution.