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You Want an X-Ray? I’ve Got an MRI!

You Want an X-Ray? I’ve Got an MRI!

I pride myself on finding interesting topics to write about here weekly.  While the major thrust of my message targets the world of family business and family wealth transitions, the inspiration for my blogs can come from just about anywhere.

This week’s post simply comes from my everyday real life. I always keep my antennae tuned to things that are a bit out of the ordinary or counterintuitive.

These stories can then be artfully turned into useful metaphors, or at least that’s what I’m trying to do.

A Real Pain in the _______

My knees have been an issue for almost as long as I can remember.  My Dad had both knees replaced in his 60’s, so I suppose that’s something else I inherited from him.

Of course the “misspent” years of my youth when I played baseball and was usually the catcher surely didn’t help me preserve whatever parts of my meniscus that were there to begin with.

I had arthroscopic surgery a few years ago and it helped, but relief was only temporary.  My exercise options are now limited, and lately even riding a stationary bike results in pain after only short stints.

My doctor tells me that I should lose weight and that will help, and of course he’s right.  But I can’t help think that there may be something they can easily “fix” in my joint, to minimize the pain of exercise, which should help with the weight loss.

I know, I’ll get an MRI!

What’s Covered, What’s Not

In Canada, our health care system is run and paid for by the government, and it’s generally very good.  But not everything is covered, so sometimes when you want special services, you need to pay for them out of pocket.

No big deal, I think, I can afford the MRI, because this is what I need to allow the doctors to really see what’s wrong with my knee, and then devise a treatment solution.

Where’s the X-Ray?

Imagine my surprise when the orthopedic surgeon looks at the MRI and asks me “Where’s the X-Ray?”

WTF?  Is he joking, I wonder?  I feel like I sent an email attachment and was then asked to send a fax instead.  Are we going backwards?

Evidently not.

So I ended up going back to the same place I had the MRI done again, and instead of paying $500, this time it was “free” with the simple presentation of my Medicare card.

The Family Harmony and Governance Angle

The first metaphor that comes to mind when I put on my family business consultant hat is one that I touched on a while back, in Behind the Flawed Family Constitution.

The essence of that post was that some families who are unsure of what to do, but who know that they should do something, (and they can afford to do whatever it takes) will often overdo it and decide that what they need is a full-fledged family constitution.

Some of the biggest, most successful families do it that way, so we will do it too.

It’s actually a pretty good sentiment, but it shows a fundamental misunderstanding of how those successful families went about it.

Start Early, Start Small, Start Slowly

There is nothing wrong with having a family constitution. But, and it’s a big “but”, it is not the place to begin.

Families who decide that they need to institute some form of governance should instead follow the steps I outlined in a 2017 blog post, Start Cleaning Up your M.E.S.S.

The acronym “MESS” was something I came up with almost by accident.  But I think it’s a useful way to remember things about “getting started” with big changes, such as instituting governance.

The letters in MESS each follow the word “Start”, as in “start moving”, “start early”, “start small” and “start slowly”.

Start with the X-Ray, Then the MRI

In the same way I went straight to the MRI, many families think that they can take a shortcut, and get someone to help them write up a family constitution, and then all will be right with the world.

But just like the clinic that gladly took my money for an MRI I probably didn’t need, there are plenty of people out there who will take your money and write you a family constitution.

A family constitution needs to be done BY the family, FOR the family.

There are no exceptions.

Conversation between family members

Conversations: Does “Uncomfortable” = “Productive”?

Conversations: Does “Uncomfortable” = “Productive”?

This week’s post was inspired by a recent Zoom call that I was on with a group of like-minded colleagues.  The group consists of people trained in Bowen Family Systems Theory (BFST), which became an interest of mine about five years ago.

Actually, I was more than just “interested” in BFST; I recently published a book about how it illuminates the field of intergenerational wealth transitions. (See Interdependent Wealth)

In the book, I also share my journey of learning and discovery of the fascinating world of BFST.

 

“Uncomfortable Conversations”

On that call, one colleague related a story about a recent meeting that she had had at her workplace, where some “uncomfortable conversations” took place.

She shared her reaction to the conversations, and how she was able to maintain objectivity towards the subject, not allowing her emotions to derail her thinking, thanks to her understanding of, and training in, Bowen Theory.

During the ensuing discussion, someone referred to that conversation, and dubbed it a “productive conversation”.

And suddenly in my head, there it was, “A-Ha!”, there’s definitely a blog post in this idea. 

I know that lots of business families face these issues around “tough” conversations all the time.

 

Of Productivity and Discomfort

In the example from above, that conversation was deemed uncomfortable, and also productive. My understanding of the productive aspect is that it likely resulted in an ability to move forward on some important matter(s).

If I frame this question around just the area of conversations, I might ask, “Does every productive conversation have to be uncomfortable?”

Or, turning it around, “Is every uncomfortable conversation productive?”

I think everyone would agree that the answer to both questions is a resounding “No”.

 

Avoiding the Tough Conversations

So if we’ve determined that “uncomfortable” and “productive” are simply two adjectives that can be used to describe conversations, and that even though there is some overlap of these groups, it is not a perfect overlap, what is this really about?

My guess is that it’s really about the fact that even though we know a conversation could be productive, it will often be avoided if it is expected to also be uncomfortable.

I know there’s no rocket science in that last sentence.

 

Necessary Conversations

In my notes to capture this as a blog topic that morning, I included the word “necessary”, because that word also came up for me as I considered the idea.

How many “necessary conversations” are being avoided, simply because they’re expected to be uncomfortable for someone?

Probably way too many to even begin to count.

 

Preparation and Culture

I want to share a few ways that we can have more productive conversations, that won’t necessarily be “comfortable”, but will at least be less “uncomfortable”.

First off, when people are prepared for a conversation, they can be more ready to hear things that they don’t always like to hear. When you can brace yourself before you fall, you won’t get hurt as badly as when you can’t.

Another important element that you can work on, is creating the proper culture for these conversations.  If you can be in the habit of creating a safe and supportive space, that can certainly help with the comfort issue.  

The more often you get together with people, raising some difficult issues and dealing with them positively, the more this can become a habit, and eventually part of your culture.

 

Make It a Regular Forum

In fact, one of the recommendations I typically make to families who say they really want to get serious about their planning for their eventual intergenerational wealth transition, is to begin to have regular family meetings.

These meetings don’t necessarily need to be held frequently (monthly or quarterly) but there should be at least one or two a year.

The important thing is to make sure that everyone knows that there will be an opportunity to have important conversations, around matters that will affect the whole family, over the very long term.

 

Start Slow, Add “Big” Topics Later

The initial few meetings can be used to get the attitude and culture right, hopefully dealing with simpler issues at the outset.

With time, some of the more sensitive topics will typically be added to the agenda, as people will have become used to working on important aspects around how things will evolve.

Hopefully, you can be productive, without being uncomfortable.

 

Doing Better than the 4 D’s

Doing Better than the 4 D’s

This week I want to talk about the “4 D model” that I’ve heard David York speak about on a few occasions.

Now, lest you think that the word “model” is being used here in a positive sense, as in “a model that you should follow” or “role model”, please erase those thoughts immediately.

And furthermore, if you think that I’ll be arguing against York’s views, again, that ain’t it either.

York coined the term “4 D Model” to describe what has been going on for far too long, and we are in full agreement that there is a better way to go.

 

Background and Context

I first met David York in Denver a few years ago, at the annual Rendez Vous of the Purposeful Planning Institute (PPI).

Regular readers know that PPI is one of my absolute favourite organizations and that the Rendez Vous in July each year is the one gathering each year that I never miss.

I personally see York as one of the rising young stars in this field and love the way he conveys his important message.  This TED Talk of his is a great example.  His books are great too.

 

Traditional Estate Planning

York has long described the traditional “4 D Model” as follows:

Dump, Divide, Defer and Dissipate.

He’s also well aware that many of his estate planning attorney colleagues continue to follow this model.  Let’s look at the 4 D’s one by one.

DUMP

This is the part where the assets of the parents are transferred to their offspring upon death, usually after the second parent has died.   Little is done to transition any wealth while the parents are still alive, because that might require some real thought.

DIVIDE

This refers to the fact that upon death, those assets will be automatically divided equally between the offspring, regardless of any other circumstances, like ability, needs, etc.

DEFER

The deferring is mostly about trying to avoid paying any taxes until absolutely necessary.  So delaying any transfers of assets is part of that strategy too, because if you can’t avoid paying taxes, deferring them as far off into the future is the next best thing.

DISSIPATE

The final D is mostly about the results, as the family’s wealth dissipates after applying the first three D’s.

When the wealth has been treated in this way, with financial wealth as the sole issue of concern, and where no effort was ever made to involve those who would inherit it, it shouldn’t be surprising to learn that in many instances, that financial wealth will be handled by the inheritors in ways that could be described as sub-optimal at best.

 

More Purpose, Please

So far we’ve spent lots of time on how NOT to do the work necessary to transition wealth from one generation of a family to the next, and now it’s time to look at some positive moves a family could make to do a better job.

Notice that I said “moves a FAMILY could make” because ultimately the onus is on the family to do what is right for them.

Unfortunately, most families rely on outside experts to help them with this important work, and if a majority of advisors are stuck in the “old ways”, it can be very difficult for families to get the kind of help they really need.

Truck dumping grabbage

Involving More Parties – Inside and Outside

If the Four D model has survived this long, it’s largely because it’s very efficient.  It’s quick and relatively easy.

Making purposeful plans involves a lot more people so it naturally takes more time.

The first group of extra people are the other family members.  How can you make important plans for the next generation without involving them?

I don’t know, but most families have done it that way.

 

Multidisciplinary Advisors

The other group of extra people that need to be part of the solution are the advisors.

Every great plan will need to include input from a variety of outside specialists.  Ideally they will collaborate for the good of the family.

But most importantly, most of them should only be brought in after the family has figured out the most important questions around how they want the wealth to serve the following generations of the family, not before.

Rendez Vous 2019 will feature a breakout session featuring David York as well as one featuring Steve Legler and Joshua Nacht.  We all hope to see you there.

Guy sitting in his office facing a window

Putting “Family” in the Family Office

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

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

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

 

 

An Investment Vehicle

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

“The family offices through which the world’s

wealthiest 0.001% invest are a new force in

global finance that few have heard of”

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

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

 

Where is the Family?

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

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

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

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

 

 

Family Members as Clients

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

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

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

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

 

 Meeting room for family

Values, Goals, Mission, Vision

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

See: Huge Liquidity Events – Great News, Right?

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

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

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

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

 

 

Family Office as a Catalyst

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

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

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

 

 

Multi-Family Office Opportunity

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

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

 

 

Check Before you Sign

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

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

 

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.

Woman in Family Crying

Calm Is Contagious

Calm Is Contagious

Most people have witnessed occasions where anxiety in one person quickly spread to others in the room.

There’s an invisible “emotional field” that exists within groups of people, and just because you can’t see it, doesn’t mean that it isn’t there.

Anxiety is essentially “contagious” because one person can quickly spread it to others.

 

Does the Opposite Hold Too?

So if one anxious person can render others in their vicinity anxious as well, could the opposite also be true?

Obviously I think so, otherwise, I wouldn’t be writing this piece.

My premise is that calm is also contagious.

 

Family Drama

I was born into a family with what I consider to be low to moderate level of drama. That was my family of origin.

As for my nuclear family, the one where I’m the father, and my wife is the mother, and our two children are the kids, I like to think that we’re also on the lower end of the drama continuum.

We all have our own family or families, and if we think about them in terms of their typical drama level, we surely know of other families who exhibit a higher propensity for drama.

 

Emotional Reactivity

Another way to look at this is to think about it in terms of emotional reactivity.

There’s often one person, or maybe more, who simply have a way of triggering the emotions of others, and not necessarily in a good way.

It could be something very subtle and it may even operate at an unconscious level, but it is definitely there.

You may not be able to see the anxiety, but you can definitely sense it.

 

Superpowers

A while back, an acquaintance asked me straight up, out of the blue, “What’s your superpower?”

I was a bit taken aback, but since then I’ve really come to love the term and what it means.

It’s a nice way to define some ability that one has that seems to be very rare in others.

It’s often something that comes to you so naturally, that at first, you assume everyone has it too.

But eventually, you realize that it’s some innate ability that you have, that few others do.

 

The Sixth Sense

 My superpower is the ability to sense the anxiety between people.

I’m not just talking about walking into a room and sensing the general tension that’s there or feeling like there’s an ultra-sensitive air in the room.

I’m talking about the direct tension that exists between a specific pair of people.

Unfortunately, this sense is not infallible, and it does not kick in immediately every time.

 

Drama Management

So let’s try to bring this back to the calm contagion where we began.

Families, especially when they manage a business together, or simply share ownership of some assets as a group, need to come together occasionally to make decisions.

Because of their complex relationships, being family members and having shared financial and ownership responsibilities, things can sometimes become tense.

Oh, and can we all agree that when our brains are preoccupied with interpersonal anxiety, we don’t always do our best thinking?

 

Calming the System

In order for a group of people, in this case, a family system, to be able to function at their best, it helps if they are not distracted by emotional reactivity, a.k.a. drama.

One person can quickly disturb the calm in a system.

Can one person calm a system back down?

 

Realistic Expectations

I believe that it is possible, but it also requires patience and a realistic expectation level.

Anxiety can be ramped up quite rapidly, but instilling calm usually takes more time.

A key ingredient is that one person who goes first, and models the calm for the others to follow.

 

Immunity

The contagion analogy is making me think about the one person who is immune to the sickness, who can then interact with each of the sick people without worrying about catching their disease.

The mere presence of the healthy one can give hope to the sick to believe that they too can be well again.

For families, it can be difficult to find such a person from within their ranks, because each person is “caught” in the system to some degree.

That’s where an independent, unbiased, objective, neutral outsider can certainly play a role.

Serenity now!

 

See: Calm-Fident Advice for your family

Someone playing ganja and one of the blocks has governance written on it

FamBiz: Management vs. Governance

FamBiz: Management vs. Governance

In a family business, there can often be confusion around the questions surrounding the management of the business, and the separate, but equally important area of its governance.

I see it in many places with family clients and this post will hopefully help clarify the differences.

 

Management = Day-to-Day

Management of the business starts with all of the day-to-day actions and decisions that it takes to keep the business running.

It’s about what you can see happening in many areas, and it usually involves all of the activities that are done by the vast majority of the employees.

The management of any business is all about the short-term execution of the company doing what the company has decided its business is.

 

Who Decided?

So in case you didn’t notice, the key word in the last sentence is “decided”. I purposely said that “the company decided”, but in reality it isn’t decided by “the company”.

There are people who “govern” the company and what it does, and then the managers of the company implement those decisions via their management functions.

But then that just begs the next question, which is, who gets to decide? And then there’s another level of that, which I‘ve already addressed here: “Who gets to decide who gets to decide?”

 

Corporations Are Easier

In contrast to a family business, if we look at a big corporation, things are pretty clear. The shareholders elect the board of directors, who decide who the management will be.

There are plenty of layers and checks and balances and there are formal structures and procedures in place to guide all of these decisions.

In a family business, well, usually, not so much.

 

Informal Governance

I used the word “formal” intentionally just there, because it reminds me of the expression I like to keep in mind:

“Formality is your Friend” 

I need to thank Ruth Steverlynck, one of the instructors in the Family Enterprise Advisor Program, for that expression. I’ve used it a lot and will continue to do so.

Family businesses often resist formality because they don’t want it to slow them down. Sometimes it’s simply the founder who has a preference for flying by the seat of his pants.

 

Governance sounds Formal

Regular readers will be familiar with my personal struggles with the word “governance”, and the fact that I have a sort of “love-hate” relationship with it.

It sounds almost TOO formal, to the point where it can actually scare people off.

I try to soften it by repeating that you don’t necessarily have to be overly formal, and that any governance you choose to put in place is best done incrementally.

 

Constitutional Crisis

I read a lot of stuff from the academic field of family business and I see people using the term “Family Constitution” a lot lately. A family constitution CAN be a great thing for a family to have.

BUT, and it’s a huge but, that shouldn’t be the place that you start the governance process.

In fact, I personally would probably never even mention the term “constitution” during my first year of working with a family.

 

Management Confusion

Sometimes company management acts as if they are also in charge of governance, because, well, frankly, they can.

But a family business is a complex system, involving not only the business, but also the family, and the ownership.

These interdependent systems are where some formality and definition of roles and responsibilities comes in.

In fact, the part about figuring out, deciding, and writing down who decides which questions is what governance is all about.

 

Clarity goes a Long Way

There can be lots of ambiguous situations in a family business, and when things aren’t clear, people step on each other’s toes a lot, which can create conflict.

It’s important to clarify which groups of people will be responsible for which decisions.

But sometimes that’s really hard to do.

It really needs to be “hashed out” as a group. Some “horse trading” and compromises may end up needing to happen too.

 

“Don’t Try This at Home”

What can happen is that families will try to work these things out by themselves and end up making things worse.

An independent person, who has no stake in the systems, can go a long way to making these discussions more productive, and more civil! It’s worth trying.

 

Coach in soccer field

No, Dad, Coaching is NOT “Helping Losers”

No, Dad, Coaching is NOT “Helping Losers”

I’ve just begun a series of coaching courses that have been “right up my alley”, and the process has also triggered some memories and anecdotes about the coaching profession that I think are worth sharing here.

When I first learned about ORSC (Organisation and Relationship System Coaching) I was instantly intrigued and thought it might be the perfect place to hone some of my facilitation skills.

Working with families means that there are lots of “relationship systems” already in place, and there is both some art and some science behind knowing how best to work with them.

 

Flashback No. 1

So let’s start with my first flashback, which is the source of the title of this post. It touches on some of the misconceptions and general misunderstanding of what coaching is, and conversely, what it isn’t.

It was over a decade ago, and someone who respected my father as a businessman made the unfortunate mistake of asking for his opinion on a matter he knew little about.

My Dad deserved the respect for his business acumen, but his penchant for offering strong opinions on matters he knew very little about was also part of the deal.

A family member in his forties was thinking about coaching as a career change. This person could have / would have made a great coach, but never pursued it, thanks in part to being dissuaded by my Dad.

I learned of the discussion later from my Dad, who off-handedly mentioned that so-and-so was considering going into the business of “helping losers”.

 

A New “Profession” 

The coaching “profession” is still relatively new and misunderstood, although it feels to me that things are getting better slowly with time.

Something interesting I have noted in my work in the area of Bowen Family Systems Theory is that Dr. Murray Bowen was calling himself a “coach” since at least the 1960’s, which likely pre-dates much of the current coaching “industry”.

Unfortunately, many family leaders from the senior generation have a hard time grasping the idea of hiring a “coach”

I know of at least one family who missed out on hiring someone that I know would’ve helped them greatly, but the patriarch was not convinced, in large part because the person presented herself as a “coach”, and he couldn’t get past the fact that his family wasn’t a “hockey team”.

 

What should we call ourselves?

I touched on this last week in Providing Counsel to the Family Council, where I mentioned that I don’t like to call myself a consultant. So I use the term “Advisor”, but then I really don’t like to give “advice” per se.

One of the best words to describe the kind of assistance I provide is “guidance”, but calling myself a “guide” just feels a little too nebulous.

 

Tour Guide or Wilderness Guide

Let me play with the “guide” theme a bit here. I really don’t think the city tour guide at the front of the bus is a good analogy. However, a safari guide or wilderness guide might be a better fit.

When you go to a place where things are unfamiliar and potentially dangerous, you really shouldn’t go it alone.

I don’t think too many people just book a flight to Kenya, stop at the Hertz counter and drive into the jungle to find the lions.

 

A Safe Expedition

Working on your family alignment and governance also requires making sure that everyone feels safe and that nobody is ever in danger. You want to make sure that you have at least as many members in your party at the end of the trip as when you started.

In the cases where some members are no longer part of the journey, you want it to be because they chose to come home early or to go on a journey with a different route.

 

How about a FLAG?

Now I’ve added even more elements, i.e. alignment and governance, that people who do this kind of work like to talk about, which can also add to the variety of titles.

So a Family Legacy Alignment Guide could be shortened to FLAG. I’m not sure that one would resonate though.

I think I’ll stick with Family Legacy Advisor for now, while continuing the coaching courses, which are actually more about “facilitation”.

 

Moral of the story: All families are different, and so are the people they hire.

Also please see: Going Far? Go Together!

Family sitting around a table

Providing Counsel to the Family Council

Providing Counsel to the Family Council

I enjoy wordplay more than most, and this week I stumbled across something I probably should have addressed in this space already, but seemingly haven’t.

So by exploring the words “Counsel” and “Council”, which are homonyms, I get to touch on a couple areas that are important to me and to my practice.

 

Family Counsellor

My current business card identifies me as a “Family Legacy Advisor”, but I’m never sure what I should actually call myself.

I cover a few bases by adding “sub-titles”, (Facilitator, Coach, Mediator), but even then it never feels 100% “correct”.

I prefer “advisor” to “consultant”, but when I’m crossing the border I always say I’m a consultant, because it sounds more straightforward.

Somehow, “family counsellor” feels like an appropriate title for a role I really enjoy playing, although that could also be easily misconstrued.

 

Business Family versus Family Business

Regular readers know that I often note the difference between a “family business” and a “business family”, and I have a clear preference for which entity I prefer to serve.

I like to work in the “family” circle, serving the business family first and foremost, because the family side is usually “under-served” by outside professionals.

The business circle has plenty of outside help from lawyers and accountants, not to mention various other professional consultants.

“Business counsellor” would sound kind of funny, but “family counsellor” has an interesting ring to it.

 

Family Governance = Family Council

I’ve written quite a bit about family governance, and family meetings, and one of the most basic terms in this area is “Family Council”, but until now I haven’t used that term.

Governance can get a bad rap, and too often it scares people because it sounds way more formal than it needs to be in real life.

This week I attended an event for business families held at a local University family business center, where the topic was “family councils”. Actually, since it was in French, it was “Conseil de Famille”.

There were representatives of three local business families on a panel, and the moderator asked them questions about their family councils.

 

De-Mystifying Governance

I truly appreciated the family members who spoke in front of a group of strangers about personal subjects, and I applaud the organisers for trying to de-mystify the idea of having a family council as a basic element of family governance.

However, based on some of the questions during the Q & A, I think that plenty of attendees still didn’t “get it”.

Despite the fact that the panelists were very forthcoming, explaining the nuts and bolts of how often they meet, who gets invited, what they talk about, who sets the agenda and who runs the meetings, it felt like many were still mystified by the idea.

I think it’s likely because they couldn’t picture how it might work in their own family, and I wonder if the name “Family Council” is too formal, and scares people as much as the term governance does.

 

Evolutionary, Not Revolutionary

It shouldn’t be so formal though, especially at the outset. Just have a family meeting, and let it evolve from there.

The only “revolutionary” step is bringing in an outsider to facilitate the meetings. Everything else needs to simply be “evolutionary”.

The most important part is actually starting to set up regular meetings to talk about how the family is affected by the business.

 

A Seat at the Table

Yes, even those family members who don’t work in the business, or don’t own any of the business, do have questions and concerns about the business, because they are certainly affected by it.

Providing them a seat at the table, so that they can be heard, and so that they can ask questions, is simple and basic.

If you organize such a forum before you need to do so, it will all go so much more easily than if you wait until they demand such meetings.

 

Counseling the Family Council

Meeting even just once a year is fine to get you started. But please start before you feel like you need to.

Start slowly, start small, and evolve from there. Learn as you go, and look for progress, not for perfection.

Eventually, you’ll find a family counselor to come in and facilitate those meetings, and then you can officially call it a “Family Council”.

My Notes from a Great Keynote

My Notes from a Great Keynote

The Family Firm Institute recently held its annual conference in Chicago, and the subjects covered were enough to fill out my blog calendar for the next few months. But today I’ll concentrate on just one session.

The main FFI conference wrapped up Friday, and then Saturday featured a one-day “research and education” session. I’d never stayed for the extra day before, but the lunchtime keynote alone made it well worth staying.

 

An Industry Pioneer

The speaker was none other than Craig Aronoff, one of the founders (in 1994) of the Family Business Consulting Group (FBCG) as well as a past President of FFI.

FBCG has been a leader in the field of family business advising and they are held in high esteem by just about everyone connected to this profession.

They’re a leading producer of great content as well, which actually brings me to the first of the three points Aronoff made that I want to share with you today.

 

Private Lessons

Aronoff noted that business families have different ways that they deal with their challenges, and that those who actually hire an outside family business consultant are just a small minority.

The ones who do hire such a specialist are in effect opting for “private lessons”, as he nicely put it.

You can learn to play a musical instrument in lots of different ways, especially with today’s technology. Some people will just go to Youtube and find some instructional videos, while others will hire a teacher to come to their home and offer private lessons. (My analogy, not his)

 

Market Penetration 

He went on to actually put some numbers out there, estimating that only somewhere between 2 and 4 percent of family businesses hire family business consultants.

I wouldn’t know where to begin to try to figure out what the number is, but given Aronoff’s experience in a leading position in the industry, I’m inclined to give his numbers plenty of credence.

If so few business families are reaching out and hiring specialists to give them “private lessons”, then what about the rest of the families?

 

What About Everybody Else?

I guess that the other 96-98% of families try to meet their challenges “on their own” and with help from their other professional advisors from various fields (law, accounting, tax, psychology).

I would hope that more and more of those families are at least benefiting from the ever-increasing amount of great content that is being created and shared in the burgeoning family business space.

When I entered this field, I reflected on how many families I could realistically work with directly during the next 25 years of my career, and I had trouble getting to triple digits.

But that only includes families for whom I would be their provider of the “private lessons”.

Between writing, speaking and teaching, I have the potential to be a resource to so many more families.

 

Values: Guide & Goals & Glue

One final note on my take-aways from what Aronoff talked about.

(I should also note that the main subject of his talk was research and its relevance to the field of family business, which I’ve decided to ignore in this blog, since it’s not my area of interest or expertise.)

He quickly mentioned the importance of values to family businesses. (Please see: FAMILY BUSINESS: HOW DO VALUES FIT IN? for my take on this issue).

He noted that from his perspective, values provide the 3 G’s:

The Guide, The Goals, and The Glue.

As a fan of anything that helps people understand and remember important concepts, I found this noteworthy.

 

The Glue and the Grease? 

I’ve had a blog idea about glue stuck in my head for a few years now, involving “Glue and Grease”, but I’ve yet to find the substance in nature or industry to complete the analogy.

What I try to bring to families who hire me is a bit of both; glue to help keep things together, but also grease that keeps things running smoothly.

Any engineers or creative types out there who think of a substance that fits this analogy can look forward to a hat-tip and shout out from me for sharing ideas for that blog.

I remain available for private lessons for select families, and I will continue to add and share content to this fascinating field.

Note: Last week this space featured its first ever Guest Blog. Unfortunately I was a less than perfect host for my guest, and when I posted her piece I accidentally dropped a few paragraphs in the middle of it.  It has now been corrected, and can be found here: Lessons Learned from Women in Family Business

(Sorry Kim!)