Stand Up and Be Counted in Your Family Business

A great paradox of life is that we find it so hard to talk about intimate things with family members, yet, when we fly for three hours next to a total stranger we’re likely to walk off the airplane knowing each other’s detailed life history.  It’s somehow easier to vent real feelings on someone you’ll most likely never see again, than with a family member we fear will construe heartfelt expressions of feeling as weakness, and use it to our detriment. While it may seem risky in the beginning, the effect of honest communication in the family business is awe-inspiring.  It often contributes to the breaking down of old barriers, just as the Iron Curtain fell partially because of the radical advancement of communications technology; new ideas could no longer be kept from people.  Communication helps create a firm foundation for any business to survive and thrive. Hard feelings and distrust among family members may go back decades.  Instead of dealing with current situations while looking through the lens of the past, it’s helpful to keep reminding oneself that age and maturity can have a softening effect if we let it.  Sibling rivalry and jealousy can often be traced back to infancy.  Parental circumspection with an adult child may date back to a teenage indiscretion.  Generally speaking, people act in accordance with the way they’re treated.  If I’m treated as incompetent by a parent, then chances are that’s the way I’ll behave in their presence. One thing that led to my interest in dealing with family business was the observation of how we adult children of entrepreneurs continue to...

The Tripping Point

Malcolm Gladwell introduced us to the concept of “The Tipping Point” in his 2000 book.  He defines a tipping point as the “the level at which the momentum for change becomes unstoppable.”  We’ve all lately seen vivid examples of when a tipping point has been reached: the demise of Wachovia—who’d have thought that was a probability 2 years ago?!  The death of the house that Madoff built, unfortunately, as a house of cards that met the unstoppable momentum for change.  And 9/11, the defining moment of our generation, a time when the flattening of the world was consummated.  Such are but a few stark examples of the inevitability of change and the inability of anyone or anything to alter or deflect it away. There’s another point I use with family business clients that I call the “tripping point”.  Attitudes, behaviors, animosities, and jealousies have been swept under the proverbial rug for so long the lump can no longer just be stepped over and ignored; it’s so big now it will trip you up. Working with a client this week I watched and facilitated while two couples, related by blood and property decided the time had come to no longer jointly own an inherited piece of property.  One of brothers said, “Uncle Jake said there would come a day when this property will no longer be owned together by family.  I think today is that day.”  An inaudible sigh of relief, tinged with sadness, filled the room in that moment.  As so many families do, unspoken assumptions have led to hard feelings and strained relationships.  The good news is for...

The Fifth Child

A retired banker friend is now the executive director of a regional community foundation.  The foundation is the recipient of bequests from people who want part of their estate or wealth to be used for charitable purposes.  Recently a mutual friend of ours, a retired, widowed attorney, passed away leaving the bulk of his estate to his four adult children.  I’m sure it was a sizeable estate from his long time law practice and from his influential and prosperous client base.  As he was doing his estate planning he told my friend, “I’ve got 4 children and I want my charitable estate to be my fifth child.”  The concept of the fifth child as an inheritor is a compelling image. While there was no family business to keep the family connected around the wealth, our attorney friend set up a trust account in the foundation which the children would run.  This corpus doesn’t belong to the children, but by establishing the fund he created a vehicle for them to remain connected and to learn to work together.  Granting gifts to worthwhile causes upon which they must have substantial agreement is a great piece of legacy for a family; perhaps more valuable than the dollars.  Here is a connection for them that doesn’t involve their own money, and it provides them a way to continue giving for the benefit of their community.  It keeps them working together on a project of mutual interest.  Many family wealth lawsuits come from those who feel disempowered.  By giving voice and input to all family members a real harmony has a chance to develop...