All posts by Dana Telford

Rules of Communication in Family Meetings

Dana Telford
Dana Telford

I’m mechanically disinclined.  My dad recognized this early in my life.  But he wanted me to at least understand the basics of a few mechanical functions.  This inspired him to create a simple, memorable, four-word description of how a combustible engine works: pump, squeeze, pop and blow.  Let me elaborate to (literally) the full extent of my abilities.  Fuel is pumped into a cylinder.  A piston squeezes the fuel, increasing pressure.  A spark plug pops and ignites the compressed fuel.  The explosion blows the piston up and blows the exhaust out.  The energy created by the explosion is converted into power.

Family businesses are like combustible engines.  Family members and non-family employees provide the talent and skills that make up the fuel.  Goals, objectives and compensation models create pressure to succeed.  Personalities and individual work styles create the sparks that can easily turn into explosions.  Governance (a la family meetings, policies and processes) is the exhaust system that regulates the pressure inside the engine and generates the power.

Consider this: Without an exhaust system, a combustible engine is a bomb.  And with too little pressure and too much exhaust, a combustible engine is nothing more than a lit flame — it doesn’t generate power.  I would argue that without effective governance mechanisms, family meetings will suffer one of the same two fates — either an explosion of emotion and frustration or not enough energy to accomplish goals and make progress.

In my experience, good governance begins and ends with effective communication. Family meetings rely on it to manage tensions that exist between family members.  One way to make progress toward excellent communication is to create rules together.

A couple in the southeastern USA had a family construction business and 10 children.  The business and family grew and grew until the couple decided it was time to pass the business to the next generation.  To facilitate the process, they hired me.  As I interviewed family members and started to understand their strengths and weaknesses, they told me about their most recent family meeting.  At a crucial point, when the family was asked to make an important decision, the eldest son became angry, yelling profanities and cursing his parents and siblings.  He stormed out of the conference room door, slamming it behind him and leaving the family stunned and shaken.  “We were so shocked by his behavior that none of us wanted to have another family meeting any time soon,” one sister said.

In spite of this episode, we invited the brother to attend our family business workshop.  At the beginning of the meeting we turned our attention to creating rules of communication.  “How can we make sure we are listening and being heard? How can we make sure these meetings are productive?” I asked.  The responses were thoughtful and honest and included suggestions such as:

  • No interruptions
  • Be honest but respectful
  • Seek first to understand
  • Everyone has a responsibility
  • Set an agenda and stick to it
  • Set time limits set for topics and debate
  • Anyone can call a time out
  • All are equal
  • Everyone is included
  • The rules rule
  • Notes will be kept by the secretary

But the subject of the emotional outburst of the eldest brother had been fearfully ignored.  Finally, a brave brother-in-law raised his hand and suggested: “Nobody leaves without approval.”  We each held our breath but the eldest brother nodded in agreement.  The rules were approved unanimously.

Two months later, we met to review the first draft of a family constitution that would serve as the foundation of the family’s governance system.  The entire family was in attendance.  At the beginning of the meeting, we reviewed the rules of communication and each raised a hand to signal that they agreed to follow the rules during family meetings.  The meeting went very well until early in the afternoon. The topic was family compensation. Unexpectedly, a sister stood up and announced that she was tired of the meeting and hearing about her siblings “living in la la land” while she had to “struggle through every day.” She headed for the door (which, luckily, was on the other side of a large room) while the family watched her in frustrated silence.

Who came to the rescue?  None other than the brave brother-in-law, brandishing the Rules of Communication as his sword of Level Headed Truth.  “Jane,” he said quietly but firmly, “we all agreed to the Rules of Communication and we agreed that the rules rule.  Please, for the sake of your family and for this process, stay here and work with us.  We need and want your help.”  Jane stopped and scowled at him before sitting down in a vacant chair near the door, purse and car keys in hand.  She stayed put for the rest of the meeting, only to bolt out the door the instant it ended.  Two of her sisters were able to catch up to see what was bothering her.  It turned out that she and her husband were in the middle of a significant financial challenge that was causing her great stress.

Rules of communication, when created through an inclusive process and agreed to by all decision makers, can save a family meeting from falling apart and becoming a wasted, frustrating use of time and energy.  They create an expectation of professionalism in an otherwise emotion-filled gathering.  Without them, the frustrated, brave brother- in-law had probably said “Jane, sit down! You’ve always been a drama queen!” or something insensitive and hurtful.  Do your family a favor: If you already have rules of communication, dust them off and review them prior to your next family meeting.  If you don’t have them, set aside a half hour in your next meeting and create them.  As a result, your meetings will be more productive and respectful and the time spent together will be more rewarding.

First Struggle Then Strength

Dana Telford
Dana Telford

Is it possible to build personal strength without first going through personal struggle?

Sometimes as parents we are tempted to cushion our children from the pain of disappointment and failure as they mature. Too often as family business leaders we believe that we are helping family members by giving them a position that they have not earned when in reality the opposite is true. By helping too much we hinder growth. By enabling we create entitlement.

My teenage son Will loves video games. In his free time, he sits in front of our TV, thumbs a blur on the controller, eyes fixed to the screen, chattering away into his headset as he and his friends strategize how to counter the latest wave of alien invaders. My favorite game growing up was one played not on a screen but in a field: baseball. Despite my hope that this interest would somehow be passed down to Will, his interest in Little League was short-lived and unfulfilling. He tried some other sports and activities and has become a good tennis player.  He has found a passion for nutrition and weight-training. But video games are his first love, and his mom and I have given him the space to pursue this interest.

As Will’s gaming skills and interests have grown, so has the price of his hobby. Earlier this year, he set his sights on a high-powered gaming computer that was “on sale” and asked if we would order it online for him. “You know how it works,” I told him. Once each of our kids is old enough to understand, I explain to them our approach to large purchases: If we agree that the purchase makes sense, the child is expected to work to earn half the money.

It’s the same principle I learned from my mother. Whenever I wanted a new baseball bat or bike or expensive toy, my mother made me earn half the money to pay for it. That not only made me think about how much I really wanted the item — not surprisingly, a lot of things dropped off my “must-have” list when it was clear I had to help pay — but also created space for me to earn the item through hard work, rather than having it handed to me.

“But this is a lot more expensive than anything else I’ve wanted,” Will said when I reminded him of the policy. “I’ll have to earn $800 and I don’t have a job!” I told him I understood that earning the money would be difficult, but reminded him of a few pending expenses in the household that were higher priority – Anna needed braces and Sarah needs her wisdom teeth pulled.  “And,” I reminded him, “your half is going to be more than $800.  Don’t forget tax and shipping charges.”  He let out a sigh of frustration but accepted the reality and agreed to the deal.  Over the next few weeks, I observed him working and saving diligently, putting aside the money he gained from extra chores, babysitting and selling other gaming equipment he didn’t need.

One day Will came to me excitedly and said, “Dad, the computer sale is ending this week.  I need $1600 now!” I reminded him of our deal – that we would order the computer once he put $842 (don’t forget tax and shipping charges!) in my hand or my bank account. He looked disappointed. “I only have $500 saved,” he said. “But my Xbox is for sale and I’m sure someone will buy it.  Could you just order it and I can owe you the rest?”

I admit that it was tempting to give in to his request.  The clash of family socialism and breadwinner capitalism clashed inside me in a major way.  He had worked hard to save more money than ever before. But my wife and I realized that giving in would fail to uphold the principle we wanted him to learn, and would limit the space he needed to grow fully.  Obviously Will was disappointed, but he kept working toward his goal.

Within two weeks, Will sold his Xbox and reached his goal.  We were thrilled to see that the price of the computer was still $1,600 and ordered it straight away.  When it arrived it was everything he’d hoped for and he beamed with joy as he opened the box.

My wife and I told Will how proud of him we were for earning that computer.  He had become very resourceful as he pursued his goal of buying the computer: He had worked and saved and sacrificed his time and other valuables. He had become much more confident in his ability to figure out a way to make things happen. And he gained a greater appreciation of the value of money.

Through the struggle comes the growth.  As leaders we need to keep this principle in mind as we offer jobs and financial benefits to family and non-family employees.  We need to provide them adequate time and space to struggle.  Time to filter through the emotions of disappointment and space to figure out what they really want and how to earn it.  Without it how can they ever hope to develop their own strength?

Asking and listening…

Dana Telford
Dana Telford

I visited my mother in law last Tuesday. Before I left to drive home, she insisted that I take a sack full of “windfall apples” back to my wife and kids. “Windfall apples?” I thought to myself as we began picking red apples off the lawn. “I’ve never seen Windfall apples in the grocery store. Fuji and Gala and Macintosh and Granny I recognize, but Windfall apples? Are they grown in Chicago or on a windswept tropical island somewhere? She must be confused.”

Had I stopped there, and gone on assuming that I knew more about apples than this mother of 7, grandmother of 18, I would have missed a valuable lesson. She was describing the way the apples had been harvested, not the brand.

I asked her, “What are they called? Windfall apples?” She said, “Yes, they are the ones knocked out of the trees by the wind. My dad used to call them that, so I do as well.”

A light bulb went off in my head – windfall. Like in Monopoly. A windfall is defined as a “sudden unexpected gain or piece of fortune.” I’ve played Monopoly for decades with my siblings, friends and now children, and have never understood the meaning of that word.

Too often in life we forget to ask family members what they know and how they know it and what they believe and why. By listening to their reasons for doing certain things in a certain ways, we can discover, not only more about them, but also more about ourselves. Why does mom put the paper towels on the roll one way versus the other? Why does granddad add water to the pancake batter? Why does Uncle Steve say “a quick nickel is better than a fast dime”?

There are usually very good reasons why people believe what they believe and behave the way they behave. But if we never ask, we’ll never learn. We can gain so much from each other, regardless of age or gender or role in the family. And learning will ultimately help us avoid some of the pitfalls that others have experienced and shape our views of the world and how we want to experience life. It is not uncommon for adult children to take their experiences from younger years and find ways to improve on them. Watching parents struggle with financial challenges, for instance, and living paycheck to paycheck can cause a young adult to focus on discovering ways to ease those challenges in her own future.

Improving our ability to ask “why do you do this or believe that” and listening carefully to the answer will provide greater benefit than simply observing and either dismissing or mimicking behaviors. This is a habit we can begin to instill into future generations. And when one of our children or grandchildren ask us why we ask so many questions and listen so intently to the answer, we’ll know we’ve reached our goal.

Compensation in sibling partnerships – A “fairly” complicated topic

Dana Telford
Dana Telford

A common anecdote told by family business advisors quips that the first three things a second born child learns to say are “Mama”, “Daddy”, and “That’s not fair.”

Tensions and complications related to sibling partnership compensation are grounded in the early-formed, emotional quest for fair treatment between siblings. Like it or not, brothers and sisters compare how much time and resources they receive from parents and grandparents with that of brothers and sisters. This dynamic lasts throughout the sibling relationship – which on average is the longest in life – and must be confronted and managed if we hope to put together a successful compensation system for family members in our businesses.

Earlier this year I analyzed my 70 most recent client engagements and was not surprised at how many of them struggle with the question of siblings and compensation.

  • In 60 of the 70 family companies (86%), siblings work together on a frequent basis (at least one day per week).
  • Of those 60 family companies, compensation is a major issue in 54 (90%).
  • Of the 70 total companies, family member compensation is a significant issue in 58 of them (83%), regardless of whether siblings work together.

Though it may seem simplistic, many of my clients use the Golden Goose analogy to teach children (and adults) about their family business. Protect the Golden Goose from the Sly Fox (primary competitor) and it will lay Golden Eggs for its owner. If the owner gets too fixated on the Golden Eggs and forgets the Sly Fox, he’ll kill the Goose. Dead geese don’t lay eggs, and families miss them when they’re gone.

Compensation in sibling partnerships becomes more straightforward when viewed as an important part of keeping the business healthy for its owners. Owners want their businesses to grow profitably. Profitable growth is a result of excellent decisions made by managers. Owners understand that overpaying under qualified managers, whether family member or stranger, isn’t going to protect the Goose for very long.

Developing a Compensation Policy can help provide clear guidelines for the family to consider when analyzing sibling partnership compensation. Some important elements of compensation policies include:

  1. The concern that any advantage given to family members working in the business will be seen by employees as family socialism superseding free-market capitalism.
  2. Family employees will be compensated in the same manner as non-family employees, period.
  3. Compensation levels will be determined by fair market value analysis.
  4. Family member performance will be measured consistently and compensation adjustments made accordingly.
  5. Family employees are expected to live within their financial means and not encumber themselves with excessive debt or rely on special disbursements.
  6. Extra compensation, when deemed fair and reasonable by the Board and/or Family Council, will be provided through ownership and/or family channels.

As a mechanism for satisfying point number six, consider compensating family employees as owners or future owners. Provide stipends for serving on the Board or Family Council, provide a fair and reasonable dividend taken from profits when the company performs well, pay family members for special ownership-related research projects (e.g. A review of a top competitors strategy) or to serve on an investment committee.

The Prenuptial Agreement – Handle with Care

Dana Telford
Dana Telford

Greg was engaged to Rachel, the only daughter of John, a wealthy business owner.  A few days before the wedding, Rachel’s family lawyer called.  He wanted to meet, as soon as possible, about a “pressing financial matter”.

In the attorney’s office, a thick prenuptial agreement was put in front of Greg.  He was instructed to “sign it or the wedding checkbook will close forever”.  After reading through the first pages, and getting terse responses to his questions, Greg refused and walked out.

Rachel phoned minutes later in tears. “Is it true what daddy said?, she asked. “That you are after my money and have called off the wedding?”

Ah the prenuptial agreement.  A topic that generates significant stress in wealthy families everywhere.

A pre-nup makes sense.  Most people agree that pre-wedding assets should remain separate after marriage.  Statistics show that half of marriages end in divorce. So it’s a predictable issue that arises as children of wealthy parents develop serious relationships, yet it is still difficult to navigate.  Why? It is an energy-rich combination of youth, romance, family money and intergenerational relationships, all intensified by a ticking “days ‘til the wedding” clock.  Add them together and you have the perfect environment for off the charts whacked out emotion.  Not the best scenario for sound decision making when great decisions are paramount.

So what’s a parent to do?  My goal here is to provide four ideas for putting the pre-nup in place without putting relationships in peril.

Lesson One: Put yourself in the couple’s shoes.

Remember those days?  You were young but increasingly independent and self-sustaining.  You wanted to be treated as an adult and huffed and puffed when it didn’t happen.  You were in love.  And the last thing you wanted was someone to throw cold water on your flames and get you to look closely at reality.  This is how a pre-nup can feel to the Next Generation.  Also, remember, your “child” is legally defined as an adult and deserves to be treated with respect.

Lesson Two: Get it done early.

Start giving your children more information about family assets each year, carefully and with judgment, starting in their teens.  To begin, tell them the stories of how the business began or how family holdings were accumulated.  Underscore the principles that have been a foundation for success.  Remind them of the benefits the family has received (e.g. education, travel, comfort) in order to help them respect family assets as something to protect. I firmly believe that children can handle more truth at a younger age than we give them credit for.

As they get older, teach them the logic behind a pre-nup. Pass along to them articles about family lawsuits and best and worst case scenarios.  Help them to understand that no relationship is guaranteed to last forever.  Confirm your belief in their ability to choose a spouse wisely and to work through any difficulties, but make it clear that pre-nuptial agreements are 1) a part of the family principles and 2) a benefit to everyone, including the future in-law.

The worst possible pre-nup scenarios happen in the 11th hour.  Nobody wants to have the discussion, so it is avoided and procrastinated and pretty soon the wedding is tomorrow.  As a rule, a pre-nup should be signed at least 30 days prior to the wedding.

Lesson Three: Send a messenger and blame him/her for everything.

If you represent the wealthiest side of the couple, you have the highest interest in assuring that a pre-nup is in place well in advance of the ceremony.  So drive the process, but send someone else to complete the task.  Your primary goal is to make the new family member feel welcome, cherished, appreciated and respected.

In my experience, there is no better time to use a trusted attorney.  And make certain that she politely advises the fiancé to seek qualified independent legal counsel so as to make the process fair, professional and reasonable.

If the fiancé calls to question the process or document, acknowledge the awkwardness of the situation, blame the attorney and kindly suggest that he/she give her a call.  Underscore that the intent is not to hide or avoid any details, but to make a sensitive issue less emotional.

Lesson Four: Be transparent.

Remember, there is a fifty percent chance that you will be spending holidays and vacations with this person for the next 20 or 30 years.  It is vital to ensure that the wedding goes off as a true celebration.

Don’t hide family assets in the pre-nup process.  Don’t “mis-remember” things that can hurt you in the future should the pre-nup become a guiding document for a divorce settlement.

The purpose of a pre-nuptial agreement is to clarify expectations and protect family wealth in a reasonable, less emotionally driven manner. Too much emotion hijacks our brain, literally, and makes us respond to reasonable things in unreasonable ways. Perhaps the greatest benefit of a pre-nup done well is that it minimizes the emotions that surround love, family and money and paves the way for a wedding that celebrates the beginning of a new family.

Unity, Yes! But I Prefer Harmony

Dana Telford
Dana Telford

Two brothers (Ron and Kim) each own 50% of a half billion dollar manufacturing company in the western United States.  Both are over 60 and have large, dynamic families filled with talented, creative, hard-working daughters, sons, in-laws and grandchildren.

During a three day, intensive family business workshop a brave member of the 3rd Generation posed a difficult question to his father, Ron – “am I expected to look and think just like you do if I want to be a leader in this business?”  The query spurred a memorable discussion about individuality, guiding principles and the difference between unity and harmony.

To help facilitate the discussion I suggested we use music as a point of reference.  I am not a musician, but I was taught how to carry a tune (or some semblance of one) at a fairly early age.  I remember singing with my family at church meetings while watching mom’s finger track the melody line of the song.  As she sang the words in her clear alto voice, I tried to mimic the sound.   Only after adolescence had exacted its toll on my vocal chords, however, did we both realize that alto was no longer a viable option.

Using the same “follow my finger and mimic my voice” strategy, my mom helped me to become comfortable with bass and tenor notes.  Soon I was able to pick out the sounds of harmony in the church congregation and felt an increase in my appreciation of the power and language of music.

Ron spoke up in the middle of my analogy.  He said, “I know right where you’re going with this Dana.  Please allow our family to provide a live exhibit to the case you’re building.”  He then called 5 of his 7 children to the front of the room.

He asked them to sing the first verse of “O My Father”, a popular Christian hymn, in unison.  Obediently, they all sang the melody line, and did so beautifully.  He then asked them to sing the first verse again, but in harmony, each using her or his own voice.  What followed brought tears to my eyes and still sends chills up and down my spine.  I remember the absolute clarity and heightened energy that came into the room as they broke into alto, soprano, tenor, baritone and bass parts.   All singing the same words, but in their own voice. The verse is beautifully written.  When sung in unison, it’s lovely.  But when sung in harmony, it’s moving and emotional.

Simon & Garfunkel, Don Henley and Glenn Frey of the Eagles, Peter, Paul and Mary.  Would the art they have created influenced the world if each had been singing the same tune and mimicking someone else’s voice?  On that same note, isn’t a family business system that much stronger when family members use their unique talents, aptitudes and perspectives rather than try to mimic the style of the past leader?

Guiding principles and core values are the words of the song.  Those words – such as integrity, loyalty, respect, hard work, innovation, gratitude, frugality, – convey ideas about expected behaviors.  Let’s make sure that future generations know that we want them to live those ideals, but in their own unique way.  Let’s help them to know that we believe that when they add their own voice to the melody the song will be that much more compelling and beautiful.

Implementing a Family Employment Policy

Dana Telford
Dana Telford

In my last post, I promised to give you an example or two of family rules or policies that can help to create a healthy separation between family socialism and business capitalism in family businesses.  A family employment policy is one of the best tools for protecting a family’s business from inappropriate disruptions by family members who may see it as a piggy bank or birthright. 

Here’s an example:  Two brothers, Craig and Jim, bought a manufacturing company from their three siblings and their father.  The family is large, with five Second Generation and twenty Third Generation members. The brothers knew that eventually one of the members of the 3rd Generation would ask them for a job.  In anticipation of this, I worked with them to develop a family employment policy.

The family policy stated the expectation that any member of the family seeking employment would have to meet the following pre-requisites before approaching the owners:

  • Graduate from college with a bachelor’s degree in business, economics or science
  • Earn and hold a job outside of the family business for at least two years
  • Earn a promotion or pay increase during those two years
  • Only apply for currently open positions

The brothers then asked their non-owner siblings to sign off on the family employment policy to ensure their support of the requirements if and when any of their children applied for work.  All of the siblings saw the wisdom in the policy and agreed to it in writing.

Not many months later, Tom, a 21-year-old nephew, approached Craig, the CEO and controlling owner.  Tom told Craig that college “hadn’t really worked out for him”, that his five previous jobs had been “learning experiences” and that he was ready to join the family business.  Craig told his nephew that he would be happy to consider him for any open position after he fulfilled the family’s requirements set forth in the family business policy.

He gave Tom a copy of the policy and asked him to take it home, review it and get back to him with any questions before they continued the job search process.  Not surprisingly, Tom never called or came back to Craig’s office.  Some days later, Craig called me and thanked me for leading them through the development of the family employment policy.  He said it had helped the family to steer clear of a potentially upsetting and negative confrontation between siblings about “whose children had the right to family employment”.  In his words, “the ounce of prevention had been worth more than a dozen pounds of cure”.  He also was grateful for how well the policy had de-personalized the situation and minimized the negative effect on Tom’s sense of self-worth as he struggled to find himself as a young man.

It’s important to note here that, although this example paints Tom in a negative light, he was not ready for work in the family business.  Young family members who need help with discipline, self-awareness and career planning need to turn to their family for support and assistance, not the leaders of the family business.  Bringing ill-prepared family members into the business sets a flawed precedent of allowing socialistic behaviors into a setting where only meritocracy can provide the long-term growth and success the family hopes for.

Tune in next time for another gripping tale of family policies that help to separate family and business issues in a family business…….

Home- to-Office Transition Challenges in a Family Business

“From each according to his ability, to each according to his needs, “  is a slogan popularized by Karl Marx in his 1875 Critique of the Gotha Program.

Dana Telford
Dana Telford

Often when giving a presentation about the challenges of running a family business, I use this quote to highlight the differences between the economic system we use in our family and the one we use at work.  If you are the main bread-winner for your family, it’s not reasonable for you to use all of the income you produce for your own wants or needs. Resources you bring in are allocated to family members based upon their needs.  Parents typically determine what is a “need” versus a “want” and set up a priority system.  Once the basics of food, water, shelter, clothing, transportation and communication are covered, the question of where to allocate resources is answered by finding the greatest need.  As an example of this, consider the family with a member who becomes ill and needs urgent medical care.  A family will sacrifice almost everything to ensure the well-being of the one member.  Once the member is brought back to health, however, the priority system and allocation of resources will change to fit the needs of the family as judged by parents. It’s a system that we are all used to and that feels natural and right.  And it is socialistic by nature.

I’ll state the obvious:  it’s important to make a hard break between our family and our family business. If a member of the next generation of a family business arrives at the workplace with an attitude akin to “Congratulations all who are here employed, I have arrived!  Me of Royal Blood!  Bow down and worship the future heir and bring gifts and resources to lay at my feet” we create problems for employees, family members and ourselves. At the family business, we must operate as capitalists, allocating resources based on forecasted return on investment and fit with strategic goals and culture.  Employees who don’t perform according to expectations lose jobs or get demoted, regardless of relationship to the owners or managers. Those who do perform get promotions, accolades, corner offices, bonuses, perks, more responsibility and prestige.

So how can we successfully make the transition between home and office in a family business?  How can we make sure that the Next Generation understands how important it is that the business can succeed only if it is managed by principles of merit and competition and performance?  Much of the answer is found in creating a set of shared expectations and understandings with family members, employees and owners to define which behaviors and attitudes are acceptable and which are not in the scheme of the family business system.   What does this mean on a workable, practical level?  Tune in later this week for a specific example or two of family rules and policies that can provide immediate help in keeping family socialism at home and capitalism at work.

Playing to Strengths

Dana Telford
Dana Telford

There are many ways to create wealth – particularly if you use your strengths.

Consider the trophy wife.  In her husband’s final days he whispered, “Barbie, promise me something.”
“Anything, Baby Cakes,” she replied.
“My money means a lot to me,” he said. “Please bury me with it.”
She nodded solemnly, thought carefully, and agreed.  He died shortly thereafter.

As the funeral concluded, she placed a small box inside his coffin. Her girlfriend, seeing the box, asked incredulously, “Did you really do it?”

The widow replied, “Yes. I promised I would.  Call me old-fashioned, but I believe in keeping a promise.”

She dabbed carefully at the water welling in her eyes and continued,” After he passed, I put the money in my checking account.  Inside that coffin is a check I wrote to him for the full amount. If he can figure out how to cash it, he can have it.”

Of the many paths there are to creating wealth, I believe they all start with playing to strengths.

I have a client with a son named Henry. After years of frustrating his teachers and parents, Henry was diagnosed with ADD.  By his mother’s account he couldn’t sit still for 10 seconds, let alone concentrate on a blackboard. She became obsessed with finding something that would hold his attention.

Then she took him to a go-kart track. He drove with confidence, zoomed past everyone, and loved it.  From then on all he wanted to do was race go-karts.

She got him involved in circuit racing.  He won nearly every race.  In one particular race she noticed him raise and shake his right hand as he passed her seat in the bleachers. As she congratulated him after the race, she noticed that he seemed upset.  When asked about it he replied, “You changed seats in the middle of my race. I know where you sit.  I watch you every lap. Don’t you see me waving at you?  It’s hard to concentrate when you change seats while I’m racing.”

The realization hit her that her son’s ADD brain was wired to manage lots of images and information simultaneously.  A 16 year- old who did poorly in math could drive a go-kart 60+ mph, maneuver corners and opponents, locate his mother in the stands, wave to her, and win the race.

We all have inherent strengths. Let’s all get better at helping the young people around us discover theirs — whether it’s driving go-karts, sculpting, singing, running a business, or a myriad of other talents.   By so doing we’ll help them build self-confidence, attain individual fulfillment, and succeed.

 

The “Why?” Exercise

Dana Telford
Dana Telford

I refer to a favorite consulting tool as the “Why?” Exercise – a process that utilizes repetition of the question “why?” to discover the guiding principles behind decisions. I’ve found that when working through the question, some clients realize they may be abandoning long-held values for other perceived short-term gains in status, power, wealth or comfort.

Some years ago a client (Jeff) and his wife (Rhonda) were given the opportunity to go on a service mission to a developing country in Latin America – something they had both hoped for and worked toward for many years.  When faced with the question “what to do with the family business?” they felt it was time to completely dedicate their lives to charitable service, to include gifting their assets to their church rather than passing them to their 8 children.

As I talked them through the Why? Exercise regarding this decision, a fascinating complication came up.  I learned that early in his career Jeff had been employed by his church to manage charitable gifts.  When pressed, he confessed that he did not believe that the well-intentioned folks in the charitable gifts department could fully appreciate the blood, sweat and tears he had invested into amassing the wealth.  He knew that their job was to graciously accept the gifts, assess value, provide tax documentation, meticulously dismantle the empire, sell the pieces to the highest bidders, and collect the funds for the benefit of the church.  With careful thought he realized that the thought of his businesses and assets going through this process left him feeling empty.

The alternative – to give and sell assets to their children – also caused them concern due to long-standing sibling rivalries and an overall quest for peace in the family as they prepared to leave the USA for two years.  Based on my time spent with their children and in-laws, I felt that they were talented and diligent and capable of working together, and I told them as much.  I also voiced my opinion that they would have a much higher chance of appreciating the Legacy and protecting it for another generation.

After further Why? questioning and discussion, Jeff and Rhonda realized that keeping the assets in their family was a more authentic reflection of the guiding principles they had followed as they raised their family and built their businesses – faith, family, hard work, education and service.

Jeff and Rhonda’s dilemma over the future of their business is only one example of the myriad emotional decisions that you face as a business owner. No matter what your own motivation is for building, nurturing and growing your business, keeping your “why” centered in your view through the decision making process will help you ensure that the business continues to grow in keeping with your  values and in a way you can be proud of.