The pandemic crisis is forcing the hand of family businesses to address the pace of change in new ways. Every day we must act and even make some tough choices—despite the lack of any reliable information about the best direction to take. Some owners make tough decisions on their own, rather than seeking help from others. Some choose impulsive or blind allegiance pathways.

I wrote the following on the Bloomberg press about the Singh brothers – heirs to an Indian health-care empire – and their relationship with guru Gurinder Singh Dhillon. What makes this interesting is the financial relationship between them, and the dramatic fall in their fortune over the last few months.

It brings to mind another story with plenty more still to happen – that of Clare Bronfman’s involvement with a New York self-help group called Nxivm, which appears to display cult-like behaviour. In addition to Bronfman sisters using their substantial fortunes to underwrite Nxivm in a variety of ways, most recently there have been accusations of criminal behaviour including conspiracy and criminal racketeering, and Ms Bronfman herself has been arrested and is out on USD 100M bail.

Stories like this are a warning bell to wealthy families of their vulnerability to people of all kinds with ulterior and sometimes nefarious motives. Many families employ gatekeepers to protect them, but this is a never-ending game of cat and mouse. Social media and techniques like social engineering can readily be used by protagonists to worm their way in. When it comes to trust, families should observe a healthy (but not obsessive) measure of vigilance.

Consider This: Does your family have policies about the use of social media, and acceptance of ‘friendship’. Do family members have an awareness of spotting ‘hangers on’, and maintaining the right degree of scepticism and vigilance when meeting new people?

Original articles: https://www.forbes.com/sites/dennisjaffe/2020/03/24/how-family-businesses-can-respond-to-the-pandemic–collaboration-openness-and-sharing-the-burden/#58b2b7a94e34 https://www.bloomberg.com/news/features/2018-08-16/billionaires-and-the-guru-how-an-indian-family-lost-2-billion and https://www.cnbc.com/2018/08/12/new-york-times-digital-from-heiress-to-sex-cult-defendant.html

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties to a win-win-win result. Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/ or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship #covid19 #coronavirus #workfromhome #futureofwork #pandemic #socialdistancing #shelterinplace #washyourhands

#Intergenerational necessity, vulnerabilities, and resilience are typical factors addressed in determining wealth transition. However, adapting to the changing demands, expectations and opportunities in the disruption via #pandemic will epically force family businesses to rethink their strategies.

The immediate need for #workfromhome, revised #familybusiness strategy, #riskassessment, and governance are paramount for pivoting to #nextgeneration and #futureofwork organizations.

In the UK, the final report by the Intergenerational Commission speaks in terms of an intergenerational contract – “the principle that different generations provide support to each other and that each successive generation should be better off than previous ones.

One of the biggest issues in current reporting on this and so-called “generation wars” is the cost of housing, which has become significantly less affordable for Millennials compared to Baby Boomers.

The Financial Times challenges the entire underpinning of this argument, namely that there is no such thing as an intergenerational contract. They argue that generational boundaries are arbitrary (which in my view is only relevant to labelling), that inequality within each generation is far more significant than between them, and that the idea that successive generations should enjoy a better life is simply a proxy for sustained economic growth.

These are all good points, particularly the latter. As they point out, in the last decade, real GDP rose by 3.5 percent, compared with 29 percent in the previous decade.

The other consideration is the ageing population: as birth rates are collapsing in many countries, this poses a huge risk to economic growth as not enough young people are coming through the system.

We’ve discussed earlier the impact to wealthy families of increasing life expectancies, and will probably revisit this in future.

Consider This: It’s very easy to make arguments about how things ought to be between generations, but there are always implicit assumptions, and it’s a good exercise to challenge them. What are the unstated assumptions about how things ought to be between generations in your family?

Original article: https://www.ft.com/content/918e9a28-58f8-11e8-b8b2-d6ceb45fa9d0 (requires registration; if you don’t want to do that, access the article via google by searching for “The focus on intergenerational inequity is a delusion” and https://www.resolutionfoundation.org/advanced/a-new-generational-contract/

About
David Werdiger is a Familosopher, the Founder and Principal in Nathanson Pearson Family Advisory and Adjunct Professor https://www.transitionbook.co/conflict-resolution

Specialties Include:
#ConflictResolution
#CommunicationManagement
#StrategicPlanning
#SuccessionContinuity
#Governance
#LeadershipDevelopment

The Moose

#covid19 #coronavirus #pandemic #socialdistancing #shelterinplace #washyourhands #familybusiness #nextgen #familyoffice #businessowner #founders #transition #ypo #uhnw

With many people forced into #remotework and/or #shelterinplace, it is essential to understand the impact of the family dynamic on a business. Besides the obvious space and time-management issues, conflict in family business happens differently, therefore must be resolved differently.

Disputes within a family don’t escalate suddenly. They are often built on years of relationship sentiment that is latent or suppressed. With the current #pandemic the triggers for those conflicts can easily be fast-tracked and may have long term impact both the #familyculture and the #futureofwork.

These conflicts have a factual or financial component, as well as an emotional component, so both aspects must be considered when seeking to resolve. Often, the emotional component is what is at the heart of the conflict. A family is not a meritocracy. Family decisions have a very different basis than business decisions. When those two decision processes lead to different outcomes, conflict is inevitable.

3 Things to focus on at times like this

• develop skills for future – many opportunities for online learning
• become 360-degree humans – think about purpose and how to help others through this
• entertain innovative solutions – crisis is also opportunity

Having independent voices – around the board table, or generally advising the family – can be very helpful to unpack complex, multi-layered issues. They can also assist with the establishment of more formal (but not necessarily too formal) governance and dispute resolution processes.

David Werdiger is a Familosopher, the Founder and Principal in Nathanson Pearson Family Advisory and Adjunct Professor https://www.transitionbook.co/conflict-resolution

Specialties Include:

#ConflictResolution

#CommunicationManagement

#StrategicPlanning

#SuccessionContinuity

#Governance

#LeadershipDevelopment

Familosophy (noun): the critical study of the principles and concepts of family dynamics and intergenerational issues, with a view to improving them and providing guidance in practical affairs.
origin: portmanteau of family and philosophy

https://youtu.be/VBjOcFtRqNw

How many people have put their business life ahead of their spouse or relationship to its great detriment? While we can think of a business as a the living thing, unlike a spouse or a family member, it isn’t a sentient being.

It won’t get mad at you if you don’t spend enough time with them. It won’t give you attitude. You can decide what you want the relationship with your business to be like. There are business and personal consequences to whatever decision you make about that relationship, but it is your decision to make.

Five Tips:

1. Work ON your business not IN it
2. Diversify
3. Shift Expectations
4. Balance Humanity
5. Consider Consequences

This friend of mine immigrated and bought a manufacturing business. He was deeply immersed in the business and it took all of his time. You know, he had a new life in a new country and a new business and it was all very exciting for him and things were going well, but he was so busy with work that he neglected his family and especially his wife. The kids were able to settle into a new school and made make new friends, but his wife was really struggling socially and having a husband that was largely absent only made things worse.

After about 18 months, she finally confronted him. You’re married to your business, not to me, don’t you understand? He told her, I’m doing this for us, but it was the husband that didn’t understand that she needed his personal attention more than the new merc and the nice house. He was so enmeshed in the relationship with his business that his marriage suffered what turned out to be irreparable damage and they split up.

Thinking of this in terms of business continuity risk, his relationship with his wife was an external risk to the business which he was unable to manage and sadly the business won.

For more in-depth, thought-provoking discussion points and commentary on family and business, find business intel and guidance in paper, digital, video and community formats, visit https://www.transitionbook.co/storefront influenced and partly based on the Book E-Myth Revisited case study.

David Werdiger is a Familosopher, the Founder and Principal in Nathanson Pearson Family Advisory and Adjunct Professor https://www.transitionbook.co/conflict-resolution

Specialties Include:

Familosophy (noun): the critical study of the principles and concepts of family dynamics and intergenerational issues, with a view to improving them and providing guidance in practical affairs.
origin: portmanteau of family and philosophy

#familybusiness #nextgen #familyoffice #businessowner #founders #transition #ypo #uhnw #intergenerationalwealth #wealthmanagement

Most people with wealth to pass on have never talked to their heirs about how they plan to distribute their assets after they die because they consider the information too personal, according to a recent survey. In six out of 10 families, there is no process in place to ensure family wealth decisions are made and communicated effectively (from another survey).

This is actually no surprise, because these sorts of discussions are among the most difficult. They evoke feelings of mortality in the incumbent generation. And because our relationship with money is primarily emotional, talking about money produces subconscious reactions in those participating in those discussions.

These reactions are usually driven by fear and most people will need help to understand their emotional drivers. Understanding our attitudes to money is therefore a prerequisite to having a healthy family communication framework.

In the absence of communication, family members fill in the gaps by guesswork, or what they can find out online, both of which are usually wrong which leads to assumptions. Open communication helps children learn about wealth and values, while enabling the family to comfortably navigate difficult money talks.

By creating a family mission and vision statement first, discussions about money can be suitably contextualised and be less about the numbers, and more about the underlying purpose and meaning to their lives.

Consider This: What have you told your children about the family wealth? What do you think they have discovered without you telling them anything? At what age do you consider it appropriate to start preparing them to be good custodians of family wealth? Are they are aware of all the things money can’t buy?

Original articles: https://www.kiplinger.com/article/retirement/T021-C032-S014-to-successfully-pass-down-wealth-share-your-intent.html, https://www.bizjournals.com/bizwomen/news/latest-news/2019/08/most-heirs-left-in-the-dark-about-estate-plans.html?page=all, https://www.wealthbriefingasia.com/article.php?id=185247#.XbYkguYzaUk, https://www.moneymanagement.com.au/news/financial-planning/australians-need-discuss-their-will-children, https://www.forbes.com/sites/forbesfinancecouncil/2020/01/31/how-being-too-guarded-can-prevent-your-family-from-achieving-its-mission/#7fdd15732df5, https://www.bizjournals.com/denver/news/2020/02/03/tips-on-talking-to-the-next-generation-about-your.html?s=print

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties through #conflictresolution to a win-win-win result through Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

newfamilyoffice #familyworth #nextgeneration #intergenerationalwealth #entrepreneurship

I’ve recently returned from a speaking engagement at a conference in Dubai, which was my first visit there. As I walked around the city and particularly the mall, I pictured “founding father” Sheikh Al Maktoum just a few decades earlier looking out on a desert, and imaging a future that few others could imagine.

Creating modern Dubai took a huge amount of money and some outstanding engineering, but the most important ingredient was … vision.

Those blessed with fewer financial constraints than most have an opportunity to make their visions a reality. Their vision can make the world around them a better place in so many ways. But it starts with imagining and dreaming of possibilities. For some, those dreams come spontaneously, but for others they can be stimulated through a structured process. For families, there is an opportunity to do this as a group, which has added benefits: the contribution of diverse voices to build the vision, and the power of shared vision to bind the family together.

Warren Buffet famously said that he would leave his kids enough to do anything but not enough to do nothing. If we are blessed with wealth, we ought to make our “anything” the best it can be.

Consider This: Has your family articulated a shared vision? Do you encourage rising generation family members to dream and consider the possibilities open to them? Whatever your age, what are you dreams?

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties through #conflictresolution to a win-win-win result through Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

newfamilyoffice #familyworth #nextgeneration #intergenerationalwealth #entrepreneurship

Whether you choose to spend your kids inheritance, gift assets or you prefer to hold money back for the kids, managing what you leave behind can be done a few different ways. There is no right way, and there should be no pressure to choose one direction or another. Your life, your money!

Mass media will always jump on stories that seek to challenge and debunk commonly accepted narratives. CNBC is running a story suggesting that the huge intergenerational wealth, estimated at $30 trillion, is a myth, because the actual transfers will be “small, fragmented and drained”. Why? Because baby boomers will spend on themselves as they age (what’s known as SKIing – Spending your Kids’ Inheritance), and because they will choose to gift their wealth to charitable causes.

This is where some nuance is needed, particularly in light of the US Fed report cited above. We can split the boomer wealth into two categories: “mid-range”, where big spending by parents can actually have an impact, and “high-end”, where even that is a drop in the ocean. While certainly the mid-range will be affected by SKIing, the bulk of the wealth by value will certainly be transmitted.

Consider This: Don’t get jumpy when you read sensationalist stories like this one. Every family is different, and therefore their approach to transmitting family wealth should be uniquely considered.

Original articles: https://discover.rbcroyalbank.com/skiing-spending-the-kids-inheritance-and-other-ways-to-manage-what-you-leave-behind/, https://www.cnbc.com/2018/05/22/that-30-trillion-great-wealth-transfer-is-a-myth.html, 

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties to a win-win-win result. Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

#newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship

The millenial impact research has illuminated a much more caring generation than generally believed, one that is complex in their depth of passion toward causes. http://www.themillennialimpact.com/about

The ongoing debate about ‘generation wars’ will never stop, but here’s an interesting take on this from Slate Magazine, which claims that research on generations is flawed.

Statements like “baby boomers are selfish” and “millennials are narcissists” abound, but where is the science to support this, it asks. While they acknowledge that times change and people do, they reject the idea that distinct generations capture and represent these changes.

The author then goes on to debunk common generational tropes, e.g. that millennials are less satisfied in their jobs, that national pride shows differences between generations, and show that statistically these are incorrect.

He goes further to suggest that we should focus more on ‘why’ groups of people are different, and stop using generational labels, in part because they reinforce a fallacious 20 year boundary.

My response: the essence of generational theory is that people are influenced by external events during their formative years. I haven’t seen anyone debunk that. What naturally follows is that groups of people who share those influences because they grew up during a similar time, will be influenced in similar ways. People are still different, and are a product of nature and nurture in different measures. It’s important to remember that.
The danger in applying these principles is that it’s very easy to put labels on people and draw hard generational boundaries. That is no different to any taxonomy – proponents of the Myers Briggs Type Indicator (MBTI) will not suggest there are exactly 16 types of people.

In addition, there are some things where generational differences are significant, and others where they are not. You are far more likely to read about sensationalist labels (selfish, narcissist) than the more meaningful ones (political beliefs).

The question really should be: how are models like this useful? The answer is that by acknowledging differences and some of the causes of difference, we are better able to bridge those differences.

Consider This: In your family, do you often apply generational labels and stereotypes? Next time you do, think a little deeper about whether the labels themselves provide any value, and instead, think about how to recognise difference as a way to build better intergenerational connections.

Original article: https://slate.com/technology/2018/04/the-evidence-behind-generations-is-lacking.html

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties to a win-win-win result. Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

#newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship

Consider This: In high-net worth families, how large do patriarchal figures loom? Do the second generation feel the challenge of achieving more than their fathers insurmountable (I certainly felt that way)? What can both generations do to mitigate those negative feelings?

Now, here is some real research on generational difference. According to a study by Oxford University academics, men who surpass their parents’ qualifications report lower levels of psychological stress, while those who do worse are more likely to feel depressed, lonely or sad. Women, however, have no such hangups.

The study is quite extensive – using European Social Survey data from 52,773 people aged 25 to 65 in 28 countries.

The lead researcher attributed a possible reason that men are more likely than women to attribute success and failure by pointing to their own merits, abilities and effort rather than factors they have no control over.

At first glance, this looks quite controversial, in particular the suggested cause as a difference between the way men and women attribute success and failure (which looks like conjecture more than anything).
That said, children tend to grow up with their parents as role models and therefore their benchmarks of success. It is also commonly held that parents are rarely jealous of their children’s success and want them to achieve more than them.

Original article: https://www.thetimes.co.uk/article/happiness-is-doing-better-than-your-parents-if-you-re-a-man-tshrgt5wk (requires registration but is free)

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties to a win-win-win result. Family Business Advisors-Counseling Actionable Generational Wealth Succession. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study.

#newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship

I stumbled across a wonderful article that deals with the intersection of two of my favourite topics: intergenerational issues and the impact of social media on society. It analyses the starkly different ways that Facebook is used by Baby Boomers, as opposed to Millenials. It comes from a web site called The Cheat Sheet, which is “dedicated to providing audiences the information they want in an approachable, entertaining way”. But looking at the content and the presentation, it looks much more like advertising-ridden viral click bait (which it probably is). While I might be old fashioned, to me the term “cheat sheet” brings to mind a memory aid concise enough to sneak into an exam. Because the actual content of the article is so good, I’m reproducing it here in a true “cheat sheet” form!

Baby Boomers	Millennials
Connect with old friends	Make new friends
Value family connections	Prefer to not have family connections
Tend to overshare	Share the highlights of their lives
Do not use Facebook as their sole news source	Use Facebook as their primary news source
More likely to fall for scams	Less likely to fall for scams
Use Facebook to rekindle old flames	Use Tinder and other sites to kindle new flames
Use Facebook to bookmark sites	Use the browser’s bookmark to keep track

So now that you have a real cheat sheet, let’s talk about what it means. There are some interesting themes here.

Friendship & Family: Boomers have accumulated plenty of friends already, and have had their share of relationships. So their approach is to reconnect rather than expand their network. Millennials are at a stage in life where they are expanding their personal networks and are less interested in family relationships. When I joined Facebook, there was a group (remember groups?) doing the rounds called “OMG my Mom’s on Facebook” as the young people expressed shock at the idea of their mothers invading their social media world. It seemed funny to me at the time, until a few years later when my mother (who was around 80) joined!

Media: For Boomers, social media augments traditional media – they get news from both. For Millennials, social media supercedes traditional media, so their newsfeed is their source of news. This is actually very significant, because it enhances the ‘echo chamber’ effect of social media (as users just see what their friends like and share) , and further erodes the value of online news sources, which are becoming less financially viable.

Technology: Millennials are far more tech savvy than Boomers, so understand the specific use of other platforms like Tinder, and other tools like browsers. They also know how to spot a scam a mile off.

What have you noticed about the difference between the way you and other generations (up or down) use social media?

As a third party advisor to #familyoffice and #familybusiness Werdiger often helps guide the #intergenerational parties to a win-win-win result. For more in-depth, thought-provoking discussion points and commentary on family and business, sign-up to gain access to the archives of my Family Matters newsletter: https://www.transitionbook.co/member-area/6cf3b890596 or book a call or speaking engagement at https://www.davidwerdiger.com influenced and partly based on the Book E-Myth Revisited case study. Family Business Advisors-Counseling Actionable Generational Wealth Succession.

#newfamilyoffice #familyworth #nextgeneration #newmoney #intergenerationalwealth #entrepreneurship #salereadybusiness #generationwars