I have had a number of situations recently where I have been involved in family situations where two members of a couple have come from significantly different levels of financial resources.

The following are more in the category of “in process” observations — thoughts and reflections that I have that are still developing and not fully complete yet.

• Coming from different financial backgrounds is a relatively common occurance for couples.  Why?  It is really statistical in nature.  There are more individuals who come from middle, upper middle, and even fairly high income families — as opposed to the number of individuals who come from ultra high net worth families.   So there is clearly a higher probability that someone from an ultra high net worth family will find a life partner from a lower financial situation than their family’s.
• No matter how functional the individuals are, or how healthy the relationship is, there will be significant challenges experienced.  Long-term relationships are difficult.  And being (or becoming) a healthy, responsible adult is no easy task.  When individuals come from significantly different personal and family backgrounds (regardless of the types of difference — ethnic/cultural, religious, educational, SES), this creates challenges for the couple to understand each other’s perspectives and worldviews.  This, in turn, creates difficulties in communicating clearly, not jumping to incorrect assumptions, and being able to empathize with your partner.
• Relationships with in-law’s (parents-in-law, siblings-in-law) and other extended family members are the source of much of the tension experienced.  This is not to paint in-law’s or extended family members as the “bad guys” in the situation, but the fact of the matter is: expectations from your spouse’s family (and the resulting “in the middle experience” of the spouse) are the starting point for many conflicts.  Expectations about holidays, vacations, your career pathway, where you live, how you raise your kids — all are deeply rooted in one’s financial status and resources.  So when individuals within a couple come from significantly different financial backgrounds, tensions arise in these daily life decisions.
• What is “no big deal” to one person (or family) can definitely be a “big deal” to another person (or family) — and the resolution of the different perceptions has nothing to do with logic.  Family values, traditions, and ways of being have little to do with logic.  When (or whether) you open Christmas presents; how you celebrate birthdays; the amount of money you spend on clothes, fireworks, sporting events, cars or art; the need to attend a great aunt’s birthday party — none of these decisions are purely logical.  They are influenced by personal experience, family history, individual preferences and probably lots of other things.  As a result, trying to convince another person that what is important to them really isn’t that important usually doesn’t work.  The best response is to listen intently to what the other person is saying, try to understand their worldview to the best of your ability and accept (and affirm) that what is important to them is important to them (even if you don’t understand why.)

There is a lot more that could be said — and many of you just had a bunch of personal stories triggered in your memories (share them, if you wish).  Let’s stop there for now.

Have a great week!

Over the past several weeks I have been involved with a number of families, helping them with their philanthropic giving process.  What has been interesting is the fact that almost all of the families are at some different stage in their developmental stage of philanthropy.  Some are really just beginning, others have been “doing” philanthropy for a while but are at a new life stage in their families and having to reshape their giving process, and some are not only experienced but are providing leadership to other families and foundations.

Let me share some lessons I am gleaning from my facilitator role.

“Successful” philanthropy reflects the true, authentic character of the family.  There is a lot of discusssion within the marketplace about what “successful” philanthropy is, but from an observer’s position, it seems successful philanthropy entails actively engaged family members who enjoy the process of giving along with positively impacting people’s lives as a result of the money given — both pieces seem to be necessary.  Given this description, I see “successful philanthropy” take on many shapes and forms.  No one approach or format yields these results for families.  Rather, if a family is laissez faire and goes through life more experientially (versus planned out), their philanthropy and generosity works well in this form.  But for families who are more goal-driven, structured and need to help “move things along”, a laissez faire approach to their philanthropy would drive them mad and not be fulfilling.

Ongoing, regular two-way communication is key.  Regardless of the level of development of the family’s philanthropic process, whether it is just a couple sitting down to talk together informally; parents sharing about their giving with their adult children; or a group of adult siblings with their spouses having a formal Board meeting — if there isn’t ongoing regular communication, problems erupt.  Misunderstanding, hurt feelings and mistrust can grow over a few thousand dollars to be given or over hundreds of thousands of dollars — the amount of money is not critical.   The challenge is — regular communication takes effort and time, and a commitment to overcome the obstacles of life (busyness, interruptions, illness, unexpected demands from other commitments). Families that can meet the challenge win — the process of giving together stays healthy.

There needs to be a healthy acceptance of different levels of interest, passion, and involvement across generations.  I am asked to speak on or address (to families) the topic “How to Engage the Next Generations in Philanthropy” fairly frequently.  And the pattern which I am seeing that is yielding the most positive results is this:  a) there is a generation of the family which is interested, passionate, and involved in giving;  b) there is a desire within this generation to pass on their passion to other family members;  c) however, they understand that there are seasons of life and interest in philanthropy needs to be grown and developed over time;  d) the involved generation attempts to model and share about their giving at a level which matches the level of interest by the next generation;  and e) the involved generation continues to be involved and excited about what they are doing philanthropically regardless of the response of the next generation (that is, they don’t get discouraged, start to manipulate or place “guilt trips” on the next generation).

These are just some initial observations from recent interactions.  Being forthright, working with families and their philanthropic plans is once of the most enjoyable and rewarding aspects of my work right now.

Have a great week!

It seems to be appropriate week to write about women and the family business, given the high profile of women in politics this past week (Hillary Rodham Clinton’s eloquent speech at the Democratic National Convention, and the selection of Governor Sarah Palin as the Republican vice presidential candidate).

Six female authors have recently published A Women’s Place . . . The Crucial Roles of Women in Family Business. Five of the authors are directly involved in family-owned businesses and all of them are consultants with The Family Business Consulting Group, Inc. In the introduction, they indicate the book is not only for women in business, but for family businesses in general (many of whom may need to rethink their positions on women in the business), and for family business advisors.

In one of the first chapters of the book, they list a variety of roles women typically embrace in business-related families. The list, in and of itself, is insightful and causes pause for reflection on the variety of roles women hold (like men, many are held simultaneously):

Business Founder. Financier. Owner / Shareholder. Co-president. Emergency leader. Back room support. Innovator. Advisor and confidante. Nurturer of the next generation of leaders. Family business board member. Board Chair. A groomed CEO or senior executive. Family leader. Family foundation leader. Individual philanthropist. Ambassador. Employee. Mentor. Family historian. Steward.

As consultants, the authors share some themes they are seeing among family-owned businesses:

• More and more women are working in their families’ businesses
• Women seem to have more work experience before they have children
• Given increasing longevity, there are more work-related years available after children are raised.
• There are more daughters partnering with their fathers and mothers in business.
• The movement toward more service economy businesses appears to make business more amenable to women.

The authors suggest a number of steps to family businesses for helping young women prepare for significant roles in their family’s business. I found a number of them to be wise words to heed:

a) Start early. Regardless of gender, family members need to be exposed to the real workings of the family business early in life, and in multiple ways across the years.

b) Don’t leave the girls out. Think about it. If a family business disqualifies women from leadership, they may be reducing 50% (or more, depending on the family makeup) of potential future family leaders.

c) Avoid creating an environment where are the role models are male. Great point – if all the mentors are male, it makes visualizing oneself in and identifying with the role model more difficult.

I have been fortunate to work with a number of women in family businesses, and like the list above, they serve in a variety of roles:

*owner and CEO of a manufacturing business
*co-founder and principal researcher in a high tech firm
*VP of marketing and business partner with their spouse
*business owner of a professional services firm
*co-chair and leader of the family foundation
*individual philanthropist and change agent
*Board officer and confidante
*mentor to other women in philanthropy
*family leader.

One theme I have observed in this collective group of female leaders is the inner strength that each of them has. Having been raised in a more traditional Midwestern family, in which the business side of the family was patriarchal, it has been an interesting experience for me to see how women often lead very differently from the traditional male entrepreneurial stereotype – and how effective their leadership is.

I am looking forward to learning more as I complete A Woman’s Place . . . , (there is an chapter on Work/Life Balance that looks interesting) but even more so, I am eager to learn how to lead (if it is possible for a guy) like many of the woman I see – effectively, decisively, but with more attention and focus on the human side of business.

Recently, my wife and I have had a couple of experiences together on which we both commented to one another.

One experience was actually two separate events that were similar and which occurred close together. As a family, we enjoy music and frequently go to music events of various kinds — concerts by professionals, school concerts, musical theatre productions, and free community events (e.g. concerts in a park). This summer we had the opportunity to go to a couple of professional productions and were able to take along some younger friends of ours and our family. The evenings went well and we drove everyone to and from the events. Now, we don’t invite or take others along in order to be thought well of, to receive praise, or to be viewed as magnaminous — we like to share the opportunity with friends who will enjoy the event but may not be able to go regularly. But both Kathy and I were struck by the apparent lack of appreciation (or at least, the lack of communicated appreciation) by the young friends who went with us. There was a casual, “Thanks!” as they got out and shut the door, along with a “See you tomorrow!”

This is in sharp contrast to another experience we had recently. A group of young single adults asked us to have a party at our place (we were pleased they felt comfortable to ask us) — and so we had a combination “hang out”, croquet, volleyball and outdoor movie night (we hung a cord between trees and hung a sheet as our movie screen). The evening turned out to be a lot of fun and we didn’t do much — they did most of the setup and all of the clean-up. So it was really no big deal for Kathy and I — it wasn’t costly in time or other resources. But the continual, repeated thanks we received from numerous members of the group has been almost overwhelming. Not only that night, but several times since, a number of individuals have gone out of their way to express appreciation to us. Again, we didn’t host the party in order to “look good”, or receive kudo’s. But the thankfulness and gratitude was encouraging to us — and in stark contrast to our other experiences.

Now the first group of individuals may be appreciative but as G.B. Stern has said, “Silent gratitude isn’t much use to anyone.” And I found an Estonian proverb (do you know where Estonia is?) that states: “Who does not thank for little will not thank for much.”

As I work with financially successful families, one of the repetitive concerns voiced by the senior generation is that they don’t want their children or grandchildren to develop an attitude of entitlement. And I can honestly say that the amount of wealth a family has is not the best predictor of the next generation’s attitude — either of gratitude or entitlement. I work with some extremely wealthy ($50M and above) whose children are grateful for the little (and big) things their parents do for them (I know some young adults in families in the same range of wealth that don’t seem to have a clue about being thankful.) And I have worked with children, teens and young adults of a wide range of socioeconomic status who consistently whine, seem to always want more, and who do not seem to appreciate the sacrifices their parents (or grandparents) make for them. Sadly, this latter group also seems to have a hard time enjoying life.

So the point?

First, it never hurts to be reminded to not only be thankful for all the good things in our lives, but also to communicate thanks to others. There probably is a point where you can be overly grateful, but most of us are a long ways from that point.

Secondly, if you are a parent (even of young adult children), I would encourage you to reaffirm the importance of communicating appreciation to those who do something or give something to us. This can be done in many ways — a phone call, a hand-written note, an email, a “thanks for ..” the next time you see the person. And, as a parent, you may need to help structure the action (help them find a time and place to actually “do it”).

I know Kathy and I have been encouraged by some simple “thanks” this week. Hopefully, we can send a wave of encouragement to others in our lives, as well.

I have observed a common pattern across many areas that I work (and live) — people avoiding dealing with tense or conflictual situations in their relationships with others. And almost always, not dealing with the situation creates additional problems or makes the conflict larger and more intense (often involving more people than were originally involved).

And it happens it lots of settings:

• in family businesses, between family members working together
• in office settings, between coworkers who can’t get a long
• in marriages, between spouses
• in extended families, between parents-in-law and their children’s spouse
• in schools, between teachers and parents of the students
• in wealthy families, between siblings who are inheriting wealth
• and on and on.

Now, I am not going to try to address all the issues relevant to conflict in relationships, that would require a book (or two). But let’s look at some core concepts.

First, why do people often try to avoid conflict? I think there are lots of potential reasons, but let’s identify a few.

1. Many people do not like emotionally-charged situations, and they feel if they raise the issue underlying the conflict, emotions will get out of control.
2. Most people don’t like others to act or communicate in an angry way towards them, and will almost anything to avoid this type of interchange.
3. Some individuals believe that, in conflict, someone must either “be wrong” or have done something wrong, and they don’t want to be accused of this.
4. Most of us, when we have done something wrong, don’t like admitting it or apologizing for our error.

The problem is — not dealing with conflict in a situation doesn’t make it go away. In fact, frequently, things get worse. When there is tension between two people, or when there is a relational break (that is, the two people are not communicating much at all, if any) — not dealing with the issue creates additional problems, including:

• Others notice the tension and it makes them feel uncomfortable.
• Communication between the two individuals becomes minimal and ineffective.
• Other people get pulled into the conflict, and often begin to “take sides”.
• The people involved in the conflict experience a lot more emotional tension in their lives, with their emotions “building up”, and often spilling over into other areas of their lives.
• The relationship becomes more and more distant, sometimes to the point of total cut-off between the two parties.

Now, I am not suggesting, that if you are in the midst of a conflict in one of your relationships, you should run out and “deal with it”. Why? Because most people who have the habit of avoiding conflict don’t have very good success at resolving conflictual situations on their own — they don’t haven’t been practicing how to deal with conflict in their daily lives (we all have it, you know), they have misbeliefs about what should be done (”we just need to sit down and talk it out”), and they may not have the skills to deal with the situation effectively.

So what should you do?

First, take stock of your relationships and see if there are any that currently have significant tension or conflict that is getting in the way. Admit to yourself that there is a relationship that needs attention.

Second, observe how the tension in your relationship is affecting your life and those around you. For you to seriously consider dealing with the situation, you are probably going to need to be convinced that the conflict is creating problems in your life. You may want to ask those close to you in the situation (coworkers, family members) how the tension affects them (don’t ask it in a way where you are looking for support for your position in the conflict).

If possible, seek some help from someone who can help you deal with the conflict in the relationship in a positive way. Get some counsel from someone you admire and observe that they seem to be able to address relational tensions in their lives in a healthy way. Sometimes it may be beneficial to talk to a professional counselor, business coach, or facilitator — to help you and the other person meet together to resolve the issues creating the conflict.

Do some reading that can help you grow in dealing with conflicts in your life. Whatever the conflict you are currently experiencing, if you are a habitual “conflict avoider”, be assured this will not be the last difficult relational situation you have to deal with — there will be more. So it would be wise to start to grow in your ability to deal with tensions in relationships in a healthy way. There is a great book, Difficult Conversations: How to Discuss What Matters Most that a number of my clients have found to be quite helpful in guiding them through tough conversations they needed to have with someone in their life. Additionally, Lewis Smedes has written an excellent book, The Art of Forgiving, that is also extremely helpful.

I have conflict in relationships in my life (just ask those close to me), and I am still learning how to deal with those tensions in a healthier manner — I think we all can. Let’s just commit together to not let tensions in relationships fester to the point where they poison our lives — it will make all of our lives healthier.

There is an old saying, “It is good for brothers to get along”. And it is true. But one of the most frequent problems I see in my work is the challenge of brothers “getting along” in business. And the issue plays out in many different ways and settings:

*Brothers who have been working together for years (and now are in their 50’s, 60’s and 70’s) and have built a successful business together, and are now in conflict about business succession issues — especially about how and whether the next generation should be involved in the business.

*Adult sons of the business founder who are working in the business, in different roles and levels of responsibility, and struggling with what is fair in compensation, power, influence and privileges.

*Adult children (for it is not always just brothers, but their sisters, too) — some of whom are in the business, some who are not directly involved in the day-to-day management — who are owners together and have significant conflict over the direction of the business and how resources should be distributed (i.e. dividend distributions, bonuses for the managing owners).

*One or more siblings who are working hard, taking their responsibilities in the business seriously, along with one sibling (usually a brother) who is “coasting” — not working very hard, not putting in the hours, not getting the job done — but who is pulling the same benefits (income, perks) and playing a lot more than his siblings. Result: plenty of resentment to go around.

There are lots of variations.

You may or may not remember that I grew up in a family owned business (a manufacturing company). I am the youngest of four sibs, and although I did not work in the business as an adult, I was an owner and on the Board. My two brothers worked in the business (as did my sister later on) and we had our own challenges — personality differences; some were owners and managers, others (me) were non-managing owners. So I speak from experience — it is good for brothers (and sisters) to get along. And it is a pain when you don’t.

You may have heard that there are two “CEO’s” in family businesses: the Chief Executive Officer, and the Chief Emotional Officer. The latter is often the matriarch in the family system (she may be the wife, mother, mother-in-law, or grandmother depending on the stage of the family). And one of the (self-imposed) roles of the Chief Emotional Officer is try to ensure that everyone in the family gets along. (Good luck!)

In fact, when identifying goals for the family and the business, the most frequent goal cited by the matriarch is either: “I just want everyone to be happy.” or “I would like everyone to get along peacefully.”

So, what is the point, practically? First, it may be helpful to recognize that conflict between brothers in business is a common occurrence. If this is your current (or past) experience, you are not alone.

Secondly, it is an important issue to pay attention to. Many successful businesses have been shipwrecked by unresolved conflicts among siblings in business together. It is to everyone’s benefit to address issues early, before they become unresolvable.

Finally, it is critical to recognize that relational issues — trust, healthy communication, acceptance of differences, resolving conflicts in a healthy way — are just as important for the long-term success of a family-owned business as are good management and execution of the business plan.

If you, or your family’s business, is struggling in this area, I’d love to help you work through the issues in a way that will bring a positive resolution. If I can help, let me know.

This week I have been gone five days for a series of business meetings. I am writing this as I travel home to be with my family. I have been reading, and have decided to review, a book entitled, The Price of Privilege by Madeline Levine. Dr. Levine is a psychologist who practices in the affluent area of Marin County, just north of San Francisco.

Ironically, I have been gone from my family for business this week and I now have to look in the mirror regarding the concerns she raises about parenting in an achievement-oriented home. Dr. Levine raises numerous valuable issues and points, but I will focus on some of the foundational issues related to parenting in the upper middle-class and affluent subcultures. (Quotes are followed by page numbers in parens.)

“Raising children has come to look more and more like a business endeavor and less and less like an endeavor of the heart.” (14) Dr. Levine cautions that more and more parents focus more on “results”, (and specifically achievement), rather than a relationship with their child.

Research is indicating a growing high at-risk group: preteens and early teens of affluent families. The incidence of depression, substance abuse, anxiety, and unhappiness is increasing at a staggering rate (20% of early teen girls are depressed.) Related to this, a subculture among affluent preteens and teens has developed which values substance abuse, rule breaking and sexual activity.

There are two primary core issues which underlie the dysfunction in this preteen and early teenage subculture:

a) the pressure to achieve, and b) isolation from parents.

Dr. Levine believes parents are “over-involved in the wrong things, and under-involved in the right things, both at the same time.” (28) She views inappropriate involvement in children’s achievement as intrusion, and an unavailability to support our children leads to isolation. “Support is about the needs of the child; intrusion is about the needs of the parent.” (12) “It is when a parent’s love is experienced as conditional on achievement that children are at risk for serious emotional problems.” (30)

“Being free enough from your own preoccupations to be attuned to the needs of your particular child is one of the greatest contributions to their healthy psychological development you can make.” (34)

Ouch. That one hits too close to home for me. I have to honestly say that often I am so preoccupied with my work that I am mentally and emotionally unavailable to both my wife and children. I need to correct that pattern in my life.

Dr. Levine then moves into a section of the book entitled Materialism: The Dark Side of Affluence. I like the way she differentiates between having significant financial resources and ‘materialism’.

“Materialism is not the same as having money. . . Materialism is a value system that emphasizes wealth, status, image, and material consumption.” “Materialism [as opposed to being wealthy].. does predict a lack of happiness and satisfaction.” (45)

Why? “When money becomes overly important, it crowds out other goals, endeavors, and interests; work, friendship, marriage, hobbies, parenting, spiritual development, and intellectual challenges can all fall by the wayside.” (47) “Materialism is about how easy it can be to choose the simple seduction of objects over the complex substance of relationships.” (48) So the focus and enamor with money, possessions, image and pleasure lead us to make choices that eventually depletes us from the more substantive, fulfilling, and lasting aspects of our lives.

The comments and observations Dr. Levine causes me to stop and reflect on my life. ‘What do I need to do differently to demonstrate to my family that I am more interested in them personally than I am about “achievement” (either theirs or my own)? I know this. I am going home and spending the evening with them – talking and listening. Any work that I could do will have to wait.

The third theme I have observed in financially successful families is that many of their children and grandchildren struggle with poor self-esteem and low self-confidence.  Now let’s get this straight from the beginning — although I am a psychologist, I do not believe that feeling good about oneself is the goal of life (nor of parenting or education). 

Self-esteem (that is, having a positive view of one’s self) is not a goal, it is a result of other good things in your life.  Self-esteem is not global; it is situation specific and is the result of being competent.  As we develop competencies in our children, and they begin to demonstrate these competencies, their confidence grows (in that skill or area of application).   Thus, telling a child that they are “good” or “special” has virtually no impact on how they feel about themselves.  But teaching them various skills – how to dribble a basketball, learning to play the piano, learning how to bake cookies, riding a bike, balancing a checkbook, learning how to play chess — that is how a child’s self-esteem is built.

Why, then, do many descendants of wealthy or successful individuals struggle with feeling good about themselves?  There are a number of factors to consider.

First, we must understand that “skill” is relative.  Learning to play chess at age four or five is a relatively impressive feat.  But even a bright seven year old girl who has advanced skills typically will be no match for a sixteen year old ranked player, and her skill will pale in comparison to her father’s, who is an internationally ranked chess master.  The same is true for budding athletes, developing entrepreneurs, academic scholars, accomplished musicians – you can take any field.  When you are growing up in a family where your parents or grandparents are known as one of the most successful individuals in their respective field of expertise (business, technology, entertainment, sports) — your skill level, no matter how good you are, probably can’t compete with the level of success your parent / grandparent has achieved.  Thus, feeling good about your skill level is difficult because “I’ll never be as good as . . . ” (which may or may not be true in the future, but currently your skill level has not developed to level of your parent’s at the height of their career).

A second issue which contributes to struggles with self-confidence in descendants of successful families is the reality of life called “regression toward the mean”.  If you think about a bell-shaped curve, the issue becomes clearer.  The bell-shaped curve visually represents the fact that most people are average (average height, average intelligence, average musicians, etc.) and this is the large group in the middle of the curve.  There are fewer above average individuals (and similarly, fewer below average) and even fewer really skilled individuals — in any area of life.  This small group of really skilled individuals is represented by the small “tail” at the far right hand side of the curve.  These are the people who have the combination of natural ability, access to training, the requisite personality characteristics, and possibly the good fortune of being in the right place at the right time — to be highly successful in their field.  And, as reality demonstrates, in comparison to all of the people in the world, there aren’t many of them (e.g. Tiger Woods, Lance Armstrong, Warren Buffett, Bill Gates, Jerry Seinfeld, Yo Yo Ma).  Although the pure number of individuals may seem large, in comparison to 6.5 billion people, the relative percentage is extremely small.