Friends, I thought I would briefly share about two significant events in my life this week.

1. My wedding anniversary. As of September 1, my lovely wife, Kathy, and I have been married 31 years. So it’s not one of those “special” years, but this year does seem special — partially, I think, because all four of our adult children are “out and about”. Plus, Kathy and I are enjoying our relationship more than we have in several years. So celebrating our life together seems appropriate. Finally, we realized (it takes a while for things to sink in sometimes) that we have been married a long time when one of our younger friends said to us: “You were married before I was born!”

2. Completion of my book. Some of you may know that I have been working on a project for about four years which has led to the writing and publishing of a book. Earlier this week, Dr. Gary Chapman (author of the NY Times #1 bestseller, 5 Love Languages) and I completed the manuscript of our book — 5 Languages of Appreciation in the Workplace: Empowering Organizations by Encouraging People. It is going to the publisher for editing now, and won’t be released until next summer (July 2011), but this was a major milestone for us. There is still much to be done — we are developing training resources for businesses and organizations — but now we can say, “The book is done!” (You can be sure I will sure more about the book and related activities in the future.)

So, rejoice with us — and have a great week!

Sometimes someone writes an article, or gives a speech, that is noteworthy. Their thoughtfulness and manner of communication is remarkable. And you really can’t add much to what they have already said. But you want to share their thoughts with those important to you.

Such is the nature of the article, based on his commencement speech to the 2010 graduating class at the Harvard Business School, by Clayton Christensen. He is a professor at the school and was asked by the class to speak at their graduation ceremony.

I will briefly highlight some of his points — primarily to entice you to read the whole article, which can be found at this link.

Dr Christensen states that: “On the last day of class, I ask my students … to find cogent answers to three questions: First, how can I be sure that I’ll be happy in my career? Second, how can I be sure that my relationships with my spouse and my family become an enduring source of happiness? Third, how can I be sure I’ll stay out of jail?” [He goes on to report that two of his Rhodes scholar program classmates wound up spending time in jail.’

With regards to the career question, he states: “More and more MBA students come to school thinking that a career in business means buying, selling, and investing in companies. That’s unfortunate. doing deals doesn’t yield the deep rewards that come from building up people. I want students to leave my classroom knowing that.”

Regarding the second question, Christensen reports: “Over the years I’ve watched the fates of my HBS [Harvard Business School] classmates from 1979 unfold; I’ve seen more and more of them come to reunions unhappy, divorced, and alienated from their children. I can guarantee you that not a single one of them graduated with the deliberate strategy of getting divorced and raising children who would become estranged from them. And yet a shocking number of them implemented that strategy. The reason? They didn’t keep the purpose of their lives front and center as they decided how to spend their time, talents, and energy.”

He goes on to say: “Your decisions about allocating your personal time, energy, and talent ultimately shape your life’s strategy. I have a bunch of ‘businesses’ that compete for these resources: I’m trying to have a rewarding relationship with my wife, raise great kids, contribute to my community, succeed in my career, contribute to my church, and so on. And I have exactly the same problem that a corporation does. I have a limited amount of time and energy and talent. How much do I devote to each of these pursuits?”

Finally, regarding “staying out of jail”, he frames it as “how to live a life of integrity (stay out of jail). Unconsciously, we often employ the marginal cost doctrine in our personal lives when we choose between right and wrong. A voice in our head says, ‘Look, I know that as a general rule, most people shouldn’t do this. But in this particular extenuating circumstance, just this once, it’s OK.’ the marginal cost of doing something wrong ‘just this once’ always seems alluringly low. It suckers you in, and you don’t ever look at where that path ultimately is headed and at the full costs that the choice entails.”

I will let you read the rest of the article yourself so you can gain the full impact of his points.

Let me briefly add some supporting comments of my own.

Since I have the opportunity to work with business owners and financially successful individuals and families across the country, I am able to observe some repetitive patterns in families and relationships.

The most glaring theme is that there seem to be three types of individuals who are successful in business (or their chosen career):

1) those who are extremely successful largely due to a high level of commitment, drive and who have sacrificed most of the rest of their lives (physical health, family relationships, friendships, personal ethics) to achieve their goals;

2) those who have been able to maintain a sense of balance in their lives along the way due to a clear commitment to priorities in their lives; and

3) those who are somewhere in between, desiring to be balanced but often find themselves out of balance in their use of time and energy.

Members of Group 1 are often wealthy, sometimes famous, still “driving” toward career (or other) goals. They are largely unhappy, self-focused and highly insecure. My observation is that they usually are not very enjoyable to be around — they often have anger issues.

Group 2 members are usually amazing people, who are a delight to be around. They are humble, realizing that their success is probably a combination of perseverance and being in the right place at the right time. They are guided by a strong set of personal values. They have a giving approach to life and much can be learned from them.

Most of us (I think) are in Group 3. We have good intentions. We generally are going on the right path, but often need to make corrections along the way — with work/career or other pursuits getting out of balance. We need mentors, reminders and good friends to give us honest input and feedback.

Which group are you in? Where do you want to be? How can you get there?

As many of you know, I do a fair amount of consulting with family owned businesses. One of the common issues I help business owners and their families work through is the sale of their business (either preparing to do so, or dealing with the results afterward). Recently, a friend who meets with a number of business owners starting to think about selling their businesses asked me to outline some of the key issues that I help families think through. Here is what I came up with:

Integrating Business Ownership Succession, Business Management Succession, and Personal Estate Planning. Most people don’t distinguish between ownership succession planning and management succession. This creates significant problems — especially when the owner wants to sell but the company doesn’t have the management ready to take over the company. Often we have to work to develop a “bridge plan” for getting an interim management team, so the sale can occur.

A second common problem is when the owners’ personal financial estate planning isn’t integrated with business succession planning. Business owners want to get their financial investment out of the company when they sell it, but if not done correctly, they can pay excessive capital gains taxes.

How will the sale of the business affect your family? The sale of a family business significantly impacts the whole family. This includes family members who work in the business and those who do not work in the business. There can be issues of “fairness” within the family — those who work in the business may lose their jobs (or the perks previously associated with ownership). But if they own some of the business, they can reap a large financial benefit while non-owning family members get nothing.

A secondary, but significant issue, can be the impact of the sale on the career development for succeeding generations. If the family has a large influx of money from the sale, this can create challenges (and disincentives) for career development for younger family members. How the sale is structured — and how things are communicated to the family — can help avoid these issues.

How do you decide how much money to give to family members? Key questions we work to answer are: How much is enough? How much is too much? In reality, we have learned these are not the most important questions. Rather, we have identified the key factors that avoid destroying family members with money.

What plans do you have to keep the family together in the coming years? Often families in business communicate primarily about the business when they get together. When the business goes away, many families struggle to stay together — they have no history or tradition for family gatherings outside of the business. So they need to answer questions like: What will be the basis for family interactions and gatherings? What type of communication process will be in place? How will you keep the extended family connected?

The most common “big impact” mistakes owners make when selling their business:
-Not involving their spouse in the process.
-Not preparing their children for managing the wealth they will be receiving.
-Not involving children’s spouses in the process.
-Not integrating the sale of the business with their personal / family estate planning, and paying unnecessary taxes.
-Not developing an adequate plan to finance buy-sell agreements
(between family members, or in the case of death).

The reality is: Most business owners and families need help both “thinking through” and “working out” a business succession plan. My advice to business owners: Don’t risk losing two of your most valuable assets you have spent years building (your business and your family) by making un-informed decisions. A little “pre-work” with a family coach can go a long way to saving a lot of heartache later on.

Some books are just incredibly thought-provoking. I was recently referred to The Language of Conscience by two good friends whom I highly respect. So I ordered it and have been reading it (it is one of those books you do not finish in a couple of hours). And I am intrigued. I am not sure I fully understand all of the concepts — and I think I agree with most of the premises. But I am still thinking about it. The author, Tieman “Skipper” Dippel, Jr., sounds like a fascinating man. So I thought I’d share a bit — possibly to whet your appetite as well. Here are some quotes from the book:

“Conscience is good for society and civilization whether it is taught or whether it is instinctive. . . It is important to look at conscience as if it were a muscle or a nerve. The more you exercise it and the more you sensitize it, the more effective it is going to be.”

Tielman uses the term, “enlightened conservatism”, but do not think that he is talking about political conservatism — otherwise your assumptions and associations will lead you astray. “Enlightened conservatism, as a concept, is well described as trying create an environment in which ethical actions of character can best be performed. . . the character of choice of conscience and concern for others prevails over-self-interest.”

He goes on to contrast decisions made through convenience versus decisions made through conscience. “(D)isciples of conscience look to the future and their children to build a greater society. The disciples of convenience look more to their gains at the present. . . Leaders of convenience often have to step on teh people below them and pull down the people above them. Their weapons are personal attacks, distraction, and the negative emotions. Leaders of conscience use constructive leadership to help others move forward positively. . . Their weapons have to be integrity of purpose and devotion to common goals.”

“In order to achieve the common good, the world’s people must reach the point of saying, ‘What do I think about that?’ rather than just ‘How do I feel about that?’ . . It is in reasoning together in toleration and in appreciation of common values and common moral codes that one can seek the common good by looking beyond personal self-interest and past historical prejudices.”

Note that the book is actually a compilation of papers written and lectures given from the 1970s to early part of the twenty-first century. Tielman shows an amazing foresight on a number of issues:

“I do not see the future as being dominated so much by clashes of great ideologies such as capitalism vs. communism, as by more subtle but extremely potent influences on the culture that determines civilization’s direction. The new subtle concept is victimization and victimhood. It argues that society owes more than basic rights and that government should grow in order to fill those rights.”

“The right question is not whether you want big government or small government. The right question is what should be the role of government as the expression of the combined will of the people in regard not just to the protection of individual rights and dignity, but to the granting of economic benefits on the concept of victimization vs. individual responsibility.

“Character is the acceptance of individual responsibility. . . You cannot build character and courage by taking away initiative and independence, and you cannot help men permanently by doing for them what they can and should do for themselves.”

He then quotes Theodore Roosevelt: “The things that will destroy America are prosperity at any price, peace at any price, safety first instead of duty first, and love of soft living and the get-rich-quick theory of life.” Wow. And that was state over 100 years ago.

He later comments on the Internet. “One of the Internet’s great benefits is that it will make information readily available to an enormous quantity of people on an individual basis. But, it is a double-edged sword since one benefit and detriment of the Internet is that it will provide information easily available to an enormous quantity of people on an immediate basis. With quick availability to information, people will feel less of a need to read books and to think about the concepts that help them remember those individual parcels of date and weave them together. Without the knowledge that is gained from in-depth thought, it is difficult to gain the wisdom of how to use the ever-increasing amounts of data.”

“it will likely occur in an information age that will have two parts — an age of knowledge that expands rapidly with the dissemination of information. And than an age of wisdom necessary to process the excess of information where trust and experience are very valued and character re-emerges. . . Wisdom requires a perspective, a very basic position from which to make judgments. It is at this point that leadership becomes particularly critical in providing guidance and direction. Leadership defines culture and thereby defines civilization, and whether those leaders are directed by conscience or merely by their own convenience will determine the direction that civilization will take. . . The contrast of the Renaissance and the Dark Ages shows that leadership can move culture both ways.”

There is much more thought-provoking (to me) content — and incredible foresight on issues regarding China, the movement of politics in the U.S., and the increasing role of non-profit organizations in our culture. I would highly recommend this book to others who are trying to make sense of the macro-economic, cultural and political confusion which seems to exist.

[A final side-note: This book has been translated into Chinese and reportedly is one of the few Western books used as a text in Chinese universities.]

I just returned from a week in Istanbul, Turkey, speaking at a conference, meeting with families, and doing some sightseeing. And I was struck by the similarities of issues that exist half away around the world, within cultures that have incredible differences.

First, I need to let you know that Istanbul is a beautiful, beautiful city with incredible history, architecture, and stunning visual images. It is the only city that spans two continents — Europe and Asia, separated by the Bosphorus river (a salt-water river that joins the Black sea to the north and the Aegean Sea to the south). The metropolitan area is larger than you might guess — at least 15 million people (it reportedly had 400,000 people in 1970 and 10 million in 2000.) And it has a unique blend of numerous ethnic groups and nationalities — Turkish, Iranian, Russian, Syrian, French, Italian, German, British and more. You might remember that it was the capital of the Emperor Constantine (Constantinople) and the seat of the of the Orthodox church, and then became the capital as well as the trading and economic center for the Ottoman Empire from the 1300s through the early 1900s.

So the themes I noted that are similar across cultures, and seemingly across time, include:

Entrepreneurial spirit (when freedom of competition is allowed).

Both the modern Turkish economy (textiles, agrarian commodities, shipping industry) and the small shopkeepers in the markets (the Grand Bazaar, the Spice Bazaar, and individuals selling goods on the streets) demonstrate the vibrancy of the desire to make one’s life better through business. I was amazed at the energy and creativity I observed in individual’s and small businesses; and I appreciated their humor as well: “How can I convince you to leave some of your money with me?” “What would you like to buy that you don’t really need”? And, “Step into my shop and let me show you some genuine fake watches!”

The importance of family relationships.

Individuals and families repeatedly reported their personal stories of how important their families are to them. Young adults shared the dilemma they face of wanting to pursue career opportunities in other parts of Europe but also wanting to be near their parents, siblings and extended family members. Older adults discussed their desires for their children to join them in the family business, but also wanting their family members to pursue their career interest in a different area. And I got to see the joy of families enjoying time together — with their grandchildren, with the extended families of their siblings’ children and cousins.

The high value of education.

Time and time again, parents told me how proud they were that their children were doing well in the schools they attended (often private schools, at great personal expense to their parents). I believe that when individuals are faced in their day-to-day lives with the mass of humanity — in traffic, on the streets walking, in the marketplaces — they realize more intensely the need to “get ahead” through training and education. And the issue is not lost on the youth — they are quite committed to studying hard to do well in school, and appreciate the sacrifice their parents are making so they can get a good education.

The tension between governmental support and governmental interference.

Similar to the challenges our own country and economy are facing, countries worldwide are battling the tension of how much the government should set economic policies (both internally and regarding international trade) and how much they should “stay out of the way” and let the forces of capitalism lead the way. In Turkey currently, there is the additional tension of “being in the middle” of connecting with western Europe and the West economically, and remaining close to its neighbors and historical partners (Iran, Russia, Syria, Greece). In both the United States and Turkey, the answers are neither simple nor agreed upon by their citizens.

Differences.

So what are the differences I see? Mainly small ones — size, shape and the differences in appearance that are the result of differing ethnic backgrounds; clothing styles and preferences; types of food eaten on a daily basis; languages used to communicate with others; and historical heritages that bring different traditions to daily life and life’s events.

But underneath these surface variations, I still see people who love, who want to accomplish something in their lives, who learn and try to capitalize on available opportunities, and who are intrigued by those who are different than they are — but who try to be kind and helpful to strangers in need. Finally, life seems to be both enjoyable and difficult for individuals, families, and businesses on all sides of the world. Most of us experience both the wonderful aspects of daily life (the beauty of nature, loving relationships), along with the pain (illness, physical pain, death) that accompanies life in this world.

Recently, in a variety of settings I am observing the issue of trust impacting business relationships.

Obviously, trust is at the foundation for business transactions – that the vendor will provide the goods or services purchased, that the goods or services will be at the quality level described initially, and that the customer will pay for the goods or services in the time frame agreed upon.

Another area of business where trust is impactful is in the employer / employee relationship – where the employer follows through on commitments communicated to the employee and the integrity level of employees to be trusted to access to information and resources.

This past week I was talking to a business owner who described a situation where he had hired a sales manager (in early 2008, prior to the financial crisis hitting) who in turn started hiring a fairly high cost sales staff. Whenever the current owners or management team raised issues or asked questions of the sales manager, he reported replied, “Do I have to earn your trust or earn your mistrust?” (implying they should trust him until he proved untrustworthy.)

I replied that this was the wrong question. And, in fact, I find much communication around the issue of “trust” is not laid out properly. I do not believe that the question is: “Do I trust you?” (or “Do you trust me?”). This is too broad.

Trust is situation specific. The more appropriate question, I think, is: “For what do I trust you?” Or, “What am I willing to entrust to you?” (responsibility, privileges, resources). I may trust you to hire staff within a budget amount but I may not trust you to have total access to all of the company’s financial data. Or, I may trust you to pay bills with appropriate procedural checks and balances but I don’t trust you to have total access to the company’s financial resources without monitoring.

Think back to common family situations. Teenagers often complain to their parents, “You don’t trust me!” But again, the real issue is “trust you to do what?” I do trust you to choose good friends and to tell me the truth about where you are going, but no I don’t trust you to drive three hours late at night in a car with four of your friends on a snowy night.

Generally speaking, trust is earned — either from prior behavior with other individuals (that is why we trust professionals who have gone through training and certification in their profession, but we often also check references of people with whom they have worked) or in their behavior with us. We trust others (in the defined areas of responsibility) based on previously demonstrated responsibility in similar areas.

[I do admit that in many daily interactions we confer trust to others when we have no specific basis to do so, other than assuming most people are trustworthy in daily life transactions. However, this level of trust varies greatly across individuals’ own personal history and life experiences.]

I find that people (both business owners and parents) tend to get “burned” when they give more trust and responsibility to others when the person hasn’t demonstrated a basis for that trust.

A second area where I find business owners and managers tend to get taken advantage of by others in the business world is when they ignore early warning signs of mistrust. Partly due to the self-reinforcing tendency that we don’t want to admit that something may be wrong (and that we made a mistake in hiring this person), and sometimes partly due to people’s propensity to want to believe the best of others - we wind up overlooking early warning signs of a person not being trustworthy. As a result, we continue to entrust responsibilities and resources to the individual and find out later they weren’t trustworthy in how they handled the responsibilities - digging a deeper hole and creating more problems for the business.

So, where do we go with all of this?

First, I would suggest to accurately define the parameters of trust in relationships. Using a framework such as, “I am willing to trust you to…” Sometimes, it may be appropriate to say, “I am willing to trust you with… because you have shown yourself responsible by… ” Additionally, sometimes you may need to add, “…but I don’t feel comfortable yet in giving you the responsibility to …” Finally, it is helpful to clarify what responsibilities need to be demonstrated in order for you to trust the individual with more areas (this is really helpful in dealing with teens - versus the arbitrary “when I feel comfortable”.)

Secondly, I would strongly encourage each of us to pay attention to early warning signs of problem behaviors. This can take many different forms, including:

*the facts just don’t add up

*you are getting reports from clients and customers and other trusted team members, about some problems in a team member’s behavior

*the team member responds to questions and challenges with a “don’t you trust me?” type of response

*the team member is quite adept at making excuses, blaming others or circumstances versus admitting they made a mistake or error in judgement.

How should you respond to early warning signs?

a) talk to the individual about your concerns; often your concerns may be due to misperceptions or miscommunication;

b) obtain verifying information by an independent third party;

c) set up processes and procedures to monitor transactions

d) document the issues and behaviors which are creating concerns for you. Often the weight of evidence over time becomes significant, while no one specific incident is that large.

I think it would be wise for each one of us to consider the following old saying,

“Wise individuals see danger ahead and avoid it, but fools keep going and get into trouble.”

There is an increasing emphasis on the inter-relatedness between the process of making money (whether through active business activities or through investments) and also having a positive impact on one’s community (either at the local, national or global level). The focus, along with developing opportunities, applies to individuals and families, small businesses, corporations, and family foundations.

Let me share with you some recent developments from a variety of social arenas, and also resources available, if you are interested in finding out more.

At the corporate and business level. This past week Indra Nooyi, the CEO of PepsiCo, shared her thoughts about the need for corporations to redefine what true profit is. She suggested that a company’s “real profit” is revenue, less costs of goods sold, less the costs to society. Ms. Nooyi stated, “companies can do well, long term, only if the socieities in which they operate also do well.”

Additionally, others like Dov Seidman [author of How: Why How We Do Anything Means Everything…in Business (and in Life)], propose that companies who behave ethically will also eventually outperform their competitors financially. For an introduction to his thoughts, see the February 8, 2010 article in Forbes entitled “Why Doing Good is Good for Business.”

At the individual and family level. Given the disappointment with the banking industry, their struggles with ethical behavior and seeming lack of interest in anything except pure financial return, individual investors are looking for alternatives. Recently, I was exposed to the concept of community development banks — whose mission is to not only provide a financial return for their investors but also to invest in their communities. They do this at multiple levels — providing small business loans to help businesses grow, being involved in microfinance lending for start-up entrepreneurs, investing in community projects such as Boys & Girls clubs, providing education and training for small business owners, giving loans for education, investing in the local educational systems; the list goes on. An excellent example and leader in this area is Southern Bancorp, who is having a dramatic impact in the Mississippi delta areas in Arkansas and Mississippi. [Note: you don’t have to live in the area to bank there. For example, we are moving our personal money market account from a national financial institution to Southern Bancorp — where we will earn market-rate (or better) interest while Southern will use the money in community development projects.]

From the family foundation and philanthropic perspective. For decades, family foundations and private foundations have emphasized aligning their financial investments with their values. This led to the development of “socially responsible investing” — not investing in companies whose business was not consistent with the family’s or institution’s values (for example, who made products related to military weapons, whose processes seriously damaged the environment, or were related to alcohol, tobacco or gambling).

Further developments have included mission-related and program-related investments — where the foundations proactively invest in companies who are aligned with the foundation’s mission (e.g. companies who are creating technologies applicable for developing countries, or companies developing charter schools). For an excellent introduction, see the publication “Mission Related Investing” published by Rockefeller Philanthropy Advisors.

A third wave has been the focus on social entrepreneurs — helping individuals who are both entrepreneurial (in the business sense) but who are also impacting their communities at the social level — through job creation, education and training, creating products using local renewable resources. I have had the prvilege of working with Charly and Lisa Kleissner and their family over the past nine years, as their family coach. Charly and Lisa have become leaders in the area of social entrepreneurship — and I have gotten to see, hear and learn from them in their work in this area. Go to www.socialimpact.com for great resources and to gain an understanding of social entrepreneurs. [I can’t give a sufficient introduction here — it is too big of a topic.]

Finally, a new area of “doing good” while making money is the arena of “Impact Investing”. Historically, foundations viewed socially-responsible investments in their investment portfolio, as an area where they would be willing to earn less (say 2% versus 5%) on their investments. However, there is a new movement among philanthropic investors who are demonstrating that socially-responsible investments (e.g. in long-term sustainable timber production) that not only have a positive social return but also can meet or exceed the financial returns compared to their investment allocation benchmarks.

Again, Rockefeller Philanthropy Advisors, along with Lisa and Charly Kleissner, Raul Pomares and others, have produced a thorough introduction to the topic, entitled, “Solutions for Impact Investors“. Also, the Kleissner’s foundation website provides a great introduction to the topic. Go to www.klfelicitasfoundation.org and hit the button regarding their investment strategy.

I know I have thrown a lot of information and topics out there in this entry — but they are all inter-related and I wanted to give people starting points for investigating, exploring and learning about the new resources that are becoming available. (It feels sort of like doing the abridged version of all Shakespeare’s works in 30 minutes.)

Hopefully, I will be able to “circle back” and give a more in depth discussion of some of the areas. In the meantime, enjoy exploring!

In my role as a family coach for wealthy families, one of the common issues that arises is the parents’ desire to be “fair” with their children and grandchildren. (I put “fair” in quotation marks because it really is an unusual term that is defined differently by many people and is almost totally based on perception.)

For whatever reason, and I really don’t know exactly where it comes from, fairness is an extremely important issue in our culture that drives many decisions within families. Take, for instance, this past week’s events over Christmas — parents (regardless of their financial status) are quite concerned about giving the equivalent financial value (or perceived value) in gifts to their family members.

There are many challenges related to parents or grandparents trying to be fair with their family members. Let me cite a few:

The “givers” have their own perception of what is (or should be) fair. Most people have a hard time accurately or concisely describing what “fair” is, but they sure have a strong sense of it intuitively. Often it is described in terms of being “equal”, but when pressed about specifics or circumstantial differences, the concept of equal usually fades into the background.

The “receivers” usually have a different view of fairness from the givers (and from other receivers).Most of the family members with whom I work are genuinely grateful for any gift they are (or will be) receiving. The adult children and their spouses do not appear to be greedy, unthankful or have a sense of entitlement. They understand that the “givers” have the right to do whatever they want with their possessions. Nonetheless, when probing deeper, they often express a different viewpoint of what would be “fair” in how the gifts are distributed across the family — often not to their own benefit but out of concern for one of their siblings or in-law’s.

What is “fair” changes over time (pretty easily and often). Let’s take the recent volatility in the financial markets and real estate values. Suppose, in May 2008, some parents gave one of their children $100,000 in a blue chip stock; they gave their second child a house in Atlanta worth $100,000; and they gave their third child $100,000 in cash to use as they wished. Let’s assume each child wanted and agreed to the form of the gift they received (this isn’t always true, you know). So not only were the gifts “fair”, they were exactly equal in monetary value in May 2008 (which is an unusual occurance). But fast forward to May of 2009. The blue chip stock lost 40% of its value, so it is now only worth $60,000. The home in Atlanta lost 50% of its value and can’t really be sold for virtually any price. And the $100,000 in cash is worth $102,000 after they earned 2% on it in a money market account. Are the gifts fair now? Should the parents do some additional giving to make the monetary values equal?

When do you want fairness to exist? When do the givers want things to be fair. Now? Next year? When the business sells? When everyone has completed college? When dad dies and his life insurance proceeds create cash to equalize the gifts given? When both parents die and everything will be “equaled up”? “When” is an important question to answer — for a number of reasons. First, you have the most control over events closest to the present. So “now” seems to be a pretty good option. However, you may not have the liquid assets to make everything fair now, so “now” doesn’t work for many families. Secondly, the further out the “when” is, leaves more variables to chance and the likelihood of fairness not being achieved. Is it “fair” to your second child to wait until the business sells (say in 5 years) to make things fair, and they get divorced and become a single parent needing cash flow two years from now? Or is it “fair” to the eldest child who is running the business (and buying it from you) to wait to realize their inheritance when they sell the business (potentially) in twenty years? I can run a lot of scenarios that create problems.

So what do you do? Give up on the ideal of “fairness”. Maybe, but probably not. I try to help families (usually the senior couple or single parent) clarify what being “fair” means to them, to the best of their ability currently. Secondly, answering the question “when” is critical — and it differs significantly across families. Finally, I encourage family members to think more in terms of values, rather than fairness. Since fairness is a moving target across time and is perceived differently by almost everyone involved — I find making decisions based on what is important to you as a better guideline.

Is education for the next generation important to you? Then figure out a way to fund that. Is affordable housing important? Then figure out a way to help younger family members achieve this goal. Travel? Stay-at-home moms for your grandchildren? A financial safety net? Guaranteed health insurance? Whatever is important to you — pursue that as a gift.

You will eventually have to make some decisions about what you view as being “fair” — assuming you have more than one child. Do you try to equalize your gifts to your children? Or do you try to equalize them at the grandchild level (one of your children has two kids; his sister has three kids; and the youngest has one of his own and three stepchildren)? It’s not easy. But, hey, that is what I am here for — to help you think and talk through the issues, so you can come to a decision you can live with.

Remember, you don’t have to have a lot of money or “stuff” for this to be an issue. Dividing up the household furniture and belongings raises the same issues. Whatever you do, don’t let one of your kids or grandkids (who does have a greed or entitlement issue) “guilt” you into making decisions you don’t want to.

Until then, have a great and safe New Year’s celebration.

Given that I have the opportunity to interact and observe with businesses across the country, it gives me the potential to learn from those whom I serve and interact. In preparing for a presentation to a chamber of commerce luncheon, I decided to share some of the observations I have gathered over the past months. I have seen businesses who are doing relatively well and those who are not (or who have closed their doors). And these are the patterns I have seen.

Businesses who do well in difficult financial times:

Are able and willing to make and implement tough decisions. Some companies who were not able to make tough business decisions quickly are no longer around. Those who hesitated and waited before making cuts have suffered and made the path more difficult for themselves. It is important to note that family-owned businesses often struggle in this area — either because they do not have the processes and decision-making mechanisms in place to make authoritative decisions, or because the “difficult” decision may be to let family members go.

Realize that marketing is a way of life. I am using the term “marketing” to essentially mean: a) letting people know what you do; and b) being easy to find by potential customers. Those companies who were doing well, had a large back-log for their services or products, and who had fallen asleep in their marketing, often had difficulties “gearing up” their marketing plan when tough times hit. However, those companies who had continued to actively market were in place to adjust their plan and keep going.

Combine focus with diversity. Although I firmly believe in Jim Collins’ “hedge hog concept” (knowing what you do well and using that product/service to drive your business, I also believe there can be focus with diversity. Many of the companies who are now doing well in this tough economy had some diversity built into their business plan — either a variety of markets to which they applied their product/service, or they had a secondary line of products that they could “ramp up” in response to a need that arose. A number of companies who have only one primary service or product line are struggling to survive and/or develop a new product or service in times where there is not a lot of available capital to do so.

Understand that the focus of “networking” is not primarily about finding potential customers but looking for opportunities to serve others. Given that I was at a networking event, this was an important topic to address. All too often (almost always, in fact) business representatives go to networking events (luncheons, educational seminars, receptions) with the primary focus in mind to meet potential customers, give them your thirty second “elevator speech”, and press your business card into their hand. And with what do most of us walk away from these events? A blurred memory of who we met and a stack of business cards. Consider the following scenario. How much would you remember the person who actively sought to hear about any needs or challenges you are experiencing and was able either to connect you with a resource that could help or introduce you to someone who may have the service you need? Now that is impactful.

Actively encourage their employees. I have been working on a project of applying the Five Love Languages (a book used in personal relationships) to work-oriented relationships.

Initially, when Dr. Chapman and I started the project, the economy was good and one of our primary applications was in “how to keep valuable team members”. For many companies now, the issue is how to keep your employees from becoming discouraged and burned out — they have more work to do and increased responsibilities with the same (or maybe less) pay and resources.

We have developed the Managing By Appreciation Inventory to help managers and business owners how to communicate encouragement and appreciation to their employees through non-financial means, and how to do so in a way that is significant and meaningful to the employee. Whatever tool or method you use, it is critical to find ways to encourage and show appreciation to your employees in these difficult times. Briefly think of what a discouraged employee looks like in day to day life, and quickly calculate the costs to your organization of having a discouraged team — loss of productivity, poor customer satisfaction, negative attitudes, increased mistakes.

So, if your business is still alive and kicking, take a minute and see if you can take any of these factors and apply them to your organization — and hopefully increase the probability of your survival!

An entry I wrote in April about the challenges owners and managers of businesses face in today’s economic environment was published in today’s business section of the Wichita Eagle.  If you missed it previously, you can read the article on the Wichita Eagle website.