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.

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.

This past weekend I had the privilege of helping facilitate a board meeting for a family foundation. One of the goals of the meeting was to begin to more fully integrate the next generation (currently twentysomethings) into the foundation’s activities and financial giving over the coming years.

Part of the process included looking at philanthropy through the lens of daily life, rather than conceptualizing it as just large financial gifts given to non-profit organizations. Here are a few thoughts from that process.

A reminder that philanthropy comes from the Greek words phileo (practical love) and anthropos (meaning man or mankind). So essentially philanthropy is the act of demonstrating practical love to others.

So, at a very basic foundational level, if we think about philanthropy in daily life, it is really embodied in kindness and treating others as you would like to be treated.

We then can take practical love toward others to the level of our lifestyle decisions and how our daily decisions impact our local and global communities. Here is a list of practical areas of daily life with some brief notes of issues to consider in each area.

*Groceries (packaging, buying in bulk, local producers)
*Transportation (utilizing public, automobile choices, flying)
*Clothing, Personal Items (used, consignment, self-made)
*Gifts (consider not giving objects, self-made, Third world, charitable donations)
*Electronics (recycling computers, cell phones, TV’s / screens, energy efficiency)
*Housing (green, energy efficiency, remodeling)
*Banking (utilizing community-based, socially-involved
*Services (using global professionals from accounting, web design)
*Physical health (healthy lifestyle, exercise, equipment)
*Medical treatment (natural, preventative, high tech, insurance)
*Recycling (paper, plastic, glass, metal, in general)
*Recreation / Entertainment (low cost, low impact, big business)
*Financial investments (socially responsible, mission and program related investments)

We then also discussed ways to incorporate charitable giving in one’s daily life context (versus just thinking about annual financial gifts). These included:

*Looking for needs in your local, daily community.
*Observing organizations that intersect with your life.
*Volunteering your time, service and expertise.
*Giving financially from your monthly income.
*Attending charitable events and fundraisers of organizations you want to support.

No major earthshaking revelations here, but possibly some helpful reminders in how we can think about others through our daily life decisions.

Often, when talking to senior generation members within a family, we discuss how to transfer one’s values to the next generations.  Sometimes we are talking with parents in their 30’s, 40’s and early 50’s who are still raising their children and teenagers at home.  Other times we are talking to 50-60 year olds with young adult children out of the home.  And many times we are talking to older adults, from mid-60’s to 80’s who have the opportunity to impact their grandchildren’s lives.

Many times the term “mentoring” is used — the process of teaching and modeling various life principles in relationship to a younger family member.  Typically, I find that, although grandparents and parents of adult children want to mentor the next generations, most of the time that don’t really know what that looks like practically.  [In fact, part of the coaching I do with families is to help the senior generation explore this issue, develop a specific plan for mentoring their grandchildren, and help bring resources and structure to the process.]

As a parent of four older “children” (17 to 25 years old), I have had plenty of opportunities to make mistakes in the parenting process (my children would be glad to give some examples!)  And, as I look back over my life, I can see ways that I tried to teach or train various skills and character qualities that didn’t work so well (and I see other parents repeating my mistakes).

One basic mistake is to primarily drag them along with what I am doing and try to teach during this experience.  I say “primarily” because I do think there are times when children / grandchildren can (and should) “tag along”, and they can learn during this process.  This can include running errands, going shopping, working in the yard, doing projects around the house, helping someone else out, going with their parents to meetings or events of interest to the parent.  However, if this is the primary modality of teaching, I think the young person will lose interest, resent coming along, and eventually “shut down” relationally.

Generally speaking, I think it is far better to find ways to “enter into” your child’s or grandchild’s life — come along side and find a way to participate in what they enjoy and are interested in.

I see this even with really young children - two to five year olds.  Many times parents [read: dad’s] and grandparents want to “play with” the young child — but the adult wants to structure the activity in a way they think is best, or try to get the child to do something the adult thinks is a “good” educational activity (or something that will be “good for them”) rather than just getting on the floor and playing what the child wants to in the way the child wants to.  And then everyone gets frustrated when the child won’t do it the way the adult wants, or loses interest.

This occurs in school-aged children, and clearly with teens.  One way many dads try to “enter in” is by coaching the student’s sports team.  And that can be a really great way to experience life together — but it can also be a disaster if the parent becomes more focused on success / winning / achievement than on being together in the experience.

One approach we have had to parenting is to try to do fun things with our kids and invite their friends to come along — that way we get to know their friends, we get to observe how our kids interact and treat their friends, and we can have more input on what’s happening.  We had the opportunity to take kids waterskiing, have them to our place for bonfires or playing “Capture the Flag”.  And I happen to be known in our school circles as the dad who takes his teens out to “T.P.” or “fork” their friends (or teacher’s) homes.

The past few weeks I had the unique opportunity to participate in a high school musical production with my daughter, Lizz, who had a lead role.  Being in musicals is one of her favorite activities (and I had done some in high school and colllege), and when the director mentioned they needed an adult male for a cameo part, I thought it could be a neat way to “enter into” that part of her life for a while.  And it was.  I got to know a number of her friends better.  She and I had a shared life experience — including the anxieties of learning our lines, the joys and laughter during rehearsals, the spontaneous things that happen — and that you can only experience by “being there”, and the satisfaction of a performance well done.
Doing activities with your children and grandchildren is extremely rewarding — but is also costly — it takes time and you have to give up other activities or priorities in your life (remember, you can’t do everything).  But I think most parents and grandparents who make the investment, believe it was well worth it — we’ll have to wait to ask the kids and grandkids to see how it impacted them.

So, next time you are thinking about character development and training for the next generations in your family, I would encourage you to ask yourself:

How can I enter into what they are doing or interested in and have an impact by coming along side them?

This week I have had the privilege of participating in a summit meeting of advisors who work with some of the most successful individuals and families in our country (and even the world).  Approximately twenty-five professionals from a variety of disciplines gathered to learn from one another and discuss how they can best work together to serve their clients.  Clients of the advisors present include royalty of countries around the world, former Presidents of the United States, top entertainers and sports figures in the U.S., leaders and innovators in the field of technology, “household names” of financially successful families, and generally very successful business families from various industries.

It was a fascinating two days of listening to presentations from the professional participants — who shared the latest advances in their field of service, and then to hear the team members discuss together the implications of the advances and how they can be utilized to help the families we serve.  The areas of expertise included:

*investment advisory professionals (one of the leading theorists in the field whose firm has outperformed the S&P 500 every year for the past 10 years)

*open architecture financial reporting (being able to report all of a family’s assets in one report — from multiple investment firms to including non-traditional asset classes)

*risk management  (an independent consultant who advises clients in assessing the various types of risks associated with their holdings and businesses and helps clients find the best provider for each type of risk)

*security of family members (a former intelligence agent whose firm provided security at the last World Cup games and who has successfully returned every kidnap victim safely)

*life insurance professionals (the ex-chief underwriter of one of the top five life insurance companies in the world)

*estate and tax planning attorneys (a team of attorneys who together train estate planning attorneys across the country and some of whom are involved in framing state laws in the area)

*business valuation and business succession experts (individuals who have been involved in helping transfer billions of dollars of business value from one generation to the next)

and more.

What was fascinating to me was to observe the following characteristics of these individuals:

• Humble.  Although each person was a leader in the own field, to a person they were not proud, arrogant nor self-promoting.
• A learner.  Each person was there to learn from others and people repeatedly commented on the privilege to learn from one another.
• Service-orientation.  These professionals saw their role as to serve their clients to the best of their ability.  Although everyone is also professionally successful, they were not focused on image or making a lot of money — they knew that if they served their clients well they would be fairly compensated.
• Collegial.  Although there were professionals from the same fields (e.g. accounting, tax law) as well as a variety of areas, there was no sense of “turf wars” or trying to take over areas. Rather, these professionals see and know the value of working together with others who are also competent.
• Integrity.  Repeatedly the issue came up that “we are not willing to do [x, y, or z] just to make money. We will only do what is best for our client.”
• Enjoyable to be around.  We laughed a lot.  The group was positive, caring for one another, and respectful.  I did not hear one cutting or sarcastic remark during the whole event.  And people genuinely expressed their appreciation to one another in numerous ways.

The group reminded me of an old proverb I have tried to pursue in my life:

“Do you see people skilled in their work?  They will work for kings, not for ordinary people.”

The lesson for all of us is this — do whatever you do well, learn and keep learning from others, and take the initiative to do what you can to be around those who are the best in their field.

A practical example: one of the participants who was younger (early 40s), but already extremely successful in his own field [he serves royal families in the Middle East], sought out one of the older participants and asked to be mentored by him stating “I’ll do whatever you need — carry your bags, sit in the corner and be quiet — I just want to be there, observe and learn from you.”

Share that perspective with your kids and junior managers.

There is plenty being written about the current financial crisis and, like the political elections this past fall, it is easy to become overloaded with information.  Obviously, there are a lot of opinions about what has happened, who is at fault, and what should be done.  Some of the comments are driven by philosophical beliefs (for example, about macroeconomics), some by political beliefs, and less seemingly by looking at the data in longer term historical perspective.

One interesting voice in the milieu is Peter Schiff, who has a video on YouTube with over 1 million hits, where he predicted the burst of the mortgage bubble and the ensuing market crash back in 2006.  In 2007, Schiff published a book entitled Crash Proof: How to Profit From the Coming Economic Collapse. And in a recent article in Fortune magazine, Schiff discusses his beliefs how best to deal with the crisis:  “shrink the government radically, cancel all bailouts immediately, take plenty of tough medicine, and let the free market do its job”.

Now I obviously am not a macroeconomist, nor a financial analyst, but it seems other business leaders are calling for similar (although maybe not as stern) actions.  Jim Collins, author of Good to Great,  also has an interesting article where he attempts to put the current economic situation in historical perspective.   Consistent with his message in Good to Great that business leaders must force their management to deal with the harsh realities they face, and not act like they aren’t there, Collins reiterates the point that the companies who survived the Great Depression and continue today remained true to their core values. Often these core values included commitment to their people, providing quality products even if it was costly, and maintaining a long-term perspective.

Often as a psychologist I assist people in dealing with their feelings.  And, in contrast to the old days of just helping people “get in touch with their feelings”, we now know that emotional reactions are intimately linked to an individual’s expectations — what “should” happen (or what “shouldn’t”).  So a person’s emotional reaction is an interaction between their expectation and what they actually experience — if the expectation is met, we feel pleased; if it isn’t, we can become angry, disappointed, hurt or discouraged.

I believe we are entering into an important time in recent history where individuals’ beliefs about life (about the way things should be) are going to be challenged with the reality we each experience.  And I personally believe that a lot of the psychobabble about “perception is reality” and “reality is whatever you want it to be” will crumble in the face of the difficult times many will encounter.

There is an objective reality (and, yes, our experience of it is influenced by our perceptions and beliefs) — and the choices that we each make will have increasingly important consequences for our lives.   This is true both at an individual level, as well as corporately for businesses, and also for our country.  There are some foundational economic principles — and the various macroeconomic belief systems will be proven either true or false by the results that occur.

But at a more foundational level, the following principles seem to be true over the centuries and across cultures:

• Work is the process of providing goods or services that others want or need and are willing to pay for.  Trying to make money fast on some scheme that is not grounded in providing goods or services ultimately will not work over the long-term.
• Spending less than what you earn, saving for purchases ahead of time, and “saving for a rainy day” (i.e. when you are not able to work) seems to be a wise strategy.  True, you won’t be able to maximize your opportunity for gain by leveraging your resources, but you also minimize your risk if everything does not turn out as planned.
• Often circumstances bring change that was not expected, and to survive (and thrive) we must adapt to the new circumstances, adjust our expectations, and not focus on the “good ‘ol days”.  Reminiscing about the past, and grumbling about how things aren’t like they used to be, doesn’t do much to help deal with the present.  And you can either accept the new aspects of the current reality, and learn to deal with them, or you can try to continue to live according to the rules of the past and probably fail.

I am sure there are other foundational rules that will become evident over time.  I would just encourage each of us to begin to re-evaluate our expectations, our beliefs about the way things “should” be, see if they match reality as we know it today, and determine if adjustments in our beliefs, habits and expectations need to be made.

I have been collecting some articles on psychology and wealth from a variety of journals I receive, and recently there was a group of articles published in the Monitor of Psychology which is published by the American Psychological Association.  I thought I would briefly share some of the information reported.
One article in the January 2009 Monitor entitled “Mind over money” was an interview with Dr. Paul Zak who is the founder of the Center for Neuroeconomics Studies.  He is the author of a recent book, Moral Markets: The Critical Role of Values in the Economy (2008).  In discussing the neurology and brain functioning of certain behaviors, he states: “You need to know that your brain is prone to overreaction. . . When there’s a lot of uncertainty, like there is in the stock market, it turns out that making decisions involving money generates strong activation in the areas of the brain associated with fear. .. Studies have shown that brain areas that process risk are the same ones that process pain, so the brain’s reaction to this fearful, uncertain environment is ‘Get away!’”

Dr. Zak continues, “The same dopamine [a brain chemical] system … also activates when we get any kind of new news.  One thing I suggest .. is not to watch TV, where you’re going to get all this rumor and innuendo. Wait until the next morning and read the papers.”

“Just as we saw an overreaction when the market was trending strongly upward, I think we’re also seeing an overreaction as the bubble is bursting.  The brain has put you into survival mode.”

Another article, entitled “What’s Behind American Con$umeri$m?”, (from the July / August 2008 Monitor on Psychology) attempts to answer the question is:  ‘Why do Americans consistently spend more than they earn?’  For example, since 1982 it is reported Americans’ personal savings rate has dropped from 11 percent to below zero.

Some different ideas postulated to answer the question of reduced spending include:

• When we are under stress (as most Americans are), we are more at risk for spending.
• The availability of credit cards to young adults conditions them to the process of incurring debt at a young age.
• Credit cards also facilitate impulse buying (more than buying with cash or checks.)
• We are bombarded with constant messages to spend through TV, the Internet, catalogs, print media and bathroom stalls, airplane tray tables, even egg shells.

Finally, “The Price of Affluence” discusses recent research which shows that “privileged teens may be more self-centered — and depressed — than ever before.”  Although this is really not ‘new’ news, the theme continues.  One of the authors cited, Dan Kindlon from Harvard, has written an excellent book, Too Much of a Good Thing: Raising Children in an Indulgent Age.

Another psychologist, Madeline Levine, believes that much of the mental distress is created by a fear of failure (both by the teens and by their parents).  In fact, one study indicates that parents who overemphasized accomplishments were more likely to have teens who were depressed, anxious, or used drugs.  Additionally, it is suggested that parents not shield their children from early life disappointments — let them try and fail, and learn from it.

I have written previous entries that may provide some additional information (a few worth looking at are: The Price of Privilege; The Dark Side of Wealth; Contentment - A Counter Cultural Concept ).

Have a good week!

A much talked about issue in the area of wealth transfer and family business succession is the desire to “transfer our values to the next generations”.  This is a valiant goal and one which should be true for every family regardless of wealth status — training your children and grandchildren in ways that they will instill values that are important to you.  Really, the heart of the matter is not just to teach them values which are important to you, but to teach them principles and ways of thinking that will help them be successful in life.

“Values”, after all, are ultimately relative — and I would argue that some values are more ‘valuable’ in life than others.  For example, the values of “appearing successful” or “having others think well of you” can actually lead to choices and patterns of behavior that can become self-destructive.  Whereas the values of “treating others with dignity” and “conducting all business matters with utmost integrity” are principles for behavior that I believe are more foundational and will lead to positive results in one’s life.

Many families are enamored with the idea of creating a list of their family’s core values and / or developing a family mission statement (most families, I believe, are interested in doing this because they’ve heard it is something they should do if they are going to be a successful family).  And I think these can be helpful action steps within the larger process of actively talking about the family’s core values. [In fact, one of the services I provide professional is to lead families through these processes.]

But a key question I ask families is: “How are values transferred to the next generations?”  The most common answer is — by observation.  And this is true.  Children and grandchildren observe older family members and take cues on how they should behave from them.  But, as I often tell parents of young children — children are excellent observers but they often are poor interpreters.  They watch us and see what we are doing, but they often misinterpret the actions and even more frequently misinterpret the purpose or reason behind the action.  As a result, learning by observation by itself is a poor teacher.

Modeling behavior (including choices made, and the values which they represent), I believe, must also be accompanied by verbal explanation — both of what we are doing and also why we are choosing this action.

We have an old family story that one of my grandmothers always cut off the end of a pot roast before putting it in the roasting pan and baking it in the oven.  When asked by her daughter why she did this, she replied: “Because you are supposed to — that is how my mother cooked her pot roast.”  She later found out that her mother cut off the end because her roasting pan was small and the typical roast would not fit in the pan!

Similarly, I believe it is critical for parents and grandparents (and aunts and uncles) to verbal communicate what is important to them and why these beliefs or principles undergird how they live life.  (On the lighter side, the holidays provide a rich opportunity for family members to ask about various family traditions — where they came from and why do we do them?)

An excellent way to share important principles and values is through storytelling.  Although listing principles in bullet form works well in articles and books, that is not typically how we talk conversationally (although some family members who are instructors may say: “Let me tell you three reasons why … First, …  Second, … and finally, ..”  But most of us don’t have to endure such mini-lectures.)

Stories are excellent communicators of values because they have several engaging characteristics:

• They are personal.
• They can be quite engaging and entertaining.
• They use real life examples to show the benefits of good choices and the consequences of poor choices.
• They (when told by a good storyteller) involve one’s thoughts, emotions, and sensations.
• They are easily remembered.

This past week our four adult children have been home for the Christmas holiday.  We have attempted to tell various stories about earlier events in our lives — to help them learn (both positively and by our mistakes) from our life experiences.  Additionally, I spent some time with my mother, who grew up during the Great Depression, and asked her to tell me lessons she learned during that time.  In addition to a few principles, she also related a variety of family stories that helped communicate some of the ways our family survived during the Depression (e.g. family members helped one another out).

Most people, when I mention the idea that they should use time together with their family to tell some stories, reply: “Oh, I’m not a good storyteller” or “I wouldn’t know what to talk about.”  So let me give you some ideas for story “starters”.  Talk about:

• Memories you have about your grandparents — things you used to do with them.
•   Character qualities or talents you remember about your parents or grandparents.
•   Something special you remember getting or doing on your birthday when you were growing up.
•   Vacations you went on as a child and any memorable events that occurred on them.
•   What Christmas was like when you were little — what were the traditions at your grandparents’ homes?
•   How you met your spouse; about your dating / courtship / engagement; the early years of your marriage — where did you live, what kind of work did you do?
•   Some jobs you had when you were younger — including positive lessons and negative experiences.
  

Another way of approaching the storytelling is to think of values and principles which are core to you, and which you believe would be valuable for your children and grandchildren by which to live their lives (honesty, hard work, frugality, kindness, humility).  Then think of a family member who embodied that value and tell your family a story about that person and how they demonstrated that characteristic.

As we complete this year and look forward to the New Year, and as you have time together with family, I’d like to encourage you to actively think how you can teach them something of value — tell them a story that will help them learn valuable ways of living.

This is the time of year when families gather together – college students are on break, young adults return home to visit, and the extended family celebrates Christmas and New Year’s together.*

So it is also the time when parents who have been successful in business turn their focus to their family. This is both a good thing and it creates difficulties. It is generally good for parents to engage relationally with their family; unfortunately, for some this is an infrequent occurrence due to their focus on work (or hobbies). But when we try to “re-enter” into the family relationally, the style and manner in which we do so can create tension, discomfort, and result in conflict.

Having grown up in a family owned business with a father who was an extremely hard worker, but who also cared about his family, we would experience this pattern. Through the year dad would work long hours, and my mom was the primary conductor of family matters. (This is not to say that he wasn’t involved at all, but until later in his business life, she had the primary responsibility of interacting with the kids regarding our daily affairs.) But around the Christmas holidays, dad would refocus and engage at a higher level in family matters. And, right or wrong, this pattern has largely continued in my own nuclear family.

So, both from observing and experiencing this pattern as a child, and now as a parent, I have seen some ways that “parent re-entry” can go better, or not so well. Let me share some of these observations.

Leading a family is different than leading a business. In business, there is a formal hierarchy with established patterns of communication and decision-making. In family matters, the structure, communication patterns and decision-making procedures are more fluid – largely influenced by which family members are involved and the specific areas of discussion or decision – and obviously, tend to be more relational. As a result, “top down” communication and decision-making that many business owners and executives try to transfer to the family doesn’t go over well (in some families, this is a extreme understatement.) The implication? Don’t try to run family meetings during the holidays like you run business meetings.

Influence is largely a factor of the quality of the relationship in families. Many parents want to utilize the time with their children and grandchildren to communicate important information – their goals and desires for the family, what is important to them, principles they want their children to live by. And this is good. However, the method by which this is done can “backfire”. If the parent does not currently have a positive relationship with the child (or whoever the family member is), the message will, at best, be ignored, and more probably may create a response of anger, resentment or disdain. I would suggest the following:

a) Spend individual time with family members. Talk with them, listen to them, ask them about their lives: what they are excited about, what they are learning, what are some challenges they are facing.

b) Share personal stories about your life. Rather than give a lecture (along with a handout) with your “five core principles for life”, share stories about experiences you have had and possibly the lessons you learned (sometimes the principles are better left unsaid). Think about what makes a good story: build the context, focus on the people involved, share sensory experiences (what it looked, sounded, smelled like), and share your thoughts and feelings throughout the experience.

c) Be aware that you may first need to rebuild relationships with others before they are going to be willing to receive input from you. If you haven’t ever read it, read The Five Love Languages by my friend, Dr. Gary Chapman. Then discuss it with the family member and see in what way love is best communicated to them. Then do it!

When planning activities for the family, give options and choices. Let the family give their input on what they would like to do and how they would like to spend the time together. Although your ideas may be great (and I am sure they are, just like mine are), they may not be what the others in your family want to do. If you want to have positive “family time”, then it makes sense that the family should be able to choose what would be fun for them.

I hope these suggestions will help your time together with your family over the holidays to be fun, positive and lead to significant interactions with those whom you love.

Merry Christmas!

Paul

*Note: This is a reprint of this posting from December 2007.  However, I received so many personal comments and emails from people who appreciated it and forwarded it to others, I decided to post it again.