Responsible Stewardship is Key to a Successful Legacy

For families with businesses, there are issues that surface as the family grows and ensuing generations get involved or migrate away from the family business.

Conversations about the business that may have started in the living room at home, moved to the kitchen, then a conference room then to a board room, often become a struggle as families grow and as individual agendas develop. Working well together, across generations, can become tense when visions are not aligned, and responsible stewardship is not defined. Competing and contrasting priorities due to generational differences, ownership positions, and desires for the business as contrasted with desires for the family harmony, surface.

It is not natural to manage such complexity. Like a garden who needs proper care and maintenance to stay healthy, relevant, and vibrant, a family is best served by developing a disciplined and purposed component to their family and family business dealings and becoming responsible stewards of what they are growing and eventually, passing down.

Determining an initial purpose to both the family and family business initially separate the two entities so they can clearly define themselves independently. Agreeing on and articulating the value, vision and mission of each entity across generations is key to being responsible stewards. Adapting and becoming comfortable with change is the responsibility of each generation.

Questions to consider asking at home:
• Who do we want our family to be, as a family?
• What do we want our family to represent in the community?
• What is important to us as a family: what do we believe in? What do we stand for?
Creating purpose, mission, vision and family teams to develop the family’s success goes a long way to sustaining intergenerational trust and sustainability.

Questions to consider asking about the business:
• What is the purpose and mission of the business?
• Is the business meant to develop as a business or build family wealth?
• What do we need to do to support our working together?
• How do we communicate business information so it does not take over or interfere with the family environment?
Knowing the purpose of the business, communicating that to the family, developing trust in leadership development are all critical to successfully passing a business legacy and leadership from one generation to the next.

Leave me a comment on your thoughts or experiences on this important topic. I would be delighted to read your comments.

Partner with your Strengths. They Are Ready to Serve You

Without our strengths, we would not be able to dispel threats, dangers and alarms. We would not be able to demonstrate skill, or show off, or be able to intercede when necessary.  Strengths are like breathing. We need to use them and often do, without thinking. The problem is like breathing, if we don’t know how to use them in various conditions, they may not be able to serve us when we need them most.

If you were in a smoke-filled house, wouldn’t it be important to know how to hold your breath as you got past the smoke; the smoke that kills more people than fire?  Your strengths are also how you show yourself to the world around you. When you want to impress, when you want to show off, when you want to make a statement or add value to a situation, you call on your strengths to “introduce” you. Your strengths are how people see you. They are a tangible representation of who you are.  We use them to perform and most people judge us by our performances.

Researchers in positive psychology have discovered that when we identify and regularly use our signature character strengths, life becomes more satisfying and meaningful.

Strengths are what I call your “Outer Cloak.” They are what you “wear” when you are out in the world expressing yourself, when you want to make an impression, when you need to accomplish a task or serious endeavor. You use your strengths. For example, you might express your strength in generosity when you are out with friends, your ability to organize in accomplishing a task, or your ability to persevere when undertaking serious endeavor.

Most of the time, however, you are unaware of the strengths you are applying. Most of the time you are unaware of how others see these strengths in you.

How do your top three strengths add meaning to your life? Let me know as I would like to hear what you say.

The Importance of Living a Meaningful Life Through Your Values

Values provide us a compass by which we live our lives. Although values are always present, we rarely give them much thought. Much like a compass we use on an unfamiliar hike, values provide us the platform from which we direct our lives. We judge based on the consistency of values utilized by someone.

 

The Barrett Values Center, in 2010, found, in researching more than two thousand private and public institutions in more than sixty countries, that: “Values-driven organizations are the most successful organizations on the planet. They found that values drive the culture as well as contribute to the employees’ fulfillment. In the book Built to Last: Successful Habits of Visionary Companies by Jim Collins and Jerry Porras, the noted the same outcome in companies they observed over several decades.

 

Martin Seligman, a leader in the positive psychology movement, found, through his questionnaire, that signature strengths and values fundamentally contribute to a meaningful life.

 

I remember, many years ago, thinking that emotions were fleeting and mercurial. They seemed to be missing a key ingredient to living fully.  When I was first introduced to the concept of values I thought they were a wonderful state to aspire to.  Years later, when I identified my core values, I felt a strong resonance and connection to my life. I realized that I could live from my values and when I did, life was clearer and more satisfying, with richer meaning and depth. I realized that they were my compass, the one I had been missing and to which my emotions could not relate.

 

What are your values? How cognizant are you of them on a daily basis?

Change the Narrative of Money Conversations for Better Outcomes- Part 2 of 2

It is important for couples who are arguing over money to take a moment to change the narrative. Instead of rehashing the perceived problem, engage in a different conversation about money. Start your next conversation with a question.

 

The type of question you ask is critical. For starters, ask open ended questions as they elicit a more expressive response. Listen to the responses you receive, not merely for information but for feelings and intentions behind the words that the responder provides. Seek to understand them so you can create bridges to a conversation that brings you both to a satisfying outcome. Ask questions like:

  • “How did you observe about money when you grew up?”
  • “What did your Mother teach you about money overtly and covertly?”
  • “What did your Dad teach you about money overtly and covertly?”
  • “What did you like to do with your money as a child and how did that make you feel?”
  • What is an example of a challenge you have had with money and how did you successfully face that challenge?”
  • “What is something you are proud to have done that increased your savings?”
  • “What would you like to change with your current money management?
  • “What are three things that are important to you about money?”

 

There are many more questions that can be asked but I wanted to get you started. You may think of ones on your own as well. The key point is to remember to make your questions open ended and inquisitive rather than confrontational. A question like: “Why don’t you save money?” is more confrontational than “What is important about saving money to you?” which is more inquisitive and invites understanding. People want to be understood and it is important that questions be framed to do that.

 

Changing the framework of money conversation is beneficial for two big reasons:

  • It gives context to someone’s current views and behaviors around money.
  • It can transform the existing anxieties about money to understanding where the other person’s views on money derived.

 

Have your conversations be ones built on respect and understanding as you develop strategies to your productive conversations about money.

 

One final thought: share your responses to these questions as well…after the person you are engaged in the conversation with is done with their response to the question you asked. Trust is built when people feel listened to and understood. Here is an opportunity to listen, share, seek and offer a bridge to understanding.

 

Would you like more guidance as move your money conversations from mess to success? I would love to help you! Send me an email at bhaj@focusasndsustain.com and let me know an issue you are facing with your money. Let’s get you on track to having money conversations that work for you.

Change the Narrative to Connect in Money Conversations Part 1

Money conversations are not always easy. Surveys by the Certified Divorce Financial Analysts show that money is one of the top causes of divorce while Think Health Magazine finds it to be one of the top two causes of divorce.

 

Dr. Brad Klontz a financial psychologist and associate professor at Kansas State University has found that money anxieties are fostered because people are not generally used to talking about money in a substantive manner. Too often it can “seem like a mind field that can easily go wrong, Brad says.

 

Couples can find that there disparate upbringing, experiences and expectations around their money spill into their expectations and judgments of their partner’s habits and behaviors. Of course, their partner had their own set of money experiences growing up that they bring into the relationship. Because “much of their beliefs around money are held in their unconscious,” Brad continues, “they really don’t come out to play until you are in a relationship.” These money stories and scripts can play havoc on primary relationships when the current money habits and behaviors play out.

 

Allianz’s LoveFamilyMoney Study, conducted in 2014 with over four thousand adults, found that financial issues causing the most stress in spouses were: planning for future needs at 76%, covering current financial expenses at 62%, and getting out of debt at 56%. Allianz’s study further revealed that 28% felt they spent too much on unnecessary things, 29% said their financial baggage was difficult to overcome and 23% were not saving enough money.

 

Resentments can build when the right conversations are not held. It is important for couples who are arguing over money to take a moment to change the narrative. Instead of rehashing the perceived problem expressed by “the other person,” engage in a different conversation about money. Asking the right questions, which we will delve into in the next blog, make a big difference to feeling like you have a strong financial partnership.

 

How are money conversations in your home? Let me know. If they are precarious, our next blog will introduce conversation tips to transform your home money anxieties to understanding and resolutions.

Do Not Forget the Past; It Provides Mighty Support

When we forget those who have come before, like our great- grandparents, we forget our history. When we forget our history, we must begin again leaving new footprints that are themselves, swept away and forgotten as our great grandchildren look back at photos of us and wonder who we were.

 

Contrast this with those families who have captured, and meaningfully nurture the values and enduring traits of those who have come before them as a pillar to support their own lives today and tomorrow.

 

If you do not care how your family will thrive or if it will drift into a fog of insignificance, your family’s history will play out as it has for centuries for most families. Great grandparents have no meaning, they have been forgotten. New generations start afresh as if nothing came before them.

 

But if carrying on the spark of “what matters most” to your family, as a group of like-minded connected individuals, then your family story is an important element to your family’s success. And you must create that story. It will not create itself.

 

Researchers at Emory University found that “…family stories provide a sense of identity through time, and help children understand who they are in the world.”  When adolescents can see the values and traits they share with past family members, they form a stronger sense of well-being and a stronger sense of identity.  This Emory University study also showed that ​there is real benefit in sharing the stories about where the family came from, both geographically and through their values. Family stories keep families connected through generations by its narrative.

 

Your story, the one that will live on, will include how you met challenges, what successes have meant to you, what values you deem to be important and why and how they have guided you. Your story will describe how you came to value what you do value so those who come after you can understand themselves better by hearing from you. When they understand themselves better, they have more confidence and feel more secure in a world where those without this foundation, struggle to be seen and known.

 

Do you have a family story in your family, one that benefits its members, is shared because it came from the “author’s” experience?  Let me know. I would love to hear your thoughts on this important recommendation.

 

 

 

 

 

 

Preparation is a Great Inheritance Tool

I have been part of conversation focused on what the best thing to inherit is. Some think it is cash. Some think it is real estate. Some think it is a portfolio of assets to be reinvested. I suggest it is being prepared, being prepared to become stewards of an incoming inheritance.

 

Studies show that for 90% of families where wealth makes it to the 3rd generation, it is gone by the end of this generation. This is not due to a fault of this generation. They are merely responding to a lack of preparation and instead doing what is naturally the course, spend, squander or squabble over the inheritance.

 

Each generation has a unique view and interpretation of its partnership with money and the family. The first generation carries the vision, the passion and focus to build a new company. This generation tends to sacrifice their personal life for the business. They must do so in order to build a successful enterprise.

 

The second generation has a different perspective. They have grown up with explicit or implicit expectations placed upon them to build on the family fortune that often conflict with their own personal objectives. Understandably this can create great friction. Couple this with squabbling that happens between siblings over the purpose of the wealth and there lays a sure recipe for even bigger problems. Studies confirm that 70 % of families lose their wealth by the end of the second generation.

 

For those families, whose wealth makes it to the grandchildren, there is a new perspective. The third generation is farther removed from the creation of the wealth. They are accustomed to being wealthy. From their point of view, having wealth is a birthright. They have never seen or been exposed to the struggle or the reason of making money. They are free to dream and create. They have never had nor needed the tools to build a productive life. They are only familiar with spending money.

In three generations, a family’s past and all its treasures will be lost and forgotten. Memories will fade as new generations spend their precious time scrambling to build a-new.

 

But when a family prepares its present and future for its inheritance, it can grow its bounty. A family who conscientiously grows and develops its assets, is called a legacy family. This is a family where the money as well as the family culture develops and is transferred from one generation to the next with purpose and intention. This type of family uses appropriate systems, tools and activities to stay connected through generations maintaining shared purpose, understanding, and trust. This family becomes a prepared family transferring its wealth with confidence it will grow in the family for generations.

 

Let me know your experiences on preparing inheritances for long term family connection. I would love to hear from you.

It’s Time to Alter the Traditional Financial Security Model

People are living longer lives. More years are being spent post work. And the current model of financial security funded by 401ks and social security is cracking.  Three out of five boomers, according to a recent report from Transamerica Center for Retirement Studies, are forced to retire due to “layoffs, organizational changes, health concerns and family responsibilities.” Only one in six can retire early, with a secure financial net to carry them through their golden years.  The 2008 “Great Recession” hit the boomers hard as many found their retirement savings severely reduced, were laid off, or could not find increasing salaries above inflation adjustments to fund their lifestyles.

 

Boomers are not alone.  The Generation Xers, born between the mid-1960s and the early 1980s, are concerned about their financial security. According to the Transamerica 17th annual Retirement Survey, only 12% of Xers are confident they will be able to retire comfortably, 30% have taken a loan or an early withdrawal from their retirement accounts an 86% are concerned that social security will not be there for them when they retire. Their median retirement savings is: $69,000.

 

It is time for a change to the financial model we have in place.

 

I think it is odd that people can work and then find themselves without enough money in their sunset years, after they provided great benefit to companies they worked for. I find it egregious that companies skating on the thin line of ethical standards, can jeopardize the financial security of their employees, while the founders or CEOs raid the company to line their own pockets. I think it is not right that so many retirees do not have a secure financial base at a time of life when they are more prone to disease, increasing costs, and shrinking opportunities. Dementia and Cancer are potentially major financial requirements that can reduce a couple’s assets to almost nothing. I think it is terrible that very capable workers are unable to find jobs due to efficiencies of businesses and now find themselves falling further and further behind financially. These stresses do not help people live productive lives.  

 

It is time for a change.

 

Some countries are looking at alternatives. Canada and Finland and Switzerland, for instance, are looking at a base universal income. Switzerland is talking about a guaranteed income of 30,000 Swiss francs for its citizens. Here in the U.S., Alaska has been paying its residents a dividend since the 1980s. This dividend is based on the oil revenue it produces.

 

What are you experiencing in your community as it examines its own economic security? Let me know. I would love to hear what you experience.

We Are Not the Only Ones Who Feel Injustice

The Capuchin Monkey, a small and baby faced primate has some curious behaviors and habits. No, Michael Jackson’s Bubbles was not a Capuchin Monkey, but Justin Bieber’s Mally is.

It is very intelligent with skills ranging from hustling as a street performer to providing assistance to quadriplegics. It is trained to serve much like an assistance dog is trained to do. It can perform everyday tasks like opening bottles and microwaving food. But that is not why I wanted to introduce you to the Capuchin Monkey. REALLY!!!

This monkey, which likes to live in big colonies and wander wide areas, was chosen for a study: Determine how it responded to rewards. This particular study was conducted about ten years ago, at Emory University, by renown primatologist and professor Frans de Waal. He called this research, which involved studying the behaviors of two Capuchin Monkeys under a specific setting, The “Fairness Study.”  

He assigned the same tasks to these two monkeys. Whoever was finished first was awarded a cucumber. The winning monkey took its prize willingly but not with any extra glee. And that made sense because the Capuchin Monkey considers the cucumber to be an acceptable reward but not as rewarding as receiving a grape.  

The dynamics between the two monkeys was copacetic as long as the winning monkey received the cucumber and the other monkey received nothing. But the dynamics between the two monkeys changed when Dr. de Waal gave grapes to the monkey who came in second at the same task. When the” winning monkey” saw the other one receiving grapes for doing the EXACT same task but slower, the “winner“ had a fit. It rattled its cage, it pounded the table in protest, it was not going to let such an “unfairness” go unnoticed.

The monkeys clearly understood the distinction between the two prizes, and the “winning monkey” thought it had been given a lesser reward for finishing its tasks first.

How do you deal when you are provoked by injustice? Do you rant and rattle like the “winner monkey?”  Do you confront the provider of the reward for their “inequity?” Do you not care as all rewards are good rewards? Do you ask to see the “rules” before you play “the game?” Injustice is ever present. Do you deal with it on an emotional level or on a principled level?

And we thought we were the only ones who felt injustice. I thought you would want to know what I found.

Buried Emotions around Money were Revealed When…

Because I often host money workshops, I do not have the experience that my workshop attendees (mostly intergenerational members of families) have. It was a delight to be able to participate in a workshop hosted by a therapist.

 

In this money workshop, we all pretended to be a family. Although none of us were related, it did not take long for emotional dynamics to come into play between us.  

 

The first direction was to take the bills out of our wallets and give these bills to the host. Immediately questions of trust were unearthed. Would the money be returned? Should I hold back any bills? Who cares, it’s just money, right? were just some of the dynamics that came up.

 

Next, the host asked for a volunteer to count the money the host was holding. That brought comments like: “How can we trust the counter?” “Are they going to keep the money?” “Can I count the money too to be sure they counted it correctly?”

 

Next, the host asked for a volunteer to divide the pile of money into seven uneven piles (matching the number of participants.) The host then picked up a pile, gave it to the first person, picked up the next, gave it to the second person and continued to distribute the piles like this until all the piles were distributed.  As you can imagine, this created quite a stream of comments as some felt short changed while others felt like they got a good deal from the initial amount they had given the host. One person felt like a weight had been taken off his shoulders as the pile he got was more than what he had borrowed from another player to give to the host (he did not have any bills in his wallet.) One person left the game frustrated that this was “going nowhere. You’re just moving money here and some of it was my money that I no longer have.”

 

The host then told us to put any money that we had above the smallest amount a player had in their hand, in a pile on the floor. Each participant now had the same amount of money in their possession. Tension turned to relief and awkward laughter.

 

The host asked everyone to talk about their favorite charities which we did, one at a time. The host then had us talk about what should be done with the money in the pile on the floor. Should it be returned to the participants or should it be given to one of the charities mentioned by us? We had seven minutes to reach consensus. We did not reach consensus. The host then had everyone pick a number from a hat. He called out a number and the person holding that number was identified. The host then told us we had another five minutes to reach a consensus about what to do with that money or it would go to the person holding the number he called. Still no consensus so the host gave the money in the middle of the floor to the person whose number he had announced.

 

Two people were okay with the outcome; two people were outraged that their money had been “taken from them”; one person asked what the person who was awarded the money was going to do with their new money? The person with the money said they would either give it to the charity they had defended or they would return it to each participant so they could be made whole. But the group had to come to a consensus on which choice to make. The decision was to give it to the organization that the person holding the money had talked about.

 

We then debriefed on the exercise, paying close attention to the emotions we exhibited and the feelings we had during the various sections of the money exercise. I found myself noting reactive behaviors triggered by feelings I had as a child around money.

 

Money exercises are a wonderful way to experience beliefs and emotions around money. You can identify patterns of behaviors that are unproductive and introduce new patterns of behaviors that encourage productive habits and behaviors around your money. Often, we hide and bury these feelings but they can come up in the oddest places.  

 

If you would like to explore a money exercise with your family or group, let me know. I would be delighted to develop a money workshop for you.