Episode Transcript
[00:00:00] Speaker A: Welcome back to the show.
Today. I'm really excited to have John Masservi joining us again. John works with some of America's wealthiest families, helping them figure out the tough stuff, the things that money can't fix. In this episode, we're talking about relationships and families where there's a lot of money, a business to run, and multiple generations trying to figure out who's in charge.
We dig into the four big things every family deals with and why control is the number one issue right now.
We talk about what happens when parents compare their kids, about the black sheep who sees what nobody wants to talk about, about how parents know when their child is actually ready to lead and why some families stay stuck for generations.
This conversation gets real. If you're part of a family business, if you're raising kids who will inherit wealth, or if you just want to understand how families really work when the stakes are high.
This episode is for you. Let's get into it.
So thank you for coming back. So, and how have you been?
[00:01:11] Speaker B: Busy, not quite sure why.
Lots of referrals, lots of speaking, enjoying the Travel, went to two new countries. I'm now up to 62, you know, 462 clients now. And you know, it's a honor and a privilege to help people sort out that side of the equation.
[00:01:39] Speaker A: Yeah, well, that shows that there's still some wealthy people out there.
[00:01:46] Speaker B: Yes, we talked about this last time. Sadly, the lower and middle classes of our society are not doing as well as the upper class. And the upper class is just on some other trajectory right now. And they're very bright and they're very giving and they're very smart and they know how to make wealth. The trouble is on the other end, you can't buy a house, can't afford to go to college, can't do a lot of things. And so for their lives, it's full of, I can't, we can't afford it. It's got to figure that out. That's not, I can't last. You can't have a strong country without that.
Oh.
[00:02:20] Speaker A: So you mentioned there are four big concepts that guide all families. And I was going to ask you what, what are those?
[00:02:28] Speaker B: Well, I, this is self driven, but in every family I look for power. Who's got it. Control, who needs it.
Conflict, how do we resolve it?
And intimacy. How close together or far apart family members are. And lately but perennially control. Who, whose needs must have control is at the top of the list.
[00:02:49] Speaker A: What do you think's driving that?
[00:02:53] Speaker B: Well, I Can only guess we're in uncertain times and things are speeding up and the world got smaller. Oceans and borders don't necessarily protect a country anymore. I think there's anxiety around social connections and relationships. We've kind of turned some of the equation upside down.
I think that we want to just grab on and hold on to certain things. But it's moving so fast right now, just month by month or week by week, but it's moving hour by hour. The anxiety in the culture is notable right now.
[00:03:27] Speaker A: Which culture are you talking about?
[00:03:30] Speaker B: Well, I would say Western culture, particularly Europe. I was just over in London. I was just down in Central America. I think.
I think there's a feeling among some people that we're just slipping. They're slipping behind. Not the wealthiest, they're not slipping behind. But this is the American dream is a little more of a reach.
And I've been having a lot of discussions about, with young people about what their career path should be, what their major ought to be, what colleges they ought to go to, what they should get out of. And it's just very different than even a generation to go in the whole process that we are looking for. I. I tell young people, be confident in yourself. Earlier, Diana, we talked about relationships. Well, that begins with your own relationship with yourself. But stay confident amid all the prevailing winds blowing and all the advice and all of the comparables and the comparisons and the envy that's on the Internet, on social media, I should say, and just hang in there and use your 20s as kind of a smorgasbord of trying things instead of getting locked into one thing.
[00:04:37] Speaker A: Like the concept of prototyping.
[00:04:42] Speaker B: Yeah. I mean, they're going to live longer lives. Why, you know, why. Why get in that? I graduate, I get an MBA or whatever advanced degree I might get, and then I have to be married by a certain age and da, da, da, da, da. And then I'm going to retire at 65. That's. All of. That's out the window right now.
[00:04:58] Speaker A: So you're. You mentioned control, intimacy.
There was two more.
[00:05:03] Speaker B: Power.
Power. Oh, power and conflict.
[00:05:07] Speaker A: You know, and conflict.
[00:05:08] Speaker B: Control, conflict and intimacy.
[00:05:09] Speaker A: Yeah, but wouldn't control be part of power?
[00:05:15] Speaker B: Very much so, yes.
Who calls the shots?
[00:05:20] Speaker A: Who calls the shots?
[00:05:21] Speaker B: Who's running the family? And that's. Could be mom, could be dad, but it's very clear somebody's running the family. And oftentimes they do not want to relinquish the power. This has been a dynamic in family business for many years. Or Mom. But dad traditionally doesn't want to retire.
He has a five year plan. I'll be out in five years and then every year it's another five years and son or daughter is waiting, waiting, waiting for dad to, to move on and you know, kind of wait and get into the game. Most of the time they tell me I need to know by the time I'm 40 and I don't disagree with that. I think by 40, if you don't have a career path that you can see in the family business, you really need to go to Plan B.
By 40, your prime income years are generally 35 to 55.
That's when you're most relevant, most energetic, most knowledgeable, most experienced, biggest contributor. After that, you know, you're kind of on the glide path. But you don't have to stop. My client base right now is everyone's talking about AI and the younger and nobody has any answers because it's changing every minute. So we'll see. But that's another topic.
[00:06:32] Speaker A: Yeah, well that could explain why things are moving so fast and, and people are getting worried because a lot of white collar jobs are being impacted by AI.
[00:06:42] Speaker B: Well, let's talk about that for a minute. I mean I just came out of a meeting about AI and other things and basically we have over leverage investments in my opinion, in AI right now. As someone said the other day to me, AI right now on the market for investors is a Ponzi scheme. So Larry Ellison and Musk and Nvidia and it just goes around.
So the valuations keep going up and people keep buying in and it's going up. So I'm going to keep investing but leave the investment side out of it. AI, ChatGPT and other vehicles are going to be as ubiquitous as Google. I mean they're talking now about wiping out whole rows of industries and occupations like Realtors or like.
Was it one of the. I think it was one of the major accounting firms just laid off. Consulting firms just laid off 11,000 people.
Can't remember which one it was and doesn't really matter. You can just press. Just give me. I went to Cuba as maybe call this year and I was really taken by five days in Havana and I had to turn off my cell phone which by the way made me amazingly happy.
No TV and no cell phones for five days. Try it. Pretty good.
Oh, it's very good. But while I was there I came back and I said to ChatGPT, I said, Tell me what a positive economic future for the people of Cuba could be like and it just rolled it right out and 11 points. And I couldn't argue with any of them. I mean they were pretty spot on. We're 10. Like we like to have or 12 or whatever. It was 11. So pretty.
[00:08:20] Speaker A: That's cool. So going back to those four big concepts. So when you go and work with a family, you try to see through those four lenses what's going on or how do you.
How do you use that. Those concepts.
[00:08:33] Speaker B: There's another six which is going to totally confuse your viewers, perhaps if they write slowly. But there's power, control, conflict, and intimacy.
And intimacy we can talk about in a minute. But it's really how close or how far away the family is, how they guide themselves. Are they totally enmeshed, like a rugby scrum? Or are they very detached? Or have they gone to the. What the third spot is. I call it in the intimacy dynamic, which is individuated. They have their own identities. They know who I. You know, they're all. Old question, who am I? They've answered that question. And they, they have X amount of togetherness and Y amount of separateness.
So they're kind of like an accordion. And when they. They get close or they can back off. They can get close. Back off. I'm always.
[00:09:19] Speaker A: And that's. And that's healthy, right, to have to.
[00:09:21] Speaker B: Oh, yeah, very much so, yeah. Because. Because. Why is it healthy? It's healthy because it allows for change, the inevitability of change. There's space in between.
In an enmeshed family, it's locked down.
Power comes from the top. You're told what to do, what to say, how to behave. Control is control over the enterprise, control over the money, control over the ownership plans, control over succession. Those are difficult because they don't allow for change. And so really you don't adapt to changing market conditions, changing socioeconomic conditions, etc.
But no. Finding. Finding the building a family. I try to take families from being, untangling them from enmeshment down to where they have room to accept differences. They don't have to agree on everything.
They just need to be aligned in where they're going and have. Then you get into the other dynamic we just mentioned of how do we resolve conflict.
And what I've noticed in some cases, when you have a very strong entrepreneurial father or mother, there are two casualties along the way. The big upside is you probably are financially very secure. One of the challenges for strong entrepreneurs is one, they don't imbue conflict resolution skills. In the next generation because they didn't allow any conflict.
It's whatever dad or mom said, that's the game. So don't mess with that dynamic.
And then two, they really don't have very good communication skills, so they don't know how to discuss sensitive issues because dad or mom, the word came down from above. This is how it is.
And so those two things, a failure to properly understand how to resolve conflict and a failure to effectively communicate with each other are two casualties I see in entrepreneurial families. And those are part of this power, control, conflict, and intimacy dynamic.
[00:11:17] Speaker A: What do you think is that the cause of most conflict in families?
[00:11:26] Speaker B: Well, there are many, but I think most of them start out with something small.
And I tell clients that they need to avoid improprieties or any appearance of improprieties.
So as soon as there is a breakdown in trust, then you've really got a problem. I mean, if you don't trust each other, you shouldn't be in business together.
And trust is earned and can be ruined in minutes.
So people can do dumb things and they need to admit them and recover. So the breakdown of trust is one thing. I would say also that conflict between begins kind of on something where we take our families for granted and we get assigned a family. I mean, you're not sure you would pick these other people in the family as your close friends, Truly. I mean, I know that sounds difficult for some people to accept, but that's the case.
And so you have to work harder at family relationships than you do just having friends that might or might not agree with you politically, socially, economically, et cetera. Like. Like, kind.
And so when family members feel taken for granted, that starts to unravel the relationship.
And further, when they, when they say or do things to other family members that they would never say to a friend or even, you know, a clerk in a store, they wouldn't say these things, but for some reason they think they can say them to other family members and it's kind of going to get forgiven or overlooked. No, those words are etched in granite.
[00:13:12] Speaker A: Yeah, I was, I was thinking also about the.
How the black sheep fits into that.
[00:13:19] Speaker B: Well, that, that gets into the other six I mentioned a few minutes ago. Okay, Other six are. Our families have beliefs. We're one big happy family. They have rules. How do you know what the rules are in the family? Well, break them. You'll find out very quickly because no, no family that I've seen has a big 500 page rule book. So you got beliefs, you got rules, you got Myths. The myth of one big happy family. Well, maybe.
Hope so. And then we have secrets. Secrets bind families together. You know, it takes a lot of people to keep a secret. And you can have secrets in the family. Dad's drinking, mom's affair, whatever it is. Sons gambling. And then you have, let's see, beliefs, rules, roles. Oh, yeah, roles.
So you have roles in the family, which is right where the black sheep is. You can have the dad's favorite, you know, the little devil, perfect son or daughter, etc. You can have all that, but one person, if there's a lot of constraint, a lot of enmeshment, a lot of failure to resolve differences, one person can become the black sheep.
[00:14:22] Speaker A: I see. Look at this.
[00:14:25] Speaker B: We can't have that, because more often than not, it's the black sheep that has the family figured out that could unlock the secrets, that could deal with the power and control issues, that could point out the discrepancies and how we feel toward each other. That could reveal some of the roles and rules and inconsistencies in family life. But no, no, no, no, no. You forgot, we are one big happy family. Don't you dare bring that up. And nobody else bring that up because.
Oh, no, no, no, no. We can't go down that trail. Which is shoot.
[00:14:59] Speaker A: Yeah. Shoot the messenger. Right.
[00:15:02] Speaker B: Make sure there are no multiple times, shoot the messenger.
Never come back to this family again. Because you, you, you.
I have seen that so often.
You know, they. This person leads a very lonely life because they've got it figured out. And once you figure it out, you can't get it out of your head. You see it, the patterns clearly. You've un. You know, you've unknotted all the knots in the yarn ball, and you know how this whole dynamic works, and yet nobody wants to talk about it. It's the don't talk rule. You know, we can't talk about it.
[00:15:37] Speaker A: So what was the sixth one you said? Beliefs, rules, myths, secrets, roles. You said there were six others. Beyond unspeakables.
[00:15:45] Speaker B: Unspeakables are.
Are just those things that you just can't talk about. Well, you know, what happened back then. Well, don't go there. I've had a lot of clients say when we. I try to look forward with my clients, and we try to kind of not dwell on the past, but there are stories that are part of the family lore that you have to deal with, and some of our. No, no, no, don't talk about that. That's the unspeakable. Unspeakables are different than secrets.
Tremendous power to bind a family together. Unspeakables are just kind of the don't talk rule.
[00:16:17] Speaker A: Ah, okay.
Wow. I would have assumed they're the same. Dr. Judith Landau says that secrets keep a family sick.
[00:16:27] Speaker B: Oh yeah, yeah, yeah. That's great. That's well said. She's right. And they also.
That's a family that afraid to face the reality of the situation.
So I often say to clients, there's really no getting around the reality of the situation. Whether it's governance, succession, competence of your children, the ability of the family to continue to grow and prosper into the next generation. The reality of the situation is you're losing money or you're in the wrong business at the wrong time or your son or daughter is not competent. They can't hit the pitching or you wouldn't hire them if their last name wasn't X, Y or Z or you know. The reality of the situation is that the CEO of the non family CEO you have is incompetent or unable to get past what I would call, you know, a certain level of performance.
[00:17:22] Speaker A: So that, that whole idea topic of secession is really quite interesting. Do you see in families when sibling siblings are competing for the top role and, and there's a culture of compari the siblings or between the next gen.
[00:17:39] Speaker B: I actually don't often see that.
I see the parents competing very subtly.
They want their son instead of my brother or sister's child to be promoted. I spend a lot of time with next gens. They're really fun.
[00:17:57] Speaker A: Yeah.
[00:17:58] Speaker B: And they're really smart. I mean they're really smart.
They've got a lot of anxiety about certain issues. But I get it. But they, they've got this figured out even better than the parents. They also some of them times they get along better in the cousins cohort, they get along better than the parents just because there's less time and perhaps less baggage.
[00:18:19] Speaker A: Yeah, I see that with that younger the 20s generation. They, they're more chill. They get along. Something's changed though between 20 and 50. And I see my generation tends to really care that their progeny become chosen.
[00:18:35] Speaker B: Yeah. Yeah.
[00:18:37] Speaker A: So how does, how do you celebrate one child's success without making others feel less than?
[00:18:44] Speaker B: Well, it's. I'll use a baseball analogy. You know, a little leaguer is out there with his father in the stands, our mother and, and you know, he's up to bat and he doesn't do well. And they're in the car driving home and the father said, you know, you know, you really should have been the starting pitcher today. And the son might say, you know, dad, I'm not that good.
Deep down, I think people know.
I think they figured it out.
Where they stand in their place and competence and commitment and value.
What tends to recycle, that is expectation, which often leads to disappointment. What recycles, that is envy. We live a life of comparativeness.
So we constantly. This is really true in our culture. Wow. We're constantly comparing ourselves to someone else. They've got a Range Rover. Oh, I'm going to go out and get a G wagon. I've got one. Private jet. Well, I've got two. I mean, it's in among wealthy families, particularly. And by their nature, wealthy families are mostly competitive people.
I mean, they do compete. It does matter where they stand in the kind of the social hierarchy. And yet those people, unless they're grounded, they are the most unhappy among my clients. The ones that are constantly, whether it's male or female, older, young, constantly competing, competing, competing.
Life isn't meant to be that all the time. Not everything is a competition. Where your child went to school, what sorority she got into at smu. I mean, all of that stuff is on the table, and at some point it doesn't lead to a very enjoyable experience.
[00:20:31] Speaker A: So that kind of competition and comparison is destructive. And it does happen in many families.
[00:20:39] Speaker B: I don't know if I would use. I think destructive might be a little too strong.
[00:20:43] Speaker A: Too strong.
[00:20:44] Speaker B: I think it might be mostly pretty unhappy.
I remember a young man said to me once, I busted my ass to get into a great boarding school. I busted my ass to get into a great college. I busted my ass to get in a great postgrad university, and I busted my ass to get my first job. When do I quit busting my ass?
And for some people, never. You've just got to keep going. Whether you can get into that country club or whether you can get into that social group or whether. Whatever. I mean, we set ourselves up to be disappointed.
We have enough.
I mean, I just got off a call with a young lady in Europe and just within the hour.
And I just wanted to tell her, you've got enough. You're going to be fine. If you can find anybody in a corporation, in a work setting that actually gives a damn, that actually cares to get the job right, that actually has enough confidence to face and solve problems, if you can find that person, you're going to be in the top 99th percentile because there are so few people left in our country and another in Europe particularly, where nobody works that really care. So what are we buying? We're buying smart people that care and they think just because I'm smart it matters. But no care.
If you care, you're going to do fine. You're going to be fine. You're going to be in the rare, rare group of people that will be always employable.
[00:22:09] Speaker A: Yeah, and that's so cool.
So leading back to this whole topic of control. What are the signs? Like let's say you have a client, you know, he's controlling the strings and he's comparing his kids, saying oh, so and so is really, really good. And then the other kid's like, oh, I don't know if I can live up to that. But how that person knows that it's time to relinquish, you know, that a child is ready for leadership.
[00:22:35] Speaker B: A perennial question. One, let's start with this. Often the father or mother, but primarily the father may have two children. Gender doesn't matter. And they pit one against the other.
I can't retire unless Bill and Jane get along.
And then they suddenly pull the strings so they don't get along. See mom, I can't retire. They don't get along.
So that's the subtle drama you've got to pull out. No, it's not really about them getting along. It's you don't want to retire. That's the underlying story.
[00:23:10] Speaker A: Now, interesting.
[00:23:11] Speaker B: Often the father might say, I had a father once who had a 61 year old Harvard graduate and a 55 year old Yale graduate who said they weren't quite ready. And he was 83 who wasn't quite ready, was he wasn't quite ready to retire. He died with his boots on, so to speak. He was never going to let go. He had, he had to have the power and control.
So I would say to the father, all right, if Betty or Jim or Sally or Sue are not ready, what do they need to do to get ready? Tell me specifically what that is. And well, what do you mean? Well, no, I mean this is where the tire hits the road, the rubber is hitting the road right now. What do they have to do?
Or conversely, if the son or daughter are too ambitious, perhaps by somebody's definition, or are too forthright, what does dad have to do to retire? Does that mean move to Florida and never come north?
God's waiting room? Or does that mean that they have to be there one board meeting a month? Every family has a different dynamic about this. Some of them fathers Come in every day. And some of them, they come in once a quarter.
Some of them don't want to come in at all. It's just kind of odd.
[00:24:29] Speaker A: So if the kid's the black sheep, what's your advice to them?
[00:24:34] Speaker B: Well, the deck is really stacked against the black sheep. Over time, I think all families tend to figure out the game if they want to. But who gets something back by keeping the game going?
And that's what you can figure out if you're the black sheep. You already probably know that.
Why? Who gets something back by keeping the conflict going? You can look at that even in a global scale. But. But for. For the black sheep, who gets something back, you're probably. You might peel off one or two sympathetic souls in your family. You might, you know, you might have some people that would actually agree with the black sheep and. And say, I get it, but the price is too high. It's just we're structured in a family that is so bound up together, we can't possibly change. So spending your energies on trying to change your family is often a hopeless pattern. I hate to say it that way, but you could enjoy your life in something else.
[00:25:36] Speaker A: So if you can't stand the heat, get out of the kitchen.
[00:25:40] Speaker B: You know. Yeah, there's going to be heat if you know that. If you know the dark secrets and the unspeakables and the patterns and the rules and the roles and the beliefs and systems of your family, and you've got that all figured out. And they don't want to know.
We can't. We can't talk about that. Oh, no, no, no, no. We can't talk about her addiction to always overspend money, you know, to constantly be in debt. We can't talk about that. No, no, no. We need to have a family meeting. Oh, no, no, no. We're not going to have any family meetings. See, that's what happens.
[00:26:10] Speaker A: Yeah.
[00:26:14] Speaker B: So can't let the cat out of the bag because then the fear. The fear is the whole thing will come tumbling down.
And I've carefully kind of created this deck of cards on this family, and I don't want to pick. I don't have to clean up the mess.
[00:26:33] Speaker A: Cool. You mentioned three types of family structures.
[00:26:38] Speaker B: Yeah, that was the. The enmeshed, the detached, and the individuated, or, you know, separate identity, family, which is like blocks that have space between them with a big, large drawing around them. So everybody's got a chance to move.
You know, in marriage, there's a time when people come together initially, and they haven't completed their journey to themselves yet.
And so they find somebody and they kind of fit amazingly together. Oh, my goodness. I've never met anybody like this. We finish each other's sentences. I've never felt so amazing how this amazing person came to me. It must be heaven sent, etc. The trouble with that is that this fit doesn't allow for change.
It's locked. And over time, change in every relationship forces, pro and con, will be inevitable.
So what you really want is you want two people that have kind of finished their journey and can find enough that they care, love, and respect in each other that allows for change to occur. A little bit of friction. Okay. I mean, all marriages have the same four or five arguments. All family businesses have the same four or five arguments.
Yeah. I think last time I quoted Ruth Bader Ginsburg, whose mother said to her, if you want to have a successful marriage, it's important to be deaf a little bit of the time.
I think that just is hilarious. But it's true.
[00:28:16] Speaker A: But conflict is important. I mean, there's no relationship that doesn't have conflict. Right?
[00:28:23] Speaker B: Yeah. Although I have to say this because I just came back from a Monday Night Football gathering of a bunch of guys. I have old friends that I've known since high school, and for whatever reason, you know, we. We, as friends, we know what to say and when to say it, and then we know places don't go there. And. And. And so, yeah, you know, it's nice to have friends where you can just have a good time, you know, and just blow up some stuff.
[00:28:46] Speaker A: Politics, politics, sex and religion. Right?
[00:28:50] Speaker B: Yeah, we don't talk politics anymore. Given the tenor of the times. We don't talk politics.
Religion, we can talk about. Religion, we don't talk about.
[00:29:00] Speaker A: Not in England.
[00:29:01] Speaker B: We don't talk about. We should not talk about sex. Yeah.
[00:29:03] Speaker A: Not in England. You can't talk religion in England right now.
[00:29:07] Speaker B: No, no, that's another story. Yeah.
[00:29:11] Speaker A: Or you might. You might end up in Twitter jail or something. Or in real jail, actually.
[00:29:14] Speaker B: It's frightening. It's just absolutely frightening. Yeah. Although I was just over there for five days and, you know, basically London has become a very much a Muslim country, Muslim city because of the staggering amount of wealth. I mean, there's Lambos and Porsche GTSs and Ferraris all over the hotel parking lot, and they fly them in and they don't ship them, and they fly them with a 747, and one of them had a little scrape on the front that probably would ruin the value of the car. And the doorman said he probably won't even take it back to, to Dubai. He'll probably just leave it here and buy another one in Dubai or five of them in Dubai.
[00:29:53] Speaker A: You mentioned really caring. Would that be a skill for leading for the next generation? I was thinking about essential skills within families.
[00:30:02] Speaker B: I think caring is kind of innate in all of us. I think as humans, we have a heart and we want to care.
It's what we want to care about and how deeply we want to care with the amount of energy we have left. I mean, we have in our souls. I think that it's really a great feeling to care. Like when we get involved in philanthropy, if you can find something that really is purposeful and is able to make a difference in somebody's life on a. Not on a one time scale, but on a longer term basis, that's, that's a great life. I mean, we often talk about legacy and we're not going to leave this earth with anything, but we can leave something behind that does endure. And so I really enjoy my philanthropic talks with my clients about what they would like to do. And we're only in the nascent stages of philanthropy. I think that there's a lot of ineffectual philanthropy being done. I think there's a lot of cocktail circuit philanthropy and, and there's not a lot of long term, real solution providing philanthropy. Not unlike what a business philanthropy hasn't gotten to, where business is with very focused metrics and very focused deliverables. I mean, some have, of course, I know some people, remarkable work, but big scale, a lot of money is going into silly stuff. Yeah.
[00:31:27] Speaker A: Sometimes giving a nonprofit too much money can actually destroy them.
So what do you mean?
[00:31:33] Speaker B: Absolutely. And also it's a little bit like hiring a decorator for your house. I mean, these philanthropic advisors, some of them, some of them are great. And I have a list of the ones that are great, but the ones that aren't, and I don't have that list, but the ones that aren't, they're like a decorator. They want to have their design on your money and their plan on your money, and they have their favorites, etc. So I'm very careful about any of the ones that I'm fond of because that's not, that's me. I mean, I think it's very personal when you start giving a charity money.
And I separate charity, which is basically a one term, one time, one time gift with philanthropy. Philanthropy has a strategy that's the difference is there's a strategy of giving and a strategy of outcomes and metrics and basis and talent. And some of them. Look at Habitat for Humanity, how that's taken off. Look at Tunnel Towers. I mean, Frank Silver gets paid nothing. And I checked his 990, I checked their charityadvisor.com charity navigator and boy, you know, they get nothing. Whereas the other one, if you take, I think it's Wounded warriors are on TV right now. I think they're getting millions of dollars in salaries. I mean, we're only required to spend 5% of what we give, which is, I think, outrageous. I mean, I could have a long discussion about that. It's my understanding, and I don't do tax, but it's my understanding you're required to give away 5% a year, so you get to spend the other 95%.
You know, they're watching, they're. You have to have comparables. They're watching salaries on these charity groups. But I don't think they watch them carefully enough. I know, I think there's some really shady stuff, especially going on with the NGOs which are destroyed anyhow because the.
[00:33:12] Speaker A: 5% rule is for the private foundations.
Right.
[00:33:16] Speaker B: You know, here we are kind of pulling all this together.
Families right now are challenged because the divorce rate is high.
And I don't know if there's any signs that's gonna. Unless the next generation, which as I understand quite conservative, that might change the divorce rate or how people marry, but the divorce rate is high. The deck is women have made amazing advances, God bless them.
But the men, young men I talk to, they like, I don't need to get married. I mean, she's gonna take half my stuff. I hear that more than a little. And you know, I can date and I can have my way and I can do what I want to do.
You know, I can still remain kind of a underdeveloped person that doesn't have to commit and really go through what marriage is, which is a long term commitment to be there for each other and to support each other. And a lot of people today aren't willing to do that. And then they're on their devices, which I think make relationships, which we originally started talking about, even this social media.
We're going to look back and this is not good for us. We are not handling this technology well in terms of building and sustaining relationships.
Having people who are defriending people or unfriending people or saying terrible things, putting terrible things up the whole Porn industry, the whole industry of insulting each other or the political dialogue without any attribution to a name or a location. I just think it's all enormously unhealthy. If you just stop for a minute and go back to the days when a newspaper landed on your front porch and you might have read the paper over breakfast and then you went to work with the same group of people that were your cohort, your colleagues.
Then you came home with your wife and children.
You didn't have all of this noise going on in your head. It's all an eyeball society right now. It's all about ratings. And ratings are profit making for a lot of entities.
And those ratings, I don't think our young people understand that.
And we have a default, the human default is if we see it on a screen, we are more likely to believe it than to not believe it.
So we're believing these things on the screen when probably half of it is absolute garbage. And then they drive a fear factor. Going back, Diana, to our earlier discussion about anxiety, there's a fear factor because fear sells.
So drama and suspense sell. Hitchcock told us that drama and suspense, that's why you never watch the replay of a baseball game, because you know how it's going to end. It's boring to begin with at times, but the, but the idea that fear sells. So I've gotta, I've gotta watch whoever my political or social prognosticator is a demagogue at times, I gotta watch them. And then you get, you get the bias of, I'm only going to let in the information that I agree with, I'm going to keep everything else out. And then you end up with this division in the culture. And we could keep going on this. So, and there are, there are, frankly, our adversaries that would love to see that continue to happen. I mean, there are people we know that are trying to divide us.
Yeah, end of that sermon. But that's kind of.
[00:36:34] Speaker A: Yeah, no, but you're right. And if they divide us, they can conquer us. I mean, that's Machiavelli 101.
I was curious about the whole question of the hired gun in your family or in the family?
[00:36:46] Speaker B: Oh, yeah. Well, when your family works systemically, it can work in triangles.
So let's say father and mother. This is a case. Father and mother, happily married. They have an older son who is the apple of the father's eye. But the mother and the son don't get along and the son is going to inherit the family business. So he's got to stay in the game.
So instead of, you know, the father keeps going, why don't you get along with mom? Your mother, she loves you, she's done so much for you, etc.
The son says, I don't know. I love my mom. I just. We don't get along.
So to act out his anxiety, he marries a lady who becomes the hired gun, and she drives mom crazy.
And then the father says to the son, bill, what are you doing? Sarah's driving your mother crazy. And Bill goes, dad, I know, but what can I do? She's my wife. I love her. I. You know, it's like that's the hired goal. Actually, that came out of a case we did at Menager years ago. Yeah.
[00:37:54] Speaker A: Wow.
[00:37:55] Speaker B: Yeah.
Complete deniability. It's not me, it's my wife, but it is. It is me. Yeah, it is the son.
[00:38:05] Speaker A: So that happens a lot.
[00:38:07] Speaker B: I don't think a lot, but it happens. You know, you can. I've. Oh, yeah, I saw one client that, yeah, he married a woman that was just dedicated to driving the father, who is quite narcissistic. Driving the father crazy, just driving him crazy. And she did a good job. I mean, she really did a good job. And until you uncover these patterns, it just all stays on this level. You've got to get down. Down here. Yeah.
[00:38:39] Speaker A: So what do you do when you have a hired gun in your family?
[00:38:42] Speaker B: You point out. Point out the pattern of behavior over time.
You have to have enough. I take a lot of notes because you've got to have the story straight. There's a part of my work that I call the car crash.
The car crash is when I go into a family and start listening to their history. They want to tell me, okay, fine, they'll talk about a car, a car crash five years ago, and they'll have. Everyone will be what Oliver Wendell Holmes called the many sidedness of truth. There'll be different points of view about what the weather was like, who was driving, you know, well, was dad drinking too much, was mom yelling at him, was somebody acting out in the back seat, etc.
And, and so that's a metaphor for the many sidedness that you hear in a story. And, and the illusion of what really happened or my take on.
Then go fast forward. Now I'm in the family. I mean, I'm seeing them. Usually I see a client about a day a month. Not always rough, more or less. So I see him about a day a month and things will happen and I'm kind of Scribing through all of this and remembering what they told me, etc. No, now wait. I was in the car.
Dad was drinking and mom was being obnoxious and your sister was throwing up out the window or whatever it is.
So then you've got the straight story as opposed to the edited story.
And that's important that you deal with the reality of the situation as opposed to kind of the mythological story about our family.
No, they didn't turn the power out for our apartment buildings. We ran out of money and we couldn't pay the bill.
So that's the real story. And that's okay because you know what every family business is, that airplane's gotten pretty low some days. Yeah. The interesting thing about family businesses is really nobody wants them to fail. I mean, the, the banks don't want them to fail, the customers don't want them to fail, the vendors don't want them to fail, the landlord doesn't want them to fail. You know, they usually find a way. They're enormously creative.
[00:40:41] Speaker A: Now, we, we sold our company, our family company. We liquidated.
[00:40:46] Speaker B: And that's a whole other process. Yeah, I've sold, I've guided. I take care of the family side. I don't do. I'm not the ib. I'm not the, the deal attorney, obviously, but they, they want me to come into a family business and say, john, you take care of the family side and we'll take care of the transaction.
Because there's a tremendous emotional drama about selling grandpa or great grandpa or dad's family business.
And, and so I have to cut through that. So I've sold maybe 40. And then there's a.
The intra family sale where you prune the stock at every generation or so. That's another drama as well.
[00:41:27] Speaker A: I was 27 years old, and my uncles said to me, we were stuck in some litigation, 14 family members.
And they came to me for some reason, I don't know why, and they're like, diana, help us find a mediator.
And I was 27 years old, living in Switzerland with two little kids in construction and two jobs. And they're like, you find the mediator. I'm like, okay.
So I, I interviewed a bunch of mediators. I found one. But everybody I spoke to said, this is an emotional issue. I'm like, really? My family doesn't like to talk about emotion. It's like the last thing that they want to talk about. Anyway, we ended up, to make the long story short, we, we ended up mediating successfully and we all Voted to liquidate early and, and everybody got their fair share. But it was an interesting.
[00:42:14] Speaker B: Well, I have a lot of, primarily men, but couples that sell the family business and yes, they get the big check.
But there it's very mixed feelings. I mean, talk about going back to the original part of this interview. Talk about losing power and control.
You lost it. And, and yeah, you've got the big check. And what, what I find is, you know, suddenly you've got, pick a number, $150 million or $500 million. What have you got out of the sale? And you pay your big tax check and then you're sitting there thinking, what am I going to do to assuage the pain of selling this?
So because it's such a mixed blessing.
So they go out and buy a boat or they buy a condo in Aspen or a house in Aspen or they buy, you know, a plane, a private jet. They get a private jet or a net jet or something. And, and they, they reward themselves, which is okay with me. I mean the money's gonna interest wise at that, at that level you're killing it with your compounding. So.
[00:43:16] Speaker A: Yeah, yeah, I think if you have.
[00:43:17] Speaker B: The right financial advisors.
[00:43:19] Speaker A: In our case, there were 14 family members. So I don't think they all, they all got enough to do that. Maybe some did.
[00:43:24] Speaker B: But I remember one time I was with, I was this, actually this happens quite often where somebody will value a family business and they'll pick a number and there's a lot of different ways to do this, but you know, the primarily four principal ways to value a family business. And they'll come up with a number and I'll watch the eyes and the faces of the people on the table. They're doing the division right there. Okay, number divided by 7 or 8 or 14 or 2 means. And then they forget to include tax and other expenses and n. And then they say, wait a minute, that's all I'm going to get. Yeah, yeah.
[00:44:00] Speaker A: Well, in our case it wasn't divided equally because it was the members of the family who contributed the most to, to the managing of the family business who got the lion's share.
[00:44:11] Speaker B: You know, I've been cleaning out my office, as you can see in the back, and I've, I've read some interesting articles, but one of them was the idea that family business office, they can't sell the family business until either mom or if dad's deceased, or dad, if mom's deceased, passes away and then they get the okay to do it. I mean, they all come together and say, we need to liquefy this, you know, and there'll always be somebody in the family. Usually the family historian will say, well, this isn't what dad or mom would have wanted. Okay, fine, we got to cross that bridge. Importantly. But the interesting part is I saw this article, and I can't swear this is true. But it's not far from true that once the parents pass away, the odds of the siblings getting together and enjoying each other's company diminishes greatly.
The odds of the family holding its cohesiveness after the parents are gone slips dramatically.
[00:45:05] Speaker A: If they're still together in one entity. Or what if they're separate?
[00:45:10] Speaker B: No. Even if there's no entity, even if they're just a family that the next generation tends to dissipate. So one of the pieces that go with my earlier comment about you're assigned a family is whether the family can create really, how would I say, meaningful, sustained, mutually supportive internal relationships, or whether they dissipate, whether they're just acquaintances as a family member. And then when something goes sideways, somebody pulls out the oh, but we're family card. And, well, what. And I'd say, well, what does that mean? I mean, does that mean your brother can be distrustful or disrespectful, or you can say terrible things? What is that, well, but we're family phrase? Where does that fit in?
And so when I see that it's kind of common to watch families try to do that and frustrating for them, I think it's painful at times. Yeah.
[00:46:14] Speaker A: I have one last question for you before we go. I have a client who wants her children to have a role in managing her philanthropy going forward, but she's not so happy with the way some of her children are living their lives. Like, they're not sort of aligned in terms of their values, I guess.
So should she put them all on the board, or should she pick one or two that are more aligned with what she's doing?
[00:46:46] Speaker B: Well, I don't think I answer that easily.
I don't. I'm not sure what she wants to achieve.
So if. If. If what she wants to achieve is family harmony and unity, that's one thing. If she wants to achieve helping philanthropy, that's another.
So there's two different courses or trails to go down here. I would say that just putting them all on a philanthropic board only takes the conflicts that are already there and just formalizes the conflicts. I don't know that that's a recipe for things to get any better. It Reminds me of a mother who said, well, I'm sure if Jimmy, we gave him more money, he'd stop taking those drugs. No, I don't think so.
Yeah, and the same would be true with kind of institutionalizing the conflict in your governance structure.
If they don't get along, don't set up the drama.
[00:47:39] Speaker A: Well, she's saying that she's adding other community trustees who are not members of the family, who will be able to overrule her kids.
[00:47:47] Speaker B: That's fine. That would be. My next recommendation, was get some outside professionals that would guide them. But here's the other piece, Diana. They've got to want to do it as opposed to being assigned.
And they've got to know that they're going to have to try to be more competent, more professional, more.
More committed to do this. And if they're not, just don't even waste your time with that, because you're going to end up with a lot of. A lot of disharmony, a lot of frustration and that, you know, that. That hope is a nice word in our culture, but sometimes hope stops us from achieving things. We're betting on the wrong horse.
[00:48:27] Speaker A: Yeah, well, being a mom, I want my kids to get along, you know, So I get at that.
[00:48:32] Speaker B: Tell them that. That makes a difference. Tell your kids I expect you to get along. Even when I leave this earth, I expect you to get along. I think you need to put that in there. A lot of parents just assume that's going to happen. I think I've told. We have two kids. I tell them I want you to get along after we're gone. You know, you don't have to be best buds, but I want you to be respectful and supportive and committed to each other and helping out. And that's the deal. Okay? That's the deal.
We're constantly comparing ourselves.
It's a festival of envy.
And we are. I don't have this or I don't have that, or they've got this. In the 50s, they called it Keeping up with the Joneses, but it's now at some other wild level.
And I know a lot of wealthy people that people would think they wouldn't have a problem in the world, and, boy, they. They have exponents on many of the issues that you and I would just. Just not have to deal with. I would suggest that having children that follow their own journey, their own passion, their own. I don't like that passion word, but follow their own journey on their own sense of self. What they got genuinely enthused about would supersede what the mother would like to do with the charity or the philanthropy, that I would be very happy that that family had children that were doing what they found to be the right thing for them at that time.
And that doesn't mean it's a permanent condition.
People can weave in and weave out of these things, but if they can find their own identity, what they love to do, who they love to do it with, it may not be exactly. One of the problems we have is people think they have to follow the script in the family.
They have to follow the unspoken expectation and, and that can lead to a lot of conflict, a lot of, a lot of stress and frankly, even addiction that I've just, I've got a hole in my psyche or a hole in my heart that I've got to fill. And this makes me feel better, so I'll do it.
[00:50:39] Speaker A: Yeah. And you see a lot of addiction out there, working with families?
[00:50:47] Speaker B: That's a big question. I think we have more opportunities to become addicted, especially when you're wealthy.
You don't necessarily have to be at work by 8 o' clock every morning and stay till 6:30. You don't have to do that.
But the addiction. When I was at Menninger, I asked Walt Meninger one day we were in the cafeteria with everybody and I said, you know, what percentage of the country is addicted? He said, well, who knows? We like to repeat pleasurable things.
So whether we're addicted to alcohol, clearly drugs, clearly pharma, clearly sex, drugs and rock and roll. People like, I like music, I love to listen to music. Especially when I have to fly so much on blood. I put the headphones on and nobody bothers me. But, but it's, it's, it's more of a, an escape. And, and I think, I mean, I know the treatment centers and I know a lot of the protocols and I, I think, I think that our culture can be ADHD inducing, ADD inducing and addictive addiction inducing. So to answer the question, is it more, I often get the question, is it, is it more in wealthy families? Hard to say. Hard to say. I mean, there's some families I see where they've had a line of alcoholics for four generations. Another family, sadly, everybody will be an incredibly high performer and then somebody will commit suicide by drugs or taking so hard to suicide. The great enigma.
[00:52:18] Speaker A: Yeah, yeah. Suicide and addiction kind of live in the same family, unfortunately.
[00:52:23] Speaker B: Can. Yeah, yeah, yeah.
[00:52:25] Speaker A: And eating. And eating disorders too?
[00:52:28] Speaker B: Oh, sure, sure, yeah. Eating disorders, yeah. I mean, we need to get Back to a healthy family structure where I know I can return home to the family and they will be accepting and supportive. But not, not permitting. I mean, not permitting. We gotta stop, we gotta draw the line somewhere. And, and that's important. I mean, we. I don't understand right now with all of the deaths of fentanyl, who's taken this stuff? I mean, it's Russian roulette. What's going on?
[00:53:01] Speaker A: So you talked about not permitting the enabling aspect that I guess. Permitting, enabling. How do you, where do you draw the line?
[00:53:11] Speaker B: Well, you draw the line with knowledge and awareness, self awareness and awareness. I think, I think addictions are very tricky.
I mean, I know a high number of people that are functioning alcohol. High functioning alcoholics, I call them. I mean, they can have a few drinks every night, they're fine. I mean, it doesn't make you feel better, you gain weight. But it is not, I think, an awareness of disease. And I'm not. I talked to somebody that in a treatment center and she said to me, and I'm not even sure we need to call it a disease because a disease means that the insurance companies will pay for it.
But basically there's a lot more going on there. And there is a chemical component to this. You order the first drink, the first drink orders the second, the second order is the third and the fourth, and next thing you know, you're down two bottles of wine. I mean it's, or whatever. Or you're down three gin and tonics or five whiskeys or whatever old fashioned.
[00:54:09] Speaker A: And so it's compulsive.
[00:54:12] Speaker B: It's a slippery slope, for example, every age group. And it's a coping mechanism for some.
[00:54:18] Speaker A: Yeah, so compulsive, obsessive.
I heard through a therapist once that they're related to fear. We started this whole, this whole talk about fear and how our society, our culture is very fear based right now.
[00:54:35] Speaker B: Well, we've been having that discussion in the last hour about how fear sells. I mean, if, if you want to shake people up, get them something to be afraid of, they'll put eyeballs on the screen, your ratings will go up. You'll, you'll, you'll create a we versus them environment.
And that's the game we're playing.
[00:54:53] Speaker A: And you'll have more control too, because if somebody's fearful, they want to protect their children, they'll become more controlling.
[00:55:01] Speaker B: Yeah, we can end up in these patterns where we just. It's a no. And the circle never ends. Ben du Pont's has a wonderful invitation every year to about 80 of us that we get to go and talk about non obvious trends. So a few weeks ago I went off to Wilmington dupont Country Club. It was very nice, love. Thank you. Ben. Go every year and we come up with non obvious ideas. And my submission was really kind of a return to rugged individualism, which is more this kind of fits in the theme we've been talking about. But you're really kind of in charge of your life and if you think the government's going to save you, it's not. We've really reached the limit of our ability to rely on the government to solve even basic problems. I'm on Philip Howard's board of Common Good. He wrote the Death of Common Sense and Life Without Lawyers and this last one about rolling up your sleeves and getting back to a work ethic. It's a great book that Philip put together and it's really hands on society. It's the number of people homeschooling, the number of people that are self sufficient, the number of people that I don't like this term but that are prepping. I don't know what they're prepping for, but they're becoming more self sufficient even among very wealthy families.
[00:56:07] Speaker A: Well, thank you so much, Sean. This has been such a fun conversation.
[00:56:10] Speaker B: I enjoyed it. I always enjoy talking with you. Diana, thank you for this opportunity. We'll get together again soon.
[00:56:14] Speaker A: Before we wrap up, I'd like to thank Oliver Kiker for the jingle and Gwendolyn Christian for the backup support.
Also, a quick reminder, these interviews are not a substitute for professional medical, legal or psychological advice.
Always consult with a qualified professional for any major decisions in your life.
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