Episode Transcript
[00:00:00] Speaker A: This is the thing that I'm trying to look at differently and bringing differently into the conversation. This shirtleaf to shirtleaf curse is something that you can actually fight yourself when you understand it is not about the company.
It's not about the financial wealth. It is about the family as such, as a whole system.
[00:00:25] Speaker B: I'm Diana Earley, and I've spent most of my life learning firsthand what privilege actually costs.
The legacy control, the family expectations, the guilt of feeling trapped in a life everyone thinks you should be grateful for. If you've ever wondered why having everything still feels like something's missing, you're in the right place.
Welcome to Pressures of Privilege.
My guest today grew up in Zurich. He ran his family's business, then he sold it. And instead of walking away, he asked himself, what did I just learn? And who needs to hear it? Danny Curtis is a family advisor, mediator, and the author of Family Overcoming the Myth of the Shirt Sleeves Curse. He works with entrepreneurial families across Europe on the harder stuff. The. The conversations nobody wants to start, the conflicts nobody wants to name, and the next generation nobody thought to prepare. Welcome to the pressures of privilege, Danny.
[00:01:28] Speaker A: Thank you, Dan. Thank you for having me.
[00:01:30] Speaker B: It's also lovely because we're fellow Swiss.
[00:01:33] Speaker A: Yes, we are. Yes. You said I grew up in Zurich. I was born in Zurich. I still live in Zurich. So everything draw me back here to love the Switzerland.
[00:01:43] Speaker B: Yeah. And you, you ran a business, a family business in Switzerland?
[00:01:47] Speaker A: Yes, I did. I was G2. My parents founded electrical wholesale business in the late 60s that I took over as a firstborn son. Of course, I ran internationalized business. We had subsidiaries, China and even in the US and then I sold the business right before COVID hit and end of 2019. I was still in. In the business until March 2020.
And then like everybody else, we went into curfew because Covid hit everybody.
So that changed my life.
[00:02:26] Speaker B: It was a wholesale business that was
[00:02:28] Speaker A: selling what we sold electrical materials, mainly cables and switches. And when you wonder how is, you know, power coming through the wall into your house, that's because we provided the cable and did all these kind of things and we never produced anything. I mean, that's not totally true. We produce certain things. I mean, we had 20, 30,000 articles on stock and we sold in Switzerland, but all over Europe.
We even had a wholesale business in China that we sold prior to that joint venture with a friend of mine, a Chinese friend of mine, and still having a part in an American company right now. So. But that's the Entrepreneurial part. That's kind of from my past. Me.
[00:03:22] Speaker B: You were on the inside of this business. You sold it. What happened while you ran that company and then sold it? That made you think, okay, I can maybe pass on some of my wisdom?
[00:03:30] Speaker A: Well, to be honest, at the time, when I sold the company, I didn't have much wisdom. Let's be real.
My wisdom was earned afterwards, if you want to say that. And if it's wisdom, others have to decide. No, the thing was, as many entrepreneurs as many kids of entrepreneurs who become entrepreneurs, I was not necessarily pushed into that side. I mean, I was running the business for almost 20 years abroad and in Switzerland and in other countries. So I was not pushed into that. But from a certain moment on, it felt like an obligation, and it felt like something that, well, there must be something else. And to be honest, I wasn't 50 then when I made this decision, we went to some financial problems, which any company might have, and I decided for myself, listen, I'll put the company back up into running mode, and then I'm out.
Then I kind of used all my energy and I was kind of through. And I thought, there must be something else in life than selling cables and electrical material. And this is especially true when you have a commodity kind of business, when every year starts again at kind of zero and. And you have to kind of redo everything. I mean, the innovation level in the wholesale business in electrical is not huge. I mean, we're not a telecom company or computer company or AI company where you have changes every other day for good and for bad. But then you become a commodity, and then you start selling through price.
And selling through price.
That's a tough one, right?
So this kind of wore me out.
And I made the decision in my mind that I'm going to sell. I didn't know what I'm going to do. But for me, it was clear.
I since I had the majority of votes in the company, not the majority of shares, but the majority of votes, I made that decision. I made it clear to the board that this is the way that I see it. And I sold a company at Yank with the okay of my parents, who were still living. We were still in the port. We still had chairs.
My brother was already out of the business. And then Covid hit, right? You go out of the office and everybody's home, and everybody thinks, what could be better? What could have been different?
And especially me selling. I mean, one of the board members, dear friend of mine, became a dear friend of mine, said to me, at that time, you know, the biggest luck of my parents is that I, the son, sold the business.
And this is already, if you want, one of the wisdoms, I sold basically the dream of my parents, which is a tough one. And I didn't think about that at all. And we didn't have the conversation about that at all. We had the conversation about what's the distribution of the money and how do we do that legally and how do we do that tax wise. But we never had a discussion. What does it mean?
Wow.
[00:06:55] Speaker B: Well, maybe you instinctively knew because you, you said you needed to turn things around in order to sell it. So there was a little bit of like, oh, like I feel guilty about wanting to sell the business, but if I turn it around, then it. Then at least it does. Like, then I'm allowed to sell it. That. Right.
[00:07:11] Speaker A: Maybe it was more kind of thing for myself, kind of like I didn't want to leave the thing, you know, in a weird way, in an unfinished way or in a bad way, you know, and. And this was a bit more nice that you pointed out. I, to be honest, I didn't think about that from that perspective, but I think I did.
I think I did it for myself, for my self respect, you know, kind of.
[00:07:36] Speaker B: Yeah. And also your parents were probably like, you know, Danny, nice job. You turned it around. Okay, now you deserve to sell.
[00:07:44] Speaker A: Was definitely an easier, easier discussion than, you know, with them that this is the way, you know, if you have to, if you have to sell under. Under pressure, this is, this is always a problem.
So we were not really under pressure. We were, you know, in hindsight, and everybody is clever in hindsight, lucky to be able to sell right before COVID hit, because Covid hit the industry quite, quite like everybody, probably. But I didn't have the patient and, you know, you needed to have someone, you know, driven and motivated and, you know, real business leader in that sense, which I thought I was until, you know, the energy runs out and I didn't want to do that. I was kind of super happy with a couple of months right after the sale, and I was maybe relieved that this happened.
You know, that was actually the feeling that I had. And this was also an issue between me and my parents, to be honest, that I was, you know, more relieved and happy, kind of, which gave a different tone to the discussion. You know, I went out because this was too much of a burden for me, which maybe it was at the end. So. So we had, yeah, I would say real family conflict coming from that. I mean, it didn't start immediately, but everything that was brewing before came out during that time, you know, and it took a long time. It took a long time also of, of, of conversation and self reflection, you know, to figure out, you know, first of all about me, why I did it and, and, and also my parents to understand what I'm doing now and why this is probably a better spot for me than before.
[00:09:39] Speaker B: So the conflict was with your parents and your brother. With everybody or just your parents?
[00:09:43] Speaker A: I was with everybody. It was a typical thing when, you know, when all of a sudden certain kind of money is around and before it's just, you know, abstract, it's in the company, and then afterwards it's about distribution and rights and roles and who has what and why. This is more, this is less.
It was with everyone and it was not targeted, you know, it targeted kind of everyone because in these moments of explosion, it targets towards everybody.
[00:10:12] Speaker B: It's amazing how I love the way you said that. There are these, these, these conflicts that are brewing under the surface. They may have nothing to do with money actually, but they kind of, you know, in some families, it's like they can talk about politics and all of a sudden like politics becomes the weapon that they use to fight each other with.
So anything can get weaponized, I guess.
[00:10:32] Speaker A: Exactly. Look, I mean, I mean, and you know that better than me. I mean, money is kind of, you know, money is the currency for love at the end of the day with, with entrepreneurial families and, you know, and you don't need to have much money to have quarrels about that. But it's always, it always represents something else. You know, I always loved you more than, you know, your brother, your sister, you know, these kind of conversations you were, you know, it's, it's the question also of thankfulness towards, towards your parents. Are you, are you grateful enough?
These are kind of these, these moments. Or should you be grateful at all or, you know, should the parents be grateful or. I mean, these are all conversations that one can have. But these things come out then. And money is a driver that can inflict kind of a lot of pain.
[00:11:25] Speaker B: So hard. I used to tell myself in our family conflict, this just, this is business. Just put it in the business category, don't put it in.
But inevitably there was still emotion. So this brings me that shirt sleeves curse that you write about in your book. Right? So you grew up with a family. Like your parents started the company. They came over from Czechoslovakia, right?
[00:11:48] Speaker A: No, they came. My father came from Hungary. That's right. Hungary. My mother came from Romania. They met in Switzerland. It's actually an impossible match, basically, but it did and don't work.
And they founded the business before they had kids. So I was actually not the firstborn. I was kind of the second company was first. You know, the, the, the shirt sleeves curse.
I mean, this is out there and there's a lot of books and, and, and things written about that. If it's true, if it's not true,
[00:12:21] Speaker B: can you explain it for some of our listeners? I mean, a lot of people know what it is, but some might not.
[00:12:25] Speaker A: Yes, the shirt relief cursed is, is a saying that the first generation is building something up. The second generation is keeping it up and running it, and the third generation is kind of destroying it, losing it for fading it. And, and this is a thing that you have kind of in every culture. Doesn't matter if it's Chinese or Japanese or European or American.
It's always. It's rice patties to rice patties or, or the shirt sleeves or, or, you know, the, the there, there's so many ways in German, you know that too. So, so you have this everywhere. And this is the perception that is being built up in the last, actually, not that long ago, this was a survey made from some Harvard professors around the end of the 70s to just prove that in this third generation, it gets very hard for entrepreneurs. Third generation is always at risk to lose it all.
Now, the thing is, it is true and it is not true.
It is true because most businesses don't have this kind of long lifespan per se.
Most businesses, I mean, the average age of a business built today in Switzerland, in Germany, in middle Europe is between 15 years and 18 years. That's not even two generations. So if you look at family companies that have 50 years, 100 years, 150 years, this is an outlier kind of.
Although everybody thinks it has to be like this.
But first of all, the business per se is not going to hold that long because you have market changes, you have all kind of financial changes. You have in that study, by the way, also companies that were bought were kind of disappeared, which is not true. Sometimes a company goes, you know, is bought and, and, and, or is buying other companies. So from that moment on, it's kind of a different thing now from that side. It's true. So the third generation has it more difficult. The third generation also has to understand this is not two people.
The first generation is two people.
It's the grandparents.
If you have children, your family starts to multiply and the wealth created by the company has to then sustain for more people. In the third generation, usually you have kind of a lot of people already, you know, your family becomes kind of a tri. So this is also. If everybody has a stake in the, in the company, the company has to be substantially bigger to support the financial needs of its members.
So that's why it's also much more difficult to turn within three generations a company that big that you always keep the same kind of financial possibilities for all the, all the family members. So here we have another sign that it is actually true.
Now what is being done, and that's a problem.
It's this saying of the three of the shirt sleeve curse, 3D3 generation curse is being used to scare the third generation.
You know, the third generation is kind of the loser generation.
[00:15:52] Speaker B: Yeah, the, the ones that drink it away and they.
[00:15:55] Speaker A: Even great entrepreneurs that I know in the third generation, they. They have this kind of like the Damocles sword hanging above them and telling them, listen, I'm not going to make it time because, you know, the whole story, the whole myth is kind of against me.
So what I'm saying is this picture is from the get go, wrong.
First of all, everybody is a first generation. I find this in the meantime a bit amusing that I'm third generation, second generation, fifth generation. No, we are all thousands of generations.
We're just taking a random generation that is kind of near to us in a sense that created a great deal of wealth or created something kind of big. And it is the hero generation. So the first generation is the one that builds stuff. The second generation already has the issue that they have to take over something that they didn't build.
So they are never the hero of the story. They're always the steward.
You know, they take something over and still the focus stays on either the company or the wealth.
Right? And the same thing goes on with the third generation that, as we said, has it much more difficult.
And we're still focusing on a company, on an active company or on a family wealth.
Now this picture is kind of wrong if you think everybody's first generation because kind of everybody is.
In this case, you don't focus on the wealth created at some random moment.
You have to look at the family structure and the family itself and say, okay, this is actually the thing that needs to be preserved. We don't have to focus on the company that Diana built. And now I have to take it over because I'm the child and my child will have to take it over no matter what they want in life, they have to just take it over. Because this is our family, you know, heritage where we come from. No, we're not coming from that comp. I mean, some are coming from the founders of a country or founders of a state, or founders of huge companies and huge estates. And then you become kind of, you know that you're the steward of this, but you then also understand you are also the protector of the fan.
And this is the thing that I'm trying to look at differently and bringing differently into the conversation that this shirtleaf to shirtleaf curse is something that you can actually fight yourself when you understand it is not about the company, it's not about the financial wealth.
It is about the family as such, as, as a, as a whole system.
[00:18:57] Speaker B: And looking at the family itself without looking at the wealth and the company, you mean. Or is it about the goals?
[00:19:04] Speaker A: Listen, at the end of the day, this is probably not even possible.
I mean you always, I mean there's always kind of these three circles. Everybody knows them. It's the family, it's a company, it's the wealth and they're intersected. And this is also actually, actually true in the sense of how you have to look at the whole system because it's interacted. And even if you don't have a company, then it turns into wealth. And if you don't have wealth, okay, you have little wealth, but you still have the family, it's still interacted. You still have outside components that have, you know, that have influence into the system. So you have to look at the whole system and you also have to try to have the whole system, you know, in mind when you, when you're talking to the family.
[00:19:52] Speaker B: You know what I was thinking? In Switzerland you have these families that have farms and, and, and it's usually quite.
I have never been privy to a conversation in, you know, a farming family. But how do they decide who takes over the farm?
[00:20:09] Speaker A: Ah, that's easy. It's the firstborn boy period.
Now maybe it's the firstborn child, but it's you. I mean, you have to see this discussion about wealth.
And I mean, coming from Europe, we have a certain kind of European historical background where it was like, kind of clear until roughly like 100, 150 years ago. Even in Switzerland, even in other, in countries, kind of all European countries, if you are a farmer and most of the people were farmer at that time, let's remember that they give the farm to the first born boy.
This is the natural air.
It's not being Split up. It's not like you're getting 50%, you're getting 50%.
No, the firstborn boy gets everything. Look at the royals, it's still like that.
So it was clear. The second born, he's going into the army. The third born, he goes into clergy, so he goes to church. And if you have a daughter, well, you have to marry her off. Well. Right. This was how it used to be. Now let's fast forward to the 50s of the last century because this was a time when the family structure all of a sudden became different.
This means this was kind of the first time for the broad population where you married the law.
This was a huge change in what we did. We used to marry for security.
We should not forget that family is the smallest economic unit that there is.
You married for security.
When your husband died in war, the biggest issue was how could you keep the farm run.
So you had to remarry.
So it was just a necessity to survive for you, for your kids. And you were, you could pray to God that you marry someone that accepted your kids as equal kids to his. Maybe. So this is a huge change. And if coming to today's world where you have so many different kind of family structures, so many different kind of, of, of even, even, you know, structures in terms of lifestyles and, and, and, and ideas, this is really new.
[00:22:33] Speaker B: I just have to tell you that the, there are some examples of female royals like Queen Elizabeth, the first of England to the most recent Queen Elizabeth. I mean there have been, you know, there have been women who have been the heads of state.
There have been exceptions to the males next in line.
[00:22:55] Speaker A: Yeah, that's true. But even Queen Elizabeth had afterwards King Charles as the successor. Also there, if you think about it, also there it was clear who takes the throne. It's never a question who gets everything.
So this is very different to today. And this is also very different to the kind of thinking that you need to have. If you are dealing with families, if you deal with entrepreneurial families, ultra high net worth families, it's, it's, you know, wealth or a company is just adding a lot of complexity.
Basically it's still a famine.
So, so the same rules apply. It's just, you know, maybe more money around or more complex things because you have a company.
[00:23:44] Speaker B: How do you deal with it now with, you know, so now women and women are CEOs and how do you pass the baton to the next generation?
[00:23:51] Speaker A: That's the $100 trillion question, isn't it at the moment? Let me give you a bit of a background of what's being done in the industry and around these kind of subjects. And then I'm telling you what I'm trying to do different.
So the term family governance comes to mind when you deal with entrepreneurial families that need some kind of structure and need to kind of get along with each other. And this is something that came up, I would say, 30, 40 years ago, where you kind of decided, okay, the family needs some way of dealing with each other that is fitting to the fact that they have a company or the fact that they have a lot of wealth, which means we need to come down with some kind of document that everything is written down that is relevant to the family.
So we're talking about roles, we're talking about values, we're talking about maybe legacy, we're talking about succession, we're talking about conflict, we're talking about a lot of things that are super important to do.
If you look at the ones who are offering these services, it's usually the ones who have to do with your wealth.
It's usually the financial advisors who come in, in whatever form and say, listen, since we need to kind of structure all this wealth that you're having, it would really make sense for us and you to have kind of a dog so that we know how to deal with all these wealth that you're having.
[00:25:36] Speaker B: So they're not independent?
[00:25:38] Speaker A: No, they're not. And to be honest, that's not their fault. Because to be honest, that's not their job.
Their job is as financial advisors to advise financial, you know, to advice around the wealth.
So the way that the conversation is being held and the way that entrepreneurial families are being served to my understanding, and I'm an entrepreneur, I'm coming from there. And I, you know, I kind of my own experience is like that, that they're coming from very dependent point of view with very selfish reasons.
You're going to say as an entrepreneur, listen, my family is my thing. And anyway, what you're going to sell me these soft kind of issues and emotions and stuff like that. I mean, you're not a therapist, right? And I'm not sick, so I don't need a therapist. I need someone who deals with my money and who does what I'm telling him to do.
That's where if you now shift the conversation to two facts that are around and they are actually contradicting what's being done in the industry right now is the first fact is every family is unique.
You cannot treat every family the same and it's not even the question, okay? This one has two kids and this one has three kids. And this one has this complicated. And this one is this. No, you. You have different kind of people that you deal with. You have different kind of. Of life story. You have different kind of stories of the family per se, where, where they're coming from.
[00:27:28] Speaker B: Yeah. Hungary and Romania get married. That's a pretty combination.
[00:27:32] Speaker A: Yeah. You know, I mean, you kind of forget that it's not one fits all concept at work here.
If you are a bigger firm. And this is the conversations that I'm actually having with financial advisor firms that I'm also advising is you cannot scale this product.
You cannot scale family governance in a way that every family feels hurt. Because for you, the value conversation might be super important.
And for me, I don't need to have that at all because it's kind of clear what we're doing here. We just don't get along.
So how do we get along? That's, for me, the big issue, you know, so you have to treat every family different if you're starting with the family governance approach.
Second thing is, while everybody's looking at family governance, no one is looking at family risk, okay? And family risk is an underrated thing, which I found to be odd. Let me give you the three biggest family risks.
The biggest family risk is death. And I'm hoping for everybody to live until 120 and on and then healthy and happy and everything. But to be honest, no one survived this. We are all going to die. Sooner or later, this is going to happen.
[00:28:59] Speaker B: Yeah. Now, that's the one thing you can be sure of. Death and taxes.
[00:29:03] Speaker A: This is actually, yeah, death and taxes. These are the two things. But. But we focus on taxes. We're not talking about death, and we're not talking about death out of two reasons. First of all, most people think if I'm talking about death, it's happening tomorrow.
You know, we're, you know, let's not bring the bad spirits up. Number two, with death, you have to then ask, okay, listen, if this is happening, what happens next?
Who takes kind of decisions? Who comes after? What are we doing after? And all of a sudden, we're in the succession discussion and we're talking death. Always like, this is something that's going to happen down the road.
We're all getting to be 120.
Probably not, unfortunately.
And the big question is, what happens if, God forbid, something happens tomorrow, something that happens this afternoon?
Who is prepared? How can we prepare it now? Death also to Be honest also from the tax side.
So the thing is, being unprepared for these questions represent a huge kind of financial risk.
So let's stay with the ones who. With the one people, the one group that is advising you, the financial advisors.
This is a financial risk that one needs to mitigate.
You cannot defeat death, but you can try to mitigate the outcomes, the financial outcomes of this event to be prepared. It's kind of buying an insurance for, you know, for a fire. It hopefully never happens. In this case with death, we know it's going to happen. But with a fire, you buy fire insurance and this might never happen.
Which leads me actually to, to, to risk number two.
Totally underrated divorce.
Happens in more.
Depends on which country you are. But in average, more than 50%.
Sometimes better prepare, sometimes less. And I'm not talking emotionally, I'm not talking about emotions that come in. I talk about the financial consequences of unprepared divorce.
You think? I think that our partners are wonderful and it's never going to happen with us. It's only happening with our friends and people that we know or we read about these famous people that have these ugly divorces.
No, this can happen to anyone.
[00:31:48] Speaker B: Oh, he's not that kind of guy. He's not into money.
[00:31:52] Speaker A: Exactly. Yeah, but listen, you know, a couple of years in and he saw, you know, the lifestyle and I'm not, you know, and don't get me wrong, I'm not looking at everybody who is marrying in as a potential money grabbing person. In the contrary, I really hope that it works well with everybody.
But you need to be prepared also for this kind of thing. Because to be honest, these kinds, I mean divorces have from kind of all.
Yeah, from, from most comforts that I know. The most devastating financial effect when people
[00:32:29] Speaker B: go through divorce, they become.
A psychiatrist once told me actually people go back, they, they go backwards in age. They become younger, like they become like children, they regress and they become people that are completely different to the people you might have married. And it's a temporary, I think it's sort of like a temporary insanity.
[00:32:49] Speaker A: From a conflict perspective. You reach a ladder that is so high and so destructive that, that it very well can be. And I saw this myself, it can be, no matter what happens to me, I'm gonna, you know, destroy the other person.
And it comes self destructive.
If it's, you know, in a, in a combination with a company or a bigger wealth, it becomes super financially destructive. It's kind of a pity because the social component of having A company is at the, that you have employees and these employees are sometimes dependent on the job. Right. And you provide a safety net for them too. So your social role, your social capital, if you want, is connected to that part too. And if you start destroying this, if you start destroying the company, if you start destroying your wealth, you are also harming that side. These kind of conflicts need to be mitigated too, because they can happen.
And the third thing, just to bring it on, because this is always what I mean, this is clear, this is conflict per se. If you have conflicts within a family, and let me be clear, everybody has that. If, if a family tells me they have no conflict, then they have one.
Because you should have come. The question is, how do you get along with that? How do you tackle that? And we just don't know that. I mean, very few people know how to do that.
So this is something that you see in entrepreneurial families. Many families that you have this conflict, as we had before, that they simmer underground and they just wait for the moment to strike when someone is kind of crossing over a red line and triggers someone else in the family. And all of a sudden things come out. You stole when you were five years old, you took my. Whatever. And, and we're in some other planet where, you know, on the conflict ladder, again, we're somewhere else.
[00:35:01] Speaker B: So we have death, divorce, and then just general conflict. Right?
[00:35:04] Speaker A: Yeah.
[00:35:05] Speaker B: Okay.
[00:35:06] Speaker A: And from that perspective, your job or my job is first of all to show the family that this risk represent this large kind of financial, financial risk.
And again, since every family is different, they can decide if they want to tackle this or not.
I know enough entrepreneurs who say, listen, I'm not going to do an A prenup with my wife or actually in most cases it's a postnup because it's, you know, after the marriage. We're not going to discuss this. I'm just going to leave this open and I'm hoping that everything is going to be okay.
Your decision, your, you took a conscience decision not to tackle. And let's get to the, to the succession question.
There are a lot of entrepreneurs who dodge that conversation with their kids just because it's too hard. They cannot do that. They don't know how. They don't know how to talk to their kids or talk to their wives or their husbands about what's going to be afterwards.
So you have 75, 80, 85 year old patriarchs, matriarchs that think they live forever and they're not going to have these Discussions about, okay, what's going to come after Rebecca? Death.
Because no one wants to talk about it. Everybody thinks, yeah, we're going to do that next year. We're going to do this next year. We'll talk about this next year. And you just are afraid of, first of all, meeting your own mortality and talking about death.
Because this leads very quickly to the question, okay, what am I here for? What, what do I leave? What do I want to, you know, what, what do? What should people remember?
And, and, and this is a hard conversation with oneself, you know, and this is stuff that most people don't want to think about.
And I think it is enormously helpful to have someone on your side to talk to, you know, about these kind of questions of these kind of, yeah, very, very human, very, very personal matters that have actually not much to do with the company or the kids per se, or, you know, the family. It's about yourself. What's, what's your, what is your role here? And what do you want to, you know, why are you here and coming back to, you know, this process of also mourning.
Many entrepreneurs cannot change their role because they don't know what's going to come after. Their identity is very strong. Their identity is very much linked to what they do.
Their identity is dependent actually on what they do. They think it's, you know, what I do is who I am, and if I'm not doing this anymore, then who am I?
[00:38:22] Speaker B: They say, I don't know if you heard this. The most dangerous year in a man's life is the year of his birth and the year of his retirement.
[00:38:29] Speaker A: Yeah, I can absolutely agree to that.
[00:38:32] Speaker B: What happens is they, they just like they, they retire and then they have a heart attack because they're so stressed out, they don't know what to do with themselves.
[00:38:39] Speaker A: Yes. There's this joke that most managers are dying their holidays. And, you know, so in the moment when you kind of could relax and have all these ideas, I'm going to play golf now every day, and I'm going to meet friends every day. No one plays golf. You know, I mean, let's be real. If you are a driven entrepreneur that all his life kind of had to build something, you cannot stop just from one day to the other. It doesn't make sense. And it's also like this. And this is also something that is very often mistaken.
If you are an entrepreneur, you're not on automatically also an investor.
Most entrepreneurs who are selling their company have the impression, okay, they have to do something. I mean, they were great entrepreneurs, and now they're also becoming automatically great investors because now they have the money and now they can go into any company and they're going to be a big, you know, big help for any company they join in terms of whatever.
But they forget that most, most of the times building a company takes 10 failures until you succeed. Right?
[00:39:50] Speaker B: Yeah. No, it's. I was a member of a, of an investment club, and there was a guy who had just sold his, his business, and he was like, I want to invest it. And I have this idea. I think I want to put one third in investments. One third I get to just spend. That's my play money.
And one third, I want to start a new business with it. And then everybody was like, no, no, no, slow down. Forget the plate money. It was funny. I was like, wow, this is a guy who built up a $30 million business, thinks that way.
[00:40:18] Speaker A: Well, people forget that going forward, the road is not always clear.
And you do things that you think is going to lead to success.
And entrepreneurs have the track record that they're successful.
Not everything is because of their great personality.
Many things is because they were tough and they were very lucky.
You have to be lucky. You have to be in the right moment, the right place. You need to know the right people. In any business that you do, you could be too early, you could be too late, you could be in the wrong country.
You know, so, so, so many things have to go right for your success. And you have to understand that when you were successful and you are successful, number one, this is probably not going to last for. Not everybody is Warren Buffett, that is always successful. But you have to remember that you maybe, you know, you had a lucky streak for a very long time, and you need to kind of stay humble. And when you change profession from an entrepreneur into an investor, you're a start at zero again. You have maybe a lot of money to play with. But listen, that's a different ball game
[00:41:35] Speaker B: going back to the founder who doesn't want to pass the baton because, okay, he doesn't want to lose his identity, but also the next generation. You described it in one of your articles. By the way. You've got a Great newsletter on LinkedIn. You use the Lord of the Flies as a frame for what happens to the next generation when they're kind of left to their own devices without any kind of structure. So how do you prepare the next generation?
[00:42:00] Speaker A: First of all, let's be clear that if you have a company, let's stay with the entrepreneur. For a moment, if you have a company that you built, I'm not going back 10 generations of winemakers in Italy that, you know, you have the family business since forever.
But let's say you build a company and you want to prepare the next generation for it.
The first question is, why are you expecting the next generation to do what you did? The question is always asked the other way around. And for me, it's like this for most kids, and I'm giving you an example from my own family in a second.
For most kids, it's like this, that they, of course they see what the parents are doing and they want to kind of, you know, see that they're successful sometimes, you know, if they're not becoming super entitled, you know, they, they want to try out and see what made the parents so successful. But what one forgets is if you are successful, and I mean successful first of all in what you're doing, but at the end also financially, most founders are trying to give their kids a better life than they.
And they're thinking, my kids should have it easier than me. You know, they don't have to work 80 hour weeks, 100 hour weeks, they should have it easy, they should go to better school, they should have a better education, they should try to do whatever they want to do.
And then I'm coming in, I'm telling them, now you're going to the company.
This is just not working. I had a conversation with very nice lady, a matriarch from, from a larger company of a family, and she was kind of telling me, you know, her kids in her 20s, beginning 30s, and she used the word useless, you know, they're not doing anything.
And this kind of triggered me because I don't think that anyone's useless. But the question was, how did we become to this, how did this happen?
I mean, this is the good life that you imagined that your kids would have due to your success.
You made it easy on them, you made it kind of, they can do whatever or nothing. It's also fine.
And it comes down to the question of parenting, if you want. Yeah, that's probably the right word. Now, I'm not a parenting guide or any kind of guide in that aspect. I mean, I'm still trying to parent my kids.
They're finishing their schools and going to university and we're having the conversations about what do you want to do? But let me take you back a couple of years when I sold a company and I didn't tell my kids about up at that very time when I signed. So we flew through holiday to our family, and a couple of days later, I took the whole family. I mean, my wife and my kids, three kids, took them to lunch. My, my daughter at that time was 15 years old, my smallest boy was 10, middle one 12.
So I sat them down and told them, and I need to tell you something.
And the smallest one, 10 years old at that time, tells me you sold the company.
[00:45:29] Speaker B: Wow. Amazing. You think children don't know stuff, but they do.
[00:45:34] Speaker A: They do. Yeah. The question then was like, did I take something away? Did I take an opportunity away for you to run one day the family company?
You know, the family company. We had the name, our name was on the company thing, you know, and my daughter at that time said, thank God that you did it.
And if I ask them now, you know, six years later, they're all, I mean, they're happy at the place that we are, that we have the certain kind of financial possibilities that we have, but they know they have to do something for themselves because they cannot just, you know, they cannot just take a job in the company and just do something. Now this is not always the case. There are very often cases where the family, the children are deeply embedded in what's going on, and there are very often the case where they're just not.
And when they're not, you have to decide for yourself, like, why is that and how should any one of the ones that are not involved ever going to come in, other than for the fact that it looks easy?
You know, it's an easy way. You take a C level position in a, in a, in a ongoing company, you want to have a nice salary. You know, the wealth that we're having is being created by the company.
So this is a logical step for anyone and it's a logical step actually for all the kids that, which is creating even more issues. Now, not everybody wants most don't because they understand what it takes.
They understand it's something.
It's not even the work that is the issue.
It's someone else's dream, it's someone else's thing.
And just because it's my father or my grandfather doesn't mean it's me.
And I see very often people that come into these positions that if it goes well and the company is very stable, they start to kind of change the company in a direction where it suits them better, where they all of a sudden do things in the company that suits them better.
And sometimes great entrepreneurs arise, to be honest.
So, so you, you kind of never know. But you know, when it's not working, you know, when you're not having early conversations, when you're not having, you know, these, these triggers, pressures or whatever on, on kids. And, and that's a psychological truth that a psychologist told me once. If you, if you take your child to your office, no matter what kind of office you have, and let's say seven year, eight year, nine year old child, and you put them in your chair, the desk, and you're going to tell the child, this could be your chair one day, put a child in their head, this chair becomes their chair.
You never said, I expect you there. You never said it's for sure that you're going to be here.
But for the child, this becomes something kind of an expectation that was built by their parents.
Now, okay, you can always blame the parents, but I had the conversation with my parents and I was sure, and still today sure that they told me I have to do that and they're sure, they never pressured me on this.
And probably both of us are kind of right because the perception and the language that we have intergenerationally is not very easy.
So what I'm trying to advocate here is have very early, certain kind of discussion within the family sometimes makes sense not to have them alone, to have them kind of professionalized and by, by taking in an outside facilitator and make them so everybody can be heard, so you can start discussing issues, so you can start discussing expectations.
Because this is preventing also the third risk that we're having, the conflicts if you don't know how to talk to each other, if you don't know when, which forum I can bring up, you know, issue that I'm having. You, you talked to me last week about this and this and it really hurt me and, or, or this kind of expectation is not something I want to deal with or not deal with at the moment. You know, people are afraid of these kind of hard discussions and they, they, and they put them in the, in the drawer of, yeah, these are fuzzy things. This is emotional and this is kind of not nothing.
But this is the decisive thing.
If you cannot do that, I mean, crunching numbers is something that the, you know, a computer can, you can give it to AI and they have the greatest, you know, you can make all kind of spreadsheet easy. But, but I'm saying that's kind of the easy part. And we're saying this is hard stuff, this is the real stuff. And then we're coming to the emotional side.
And, and again, I'm Trying not to talk about emotions. I'm trying to talk about risk. I'm talking about the thing that, you know, this represents something else. Now we have to talk about this.
[00:51:27] Speaker B: Well, I have a friend, you know, who was going through a separation and she could, she couldn't sleep. She went to the psychiatrist actually in Yerikstad, and she, she told the psychiatrist, you know, I just, I can't sleep. I'm feeling awful. And a psychiatrist. And they started talking about her marriage. And she said, she asked my friend, do you ever fight with your husband? And my friend said, never. We never fight. And psychiatrist, that's the reason you guys are breaking up now.
[00:51:52] Speaker A: Just to make clear, I'm, I'm not a therapist, and I'm not trying doing therapist sessions. And, and, and, and this is also something which should be a guideline for, for, for, for, for advisors. To do that, you, you need to bring in an expert. You have to know when you have to bring in, you know, a specialist for something. So when we get to these moments,
[00:52:15] Speaker B: we seem like the kind of guy who's not afraid of having tough conversations.
[00:52:19] Speaker A: No. Depends.
That's a, That's a difficult one. I'm in a lucky position not to be afraid to speak out the truth.
Now. The difficult conversation, it's never something that is new.
It's never something that no one knows about. These are usually these, you know, you talk about the elephants in the room that everybody knows. Now I'm pointing them out and I'm trying to poke them to find out are they really elephants or are they something else? So without going in there, yes, I'm not afraid of these kind of conversations because at the end of the day, what can happen to me? Okay, I, I made you uncomfortable.
Okay, that's, that's maybe my job. You know, if, as a, as a risk manager, you would. Okay, you have to talk about the bad things. I mean, if we only talk about sunshine, then, okay, let's put at least sun protection on. Right. But what I mean is, you have to have this conversation. And, and if you really, first of all, if you really care for the family, then you have to ask these questions. And not with the intent of hurting them or opening up wounds, but understanding what drives them. And sometimes they don't know.
And since no one is asking these questions, maybe sometimes it's just like that, that they never thought about.
It's kind of so normal. It became so normal to deal with these kind of issues.
Everybody knows that, but no one talks about that. And I have so Many advisors around me, and no one talks about that kind of.
I mean, I was sitting with him with the patriarch in his office. The firstborn son, the.
The supposed to be successor who already worked at the company, came and came through the door in to bring some documents.
And in the way that he came in, I kind of already saw. I mean, this is not gonna go well because you see, when you see, you know, someone comes in with a certain kind of confidence, he knows what to do, he knows how to say. But this was in a case like he was on a leash, to say the least.
[00:54:40] Speaker B: So how do you deal with that?
[00:54:41] Speaker A: I didn't speak to the father first. I mean, to the son first. I. I spoke to. To the patriarch. And the first reaction of the patriarch were, that's why I'm not leaving.
He saw that too.
But instead of tackling this and starting to open the conversation and find out, okay, what can we do? Maybe.
Maybe he needs to do something. Because, you know, you have to see, as an entrepreneur, giving the company on to a family member, that's only one way to deal with succession.
Company succession has various ways. So you could also sell it to the board. You can stay shareholders, you just own the company, but you're not in a C role.
So there are so many ways to stay an entrepreneur without running the company, necessarily. And if you find out the life cycle, as we said, goes to an end, maybe it's better to sell and do something else with the world.
Right?
Because that's the thing. So you have to say this.
You have to confront the people and say, listen, I have nothing about. I mean, the guy could have sent me answer, what kind of a guy are you? And how dare you talk to me like that? And, okay, that's the independent part that you have to have. You have to be able to, in a nice way, maybe offend people and open their eyes.
And that's what I'm trying to do.
[00:56:15] Speaker B: This is lovely, Daniela. I wanted to let our listeners know how they can reach you. And also your book. I was trying to buy your book, but I couldn't. I need to read it in German, but I think there's an English version that's available in India.
[00:56:31] Speaker A: Actually, it should be available on Amazon, I thought, in English, everywhere, I thought. But I can check again. If not, I mean, the easiest way to reach me is via LinkedIn.
[00:56:40] Speaker B: LinkedIn.
[00:56:40] Speaker A: Yes.
[00:56:41] Speaker B: Okay.
[00:56:41] Speaker A: Yes. I mean, you find. I mean, I have a very peculiar name. So you find also curtis.net.
[00:56:46] Speaker B: i'll put it in the show. Note people can find you.
[00:56:49] Speaker A: I'm happy to have the conversation.
[00:56:51] Speaker B: Yeah.
[00:56:51] Speaker A: Thank you very much.
[00:56:52] Speaker B: Yeah, thank you so much. Daniel.
If this episode landed for you, share it with someone who might need to hear it. And if you haven't already, subscribe so you don't miss what's coming. But here's the real thing. I want you to know if you're carrying something you can't talk about, if you have every resource except someone who actually understands what wealth costs. I work one on one with people like you navigating exactly that. You can reach me@diana oehrli.com. thanks for listening.
