Episode Transcript
[00:00:00] Speaker A: Some sides of the family just see the money for liquidating now and taking it, and others see the future and what it's going to look like. You know, there's a lot of family feuding after because one branch maybe kept the business that's now a billion dollar company and the other family got, you know, $100,000 back in the day and now they feel like they were slighted.
[00:00:20] 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 calls herself the GP of Family Business. And honestly, that fits. Her name is Tammy Buss and she's the founder of Blue Roots, a family run firm up in Ontario that helps other family businesses get aligned.
Tammy spent more than 30 years building her own business and living through her own family succession, which is why she doesn't just call herself an advisor, she calls herself a family business survivor. She's a facilitator, a professor, and the author of two books. I love the titles, Passing down youn Success, how to Prepare youe Family and Business for the First Transition and then the second book, Dream It, Build it and Pass It On. Tammy, welcome to the Pressures of Privilege.
[00:01:28] Speaker A: Thank you for having me. I'm excited to be here.
[00:01:31] Speaker B: You call yourself a family business survivor and before you were the advisor, what did your family business put you through that made you want to do this for a living?
[00:01:40] Speaker A: I started in the industry, financial services industry, back in the 80s, early 80s, and basically just I was selling insurance and investments and employee benefits and, and I was working with individuals, self employed individuals, and I was a young self employed individual myself. And so we grew up together through the years. So started off as a one person firm, then you know, you needed help, you got some help and then, you know, you were very good at your craft, so then you needed more help. And fast forward 30 years and where our businesses weren't one person anymore, they were, you know, 20 or 50 or 200 people, but they were all first generation family businesses except we didn't understand that at the time. We just were paying the bills, head down, buried, just trying to, you know, make a living.
And then you pop your head up and you're in your 50s or your 60s. And all my clients were because we'd been through it. All right, we'd been through the growing pains, the hiring, the firing, the, you know, having to get benefits for employees, like, all of these things. And we don't really talk about it with our family, right? We just go off to work and we spend an awful lot of time at work building these businesses. And then you look up and you go, okay, my kids are now 20.
I'm, you know, in my 50s or 60s or 70s in some cases.
What do I do with this business?
So the issue became, what do you do with the business? You spent 30 or 40 years working to build this business, which is when all the heavy lifting is done in those first, you know, 20, 30, 40 years. And all of a sudden, you know, you're ready to hand it off to someone, someone else, and you haven't had these conversations.
So I realized that I was, I was done doing what I, you know, the financial services, I was done with that. I'd spent close to 40 years and it was like I needed to move on, but I didn't know how to move on. And, and because I, I mean, the easiest thing is to sell a business, right, Is just put it up for sale.
But I realized that there's more. And I started to have conversations with my kids, but in some cases it was a little too late, right? And so I went back and got my family enterprise advisor role. So I could understand this because my clients were doing the same thing. My clients were just selling their businesses. And then I would hear the, the next gen really was disappointed that they'd sold it. They really didn't realize they were going to sell it.
So I realized that there was a lot of work that needed to be done around communication.
And, you know, having transitioned my own business, I actually sold part of it to an employee, part of it to a third party, and carved off the consulting work I was doing and then sold part of it to my, to one of my sons.
So I did this, this, you know, transition in several different capacities as a, you know, as a mom, as a, as employer, and then as just a straight business owner.
And I realized that I didn't give myself enough Runway in order to do it correctly. So I wanted to avoid that for my clients moving forward. Or even, you know, first generation is, is generally my market, first to second gen, because we don't consider ourselves a family business, right? We just consider ourselves a business owner. And all family businesses start with Gen1. And I survived it because I thought I'd done an okay job. Like when I honestly, I, I thought I Did a great job. And I had my two sons and my husband on my very first podcast. And honest to God, I still have the scars from how bad they thought it went.
And I thought it went well, but I didn't because I was too invested in it and I wasn't looking at it from an outside perspective.
So that's why I said I'm a survivor, because I still talk to my family, we still get along, and the wounds are healing. But, yeah, so I wanted to help other families.
[00:05:52] Speaker B: Yeah. What did they say on that in that podcast?
[00:05:55] Speaker A: It was a surprise that I didn't tell them about it, that I just sprung this on them and I'm like, wow, I thought I did. And they said, no, no, you didn't tell us. You didn't tell us. So we have this stuff in our heads, right, that we think we've said out loud, and it just doesn't come out. We assume everybody knows what we're thinking and what we're going to do. You know, I was like, oh, I'm really sorry I didn't talk to you about that. So really, I realized that you need to have somebody sort of help facilitate those conversations because we don't do a very good job of it ourselves when we're so invested in the business.
[00:06:27] Speaker B: That's interesting. What kinds of people could families hire to help them with those kinds of conversations?
[00:06:34] Speaker A: So I come in now as a family enterprise advisor, so I have conversations with. Help them have conversations they know they need to have but don't know how to have it. So the very first thing I would recommend is hiring a family enterprise consultant or a family business consultant. And what we do is have conversations. Right. Once you start having conversations, you might realize that there's additional coaching that needs to happen. Maybe it's individual coaching, corporate coaching, all kinds of different coaching. There might be some. Some help in terms of mental health, could be some issues, addiction issues.
There could be some issues around the money.
So you might need to bring in a financial advisor. But one of the things that a family business advisor is, is they're that sort of center hub. They're that hub of the wheel, and they're that connection to all the other spokes. So if you need legal accounting, they are a lot of times the provider of the product.
So they're providing the coaching, they're providing the solution. The, you know, powers of attorney, the wills, the shareholder agreements, all of those things.
But what's missing in a lot of cases is the conversations around what they should. What they should Say so, for example, if you have. If you need a will done and you've got a business and you've got children in the business, not in the business, you know, sometimes there's a. There's a difference of opinion on, you know, is it fair versus equal.
So you might not actually get that will done because you don't know what to do. You. One wants the child in the business to get the full business, and the other one, the other spouse, maybe your partner wants it to be split. Even, even Steven.
So those are conversations need to happen prior to executing those wills, those power of attorneys, those shareholder agreements, the sale of the business, you know, philanthropy, all kinds of things. It's about the conversations that you need to have happen first. And like I said, I learned my lesson the hard way. I probably would have done things a little bit different. However it worked out okay, but it could have worked out a lot better.
[00:08:50] Speaker B: What's interesting, you said you sold your business to your employee. The people part is not just the family, it's also the employees.
[00:08:56] Speaker A: Right. And again, if you're selling the business, what's happening to those employees? And if you're selling the business, are you selling it for the top dollar? Are you selling it for the company that will look after your clients and your employees better? So there's a lot that goes into these conversations. And generally, when you are a first generation, you are the owner, you're working in the business, you know, you're the family, you're wearing all different hats, and it's an understanding of what hat you're wearing when you're making those decisions. Because there's a protection of the employees, there's the shares, you know, there's the family issues, because the business might be what's funding the family's lifestyle. So there's all kinds of things that come into play.
And so my role as a family enterprise advisor is to get them to understand what hat they're wearing when they're having. Having those conversations. Is this a business conversation? Is it a family conversation or an ownership? Because they can be torn apart.
Right? And you can have a business standalone, ownership standalone, and the family standalone.
So when you're stuck in the middle, right, you don't sometimes know what conversations you're having.
And I think that was my issue as well, is not knowing what conversation I was having at the time.
But, you know, for the last 10 years, this is what I've been doing full time, is I have the experience to say, this is what I've done.
What I Did right. What I didn't do right. I also have a child in the business when not in the business. So I understand that. I can see it from all different angles now, having lived through it and trying to help other families have a smoother transition, whatever that transition happens to be.
[00:10:40] Speaker B: What you just described reminded me I had read somewhere that you use the three circle model, right? The family ownership and the business. And in plain words, what goes wrong when these three circles get tangled up?
[00:10:53] Speaker A: Well, they're going to get tangled up. It's a Venn diagram. This was designed back at Harvard in the 70s, and it's been sort of the foundational framework for family businesses. So what happens is there's seven positions in an event diagram. We got three circles. And. And this comes down to understanding the lens and the hat you're wearing, you know, in the conversations that you're having based on where you sit.
So you can have someone who is a family member who works in the business but doesn't have ownership.
So understanding that maybe that that child. So if you've got, say, say, two kids and one's in the business, one's not in the business, and one has a vehicle that's attached to the business because they are in sales or they're in a position service, and that role requires a vehicle. So they have a car.
But your other child doesn't have a car and wants a car, so there becomes that jealousy or that entitlement. Well, they have a car, I have a car. But that role in the business requires a car. So if it wasn't your child in that role, would that other person have a vehicle? And the answer is yes.
So I always use the example that, you know, when you go and work for a company and they list the benefits that are associated with employment with that company, do they ask you if you have any siblings that should be given the same benefits?
And the answer is no. Right? Like you're not going to get the same, but they're not going to ask you that. So it's the same thing as to understand that I am working in the business. And these are the perks of being in the business.
Not a family perk. The family, Perkins, might be that every child, when they turn 16, gets a car.
That's a family perk. So understanding what lens you're looking through, right? And that's where a lot of the confusion comes in. Depending on where you are or you're an owner and you're a family member, but you don't work in the business. So what lens are you looking through? You're looking through a different lens. You're looking through the lens of what is this ownership giving me? What, what are the dividends I'm getting? I'm more concerned about an income from the business rather than growing and preserving the business. So what lens are you looking through and understanding when someone else says, who's an owner and doesn't work in the business?
What kind of dividend am I getting this year? Or how are the dividends being attributed to understand that they're not looking at the business, they're not involved in day to day operations, they don't know what it takes to keep that business going, to be able to pay out dividends. They're just asking that questions like, what's my expectation? Because maybe they rely on that to fund their lifestyle.
So instead of going, you're all about the money. And the other it's like, well, you never think about the money. Well, no, it's understanding. This is the position they're in, this is their framework. You are over here, you've got all of them combined. You got the business, the ownership and the family. So understanding where you're coming from, asking a question or answering a question.
So I have lots of families that will ask a question and we'll say, okay, hello, are you asking that from a family? Are you a member? Or are you asking that from an employee perspective? Because the answers are going to be different, right? Depending on what lens.
[00:14:09] Speaker B: This reminds me of a situation I know of a person getting free rent from their parent who was the owner, and the free rent was part of the package. And then when the other sibling wanted the free rent too, they got the free rent, but they didn't work for the business. So there was this sort of reverse jealousy, like wait a minute, like I, this is part of my salary.
But the other siblings getting it for free and they're not contributing to the business, right?
[00:14:36] Speaker A: So that's where those conversations come around. It is that a family benefit or is that a business benefit?
So if the business is, you get an apartment or free rent, is that part of your salary or not part of the salary?
So if your sibling is getting free rent and not working in the business, how does that equal out?
What are the parameters around that? And again, a lot of it is conversations about opening up and saying, here's why. So you go, oh, that makes sense. Instead of having this bickering amongst siblings or being upset at someone that had nothing to do with it, Right? Like you got grandma's ring. And I thought I was getting grandma's ring. That has nothing to do with your sibling who got grandma's ring. It has to do with grandma and the way she set it up. So it's really understanding and having these conversations and they're tough conversations to have because emotions get involved and then you don't want to get someone upset and then you're going to get mum mad and then you know it's going to wreck Thanksgiving or, you know, lots of things like that. So people just avoid it and then harbor this resentment for years and years.
[00:15:43] Speaker B: So with your three circle model, it's, it becomes the basis of conversation where you ask families, well, where do you guys lie on that diagram?
[00:15:51] Speaker A: Yeah, so it's, it's pretty easy. There's seven positions. One is a family only. You know, one is a business only. So those are employees. Three is an owner.
You know, again, it can be ownership only. And then you start having that mix. So, so when you put them together, then you've got family who work in the business, then you've got employees who have ownership, then you have owners who are family members who don't work in the business. And then you've got the seventh position which is right in the middle, which is everything. You are a family, a business and an owner.
So understanding that the, the owner who is an employee doesn't care about your family.
[00:16:31] Speaker B: Right.
[00:16:32] Speaker A: So when you're in the middle and you're having these conversations and you're making decisions, you have to go, is this a business decision I'm making or is that a family decision or an ownership decision?
Right. So understanding what lens you're making the, the decisions from and then getting upset. Like one of the, one of the samples I examples I've, I've given in the past is, you know, there was a family who brought on a non family owner as part of growth structure. Several of the children worked in the business. But one said, why'd you do that? You know, got really upset and you know, dad and mom were upset, starting to get upset because why were they asking this? And it was like, hold on here a second, let's just take a step back. Are you asking that question as an employee of the business or are you asking that as a family member?
Because if you're asking that question as an employee of the business, you don't have a right to have knowledge ahead of time. You don't sit in a C suite. You're not privy to those conversations to make those decisions. However, if you're asking from a family perspective. Absolutely. You can ask that question. And the question is when should the family have known?
So that's a discussion you say, okay, well if we're going to make major decisions, we'll let you know, we'll talk about it as a family and then we'll, you know, before we execute the, you know, the agreement or the decision or whatever it is we're doing. So it's understanding from a family perspective. Yes. Maybe you shouldn't have been told after the fact.
Right.
But if you're asking from a business perspective, you had no right to know before that decision was made. You had, you got to know when everybody else did as an employee. But understanding that as a family member. Yes. You know, mom and dad are the owners of the company and they get to make the decisions. Cause they are the owners.
But it's a family business and has family working in the company. Therefore maybe the conversation should have happened prior to the execution of the, you know, the documents and bringing that person on. So again, it's about that conversation to go, oh gee, I really guess we should have talked about it first. Doesn't mean that the family can veto it because the ownership has the final say. However, they have a voice and it's giving an opportunity and an explanation is that we want to bring on this person because they have contacts that we, in order to do the growth that we want, we need to bring this person on board.
And the only way to entice them over was a small percentage of ownership.
Well, that could have avoided a lot of tears and frustration had that been talked about prior to finding out after the fact that the family company has now got a third party owner.
Right. Or a small portion. So those are conversations that could have been like. Those are frustrations and conflicts that could have been avoided.
Understanding that okay, this is a family business. You might not think of it as a family business. When you're first gen, it's just your business.
But every family business starts with Gen1. Do you only work with first gen? No, that's my primary focus. I think we need the most help because we don't know what we're doing.
As you get deeper into the generations, some of those conversations are happening. But it becomes more about letting go in a lot of cases. So when I go to gen 2, I think the deepest generation I have is 5. But primarily they're 1, 2 and 3. Cause sometimes goes from gen 1 to gen 2 because of a death or something unexpected.
So it really just happened. There was no Planning around it. Once it's starting to transition, then we have an issue with letting go. In a lot of cases that, you know, the, the leading gen will just not walk away. Although they might have transitioned some ownership or some control, they will not walk away from authority.
[00:20:37] Speaker B: That's amazing. I'm thinking of trusts and like our family trust, it was a testamentary trust that went way far too long.
And I was thinking of the ownership, you know, the owner, it was owned by a trust which is in turn owned by the beneficiaries represented by the trustee. And then there was a board of directors and a CEO for the businesses. And I had some uncles who were, had basically were directors, CEOs and trustee. They wore all the hats and had all the control.
[00:21:06] Speaker A: And in some cases, you know, this is where there's a lot of education required. And again, as a third party outside person looking at this, I can see where, you know, there needs to be a little more education happening. So if you have somebody who sits in all three of those positions, it's very difficult for them to see somebody else's position because they're kind of like that three circle and they're stuck in the middle and they don't know what conversation they're having. And I can tell you that working with families that have trust, that being a beneficiary of a trust, people don't understand the difference between being a beneficiary of a trust that holds the shares versus direct share ownership. And in some cases you can have family members who have both, depending on how that's happened over the years, transitioned down and it becomes very difficult. And then voting, non voting and advisory versus fiduciary boards, it becomes very complicated and complex.
And it really comes down to again, understanding communication. That's how family businesses survive from generation to generation is understanding the expectations, what the values are. We've talked about values in the past. Understanding what the family's values are, what the business values are and you can have your own values. I mean we're not saying you have to give up your own values, but understanding what the, the family values are and what the business values are so that you know when things are going well because they're true to the value. If they go off kilter, you know, that, you know, this wasn't a value. How do we end up over here? You know, bring it back. So it's a way to keep accountability by having your values and your mission vision sort of documented.
[00:22:54] Speaker B: Great great grandfather must have come up with doc, I don't know if he, he was a very controlling person. He had a will and I guess the will sort of laid out what he wanted, but I don't think he created a vision mission. I think that's kind of more modern language.
[00:23:09] Speaker A: Yes. You know, what you can, what you see sort of long term. Right. And it changes as, as we evolve. Right. As human beings. And so you know, what he thought of back in the day, he didn't think would be changing the way it is today. Like who, who would have thought we have AI the way it is now
[00:23:26] Speaker B: and women in the workforce.
[00:23:29] Speaker A: Women in the workforce, absolutely. The whole industrial revolution, I mean, so there's a lot. And so trusts are a very good thing provided that they have the right parameters around them.
[00:23:40] Speaker B: And he created some charitable trusts. And I think that was probably where his legacy lived on. And he had a brother who was a very important doctor, who was, who created the journal, you know, what is today's psychology, actually, which is kind of interesting. Morton Prince, he wrote the original papers on dissociation. It's interesting because now we have things like internal family systems, which is based a lot, I think on his research, you know, a hundred years ago.
[00:24:06] Speaker A: So I'm just curious, what are some
[00:24:08] Speaker B: of the conversations like families avoid the longest, you know, the ones that you have to drag into the room and you'll see. Come on, we're going to talk about this now.
[00:24:16] Speaker A: Well, you know what, a lot of it is assumptions.
So it's not necessarily conversations that they're avoiding, it's just assumptions. And the assumptions are the biggest cost. Right. Because you assume certain things. I assume my kids will want to take over the business.
I assume my dad is going to leave the business to me. I assume my mom is going to do this, do that. It's assumptions. And the very first thing we do as family enterprise advisors is to go in and sort of interview everybody, independently, individually, away from everybody else and ask them a lot of questions, you know, and we include questions around the family, the business and the ownership. Right. So really understanding what their knowledge is, you know, what their assumptions are.
And then we sort of bring them all together and say, you know, sort of an analyze them all and come back and say, here's a couple of themes that are really cool, common throughout all the conversations and the conversations. I can have anywhere from four members of the family, you know, to, to 16 members of the family. It really depends on, on what stage they are.
So once we do that, then we list here's all the themes that you need to start to work on the family then chooses where they want to start.
[00:25:30] Speaker B: Ah, so you don't impose it.
[00:25:32] Speaker A: No, because every family is different.
[00:25:35] Speaker B: So it's a.
[00:25:35] Speaker A: About these conversations. Here's the list. Where do you want to start?
The issue is that they don't know where to start. A lot of times families will come to me because they want a solution, but I'm not there to give the solution. So I'm not there to do the will. I don't. I'm not a lawyer, you know, they want to get their will done. Well, first of all, you can't do your will. You can't execute something until you know what you want in it.
And that's where the conversations that I start. It's what is the number one priority? Okay, the family agrees. Or here's the thing we have to figure out first.
I've got families that the very first thing is to understand what the assets they own are.
So how can you make decisions if I want to go into the business or not into the business when I don't even know what we own?
I know what we do, you know, but I don't know what we actually do.
So a lot of times that's the biggest, you know, and first conversation is like, what exactly do we have?
And because if you are, I've got one family that's third generation, so third going into fourth, they haven't got a clue what they own the fourth generation because they'd be kept sheltered. It's an industry where it's not female, sort of dominated, and all the next gens are females. And so they've been sort of sheltered and not really brought into the. The business fold.
But now, you know, the three siblings who own this company are getting up there in. In age and are trying to do some succession in estate planning.
And the next gen is like, well, we don't even know what you got. We're not even sure if we, you know, maybe we can step in and do some stuff. We. We don't know what the opportunities are.
So that's a lot of times the conversation is, what exactly do we have?
Some parents just don't want the kids to know. I mean, you know, or you don't know if your parents have money, you know, either know you can afford, you know, the designer jeans or you can't.
So that's sort of the first step is to say, what is it that we. That we have?
And making sure that, you know, that it's confidential. Because a lot of times that people Just don't want anybody else to know what they have. Right. So they don't even tell their kids.
[00:27:52] Speaker B: Here in New England, you know, there's the white Anglo Saxon Protestant ethic is sort of pretend you're really poor and you wear shirts with lots of holes in them.
[00:28:02] Speaker A: Now you pay a lot of money for clothes with holes in them. Yeah, yeah, yeah.
[00:28:06] Speaker B: Or the English. I have a friend who's English, and he's like, oh, I wore this T shirt that was a Nike T shirt that just said do it on the. On the back of it. And he was like, oh, you're wearing name brands. Terrible.
Yeah.
[00:28:20] Speaker A: So, you know, and every family's different. So there's no. I can't say there's one conversation that happens more so. But it's really up to the family to. After having talked to them. And it's surprising because I am a third party.
I am not. I have no vested interest in the outcome. And I work for the family, not for the person who brought me in. I work for the families. So it's having these conversations. So they're way more open to talking to me about things than they would be to their own family in a lot of cases. So I just have to find a way to make it so that I'm not pointing out. Well, Diana said this. You know, Tammy said that it's a theme. And so my role is to try to come up with the themes and then let them determine where to start. And it's like a progression. So I know a lot of cases, and a lot of times I know where they should start, and I know they don't want to start there, but inevitably they'll go back to it because they know they can't make the next decision without doing that first part. But if I say you need to have mission, vision and values, or you need to document your values to start with, they would go, yeah, right, okay. On to the next thing. Like, this is a big waste.
Right.
[00:29:38] Speaker B: So it's.
[00:29:38] Speaker A: It. But then you realize how important it is because, you know, they have them. You know they have values. They just have not documented them and really talked about it.
So that is one of the things I could almost say, like, with 80% certainty, is that most of my families don't have documented values.
[00:29:58] Speaker B: Well, that's why I love focus, focusing on strengths, because it's like, what. How did your. How did your ancestors survive? I always think that's a really.
Especially for the older generation. They love that family history.
[00:30:09] Speaker A: And they do. They do. And Telling the stories and having that transition. I mean that's, that's part of that legacy. You know, it's really understanding where you came from and, and how you managed to, you know, grow and be who you are. Well, it all came down to the values that were established by your ancestors. You know, even for myself, you know, starting my career in the financial services, I was only employed by somebody for a couple of years before I left and went out on my own because, you know, I didn't realize this at the time, but you look back and you go, it's values didn't share the same values. They were policy peddling, they were selling for the sake of commission.
And I'd actually had a couple of death claims in my first, within my first 18 months and realized that insurance plays a major part of growing families. And this is not just about commission.
And so realizing that, you know, again, I didn't know it was values at the time, but later on I went, oh, those are my values. It wasn't about just the commission, it was about making sure that if a product was used that it was used properly and there was enough insurance there to protect the family and get what they were trying to achieve. And so I think it's important, but sometimes we don't realize it until later on. Like what our values really are and that's how the business has survived over the years is based on values. I think that's why you, you have companies that have long term employees, they're usually family run in some cases and they're treated differently. There's a vision and a mission and they have values. They're the employees are probably valued to begin with.
[00:31:43] Speaker B: I lived a version where succession like went wrong, like where, you know, where I, the person got left out to protect the business. So where you sit, why does that happen? Even families who are supposed to love
[00:31:55] Speaker A: each other, a lot of it is sometimes culture. It's just the way it's been done. I've got a family that's fourth generation going into fifth, that's only gone to the oldest boy.
And this is going to change with this transition. It's not going to be for a few years, but it's going to change.
A lot of times it's just what's been done and they want to continue that without really looking at it. A lot of cases it's the easiest thing to do. You've got a child in the business, not in the business.
Female, male, assumptions. There's no set reason for it, but it happens even today.
[00:32:31] Speaker B: Yeah, it's hard to believe that they still do that. My mother always says the female side is the only side you can be sure of. So the women should be the ones, you know.
[00:32:41] Speaker A: Yeah. No, it still happens today. And it's interesting when you're in the
[00:32:46] Speaker B: room and you've got a family around you and how can you tell the difference between a next gen kid who, who's entitled and one who's never really been given a real seat at the table?
[00:32:57] Speaker A: You know, generally I'm brought in because there's an issue happening, right? And the issue is, you know, someone, they don't know how to transition. They don't know if they should sell it, they don't, they don't know how to get mom or dad out of the office.
There's an issue.
And you know, I think most of the time today, most first gens and again, at this point it's depending on the generation. Okay. It really does depend on the generation that first gens with their next gen, they're all sort of entitled in a sense that because they weren't in the business or allowed to come into the business for whatever reason, they've had to go forge their own way. But they've ended up getting support along the way. As you get deeper into the gens, the trusts or depending how the accounts are set up, you know, if the shares are transitioned or if the business was sold and there's assets, it really depends on sort of what they're doing now. And you can sort of tell that they're not really engaged with the rest of the family. They're not engaged. They're. They don't really care about what the business, the ownership or the family's doing. It's more about themselves.
But to be honest, most of the families that I'm working with, they are all interested because they're newer, you know, newer in terms of generations might It'll be gen 2 or 3. Trying to understand what's happening now, like what's happening with the, with the family business or what's happening with the assets. Sometimes you can tell that those who are more entitled want like, well, let's just sell it and get the money now. Like I'm working with one family that they're all concerned about philanthropy and there's a lot of money involved and really concerned about what they should be doing with this money.
Are, are the businesses that generate all that money something they want to continue in the next gen because they're not always happy with what generated the income and Then you get siblings to say, well, let's just sell it all and give us each our own portion. We'll do whatever we want with it.
So that sort of, you know, some from my side, I see that as the entitlement. So they're not really concerned about what they're trying to preserve as a family and legacy down the road. It's more like, give me my share now and let me do what I want with it.
And that's really. And that doesn't happen all that often in the families I work with because I'm called in because of an issue. Right. I don't. It's not just general. The general population. So generally someone has brought me in because they know of me or. Or an advisor is having an issue, maybe a lawyer, an accountant is having an issue getting something done or signed, and they realize that it's a family issue. And it's not a, you know, the wording in the document. It's. It's something else is deeper. And that's where I come in to have the conversations again.
[00:35:53] Speaker B: In our case, there was a liquidation event that we couldn't avoid. The whole trust was liquidating at a certain date. So there was no question that we had to liquidate. But there could have been a point where we could have all come back together to reform. I think some of my brothers kind of are sad that we didn't do that. But there was such a lack of trust by that point. I wonder if sometimes people want to sell not because they're entitled, but because they just don't trust the other family members because they haven't had conversations.
[00:36:20] Speaker A: Right. There's. Because there's been no conversations. And what is the point, like, of the trust? Why was the trust set up? Like, why did Grandpa or, you know, grandma set up the trust originally? And what is the. What is the vision for this family in this family business or businesses again, you look at the whole family enterprise. So the enterprise consists of everything that the family owns. So it's not just the operating companies, it's the holding companies, it's the real estate, it's the art and jewelry. You know, it's the life insurance, it's the liquid assets, it's the human capital. There's so many components of it. There's so many different ways that a family can continue for generations. But it's understanding what that enterprise is made up of and having the conversations around it because there's different elements of it that different family members will be more engaged in, might be more in philanthropy might be more wanting to handle the investments. One wants to work in the operating company, one wants to manage the art jewelry like it's, it. There's so many different components. It's really about conversations and how do you move forward as a family? You're going to have issues where a branch of the family will, will go their own way.
But those are conversations that say, look at, I know you're not interested in maintaining this, so you know, here's your portion. But we're going to maintain this down this branch so it doesn't have to be an all or nothing.
Right? And that's the conversation. Look at, I'm not, I'm not interested. And I have had families where that has happened that, you know, some sides of the family just see the money for liquidating now and taking it and others see the future and what it's going to look like. You know, there's a lot of family feuding after because one, one branch maybe kept the business that's now a billion dollar company and the other family got, you know, $100,000 back in the day and now they feel like they were slighted.
So it's about conversations and what do you want? What is the purpose of this family business? What are we trying to achieve? Is it just a money maker? Is that all it is?
Okay then, then look at those components. If it's about maintaining that business in that, that revenue for many, many generations to do good in the community to do, you know, make sure that all our children are educated, you know, at no cost. I mean, there's lots of conversations to have, but where do you start is the question that the family always has. There's so many different components. You know, two, two siblings don't speak to each other, so you know, we can't even get them in the same room. So. And again, that happens. But when I come in and lead it, they will come into the room, right? Because it's not mom or dad leading the meeting, right? It's like here we're having this conversation about estate planning.
[00:39:12] Speaker B: You ever, you ever get like one family member who refuses to come?
[00:39:16] Speaker A: I have not. I've had family members who sit there with their arms crossed, you know, leaning back and you know, maybe won't speak to somebody else in the room. But I've yet in my, all my years have had somebody not show up.
[00:39:32] Speaker B: Other difficult things that can happen. How, you know, let's say the first gen founder just doesn't want to let go.
So why is it so hard for them to let go. And even when they know it's time,
[00:39:44] Speaker A: it's identity is a lot of times the issue. They don't have an identity outside of the business. The business has been, particularly if it's first gen, you know, first, second gen. When it's deeper into the generations, it's
[00:39:56] Speaker B: a little bit different.
[00:39:56] Speaker A: But first, second, by, by all means, it's, it's its identity. They just don't know what to do with themselves after the fact is a big deal.
The other issue that again we have to work through is that this is my child and I see them as a child. I don't see them as the adult that they've become and they, and the ability for them to lead and make their own decisions or, you know, I don't like the decisions that they've made. So therefore, you know, I don't want to walk away when in fact, you know, you need to make decisions and think about Blockbuster. I always use Blockbuster as an example.
You needed someone to come in and think outside the box. You might not think that someone's going to, you know, rent their CDs through the mail.
Why would they do that when they can walk down to a store, but you have to open up and talk about why.
So it's usually they don't know what to do after the fact. They can't get by the fact that these are still their kids.
And how do I not see them as a 5 year old, but as a 35 year old?
So those are generally it. So we'll work through those.
[00:41:02] Speaker B: Really?
[00:41:03] Speaker A: You can do that? Yeah, we can. We, we work through them for sure. There's a lot. So this is, you know, where you'd bring in maybe a coach on retirement or after. Not really retirement because you never really retire from a family business. You might have ownership right till you know, the day you die. But it's looking for outside or what they loved to do before and they didn't have time to do right, or, or move them into more of a mentorship program.
So there's lots of different ways. But just saying it's time for you to go home.
It's time for you to leave me alone. Doesn't work right? So it's, it's just saying, okay, well let's look at this. What do you want? Mr. Or Mrs. Founder or leading Gen?
You know, if you look back five years from now, what is more important to you? To have people still coming to you for answers because you're the only one who knows it or to be proud of the fact that you've mentored these people and they're making great decisions and the company is growing. Like, what is the most important thing?
[00:42:04] Speaker B: So I guess you had to do that.
[00:42:07] Speaker A: Oh, yeah, Yeah. I walk away. You know, I'm still partners with my son and the one company, and I let him run day to day. Do I like what he's doing every day? No. Would I want to change it? Yes. Um, and it's taken. You know, I've got scars on my tongue from biting it so much. But, you know, he's doing it. He's doing fine. He's just doing it a different way. It's hard to watch them because you want to protect your kids and you want them not to have any hard times.
That's the way they learn in a lot of cases. Right. I mean, I won't let him fall flat in his face, but, you know, he's. He's done a few stumbles for sure.
[00:42:41] Speaker B: You spent decades in this. So what does a family that gets it right actually feel like from the inside?
[00:42:47] Speaker A: They are just so happy and thrilled and just.
They just love. Like the family gets along well.
Everybody's happy. The business is. Is rolling along. It's not that you're not going to have, you know, everything's perfect and, you know, lollipops and rainbows. There is going to be issues, but those major issues that tear families apart have been looked after.
Right. You have that understanding, that expectation. Successful families don't always agree on everything, but they understand why the decisions were made.
[00:43:21] Speaker B: Back to those conversations, back to.
[00:43:24] Speaker A: I understand why. I don't necessarily like it, but I understand why I would have done it differently. Unfortunately, I didn't get that. I don't have that luxury of making those decisions, but it's understanding why. So you take all those assumptions out. Oh, yeah.
[00:43:40] Speaker B: Assumptions and coaching are deaf.
Part of our test is like if. If they. If we assume anything about our client, you. You fail. So if a family is listening right now, you know, and they. They know that this transition is coming and they're scared of it, what's the very first step you'd give them?
[00:43:57] Speaker A: The first thing I'd say is if you hire a family enterprise advisor, they will help you the most. You'll get the most of that. On the other hand, what I would say is if you. If you really want to, you know, look at this, is to bring everybody together, bring in someone to facilitate the conversation and just have an agenda and just talk about what you want to talk about.
And maybe the very first meeting is. And send it out in advance so that they know why they're getting together. It's not like, oh, is dad or mom going to tell us that they're dying? Or, you know, what's the, what's the news here? Say, oh, just want to talk. We're doing some planning. Just want to bring everybody in. And the first meeting might say, here's what we'd like to do. We really would like to just talk about what your thoughts are. You know, let's look at, you know, what we have. So the first thing I would say is have a meeting and list everything in your family enterprise so that they understand what's there to know, what needs to be done.
You know, could even be things like family cottages.
You know, let's understand about that. Who wants to use it? Who doesn't want to use it? Do you want to keep it? Do you not want to keep it? It's really getting to understand what the opportunities are, what is in the whole enterprise that the family may or may not want to be involved in to understand that you do not have to be working in the business in order to maintain the business. You can have a non family member run a business.
So it's like, don't throw the baby out with the bathwater. Keep the golden goose, but have somebody else farm it for you.
So really I would just say bring everybody together. If you can have a third party facilitate, if not, just start at the very beginning to list what you have and the purpose of why you want to have everybody together and what you're hoping to achieve.
And then out of that first meeting, then you'll have a list of what you need to do at the next meeting.
[00:45:54] Speaker B: Probably would be conducive to increasing family trust.
[00:45:58] Speaker A: Absolutely. Because you're going to get differing opinions, you know, on what. But it's. And that's okay. But then you can make those decision based on what the family wants. You know, everybody's had an opportunity to say what they wanted to say while everybody was alive and sitting around the table and able to defend their positions. Wow, that was so valuable.
[00:46:20] Speaker B: Thank you so much. Tammy, is there anything that I didn't ask you that you would love to say?
[00:46:25] Speaker A: My philosophy is. Or our mission and vision is to keep family businesses in the family.
That's what we want to do. And a lot of times it is sold because it's easier to sell it than it is to have these conversations.
And I would like all families to have the conversations prior to making a decision so that there's no regrets. There is a stat in the States, it's something like 70 some percent business owners regret selling their business within the first year. So really it's understanding what the opportunities are.
And yeah, that would be it.
[00:47:01] Speaker B: I moderated a panel at a symposium recently and there's a company head by James Bly and he they help family businesses recapitalize in case they need extra capital to stay to go to the next level instead of going to auction.
[00:47:18] Speaker A: Sometimes people think that's the only thing to do right? But really it's just sitting down and looking at the whole thing and talking about where the future is, what each person's vision is, where there's opportunities within not just the operating company, but the whole enterprise. There's always going to be one who says, I just want the money.
Well, you know what? That's fine. Then it just goes down a different branch and that's okay. We can be different. But at least we're all on the same page. We understand what's happening.
[00:47:46] Speaker B: That sounds like really valuable work that you're doing. And how can families reach you? If they are, they love listening to you. They might want to hire you.
[00:47:55] Speaker A: You can go to Blue Roots B L U E Roots ca that's our website. Or you can reach out to me at Tammy Blueroots CA or I'm on LinkedIn. I'm all over the place. I have a podcast as well, the Business of Family that you've been on. So you know you can. I'm everywhere.
[00:48:12] Speaker B: Wonderful. Well, we'll put some of that in the show notes so people can find you. And it's been a privilege speaking with you today.
[00:48:18] Speaker A: Thank you. It's been an honor to be here. I really appreciate it.
[00:48:23] Speaker B: If this episode landed for you, share it with someone who might need to hear it.
[00:48:29] Speaker A: And if you haven't already, subscribe so
[00:48:31] Speaker B: 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
[00:48:40] Speaker A: actually understands what wealth costs.
[00:48:42] Speaker B: I work one on one with people like you navigating exactly that. You can reach me@diana oehrli.com. thanks for listening.
