This is the first in a series of articles by PBY Capital that explores the family enterprise space in Canada.
I finished reading the report and thought, “I’m going to fail.”
It was just a couple of hours earlier, at the end of a one-on-one session when a family member I was working with asked, “Did you ever see the report from the last family advisor?”
“No, I haven’t.” I replied.
“I’ll send that over to you, if you think it would be helpful.”
The report landed and I was eager to see it. I’d been working with this family for over four months, and it felt like we were making steady progress. I was curious to see where the previous advisor had ended up. The family had mentioned at the outset that they had worked with another advisor, but it never went anywhere, because it was just “not a good personality fit”.
A family or strategic planning process when it works can be engaging and energizing, even if it is also uncomfortable and scary. But the last place anyone involved wants the output to end up is in a drawer. When a workable plan goes unused, something under the surface needs to be found to get unstuck. I want to help you know where to look.
Personality fit
One quick sidebar before I delve in further–confidentiality is the cornerstone of my work, so details here are changed. Let’s call this family the Smiths, they run a generational operating business that is privately held and has been very successful. Some members of the Smiths are more directly involved in the business than others. The lines between family, business, and ownership overlapped and the roles between the core family members were blurry like most family businesses.
Personality fit matters a great deal when it comes to engaging an advisor. We share a lot with each other – numbers, feelings, pain – not to mention, advice and the occasional reality check. No matter how much I stress the confidentiality of the process, if our personalities don’t mesh, the client will not feel comfortable sharing fully. So, it made perfect sense to me that the Smiths had worked with someone, and the personalities did not mesh and consequently the process ended up with a report that went into a drawer instead of into action.
Knowing that, when we got started, I sat down with each of the Smith family members individually and gave them an opportunity to have an impression of me one-on-one before everyone agreed to go forward with the mandate.
While guiding family businesses through transition events or changes in personal dynamics, I encounter a wide range of scenarios and circumstances, but one thing is consistent in all cases–it is complicated and nuanced. My approach is to treat each mandate as one-part mediation, one-part strategic planning, and one-part coaching.
Mediation Mindset: I generally follow the mediation process of facilitating group discussions and I also work with each of the individuals separately to help them work towards a win-win solution – that means a solution that encapsulates as best as possible everyone’s ideal outcomes.
Strategic planning: Helping the group and the individuals formulate what their ideal outcomes look like and what steps they need to take to get there.
Coaching: Assisting in Keeping everyone’s actions aligned with the goals and outcomes they hope to achieve, while remaining accountable to themselves.
There is one catch, everyone has to be committed to the process. Force doesn’t work here. Just like in mediation, everyone must be a willing participant and free to get up from the table.
Often, the win-win solution is possible, but one of the parties is simply stuck. In one instance, I was working with a client managing a divorce that felt quite contentious, but, in actuality, they had managed to resolve all the financial issues and most of the custody issues quite quickly. They had reached a point where a path to a final custody schedule that would work for both was possible, which would have meant that the whole thing was resolved and both parties could look forward in their lives, but they were stuck.
Four P’s
At the heart of the problem was that the resolution to the financial and custody issues only dealt with one of the needs of the parties. There are four elements that are at play in every issue, they may be weighted differently, and not always equally, but they are always there. I call them the “Four Ps”:
(1) the Prize – that’s the thing you are fighting about or negotiating for – the money, house, or shared custody, etc.
(2) the Process – that’s the sequence or the order in which events unfolded or the way information was communicated (“If she would have only given me more notice…”; “if he would have just asked nicely…”).
(3) the Principle – the values and beliefs that underpin a perception, such as fairness, equity, rights (“it’s not about the money, it’s the principle…”).
(4) the Psychology – these are the feelings and emotions. A custody settlement only resolves the Prize. The Process, the Principle, and the Psychology, generally get left to the side. Stuck often happens because a resolution that only addresses the prize does not feel great and so it is more attractive to stick to a hard line or refuse to budge, because the things that really need to be resolved sit in the other 3 Ps. It’s also why people are willing to forgo money they are owed if they get a written apology.
Case in point
Back to the Smiths. I could see from the report I was unearthing all of the same issues. Even with a different process and a feeling of openness and candor I could see that the goals and guardrails we were going to have were going to look very similar. I was getting all the feedback from the Smiths I would want to hear as we were working along the way–they were feeling comfortable with me and finding it easy to be open. And yet… I could tell from that report that my process would also end up in a drawer. It had nothing to do with the advisor’s personality fit.
The trigger was seeing plans and recommendations in that report that easily could have been my own, but more importantly easily could have been acted on. And should have been acted on. It was not apathy, controversy, or a change of circumstances. There were solutions on the table, frameworks that could be used to make decisions, but the report was in a drawer.
I’m a big fan of Chris Voss, author and former FBI hostage negotiator, and he has a line I love, “it’s not crazy, it’s a clue.” When you have that moment sitting across the table from someone and you think that their reaction or position is completely out of line with reality: it’s not crazy, it’s a clue. Ask anyone why they did something, and they will give you their internal reasoning. It may not make sense to you, but it makes sense to them. This is a clue that they are perceiving things (or maybe one key thing) differently and to really understand you must dig.
The report in the drawer was a clue. I could see the edges of things buried below the surface, I just didn’t know what they were.
Family discussions and conflict
I view facilitating family discussions as navigating conflict. That word, “conflict,” may make you uncomfortable; many people have negative associations with that word – fighting, yelling, anger, frustration, avoid at all costs. But I’m intending it in a more unloaded way. In the book Nonflict, they define conflict as the intersection of two differing perspectives and that’s how I intend it here. In that sense, aligning a group of people on a path forward, is always resolving conflict, in some instances that conflict may manifest in an ugly way – with fighting and yelling, but it may also manifest in a loving, respecting way. The more family members at the table, the greater the number of perspectives intersecting.
Christopher Moore’s framework of the Circle of Conflict is a helpful way to map out where to look for the buried artifacts. Moore categorizes five sources of conflict: (1) relationships – emotions, perceptions, communication, history; (2) values – ideals, priorities, identity; (3) data – information gaps, disinformation, interpretations, relevancy; (4) interests – competing needs, ideas of what success looks like; and (5) structural – power, distribution of resources, channels of communication.
Each one of these categories is a place to dig. I think of it less as a circle and more as a map, Moore’s sources are the datum points. And just like unearthing a precious relic of antiquity, you have to go slowly. Sweep some dirt away around relationships, then unearth some data, dig into values, back to data and so on. The process is iterative and reveals one stratum at a time until the artifact has been excavated.
With the Smiths, I thought I had a good understanding of each of these areas as it pertained to each of the family members, but this clue demonstrated that more digging was necessary. I was not sure how to approach this. The Smiths had a very solid family dynamic, by no means perfect, but loving and caring and respectful. As it turned out, that was, partially, the source of the problem. No one wanted to say the really hard things, because they did not want to hurt each other’s feelings. It was easier to just side-step the hard stuff, but the result was all that side-stepping was stopping them from moving forward.
So, the next time we sat down together, I said, “I’m going to fail in this mandate.” The statement took the air right out of the room. “I think there are some tough things that need to be said. I’m not sure what they are, but I can feel them holding us back.” I put everything we had been doing up to that moment to the side and then set to slowly having those conversations.
I’ll share some of the results, but that is not the point. The result of the work was that two of the core Smith family had serious reservations about the direction of the business and they were rooted in the Principles and Psychology. It was hard to say those things fully, because that implicated other family members. The point is why does a family or a company spend a great deal of time and money working with an advisor and developing a strategic plan or family charter that ends up in a drawer instead of in action? The answer is because there was more beneath the surface. Please do not take that as a condemnation of the advisor–with the Smiths, I only saw the clue, because another advisor had already gone on the journey otherwise my work with the family would have ended up in the same place.
If you and your family or business are planning on working with a family advisor, I have four things that I hope you will take away:
Be honest with yourself. You don’t have to say every hard thing, but you at least need to search for the hard things you should, but may never, say.
This is hard work. Even when everyone gets along because sometimes love is an attractive reason for avoidance.
Start sooner rather than later. There’s always stuff under the surface; it is the very nature of family. Side-stepping issues can work for a time, but it can lead to resentment, strain, and stagnation if left fermenting underground. Then a lifecycle event occurs, like the death of a matriarch or patriarch, and everything comes bubbling to the surface.
Finally, make sure you address all four Ps and not just the Prize. The path to the real win-win lies in the creativity that opens from addressing all the Four Ps.
Jasen Kisber is the Founder and Mediative Consultant at KFMC . He helps individuals, family business, partnerships, and organizations move from stuck to strategic through a practical approach to conflict management, strategic planning and leadership development. He has an MBA from Oxford University.
Disclaimer: This story was created by Canadian Family Offices’ commercial content division on behalf of PBY Capital, a member and content provider of this publication.
PBY Capital Limited is registered as an exempt market dealer, portfolio manager and investment fund manager with Canadian provincial securities regulatory authorities, servicing family offices and their professionals. For more information, visit: www.pbycapital.com. The opinions and information provided in this article are solely those of the writer and are not to be construed as personal, legal, accounting, taxation, or investment advice, or as an endorsement of any entity.