Family Commitment Yields Transition Success

My dentist used to have a sign on his ceiling so you'd see when he tilted the chair back.  "The dentist can't do what the patient won't do," it said.  Unless you practice basic oral hygiene and listen to your dentist's advice, was the message, I ultimately can't save your gums and teeth.
 
And so it is with family business consultants and their clients.  A client hires us with the desire to deal with a problem, ease pain or to prepare for transition.  The consultant gathers information seeking understanding of family and business culture and values, and makes recommendations for processes, decisions and actions, which will help the client achieve stated goals.  But...the client wants the result but is unwilling to take the steps necessary to get there.  Yes, the clients say in effect, "I want to lose weight, but I don't want to exercise, reduce my caloric intake, change my eating habits, or undergo surgery."
 
What makes me think about this is not frustration about an unsuccessful client engagement, but an experience with a client that has gone exceedingly well.  (Read more and add comments.) 
Craig Aronoff served as President of FFI from 1992 to 1994.

What is the Help that Really Helps?

Dear Colleagues:  Though I'm not generally one for writing end-of-year-letters or start-of-year letters, this year I'm feeling the urge to weigh in - not with the usual list of places traveled or things accomplished over the year, but with a few thoughts that have come to me along the way.   

Thanks in part to my new young partner, Andrea Rubinfeld, who is asking probing, thought-provoking questions, I have been forced to examine more deeply than ever what I do and why I do it. I have had to sit still and tackle some challenging questions. With BlackBerry locked away safely in the drawer, I have been able to take the time to deliberate on my work and consider, above all, this question:

What is the help that really helps in consulting to families that share  assets - a family firm, a family foundation, a family office, a family compound  or family wealth? And, the equally important question, what is the help that helps in relating to one's own family?

The following four very simple (yet, oh so difficult) concepts apply to the professional arena as well as the personal one.  They are the result of observations, knowledge gained from brain research,  interactions that took place with clients, other professionals and with members of my own family.  (Read more and add comments.)  Kathy Wiseman served as President of FFI from 1994 to 1996.

The Plot Does Not Change... Only the Theater and the Actors!

When Tyson Foods, Smucker's, Heineken........ and other great family businesses needed capital to grow and transition to future generations, they went first and foremost to their business friends. When YPO was started, members went to their peers when they needed advice and capital. Growing a family company is hard work and requires capital and advice from like-minded investors who understand what it takes and view themselves as partners to the business owners rather than investors. 

Somehow, in the easy money decade of the 90's and early 21st century, family businesses lost their touch and resorted to the fast money from banks and private equity funds to solve their liquidity or capital dilemma. Preaching Patient Capital to family businesses was a very lonely exercise...Well, things changed quickly in the Great Recession.  Now, in the aftermath of the crisis, we are seeing once again family businesses seeking long-term partners - not just investors- to meet the liquidity demands of growing families or finance the investments of globalization. And who would be better long-term partners to a family business than a single family office, which experiences or has experienced the same challenges faced by today's family business; which understand family dynamics and which has a long-term view on return and capital investments. 

Families Investing in Families is the future family business capital model.  (Read more and add comments.)  Francois de Visscher served as President of FFI from 1998 to 2001.

Understanding Your Community Banker

Many stable, profitable family businesses across the country are mystified and worried about what happened to their long standing relationships with their community bankers.  Loans are hard to get; credit lines are shrinking; and perhaps most disturbing, that sense of mutual trust seems to have disappeared.

Does this sound familiar: "What in the world is going on?  We're a long time bank customer; I've known my banker for years; and now it feels like he doesn't even want to talk to me.  Ours is a solid, profitable business; down some of course, but still stable and in the "black." I need cash to keep pace with today's new marketplace and to both retain and attract new customers.  Where is my banker when I need him?"

Today the world of community banking has been turned upside down and almost no one is talking to the general public (let alone to their own customers) about what has happened and why.  The answer is essentially three-fold:  The Financial Crises; Bank Capital Ratios are out of compliance (or could be again at any moment); and Heavy, unforgiving new Regulatory Pressure from the State and Federal bank examiners. Let's take these one at a time.  (Read more and add comments.)  Glenn Ayres served as President of FFI from 2002 to 2005.