Next Gen Succession: Avoiding the Family Business Trap with Dr. Doug Gray

What happens when a family business delays succession planning? In a word, disaster! We're talking bitter power struggles, siloed communication, and enough family drama to fuel a whole Netflix series. And the worst part? It is completely avoidable. And that's what we're talking about today on Experience Leadership.

Welcome to Experience Leadership, A podcast that challenges small business owners and entrepreneurs just like you to dare to be the exception. Join our host, customer experience expert Marc Haine, as he uncovers relevant and timely content to help you script and direct your business and teams to create jaw-dropping experiences your customers and staff deserve. Here is the host of Experience Leadership, author of Lights! Camera! Action!, customer experience expert Marc Haine.

Welcome to this episode of Experience Leadership. I am your host, Customer and Employee Experience Strategist Marc Haine. I am so glad that you are here with us today. My guest for this episode is Dr. Doug Gray, the champion for next-gen leaders and CEO of Action Learning Associates. And today, we are gonna be diving into the high-stakes world of family business succession where egos clash, legacies hang in the balance, and the cost of unclear leadership transitions can be measured in hundreds and hundreds of thousands of dollars and maybe a few ruined Thanksgivings. I have one simple request. If there's somebody in your circle who could benefit from the insights that we're sharing with you today, please do them a favor And pass along a link to this episode. You know, when I was the economic development officer for the town of Devon, I was shocked to learn how unprepared most business owners were for exiting their business. According to one statistic, 58% of small business owners have absolutely no succession plan whatsoever. Now, you might be one of them thinking, well, I'll just get to it when I'm ready to retire, or When I'm ready to sell. If the leader of your family business walked away tomorrow, would anyone know who's actually in charge? Today, we're digging into the uncomfortable, unspoken world of leadership succession in family businesses. Because for many, passing the torch looks like a lot more like dropping the ball. And when legacy, wealth, and relationships are all on the line, that drop is extremely, extremely expensive. And that brings us to our Question of the Day. So, who in your family business loses sleep at night? The current owners or the next generation? I'd love for you to share your experience on social media. Why don't you go ahead, share a link to this episode on your favorite social media platform, hashtag it #ExperienceLeadership, and become part of this conversation. As I mentioned, my guest today is Dr. Doug Gray, the Champion of Next Gen Leaders and the CEO of Action Learning Associates. With decades of experience guiding leadership transitions, Doug has authored the Success Playbook for Next Gen Family Business Leaders, created a validated 360 assessment for next gen owners, and founded peer groups and coaching platforms to help support succession planning. His insights have been featured in things like USA Today, CEO Weekly, and International Business. Doug doesn't just talk about legacy. He helps families build it. Doug, welcome to the show. This is a long time coming.

Delightful, entertaining introduction. And I'm glad to be here, Marc. Great to meet you.

Before we get too deep into today's topic, could you tell us a little bit about who your customers are? We mentioned that they were kind of family businesses and stuff. But more specifically, like who they are and what is the big Well, you described it beautifully, I think, in your introduction.

And I guess I should clarify the HBO Netflix stuff that you sometimes reference. People do Succession, Landmine. Those are not my experience. Most of my clients are quietly trying to figure things out. They're privately owned, but they're looking at succession issues in part because they've got some assets and they maybe didn't when they were younger people. So I love your description of the older and the younger folks because they both have struggles sleeping, just to be clear. The older ones often can't sleep in part because they want to protect their assets and they really don't know what to do. So oftentimes people think about a 3-legged stool. You've got your legal advisors, your wealth advisors, and your psychologists. I don't want to suggest that any is more important than the other, and we need multidisciplinary teams of advisors to help with Well, you know, and I love that you said that because I think a lot of times we get painted with a picture.

These poor entrepreneurs get painted with a picture that there's a service out there that seems to be like a one-size-fits-all solution to things like success. We'll help you do your succession planning. But to your point, it takes more than one particular coach or counsel in order to make that happen.

Yeah, it does. Warren Buffett always says, look at the incentives and how are they compensated. So a financial advisor is going to be looking at asset transfer. Because he or she wants 2% of the earnings distributed over time. But 70% of the time, the younger folks won't want mom and dad's advisors. They're too old, they're too risk-averse, and they frankly don't represent the same interests that the next gens have. So 70% of the time, the next gens want to choose their own wealth advisor. And it's commonly the case also with legal advisors, in part because they may have different legal interests and want more agency and capacity. They want to invest. The increase in donor-advised funds is a good example of that, 40% increase in the last decade. Why? And it's sometimes because they don't want grandpa or grandma or aunt, whomever, to know that they're investing in some political or environmental group or religious group, right?

Yeah.

So those are compelling reasons to Make sure that the 3-legged stool happens. And the reason for the psychologists, in my opinion, is that too many folks are well-intentioned and haphazard. I can't tell you how many hundreds of advisors I've met who are well-intentioned but haphazard, in part because they don't have the skills. They haven't practiced dealing with difficult conversations or helping people look at how to support one another.

Mm-hmm.

You're Canadian, so you might like this. I grew up playing hockey. I coached and reffed a lot. And I think breaking up fights was a transferable skill, sort of. I don't want to overstate it. But the main point is that if you're not comfortable with conflict, you really shouldn't be in the room.

Right.

I see it often as there's all kinds of material wealth, material abundance, and emotional scarcity. So it's a weird conflict.

Well, and I could see that, you know, when it comes down to parents passing on their family business to the next generation and stuff, that there's also A ton of ego in the room, right? There's tons of ego because, hey, I've been running this for 25 or 30 years, you're going to be taking over. There's ego on the other side to say, you know, we learned more at my age. Now I learn, I know more about, right? And so then there's, I'm sure that, that there's that constant push you, pull you kind of environment going on.

Yeah, I think it's naive to ignore it. Uh, we're emotional blobs, emotional entities, emotional blobs of water. You know, we make things complicated, but let's assume that people are full of emotional blobs that they can't articulate sometimes, right? So they need to do that. We didn't speak yet about the next gens, but they have a desperate desire to prove their capacity.

Yeah.

Our kids are in their 20s and one's in her 30s now, and they're amazingly well-balanced despite our parenting. And I'm just Delighted, regularly.

Because of your parenting or in spite of your parenting?

I don't know. That comes from my good book, When the Moon Is Shining. The main point is younger folks always need to innovate. They want to have agency, which is the capacity to express their thoughts and opinions on important topics. In fact, when we did our research, that was the number one behavioral competency. It's a thing. But I don't know how many parents encourage their kids to express their thoughts and emotions on important topics. Sometimes they're squelched either overtly or tacitly by not supporting a certain idea.

Right.

And those are skills. So as parents, we need to learn to do a better job of encouraging our loved ones to express themselves. And the younger ones, the next gens, you're right, they're better educated. They're more digitally trusting than their parents. They're aware of social and career choices that their parents may not have had. If it's a G1, G2 transfer, generation 1 to generation 2, typically the founders have a whole different skill set. Thank goodness. They're narcissistic, domineering, and successful. They wouldn't have put their foot in the ground. They wouldn't have planted the business if they weren't those things.

Right.

When we think about this idea, and I like that you have like a term G1, G2, and so on, because I think that helps define it. I didn't invent that, Marc.

It's been around for a long time.

Yeah, well, it's the first time I've heard it referred to in that way because I can't imagine that probably G1 to G3, that would even be challenging. But then, when you have second generations being taken over by third generations now, there's all sorts of perceptions of ego, perceptions of entitlement, and that sort of thing that comes into the foray. So, when we're thinking about the succession planning, looking at our businesses and saying, we're going to have to start planning this. biggest mistake you think family businesses make around this whole idea of succession?

Not asking for help.

Okay.

I noticed you've hosted a number of podcasts, so you've met a number of business leaders, right? I don't think I've ever met one who has a lower opinion of the valuation of their business than the professional who does the valuation. In other words, most people have an overinflated view of the value of their assets, right?

Yeah.

Whether they're capital or Or financial or even prospective futuristic.

Yeah.

I had a client once who believed that the future earnings were going to be so high that they, 10x at least, that they ought to provide that much compensation to the next gen. Of course, this was a next-gen leader who had aspirational beliefs that were a little silly. Yes.

But at the same token, you still have owners who then themselves, because I've been driving this business for 25, 30 years, I've been in it every day since, you know, since the day I opened the doors. And because of that, when they get the valuation, because they're so ingrained in the business, they get really shocked that their business is actually not worth as much as they think it does because it's all on their back.

It is, and probably rightfully. They built the company, they built the story, and they may or may not recognize the, the fact that they've been able to raise a family or support their community or support some philanthropy or whatever they've chosen to do. Those are sometimes hard things for any of us to flash back. I can't remember being 20 years old, but when I was, I guess, 25, I started this company and now I'm in my 60s. So I can't remember some of that energy. So we've all got inflated values. And back to my point, if people were willing to reach out, there are now digital tools. What's the valuation of a manufacturing plant in Saskatchewan and you pick a town, you provide the annual revenue. You could go to bizequity.com. I'm not endorsing them, but it's a digital tool and they will provide immediately some ranges for you to look at. You can use any generative AI. You could use your ChatGPT and it will provide a reasonable range of the valuation. So then it becomes a question, then what do you do, right? And there's steps in that succession. You mentioned the G2 to G3 transition and how it could be different. And you focused again on emotions, ego, and such. But I think you forgot or didn't speak to the complexity of people. Because if you think about 3 generations before you, that'd be your great-grandparents, and how many people were alive then, and your generation now, you're the G3s, And how many people are alive now? There's probably 70-ish alive now, right? And there were maybe 20-ish. So that business in G3 or G4 or G5 is going to have hundreds of cousins, all of whom have some, or think they have some identity to the Haine family name, the legacy, the brand. It's a weird thought experiment, isn't it? Yeah. Yeah. And kind of go the other direction. But let's assume that 3 generations from now, the wealthiest person in your town will have 50 or 70 people, 3 generations from now, who have or think they have a strong interest in some asset distribution. Yikes. Now we're talking about the need for some governance.

Yes.

Some reasonable statements, some guidelines that help people express their ties to the good Haine family name and all that it represents.

Well, aside from all that assumption about the good family name part of it, it is true though that whenever I've talked to owner operators about their business, they come up with statements like, my son will take over when I retire. But what struggles about that is that it's really an unclear strategy that really affects them in real time for a number of reasons. Number one is, does the son really want to take over or is that just an assumption Because he's 16 now and he's going to take over. I promise you, in 5 years, you know, he's going to take over. And in 5 years from now, that's not actually the reality. So what, what does unclear succession actually look like in real time? Like, what are the excuses that people are pointing to when it's like, it's time to retire, but I can't retire, but I want to retire, you know, and that whole bubble of challenges?

I suppose we could probably quickly generate a list of 20. Because there's the interpersonal conflict, there's the naive assumptions about inflated valuation that we talked about a moment ago, about patrilineal successions. So the eldest son model that you just referenced, it's a very common thing in other parts of the world. Asia, you could have an inn or a teahouse that has a G150, a winery in Italy that's G50.

Yeah.

And all those assets have been distributed over time. And now let's imagine there's 1,000 shareholders. Pick the largest winery you know. It's a mess because the governance needs aren't easy to set up unless people are intentional and proactive.

So before we go really further, let's talk a little bit about what you mean by governance because to some people, if they're in a mom-and-pop operation, this might be just a foreign kind of concept.

Yep. I just think of it as the guidelines you might choose to adopt when somebody comes over for dinner on Saturday night. We always tend to behave better when somebody comes over, right? Well, let's imagine you bring in that legal expert and that financial expert and a psychologist who facilitates the process. To be clear, the psychologist could be a well-intentioned person, an elder in your church or your community, or a person with gray hair. like one of us who is volunteering to help them have those difficult conversations. I don't think, I think it'd be absurd to suggest that people need to pay tens of thousands of dollars or hundreds of thousands of dollars for succession consulting necessarily, but you can, and sometimes it's prudent. The other point that kind of goes hand in hand is I'm going to give you a quiz question. What percent of the Fortune 500 companies do you think are family owned? 30, 40, 50, or 60%?

Goodness, I have no idea. Let's go 50% and see what happens.

So I biased you with the question, right?

Yeah.

Because you may not have thought of the Fortune 500 companies as being family-owned.

Right.

The answer is 35% of the Fortune 500. I think that's staggering for lots of folks to imagine.

Yeah.

To be clear, the ownership might be a majority ownership, but it might be 10 or 15 or 20%. of the total assets, right? Because there's multiple investors. But we don't always think about the Fords and the Cargills and the larger entities that are common names. Kohler in Wisconsin. I'll be there tomorrow. When I think about a lot of brands that we don't always think about ownership, that's Gap. So one more quiz question. What percent of the GDP in North America is tied to family-owned businesses. 60, 70, 80%.

I think it's closer to 80%.

You're going high on both of those numbers.

I'm going high on that one.

And it's hard to quantify, but it's got to be 60 or 70%. Okay. The point, we don't often think about family-owned businesses as the major economic influence, but it is the major economic influence. It leads to 70% of our new jobs. So as Canada thinks about its immigration requirements and dealing with a polarized neighbor country that looks at retail and supply chain and immigration and a workforce, you've got a long history of encouraging things like immigrants to staff your growing workforce, right?

Mm-hmm.

And that's an example of looking at growth as a positive. In other words, a diverse workforce needs to be whatever. Well, that small town manufacturer in that small town in Saskatchewan may not be able to bring in workers and may not be able to grow to the capacity they want to because they sometimes just don't have the people resources. So one of the things that I see are the guys are under attack. The private equity firms and the venture capitalists are gobbling up Manufacturing and smaller-owned businesses in every sector. So it's not just finance and technology and retail and manufacturing. Those are the biggies, but it could also be your local dentists and your pharmacists. When we were kids, there were small-town dentists.

Mm-hmm.

Now we've got CVS Pharmacy and Walgreens and whatever else. And a tragic part of that story is that the small towns then lose the old connections, the social ties. that kept everybody going, right? The Rotary and Kiwanis and Lions Club kind of energy that fostered a social good. What does that mean? Because if the venture capitalists are coming in and extracting the value in 3 to 5 years, we're really losing some of the social ties that we need in Main Street North America. I just kind of lumped the US and Canada together, but—

Well, it's just as equal here north of the border. We see it all the time. We see small towns being— the properties being gobbled up by big brands, basically shoving mom-and-pop operations out of work and creating— like, I know one specific community in my mind where the big brands came in and then over a course of about 10 years, the town got together and actually created a legacy business area within the town that people could shop to, walk to, but it was really to support the mom-and-pops because they were losing those in droves.

Yep.

Right? So even though they had the Best Buy and they had the Staples and they had all these big grocery stores and everything else, there was one area in town that you could go to that were kind of the foundation, I think, of community businesses.

I love that example. So how did that come about?

I think it came through originally the loss of it all. Like, the big brands came in and it forced people out of business, and then the actual community lost their connections to the, the, uh, the Main Street volume, as it were, right? And I think it was— and it was— so it was a decidedly— it was a strategic decision that we would create kind of this legacy model shopping experience, and then worked with the landlords to make that happen, because the landlords had aging properties that the big brands didn't want, right?

Mm-hmm.

So by doing this, they were able to serve the community on multiple different fronts.

I love that example. Yep. So now we're really talking not about succession planning for an individual ownership, but for a shared ownership like that, that town, that community. In, um, some cities I'm familiar with, there's a walking area, a walking zone. No cars are permitted or they're discouraged, right? And the idea is, as you just described, to make sure that local businesses have a social Prior to this conversation, I didn't even connect business succession planning to the community good.

And now that you— it's kind of lit a fire in my eyes that says, holy moly, yeah, there's, there's a bigger complex out there that small businesses are supporting and hurting if we're not doing business succession properly.

And I've always been there. It's always been there. So when we think about the asset transfer to anonymous sources like a venture capital firm or a private equity firm. I think there's a collective enemy in— and I don't want to sound overly dramatic because I'm not a violent person, but when we think about ignorance and transfer of assets to anonymous pools, it's a problem. I'd much rather have a longstanding family business sell to another family business, family-owned business.

Why not?

Because they know something about loyalty, customer service, taking care of other people. And I think that's the understated value sometimes of every business I've ever looked at. If you've got high turnover rates, it implies you're not taking care of your people, right?

Mm-hmm.

But family-owned businesses have inordinately high loyalty rates. People stay longer, report higher employee engagement scores. They say that they're happier, they tend to be healthier, and they tend to live longer. Well, what's that suggest?

Yeah, it's something about being an automaton versus being connected at the source, right?

Yeah, so that notion of being an automaton makes me think about the capacity we have to use digital tools to connect now. Yeah, better than ever. And, um, that's an example of something that's being driven by the next gens. They're digitally trusting, they're asking questions, they're using GPTs. You may know that most Apps or companion apps, the biggest percentage is 40%. So, all those apps are being used to help lonely people answer questions. Not a bad thing.

Right. But it also helps educate and move us forward. You know, we've talked an awful lot now kind of at a 50,000-foot level on this idea of succession planning. I'd love to get down to a little bit more to ground level now to really talk about some strategies that owners should consider if they say, now's the time I have to start thinking about my succession. And we'll get to that right after this. When the spotlight shines on your business, are customers applauding or yawning? In other words, how is your business performing? Make your business a star with a new book, Lights! Camera!

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today at your favorite online retailer or directly at marchaine.com. Welcome back! I am speaking with Dr. Doug Gray. We're talking about succession planning. And Doug, why don't you tell us a little bit about your book because I think that might be a heck of a resource.

So, the short answer is I've got a book problem. You can see some in the background, I suppose. But I've written 4 books and the most recent was in response to clients, a patriarch who said, Doug, would you please create a next-gen peer group for my boy? And I said, of course, and we did. And that led to taking the content from the 360 assessment process. We had 50 different behavioral competencies, items, things that people ought to do. And that was all on a digital platform. And then the same patriarch said, Doug, that was good. My son's getting a lot of value out of this, but he needs to read some books. Can you write a little book for him? So I took the content and that's the Success Playbook for Next-Gen Family Business Leaders. So the top 10 behaviors are described in here and the model is really simple. I think I can show it to you and you'll be able to see it in this screen. There's a little circle and then 4 other circles around the outside. And to me, this is representative of All social psychology, which you've got 100 years of research. And the circle in the middle is the individual. How does the individual fit into the world at large? I mentioned my children, and this is how all parents help people figure out how to fit in the world. And most of the time, people in my world of family wealth advisors talk about 3 buckets or 3 rooms visually. They're the ownership and the— family system, and the business system. And those are probably hard to see on this image, but the point's pretty simple. Owners define succession, the success of it, and what works and what doesn't work. The family system is loosely described because every family is different. The business system is what creates and protects those assets. It could be one, it could be 20 different kinds of business divisions. All 3 of those are important, kind of like 3 rooms that you might walk into when you're having these discussions. But the 4th one that's in this model, it's called a learning system. And that's to what extent are you willing to ask questions and learn about whatever could be next? There's a whole body of research called learning organizations that looks at a growth mindset. And that's the premise. 100% of my clients have a high growth mindset, contrast to a fixed mindset.

Mm-hmm.

To be clear, I've got a fixed mindset about a lot of stuff. I don't understand mixed martial arts. I don't understand opera. Boom. Those are on one side of the wall. But on the other side of the wall, I do practice curiosity. That's the number one bit of advice I'd give to any of your listeners. Practice curiosity. Practice learning. Well, what we did was we looked at all the systems that relate and gave readers the top 10 simple behaviors that they could embrace should they want to. And the reason I think is if you played sports, there was always a playbook. There was a book of books, right?

Right.

And it is my experience that there's a lot of theory out there, but not as much practical stuff. So I'll give you the most important example. The individual is in the middle, right? And then the other 4 systems are on here. And the 2 behaviors that we found that were most important based on globally validating this research is one I already mentioned. People need to express their thoughts and actions on important stuff, whatever they think is important. What my daughter thinks is important is unimaginable to me because I was never a 29-year-old woman, but it's important to her. She needs to get it out. And the second is to express a positive outlook. Optimism is a choice. And when people express a positive outlook, they're more apt to find it. There's a bunch of research tied to that, but psychological capital is a thing and optimism is a thing. So it's possible. that people could practice those 2 behaviors in minutes and do a lot better job.

And so once the awareness comes in that we have this, how can we leverage it then so that we have a better experience with our succession strategy?

Yeah, well, don't do it alone. Mirror, mirror on the wall just doesn't work.

Right.

So most of the time, most family members don't provide honest feedback because why should they? They've never been encouraged. They've never been taught to do so. And frankly, we tend to remember that negative thing that somebody said 20 years ago about our kids, right? And it, it's the oldest part of our brain. Thankfully, it perpetuates our survival. But fears shouldn't perpetuate ongoing family discussions. So the short answer to your question, I think, is to practice new behaviors. Practice with somebody else in the conversation. That's why I opened with the idea of When you host somebody for dinner on Saturday night, everybody's better behaved. If you bring an advisor into the conversation, everybody's better behaved. Tomorrow I'll be with, or maybe it's Wednesday, a group of the leadership team that I've spent, I don't know, 4 years working with.

Mm-hmm.

And I know because of 360s and other assessments, I know some of the one-to-ones, some of the conflicts that they're dealing with. But frankly, I don't know what I'm going to walk into. That's normal. So if you've got a similar family business and it's got, say, mom and dad and one kid who has some interest in being part of the conversation but really doesn't know, and then maybe some other people who are spouses or widowed or divorced or marginalized, and they don't really know if they can ever be part of that conversation because they don't know if they're part of the family, it's the same story. People need to be encouraged to express their thoughts and actions. They need to assume a positive outcome. I love that.

And to your point, some people, some family members might not think they're smart enough. And so, by reinforcing and supporting—

Is it this intellectual smartness? What do you mean?

Yeah.

Because we define smartness in different ways, right? Yeah.

Yeah. I mean, I had a food and beverage server who I wanted to become— I thought she was brilliant with the customers. And I thought, why don't you become my banquet manager? And she goes, oh, I couldn't do that.

And I said, why not?

She goes, well, because I don't know the paperwork. And I was like, isn't that funny that her perception of becoming a manager was because she did— was the paperwork, not all the skills that she's got that would make her successful?

Right.

Until she goes on YouTube University and asks, what does it take to become a successful family food and beverage manager? Or until she does— I've created an AI-assisted coaching communication tool.

Okay.

So she goes to jitcoach, justintimecoach.com, and she plays with the avatars. And she practices communicating in various ways and developing the skills. I think the next gens are going to be so much more skillful at some of those behaviors than I was as a kid. Maybe you were brilliant as a kid, but I'm sure I wasn't socially.

Socially, academically, nope, I was not. I was hockey helmet kid, like walking into walls.

Oh boy.

So before we get too, too far, I think if this resonates with any of the audience that they now know that they need help, how can people reach out to you if they would like your service, your help, your counsel?

Sure. Well, there's a bunch of websites. action-learning.com is kind of the mothership. There's a bunch of YouTube stuff and LinkedIn stuff I post. I've got a great marketing manager whom I've never met, but she's brilliant. So oftentimes after a recording like this comes out, she'll use AI and determine what's the most emotionally evocative scenes, do those shorts, write some draft, send it to me, and of course I want to edit it. So I'll edit it and then it, you know, goes out.

Yeah.

So there's a bunch of stuff available if people have an interest. But the other thought is, um, back to my earlier point, ask for expertise, ask for help. For some reason in our conversation, I'm thinking of extended family members in Minnesota and South Dakota. They're all farmers. And they've got great, would you say smartness? Was that your word? About things that I have no clue.

Right.

But they are right. They can read the soil, they can read the livestock and assess risks that I can't even imagine. That's an example of asking for assistance from expertise, just as they go to their 4-H experts. Or go to a business score expert, you know, a well-intentioned person who would offer some free advice. There's regional banks with regional bank advisors who are often more generous than the national or international bank advisors. I think we need to, I keep saying that, ask for perspectives, but I keep thinking about the phrase practice curiosity. I think that's the bottom line.

I love that. That, you know, I was going to say, what's the first step people should have when they're thinking about succession planning? And really, I think you just nailed it with just that one statement, practice curiosity. Because until you do, I mean, that's the nice thing about being curious is you can't really be curious and still have your ego intact. Or you can't be curious and be driven by your ego, right?

Yeah, I've been an executive coach since '97. And coaches ask questions. Curious people ask questions. Active learners ask questions.

Right.

So if you're asking the questions, if you're practicing curiosity, you're actively learning about whatever it is you need to learn about. You're modeling that now because you're asking questions and we're going sideways based on those questions. That's totally unscripted, but that's what we do when we learn, I think. And I invite people to do more of that.

So for the people wanting to start off, you have a book and so on. Can people do any level of self-consulting Or should they just be skipping over that and just saying, you know, let me just find somebody who can help us, period?

When you go to the doctor, you want someone like a nurse who's going to take your vitals and assess your current condition before they bring you into the specialist who says, well, you really need this and this, right? In a similar way, I think the medical model works. So nextgenpeergroups.com/gifts with an S, G-I-F-T-S. is an example of a free self-assessment. So people can click on nextgenpeergroups.com/gifts and they'll see a bunch of articles and stuff, but that's a self-assessment that's totally free and it's based on the top 10 behavioral competencies that I just mentioned.

Mm-hmm.

That's a way to look at your pulse or your heartbeat or your cholesterol or your weight, you know, such. And maybe that was a bad example before going any further. And there are a number of tools that I use. But that's probably a good example of something that anybody could do on their own.

It's kind of like the first step is to be aware that you don't have a strategy or to be aware that you have this as kind of a— I was going to say the word liability, but maybe it's not a liability. Maybe it's a handicap for your business.

Well, you pulled the dark on me, Marc. Maybe it's just we don't know.

Yeah. We don't know what we don't know.

Well, in this example, we don't know the future, right?

Right.

So we don't know the capacity as owners to pass on those assets. And we don't know sometimes what our kids or loved ones really might want to do.

Right.

So if you had a third party who was willing to assess all of them, then I or that person could paint a picture that provides the assessment phase and then the recommendation phase. Sometimes it's 6 months, sometimes it's 12 months, sometimes it's 3 years.

Yeah.

That's just normal. I had a client once with about 50 G4s distributed all over the country, and they get together every year for an annual event in Lake Tahoe area in California. They have a bunch of properties, a bunch of LLCs, and each has its own LLC for legal protection. Smart model, makes good business sense.

Right.

But this one didn't know what this one was interested in, so they hired me to collate some of that. create some of the bios basically, and with their approval, share them with each other so that when they convened at the next family assembly— I was going to say family hoo-ha, but that sounded too informal. It's a family assembly. Then they were able to finally have a conversation with cousin Sarah, who's, you know, 10 years younger and just graduated from a great school and wants to do this.

Really?

And now, they're moving forward. So, sometimes that's the value of having an external consultant come in and assess what's going on.

I love that. When we come back, Doug, I'd like to talk a little bit about some cautionaries and pitfalls because I can imagine, I think this conversation is compelling enough that people should be wanting to take action by the time they hit done on the playback. I'd love to get into some cautionaries and pitfalls that we should be aware of. And we'll get to that right after this.

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Welcome back! We are having a great discussion. I hope you're getting lots from it today. Dr. Doug has been raising all sorts of points that have opened up my awareness. And as you can tell, as evident from our discussion today, we are deeply dedicated to supporting business leaders just like you. So, if you're in the midst of planning a leadership retreat or an industry conference and you're looking for amazing content, or you just need an expert to help guide you in your transition, we're just a message away. Feel free to reach out for conversations about your unique challenges or to discuss how we can maybe collaborate. to help you achieve your goals. Doug, what advice would you give business owners to avoid— like we talked about these pitfalls. And I guess the question should be, what's the first step they need to do? They're getting this new awareness just like I've done by talking with you. What do you think is the first step they need to do if they want to start this transition of succession planning?

So, the nerd, academic nerd in me wants to say, write it down. And it could be that each individual writes down what they think are the values of their family. What does it mean to be a gray family member, for instance? Next gens can write their own list of values. Next gens can write their own constitution or charter, which is a short list of all the things we think are important, how we want to make decisions ahead. And I'm pushing for that, I guess, because organizationally we're verbal for a while, And we founders do this. They have, this is the way it's done, boy. And then that's really crucial. But until we start to write things down, we don't organize as much as we can. And I used to study how the elders would articulate those things. It was kind of a top-down model, but that's not how most family businesses are anymore, in part because the younger ones express themselves this way. They, they have a voice and they need to share their voice. They need to write their voice. So if it's written in paper form, then it can eventually become digital, just as you're creating content with your podcasts and you're sharing and distributing that podcast wherever. I think, um, family members can choose to do the same. So you could have a private website, you could have a private Facebook group. I did this once for a number of family reunions. And events. You could have private events for that person who's turning 80 and needs to bring in a bunch of family members that haven't convened before. So you could host a Zoom meeting, for instance. We've got the digital tools to organize some of the communication structures that we didn't have 30 years ago. So in many ways, it's easier to practice family capital. Family capital is the idea of social exchange and sharing on whatever you think is important. When you take a photo of the family event, it's framed. The family capital is the big frame. So how do you include everybody? And there's different ways to do that. Some people think of a small group or larger groups. The smallest group might be whatever you might do on a Sunday night. Sunday nights are often family meeting times, and it could be that the youngest people lead the activities when they're in middle school and high school and whatnot. So that dad doesn't make too much noise, but also so that the younger ones have agency. They're practicing. It could be that that same group does investing together. The classic example is 3 jars in the kitchen, one for saving, one for investing, and one for spending. So if the allowance goes in there and the kids—

You forgot the swear jar.

Well, okay. Every family has their norms, right? There are lots of ways to think about shared investing and distributed communication.

Yeah.

But they're more often verbal and they need to be written. So if they're written over time, now you've got an opportunity for people to write their journals. What is it like to be a G4 in Alberta? And that's a beautiful thing. We're seeing more and more journaling. We're seeing video stories and documentaries of the early days in in settlement before the oil mines opened up. Boom. Your country changed dramatically, right?

Yep.

So did Texas, by the way.

Oh, I know. I keep saying we're the Texas of Canada. So—

Yep, you are. Last week I was in Texas with a client who expressed the concern, my father and grandfather have a number of oil fields that are generating all kinds of great returns for us right now. I think I've got asset access. I think I'm listed in the will, but I don't know if I'm listed in the will. And I don't know if I should ever bring that up with Grandpa. He's very close to his grandfather. And I asked, well, have you ever considered the idea of having a reading of the will while Gramps is still alive? If we did more of that, we would perpetuate healthy family business succession and continuity while Gramps is still with us. It might be an easier thing. than sometimes plummeting forward as if there's only one way to live life. It's not. And so I've mentioned a handful of examples, smaller meetings, digital tools, written stuff so that people can begin to share their expertise and their notions about whatever could be next. Does that help?

So the big takeaway I'm getting from this conversation, number one is curiosity, being curious enough to be able to ask questions. The second part Is this idea that we have to be in active conversations, whatever that might look like for us, whether that's journaling, having Facebook or Facebook groups or whatever. We have to have open and transparent conversations. For the next gens who are battling with kind of the ego of the past, this is the way we do it because we've always done it this way, and they, they're struggling to keep up or struggling. What piece of advice would you give them to help them? shake the status quo so that they can move forward.

I think you used the word ego 7 times so far in this recording, Marc.

It wouldn't surprise me.

Here's the point. Whose ego is it? Is it the ego of Grant or is it the ego of my ego? In other words, if my ego says it's important to maintain the farm or it's important to maintain this cemetery, it's important to maintain this county park, it's important to maintain this shared asset, along the lake because it's lovely and we all want to go in the summertime and enjoy, enjoy some time there. Well, that's an example of the next gen's individual or collective ego that may or may not be the same as the older gen's ego, right? So I often encourage people to ask multiple questions. What's important to Gramps? And then ask it again. What's important to you, Gramps? Gramps, may I video record your conversation?

Hmm.

May I share that with a private family website, let's say, or something like that. At the risk of really scaring you, Marc, you could take those video recordings and create an AI-based hologram. So now there's a hologram of Marc hosted at delphi.ai or something like that, and your great-grandkids could ask that hologram for insights 100 years from now. Mm-hmm.

Of what was important to me.

So when I think about time, I often land on the phrase, time is right. It's not might is right. It's not legal right is right. It's time is right. And, and there's— it all falls back on this notion. If we practice curiosity and agency, the time will become right.

This has been brilliant. Could you remind everybody one more time how they can get ahold of you?

Scream and yell loudly.

Oops, oops, I'm sorry about that. Scream and yell loudly was like—

Why not? In other words, practice asking for help. action-learning.com is another resource. How's that?

I love that. This has been so brilliant, Doug. Thank you so much. In spite of the tech and everything else, I appreciate— this has been a wonderful conversation. Thank you so much for doing this with us today.

My pleasure. I hope it's useful to folks.

Thank you very much. Why don't you let me know if this was of value to you? As always, my offer stands. If you would like 30 minutes of my time to brainstorm your business with you and your team, feel free to book a time on my online calendar. The link is down below. It's the one that's marked meetwith.marchaine.com. It'd be my absolute honor to be of service to you. And while you're at it, why don't you leave a comment or review about this episode? I'd love to get your feedback. Was this of value to you? And of course, if you haven't done so yet, please make sure you subscribe to this podcast. That way, you get notifications when I bring you fresh new content each and every week. I want to sincerely thank you for your time and attention today. I hope this was of value. Thank you for joining me. My name is Marc Haine. I hope you stay safe, stay healthy, and I hope you dare to be the exception.

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