Wealth Mediation Blog

Grooming a Successor Autocrat? Not So Fast

2011-01-07T14:51:00.000-05:00

Autocrat (def.) a person having unlimited power.

Highly successful entrepreneurs become autocrats inside their companies. Benign sometimes, benevolent sometimes, approachable perhaps, but no one doubts who has the last word, who makes the final decision. Beloved by some employees, feared by all, the autocratic entrepreneur rules.

I have encountered a number of entrepreneurial autocrats who are grooming their successors to rule as they have ruled: absolutely.

Problem is: family members (and often employees) won’t accept successors’ autocratic leadership styles. The pushback runs like this:

“We took it from him but we’re not going to take it from you!”

His father and uncle groomed Jay Schottenstein as their successor autocrat to rule their rich retailing empire with an iron hand. Headquartered in Columbus, the Schottenstein name carries lots of weight in Ohio. Indeed, basketball star Lebron James nominated Jay for Time magazine’s list of 100 most influential people.

Jay’s sisters Susan and Ann (who don’t hold him in such high esteem) are demanding that Jay be removed as trustee of trusts that hold big stakes in family brands such as American Eagle Outfitters, DSW, Cannon, Bugle Boy and Steuben Glass. After a quiet year-long court battle Forbes magazine broke the story (“The Schottenstein Family Feud, June 30, 2010.)

In their lawsuits, his sisters allege that Jay (who inherited twice as much as his sisters’ families) used his office as trustee to favor his own children over theirs, failed to make adequate distributions to his sisters’ families, imprudently invested trust assets (e.g. with Bernie Madoff) and used his trustee powers to elect himself as chairman of important family companies thereby acquiring valuable stock options that diluted his sisters’ shareholdings.

Jay responded that his sisters were simply bitter and resentful that he was left in charge and with a double share for himself, that all beneficiaries had received lavish returns as a result of his management, and counterclaimed for compensation as trustee.

The Schottenstein autocracy apparently extends to affiliated public companies controlled by a family holding company. (Forbes, “The Wasteland” November 24, 2003.) The holding company charges its affiliates fees for legal services, benefit plan work, insurance administration, store planning and design, importing merchandise and real estate management.

The charter of one affiliate permits its officers and directors to give preferential treatment to the parent holding company without violating their fiduciary duties. So long as they follow prescribed procedures, management and the board may make choices that adversely affect the affiliate’s best interests. Moreover, the family holding company may “cherry pick” business opportunities for itself while absolving its officers and directors of liability to shareholders of publicly held affiliates for doing so.

Siblings may tolerate an autocratic father, but not an autocratic sibling. This is the lesson of Schottenstein and the families I’ve encountered who have tried to impose a successor autocracy upon unwilling siblings.

It’s hard enough for a sibling to function as first among equals.

Start succession planning there.

Forget successor autocracy.

- Gerald Le Van
Chair - Family Wealth Mediation
Upchurch Watson White and Max

“…except in Sharia”

2010-11-22T15:38:00.002-05:00

I once spoke to the Texas Bar Association on the topic:

“…except in Louisiana”.

The other forty-nine states share English common law origins whereas Louisiana’s legal system evolved from the civil law of continental Europe via the Code Napoleon.

The outcome in many cases would be the same under either legal system, though vocabulary, procedure and basic concepts might vary. In other instances, the result could be dramatically different, especially if the matter involves trusts, estates, or Louisiana-situs property. Doubts about these differences have spawned a familiar footnote in American legal literature, “…except in Louisiana”.

Thirty years’ residence there among some truly wonderful human beings convinced me that Louisiana is not so different from other states except for better food, more colorful politics, and some quaint accents. Their unique legal system doesn’t make Louisianans a different species.

Can the same be said about Muslims and their sharia law? Sharia (literally “the path to water”) is a catch-all term for Islamic codes regulating everything from social mores to crime. Sharia is based on the Koran, sayings attributed to the Prophet Muhammad, and the work of Muslim scholars. In some matters, such as family law, sharia is clear and strict; in others, such as commerce, it is more fluid and evolutionary.

An Economist essay (October 16, 2010, p.71) sheds some light on sharia’s current encounter with the West. The word sharia may evoke revulsion as legal authority for corporal and capital punishments -- stoning for adultery, death for abandoning Islam, whipping for consuming alcohol or severing the hand of a thief. Muslims themselves disagree over how, if at all, these ancient punishments should be practiced in the modern world. Revolting as these penalties may be, there is no prospect of their imposition in any Western country. Muslims who would take sharia punishments into their own hands would face stern Western justice.

Sharia generates genuine dilemmas in secular countries with big Muslim populations, not for criminal retribution but in family matters such as divorce, inheritance and custody. English-speaking countries are increasingly invested in alternative dispute resolution such as binding arbitration or mediation. Now Islam-based arbitrators and mediators are entering the market. Both the procedures and the general ethos of Muslim mediation are very different from the Western model.

Among Britain’s two million Muslims, sharia-based family law both reflects and somewhat mitigates their Islamic conservatism. Since 1980, a network of sharia councils has offered thousands of rulings to troubled families, many involving women who have obtained civil divorces but need an Islamic divorce to remarry within their faith. These councils can overrule a husband’s objections but at a price: the woman may be required to forfeit her marriage settlement. Cases of domestic violence may produce a scolding or referral to an anger management course rather than a safe house for the victim and prosecution of the offender. Muslim tribunals still follow sharia intestacy laws that give daughters half as much as sons.

In Canada, the provinces of Ontario and Quebec have stripped religious tribunals (Jewish and Catholic included) of legal enforcement and stiffened rules on arbitrator qualifications and record-keeping. This hasn’t stopped devout Canadian Muslims from seeking religious guidance on family and personal matters. As one professor cautions: “Because religious arbitration now takes place mainly outside the scrutiny of the courts, there is no way to tell whether women are being treated well or badly.”

In the U.S. both secular and religious arbitration are firmly established. Christian and Jewish arbitration is well-organized. The Muslim variety is low-key and less formal but not especially controversial.

In continental Europe (the source of Louisiana’s legal heritage) law and politics leave little room for cultural exceptions to dispute resolution, though knotty issues of Islamic family law have arisen where Muslims remain citizens of their native countries. Courts try to apply the native laws of foreign passport-holders so long as the outcome doesn’t offend “public order” i.e. outrage public opinion.

Polygamy is a tricky issue. French law outlaws polygamy and denies second wives the right to join their husbands in France. Nor do the French enforce sharia talaq by which a Muslim man simply renounces his wife, unless both parties to the failed marriage testify that talaq has taken place in some Islamic country.
When legal principles clash with social reality, the results can be messy. Islam prohibits Muslim women from marrying non-Muslim men. Italy requires Muslim women to obtain consent to a mixed marriage from their embassy, usually refused unless the prospective husband converts to Islam.

In northern Greece a Muslim community of some 100,000 has lived under Islamic family law since Ottoman times. Nothing stops a Greek man from going to state courts but public pressure impels most to settle things through the local mufti. Indeed, how many Americans forego enforceable civil rights because of similar cultural or religious pressures?

Turkey has applied for admission to the European Union. By some Western standards, Turkey though largely Muslim is thought sufficiently “progressive” to be qualified for EU membership. Yet Turkey today manifests deep tensions between modernism and ancient Islamic traditions embodied in sharia.

If admitted, what role will sharia play in Turkey’s EU membership? And what role will sharia continue to play among devout Turks who work in France, Germany and the UK? Or indeed among 300,000 Muslim-Americans residing in Detroit, two-thirds of whom are U.S. born?

As a Louisiana lawyer and law professor, I did my share of griping about Louisiana’s legal system where, in my view, it was out of step with the times. I also defended Louisiana law against outside critics who demeaned it simply because it was “other” or “different” or “French”.

While Western countries are taking a pragmatic approach towards sharia’s role in Muslim family life, I’m not at all sure that Muslim scholars and judges will respond pragmatically in kind. Several years ago I worked with a number of Muslim business families in Egypt. [See, Le Van, “Egyptian Business Families – An American View” Families in Business March/April 2004] When, during a Cairo seminar, I used the word “pragmatic” hands went up asking for its meaning. Though fluent in English, the Egyptian participants seemed puzzled by my offhand definition: “do what works". So I groped for a familiar illustration. I recounted how the French began construction of the Panama Canal using the same engineering assumptions earlier employed at Suez: remove all the rock and soil between two bodies of water. The French failed because a mountain range traversed the Isthmus of Panama. It was impossible to remove all the rocks and soil between the Atlantic and Pacific Oceans. Successful completion of the Panama Canal fell to an American railroad engineer who did what worked. His solution uses ships towed by railroad engines to climb the mountains through a series of locks.

I'm not sure my Egyptian audience grasped that illustration of pragmatism, or the concept itself. "Do what works" can be unsettling. Pragmatism can seem alien to the spiritually certain.

Someone may have already addressed the Texas Bar on the topic:

“…except in Sharia”.

We live in interesting times.

- Gerald Le Van
Chair - Family Wealth Mediation
Upchurch Watson White and Max

Ambivalence: Healthy Indecision?

2010-10-27T12:45:00.003-04:00

With the election just weeks away, you’d think that every American has surely chosen between the widely polarized candidates.

Yet pollsters insist there’s still a significant pool of undecided voters. And other significant pools who may decide not vote at all. Hence the blistering last-minute (mostly negative) media blitz.

My last post reviewed the recent book, “How We Decide”. This post is about how we don’t decide – about ambivalence.

Some of us are quick-deciders whose rush to judgment omits later data and doesn’t allow time for intervening circumstances to evolve. Others are slow to decide, waiting for clarifying data to emerge, watching for events to unfold that may render decision-making unnecessary.

For some of us, everything must be certain -- black or white. We live in a world of clear choices. We speak our minds, make quick decisions, are less anxious about wrong choices, have fewer protracted problems in relationships, are less likely to consider others points of view. Perhaps we fell in love and got married right away.

Others of us comfortably navigate a world of grays, avoiding decisions if possible, feeling more regret after making them, thoughtful about making the right choice, staying longer in unhappy relationships, appreciating diversity and multiple points of view. We may spend hours in the sock aisle weighing the pros and cons of wool argyles vs. cotton stripes.

Perhaps culture plays a leading role. Western cultures need to put things in boxes while eastern philosophies have long acknowledged dualism: that something can be one thing as well as another. East and west collide in the Puzzlement Song made famous by Yul Brynner in “The King and I”:

There are times I almost think
I am not sure of what I absolutely know.
Very often find confusion
In conclusion I concluded long ago
In my head are many facts that, as a student, I have studied to procure,
In my head are many facts..
Of which I wish I was more certain I was sure!

Black-and-white thinkers can get mired in one point of view, can’t appreciate others’ positions, can create conflict with unhealthy behaviors. Persons afflicted with clinical depression get stuck in a negative view of the world, are supersensitive to perceived slights, have trouble thinking about alternative explanations.

Ambivalent people are prone to examine all sides of an argument, scrutinize the evidence, reject oversimplification. The mixed emotions they feel make them better able to empathize with others points of view. Feeling mixed emotions makes them better able to cope with loss and disappointment. And they’re more creative since they consider all sorts of ideas a black-and-white thinker would dismiss out of hand.

Ambivalence about one’s job isn’t helpful. Those who aren’t ambivalent about their work perform it well if they like it, poorly if they don’t. Black-and-white employees focus on pay or whether they like their boss, but not on the total job.

The same goes for human relationships: black-and-white thinkers focus on a few of the other person’s good qualities while gray-thinkers can’t seem to put the other’s negative traits out of their mind. They can feel hurt or abandoned in the midst of their partner’s doing something nice. Nevertheless, recognizing a partner’s strengths and weaknesses is normal and a certain degree of relational ambivalence can be a sign of maturity.

Psychologists use various tests to tell if a person sees the world as black and white or shades of gray, or somewhere in between. Here are two such quizzes:

How You See Relationships
Rate each statement on a scale of one to nine, with one being the least ambivalent and nine being the most.

_____I am confused about my feelings toward my partner.

_____I think about or worry about losing some of my independence by being involved with my partner.

_____I am ambivalent or unsure about continuing in the relationship with my partner.

_____I feel that my partner demands or requires too much of my time and attention.

_____I feel “trapped” or pressured to continue in this relationship.

Total Scores
5-9 = very low ambivalence
10-13 = low ambivalence
14-18 = average
19-23 = high ambivalence
24-45 = very high ambivalence
*Source: Adapted from Braiker & Kelly’s Construct of Ambivalence

How You See Your Work

Rate each statement on a scale of one to six, with one being ‘completely incorrect’ and six being ‘completely correct.’

_____I have positive and negative feelings toward my job at the same time.

_____When I look at my job, thinking and feeling tell me different things.

_____I am torn in my attitude toward my job.

_____I face my job with mixed feelings.

_____My view of my job includes positive and negative ideas.

_____My feelings toward my job are conflicting with my ideas about my job.

_____My attitude toward my job is mixed.

Total Scores

Sum up your scores from each of the seven items.

If you scored a 24 or below, you likely have little ambivalence about your job.

If you scored a 25 or higher, you likely have a greater amount of ambivalence about your job.

Note: These scales are meant only to be informative.

*Source: Adapted from Riketta & Ziegler’s job ambivalence measure.

For this post I’ve borrowed heavily from “Why So Many People Can’t Make Decisions” (Wall Street Journal, September 27, 2010) where columnist Shirley Wang notes that ambivalence has only recently attracted psychologists’ attention. According to the therapists she interviewed, thinking in shades of gray is a sign of maturity – a coming to grips with the world’s complexity. Yet there are few clues as to why we handle uncertainty so differently.

In my view, much of the loud and angry polarity we’re witnessing today – political and otherwise -- is not so much conflict between opposing and unbending certainties, as it is natural (and perhaps irreconcilable) tensions between certainty and ambivalence.

As Yul Brynner puzzled:

When I was a boy

World was better spot.

What was so was so,

What was not was not.

Now I am a man;

World have changed a lot.

Some things nearly so,

Others nearly not.

- Gerald Le Van

Chair – Family Wealth Mediation

Upchurch Watson White & Max

How We Decide

2010-09-10T10:51:00.001-04:00

Plato and Descartes taught that important decisions should be made rationally and unemotionally. That’s an elegant idea but not the way our brains really work according to Jonah Lehrer* author of How We Decide (Mariner 2009).

Using MRIs to monitor our brains during the decision process, neuroscientists are discovering:

Our emotional brains are like highly developed supercomputers
By comparison, our rational brains are more like hand-held calculators.
Our rational brains can handle only a few variables at one time – perhaps only four, no more than nine.
For simple decisions defer to reason. If there’s no qualitative difference between products, choose the lowest price. The rational brain likes numbers. Too often we let emotional impulses decide small stuff that’s much better done by invoking reason – like whether to use credit cards.
Complex decisions involving lots of variables can overwhelm the rational brain, e.g. buying a house or a car. Think less about your more important choices and let your emotions choose. Price is a concern of course, but only one variable among the many that contribute to your ultimate satisfaction with what you buy.
Chess is a rational game. That’s why computers can beat grand masters. Poker is both rational and emotional: reason counts the cards but intuition calls a bluff.
If the problem is unique put reason to work. If the problem is really novel emotions can’t save you. Emotions will search your past for a pattern to follow but there is none. The way out of a unique mess is a reasoned creative solution. Emotions aren’t irrelevant however. It helps to be in a good mood when tackling an unprecedented situation. Your prefrontal cortex works better when it’s not busy trying to manage your emotional life.
Embrace uncertainty. Overconfidence in poker or the stock market can lead to disaster. Consider the competing arguments on both sides unfolding in your head. Bad decisions happen when the neural quarrel is cut short. Always entertain competing hypotheses. Continually remind yourself of what you don’t know. Unforeseeable events can undo the most elegant models and theories. Colin Powell demanded of his advisors: “Tell me what you know, and then tell me what you don’t know, and then tell me what you think.”
You know more than you think you do. Your conscious brain is unaware of all the neural activity taking place outside your prefrontal cortex. This is why people have emotions. Emotions are windows into the unconscious -- visceral representations of all the information we process but don’t perceive. That’s why, with its huge computational capacity, the emotional brain is particularly useful in helping us make hard decisions.
Emotions have turned our mistakes into educational events from which we constantly benefit. Wisdom through error. Feelings -- not reason -- capture the wisdom of experience.
But don’t always trust the emotional brain. Instead be constantly aware of the type of decision you’re making and the type of decision process it requires. Study your brain at work. Listen to the argument inside your head. Think about how you think. Stay aware of how your mind tricks itself into foolish behavior. Become a student of your own errors, determined to learn from what went wrong, and how to avoid them next time.
The most astonishing thing about the human brain is its capacity to improve itself – to improve its decision-making

Lehrer’s book is a bit ragged and I suspect hastily written. A casual reader could lose interest before the above conclusions appear on the last few pages. One more good edit could have remedied these shortcomings. A good editor might have suggested that the book begin with these nuggets. So now forearmed with these nuggets I think you will enjoy How We Decide.

- Gerald Le Van

Chair, Family Wealth Mediation Group

Upchurch Watson White & Max

*Jonah Lehrer is an Editor at Large for Seed Magazine and the author of How We Decide and Proust Was a Neuroscientist. He graduated from Columbia University and studied at Oxford University as a Rhodes Scholar. He’s written for The New Yorker, Nature, Wired, The Washington Post and The Boston Globe. He is also a Contributing Editor at Scientific American Mind.

How Creative Elders Invest Their Late-Life Inheritance

2010-08-12T17:38:00.000-04:00

In Get Low, veteran screen actor Robert Duval adds yet another riveting performance to a distinguished filmogrophy that includes To Kill a Mockingbird, Tender Mercies, The Great Santini, Lonesome Dove, Apocalypse Now and of course The Godfather trilogy. Now almost 80, how does Duval keep doing it?

Recent research confirms that most of us can reach age 88, barring accident or an unhealthy lifestyle. And though dementia may lurk, the good news is that our brains may actually improve as we age -- a welcome late-life inheritance.

An emerging body of research shows that a surprising array of mental functions hold up well into old age, while others actually get better.

Vocabulary improves, as do other verbal abilities such as facility with synonyms and antonyms. Older brains are packed with more “expert knowledge”… They also store more “cognitive templates,” or mental outlines of generic problems and solutions that can be tapped when confronting new problems…

Where once it took hours of methodical scrutiny to understand a prospectus, for instance, older lawyers and investment bankers can zoom in on crucial sections and fit them into what they already know.

While younger brains solve problems step by step, older brains call on cognitive templates, those generic outlines of a problem and a solution that worked before. It's the feeling people get when they see that a new situation or problem belongs to a class of situations or problems they've encountered before, with the result that they don't have to attack problems methodically.

Yes, older people forget little things, and may have occasional attention lapses, but their cognitive templates are so rich that they more than hold their own. Their brains can keep up even with a diminished supply of blood and oxygen. As a result, older professionals can readily separate what's important from what's not – a big reason why so many of them fire on all cognitive cylinders well past age 65.
* Sharon Begley, “Parts of brain seem to get better with age” Wall Street Journal, February 3, 2007

My contemporaries confirm this brain improvement phenomenon. So does my own experience.
Like most lawyers I was a compulsive note-taker. But it’s rare that I need the detail preserved in those copious notes. So I’ve shifted gears.

Writing furiously while others speak risks missing critical non-verbal nuances -- eye movements, voice tones, pauses, body language -- that subtle unspoken connection in human encounters that communicates much more than words. Indeed, can a transcript ever do justice to a deposition or a trial?

Giving my undivided attention to people speaking has all but supplanted words on the pad. I still jot down important numbers and a few key words, but no more narratives. Within 24 hours after the meeting, I write down brief impressions and conclusions that prompt the patterns in my aging brain to save what’s needed and to delete the clutter.

Susan Krause Whitbourne connects aging creativity and one’s work:
Openness to new ideas and a flexible attitude toward change are the essence of creativity. Perhaps it is for this reason that creative artists and musicians such as Picasso, Verdi, and Tony Bennett maintained their youthful vitality until so late in life.

Analyzing the lives of a set of six highly creative older adults, Italian researcher Antonini identified a passionate commitment to pursuit of their discipline as the common thread. These creative elders also shared the trait of flexibility or plasticity and rather than dwell on their accomplishments of the past, looked forward to new goals and new creative enterprises. They maintained their curiosity and, similar to the quality of openness to experience, were able to keep up with their times and adapt to changing circumstances.
*The Flexible Brain: How Creativity Affects Aging

Some future film may capture Robert Duval’s greatest performance.

For creative elders it’s healthy to assume our best work still lies ahead …then get after it.

Our aging brains will find ways to keep up the pace.

A wise and creative investment of our late-life inheritance.

- Gerald Le Van

Chair, Family Wealth Mediation Group
Upchurch Watson White & Max

What’s New with Genes? Biology 2.0

2010-07-16T15:37:00.001-04:00

An Executive Summary

by: Gerald Le Van

Longevity Genes. My mother’s older sister lived to 101.

Do I have longevity genes like my aunt?

If I do, would I want to know it?

There are about 80,000 centenarians in the U.S. alive at one time. Nicholas Wade reports that scientists studying more than 1000 Caucasian centenarians in New England have identified 150 genetic variants that predict extreme longevity with 77% accuracy. Interestingly, 23% of the centenarians in the group didn’t have the particular gene variants the researchers monitored. (“Genetic Finding May Provide a Test for Longevity” NY Times July 1, 2010)

These longevity genes seem to trump disease-causing genes that would otherwise shorten life spans. Research suggests that 15% of the U.S. population have the potential to live to 100, barring accidents or unhealthy lifestyles. A genetic test for longevity genes isn’t yet available. The good news is that most of us have genes that will get us to age 88 if we exercise, avoid obesity, don’t smoke and don’t drink too much.

“Biology 2.0”. The Economist recently published a 14-page executive summary updating genetic research (“Biology 2.0” June 19, 2010 pp. 3-16). This is my executive summary of theirs.

Three billion dollars was spent to sequence the three billion letters of the human genome, completed in 2003. Increased computer power and improved DNA sequencing will reduce time and cost of genome mapping. Today a human genome can be read in eight days at a cost of less than $10,000. Evolving technology may soon read it in fifteen minutes for less than $1000.

Borrowing a computer analogy: the chemicals in a cell are the hardware; DNA information is pre-loaded software. The interaction of cellular chemicals is like the constantly changing interaction between memory chips and processing chips.

How our genes “express themselves” is vastly more complex than once thought. Yet biologists believe they will soon understand perfectly how a cell works, and ultimately how assemblages of cells operate in plants and animals. Since 2003, scientists have constructed an organism with a completely synthetic genome, and completed the genome of our closest relative, Neanderthal man, who lacked several critical homo sapiens genes that enable speech and higher cognitive abilities.

Practical applications of the new genomics range from DNA identification, to what goes wrong in cancer cells, to deeper understanding of human behavior (whether healthy or pathological) to better medical diagnosis and treatment. We may yet understand “in pitiless detail” what it is to be human.

Pharmacogenetics. Genomics has not yet delivered the cornucopia of drugs promised early on and few are in the pipeline. Pharmacogenetics seeks to match drugs to a patient’s genomes. Pharmacogenetics could be a boon to patient and drug companies alike, e.g. FDA approval for a given drug only for patients who might benefit from it.

First, however, more must be learned about how genes function and how they are related to disease. All this is fiendishly complex. For example, that hemophila and sickle cell anemia runs in families is fairly easy to connect genetically. But the tendency of relatives to suffer heart disease, strokes, late-onset diabetes and Alzheimer’s disease is less clear cut. Mutations across generations may not cause these diseases but simply create greater risk of contracting them. Environmental factors may also play a role. Meanwhile drug makers seem to seek the quiet life -- healthy balance sheets not drained by the costly research necessary to unlock these healing secrets.

Bio-banking of large samples of now less-expensive DNA information may yield breakthroughs in understanding heart disease and stroke. Turning data into knowledge and thence into pharmaceuticals is, of course, the ultimate challenge.

Cancer. Cancer is the focal point of genetic medicine. Cancer is known to be a genetic disease and its victims and their oncologists are willing to take greater risks for a cure. Understanding more about gene mutations (“oncogenes”) will help physicians select the appropriate cancer treatment the first time on rather than by trial and error. Some predict that drug companies will collaborate in financing independent research to more readily identify these oncogenes. Genomics has already led to successful (albeit temporary) treatment of secondary melanoma, one of the most aggressive cancers.

Personal genomics. What you learn from looking at your own genome isn’t worth today’s price (about $10,000). Either the price must come down or the value of the product must rise. Some companies offer to trace your ancestors back to their roots in northeast Africa and their wanderings over the past 150,000 years. Some offer to identify the breeds in your pet’s genealogy. Others identify genetic variations that may put you at risk for specific diseases. Of course chance is not certainty but even the chance of contracting dread diseases can still be upsetting.

Mass research. China is pursuing mass DNA banking that may allow pre-emptive treatment of tumors that are not yet malignant. The Chinese are also studying genetic underpinning of human intelligence with research on schoolchildren that might lead to some politically incorrect racial profiling.

Research elsewhere may produce a fine-grained picture of genetic differences in personality type, religiosity and even the ability to make money. Futurists foresee the creation of global DNA banks -- a genetic “Facebook” that could expose to public gaze one’s ancestry, susceptibility to disease, life expectancy, personality traits, intelligence, even criminal inclinations. That global DNA bank could yield a goldmine for medical research. And its discoveries could induce parents to clamor for genetically enhanced children – taller, smarter, more beautiful.

There will be mistakes along the way say the experts, and suffering perhaps. Information wants to be free, and technology once invented cannot be unlearned.

Muses futurist Stephen Brand:

“We are as gods, and might as well be good at it”.

A Family Lawsuit: Advance Damage Control

2010-04-16T10:08:00.000-04:00

When litigation threatens, what can family members do to minimize its destructive power? Karen JacMar proposed a “manifesto” to limit the damage.*

A lawsuit had not been filed but appeared inevitable. Disgruntled relatives had circulated an advance copy of a complaint against the top officers of JacMar Corporation, the family company. Named defendants were Jay JacMar, the founder’s son and CEO, and Jay’s sister, Karen, the company CFO. The draft complaint alleged that both had wrongfully abused their executive positions.

A mediator spoke to the assembled family and their counsel:

“Family lawsuits get out of hand in a hurry.

“Lawsuits rip and tear relationships built by generations of patient nurturing, then hand the shreds to future generations.

“If the JacMars are going to court, you need to contain the damage. You need to draw some boundaries that rampaging litigation can’t cross. So I have some homework for you. I want you to make some lists.

“First, list some family blessings about JacMar Corporation, who should be thanked for what and why.

“Second, list what you do and don’t want to happen during the lawsuit and why.

“Finally, list what should be done with your lists—who should see them and under what circumstances.

In response, Karen JacMar drafted this:

1. Mom and Dad have left us with abundant opportunities and lifestyles we have not earned.

2. We are the beneficiaries:

of Dad’s energy, ambition, hard work and generosity,
of Mom’s love, nurture and vigor,
our brother Jay’s vision, intellect and quiet leadership,
of our brother Frank’s warmth, wit and charm,
of the courage, strength and compassion of Frank’s widow, Frances, and of her sons’ continuing dedication to our Company, and
of our sister Karen’s versatility, loyalty and team play.

3. JacMar Corporation is an important part of our family heritage. The Company has provided us with careers, prominence and personal wealth.

4. Yet we differ on important issues involving Company management. We hope our differences will be settled through negotiation or mediation. If not, they will be resolved by court decision.

5. Our differences are straining our relationships with each other and we anticipate further stress. We urgently desire to avoid unnecessary injury to our connectedness.

6. Our remedies are limited to money damages. None of us subverts the importance of family to money demands. None of us will use litigation as an arena to expose rivalries, envies, injustices, hurts, slights or neglects.

7. We wish to minimize publicity, sensationalism and erroneous reporting. None of us will communicate with the media about our differences or the litigation. We will instruct our lawyers to refrain from any public comment about our case. We will seek to have all records of this matter sealed from public inspection.

8. A continuing healthy family relationship is our highest priority. We want to remain a strong family after this matter is concluded, regardless of its outcome.

9. We are particularly concerned that our differences may adversely affect relationships between our children and grandchildren. We will do all we can to confine our disputes to our own generation.

10. We urge our respective attorneys to be respectful and courteous to all family members at all stages of this matter. We ask them not to expose or exploit past disputes or differences between us that are not directly related to management of the Company. We ask all judges, magistrates and mediators to cooperate in our objective to protect our family relationship.

In an email transmitting the draft “manifesto” to the mediator Karen wrote:

“What do you think of sending the attached to the other side? Ask for their comments and suggestions?

“If they don’t buy in immediately, that’s OK. We can abide by it unilaterally can’t we?

“Maybe this will look better to them as the litigation progresses.

“Maybe it would interest the judge or jury.

“I guess the family could reconsider this even after final judgment.”

*Adapted from: Le Van, Families Money and Trouble (Xlibris 2003).]

Family Business Succession: The Beginning and the End

2010-03-25T11:28:00.008-04:00

A recent New York Times article highlighted the importance of succession planning for business families.

But where does the succession planning process begin? And where does it end?

Succession planning begins with emergency planning. It ends with a clear and comprehensive written understanding between the current business leader and the successor.

Emergency Planning

Immediately following the attempted assassination of President Reagan in 1981, then Secretary of State Alexander Haig famously remarked to a reporter: “As of now, I am in control here, in the White House, pending return of the Vice President and in close touch with him.” General Haig’s comment has raised continuing debate about the exercise of presidential powers during an emergency.

What would happen if your current business leader were out of commission for a period of six months? Lost, kidnapped, disabled or otherwise absent and completely unavailable? Who would do what regarding the business during that six month period? Good risk management requires advance planning for such emergencies.

My experience is that founders and business leaders otherwise reluctant to discuss succession are nevertheless willing to adopt contingency plans that contemplate their unavailability. A good emergency plan can be a concrete first step in planning for the business leader’s ultimate departure. (A second step is to acknowledge that most public companies require newly-elected CEOs immediately to submit a succession plan to the board of directors. They don’t want to deal with the kinds of interim leadership uncertainties generated by General Haig’s remark.)

The Final Step in a Succession Plan

A written agreement between the current leader and the successor closes the process. Below is an authentic copy of real letter from father to son, entrusted to me for publication in Le Van, The Survival Guide for Business Families (Routledge 1998) p. 166:

____________________________________________

Dear Son:

This letter is to outline some of the issues and sensitivities which pertain to your joining us.

First of all, we are interested in you because our key management believes that you possess the personal skills, background and education to be an effective member of our team, and that you can become a significant contributor to our future growth and success. The fact that you are my son is secondary. However, this can create both pleasure and problems for both of us. While I cannot anticipate all the possibilities, the following are some guidelines which I propose we follow if you accept employment here.

1. As an employee/son you can expect some quiet resentment from certain employees until you establish yourself as an independent contributor to the company. Ignore this and concentrate on learning our business, working hard, attempting to contribute, and just being yourself, not my son.
My management style is to work closely with those who report to me and to be interested in helping all other employees. I expect to be helpful to you in training and work related problem solving. But it will be as with other employees who do not report to me, at arm’s length.
As my son, you may be subjected to others trying to use you as a messenger to get their ideas to the boss, or get information from me. Don’t allow yourself to be a part of those types of conversations. I want your value to the company to be through your achievement, not your family ties.
To help our relationship, I suggest that we do not discuss those business issues at home that we would not discuss at the office, including office gossip. In other words, if you are working with a new customer and want to discuss that during our social time together, that is fine. However it is not good for you to be privy to information which you would not normally need or use in doing your job. This issue applies even more to your wife. I suggest that she should not approach me to negotiate on your behalf, but rather help you identify and discuss such issues with your direct supervisor. It would be very “healthy” if on business issues, she considered me as the president of the company for which you work and be as selective in such discussions as she would be with the president of any other company for whom you might work. In return I will try to be sensitive to her interest and concerns. This is a key issue which pertains to family harmony and to your self esteem in achieving success through your personal efforts and excellence rather than from family ties and connections.
In joining the company there are no strings attached. This is an opportunity for you, and we cannot predict where it will lead. However, we should agree on the following:

You are free to leave if ever or whenever you find a better opportunity. It will not affect my bond or feelings for you as a father. I want the best for you at all times.
If we find that this is not the right company or environment (small vs. large. entrepreneurial vs. corporate) for you, we will help you find a better fit. As my son I expect that this would not affect your bond or feeling for me.
From the outset I have run this company for the best long-term benefit of all the investors. I plan to continue this even after most of the current outside investors are gone. This means that I may choose to take the company public or to sell the company. While I do not have such plans at this time, I may in the future. I ask that you accept my right to do so and to understand that inheriting part of my estate is your birthright, inheriting the company is not.
In joining the company, I expect you to work hard, apply yourself, have commitment, and use all of your skills and education towards attaining the company’s goals. As long as you do that, you will have met my expectations of you as my son. I am proud of you now, and I shall be so in the future. I do not have any other expectations, and you should not place the weight of any other expectations which you think I have upon yourself. For example, to satisfy me you do not have to become a great entrepreneur or the next president of the company. If it happens, it will happen. My affection and respect for you are not based on such goals.
We cannot predict the future status of you, your sister and your respective families. It is therefore not sound for me to establish ground rules pertaining to relationships and financial arrangements. However, please be aware that at some point in the future I may establish such rules.

In the event that you wish to confer or disclose personal issues pertaining to your position in the company with another person, Walter and George will be available at those times.
As a member of our management you will be exposed to confidential company plans and industry secrets. As my son you may be subject to offers from competitive firms or other business offers which would be in competition with us. In joining our company, I ask for your agreement not to accept such offers.

Their objective will be to set a fair distribution of benefits from the company, should it still exist as our asset. In the event that your sister does not have an active involvement in the company and you do, I will be concerned that her interests are safeguarded. In effect my main concern will be to establish a structure which will avoid serious disagreements within the family after I am gone. I ask you in advance to accept my wishes at that time.

The ideas contained in this letter of agreement have the effective of avoiding some of the potential problems associated with relatives working together in a professional business. The detail and length of this document should not indicate that I am concerned about the success of this arrangement. I believe that it will succeed, and look forward to the pleasure of a manager seeing a young person learning, making decisions, and adding value to the business. As a father, I expect this pleasure to be compounded.

If you agree with the ideas and terms of this letter, I would appreciate your returning a signed copy upon accepting an offer of employment.

Best wishes,

Dad

____________________________________________

But then there was that father-son confrontation during the TV series Dallas when Bobby pleaded with Jock:

“But, Daddy, you gave me the power to run Ewing Oil!”

Jock glaring back at him:

“Bobby, nobody can give you power.”

Gerald Le Van

glevan@uww-adr.com

Chair – Family Wealth Mediation

Upchurch Watson White & Max

Clan Dynamics for Estate Advisors

2010-03-23T09:00:00.000-04:00

I am not a psychologist. I am not a cultural anthropologist or neuroscientist. I am an estate planning lawyer who has mediated family disputes about money and business for more than two decades.

Years of working with psychologist colleagues has contributed to my working understanding of family dynamics. I try also to understand families from the perspective of cultural anthropology and neuroscience.

Quite often parties to a family mediation declare…

“This dispute is not about money!”

…only later to admit:

“This dispute is not about money…altogether.”

The disputes I mediate are very much about money. But they arise out of family relationships and circumstances – clan dynamics -- that both intensify and complicate dispute resolution. In many of my cases, a better understanding of clan dynamics during the planning stage might have avoided a painful and costly dispute. In all of my mediations, clan dynamics play a powerful role in resolving, managing, minimizing or avoiding family disputes. These are some basic insights about clan dynamics that guide my way.

1. Human beings have primal needs that can overpower our rational selves. To ignore these needs is to misread the human condition.

Remaining deep within our DNA are powerful drives and urges to survive and to reproduce. These genes were passed down through our cave-dwelling ancestors. Our brains and bodies are largely unchanged since the famous cave walls at Lascaux were painted 18,000 years ago.

Civilization and enlightenment have not altered our DNA needs. They persist and can overpower us at times trumping reason, logic, culture, even common sense. “Let’s put emotions aside and be reasonable” suggests we can turn off our DNA needs. We can’t. The familiar phrase “touchy-feely” may reflect insensitivity to the presence and power of DNA needs.

2. A primary task of modern clans (families) is to civilize our DNA needs. The family clan functions as mentor, refiner, disciplinarian, nurturer and caregiver.

Today we better understand DNA needs, though not entirely. Some needs are conscious; others dwell below our level of awareness. Societies and cultures try to regulate how we express our needs, encouraging some behaviors while punishing others. But the primary task of meeting DNA needs still falls to family clans. Well-meaning families try hard. But their task is a tall order. As members grow and individual needs multiply, family resources can be stretched thin.

There may be more than enough money but seldom enough time or emotional energy to meet all the myriad needs of infants, ancients, and everyone in between. Fortunately however, families are the sole source of some of our greatest joys and satisfactions – the ultimate fulfillment of a deep DNA need to belong.

3. Unmet needs can generate psychic pain, family hostility and fragment relationships.

Sometimes needs go unattended because the nurturer is weary or neglectful or diverted, disinterested or even clueless. Or the needy family member is maddeningly difficult to satisfy. Or both.

Whatever the underlying causes, unmet needs can hurt, and hurt generates anger, and anger provokes a lashing out. Those hurt by the lashing out become angry themselves and lash back

“I needed you but you ignored me!”

“But you’re never satisfied!”

Thus the cycle of hostility escalates.

Meeting family needs is unrelenting hard work and not always successful. Fortunately, most families who do their best are rewarded for it. Those who don’t try suffer the consequences. Criminal gangs capitalize on unmet needs.

4. We have a deep DNA need to belong to a clan. Alienation from clan can be exceedingly painful. It can be challenging to square shared wealth with DNA needs that originated in scarcity.

DNA needs unified cave clans in their daily struggle to survive amid scarcity. An example: cave parents allocated scarce food among those most fit to help the clan survive – the largest and strongest siblings. For their own survival, smaller siblings had to wrest food away from the big ones by whatever means available: theft, cunning, charm, trickery, joining forces with other siblings, etc. Sibling rivalry was critical a survival skill. Some say these cave rivalries became coded in siblings’ DNA.

Survival rivalries that originated in scarcity persist even among modern siblings who share great abundance. Today’s family clan is linked by:

genetics,
a common history, and
shared values and meaning,
all connected by relationships that stretch back across generations.

Call this linkage the family clan’s “relational estate”. Families in all financial circumstances share relational estates of some sort. Wealth-sharing can modify relational estates. Family members may also connect through common investments. Financial statements may further reflect family values and meaning. Paid surrogates may intercede as nurturers, mentors and caregivers to some DNA needs.

To survive during the cave days, one needed a clan for protection. To go it alone or to be ostracized from one’s clan meant certain death. The powerful DNA longing to belong to a clan that feeds our needs survives today. To be outcast or to reject family is to drift like an astronaut on a spacewalk whose tether has parted. Hopefully, as wry poet Robert Frost muses:

“Home is the place where, when you have to go there, they have to take you in.”

Frost’s poem tells of a hired man who had no home to die in; no clan to comfort his last days.

5. Psychologists view families as systems. Too many psychologists view money as metaphor rather than real.

Psychologists perceive the family clan as a system in which needs and nurture dynamically interact. The family system is an organism somehow greater than the sum of its individual members. Unfortunately, most psychotherapists are wealth averse, prone to dismiss disputes about shared wealth as a mere metaphor for more basic psychic struggles.

“They’re really not fighting about money. They’re acting out childhood rivalries and unconscious anxieties….”

In my view, money is both metaphoric and very real.

“My inheritance further connects me to my clan. It reflects both my father’s love and approval and undergirds my financial security.”

6. To perpetuate one’s clan is a deep need. Families continue to relate to deceased relatives. Wealth transfer is only a part of one’s ultimate legacy.

Perhaps akin to reproduction, there’s a DNA need to perpetuate one’s clan. Ask anyone who’s held a first grandchild for the first time. Family clans have ways of perpetuating relationships with deceased members, a form of shared immortality. Part of one’s legacy is to remain connected to the clan after death.

As we age, we grow more concerned about how we will be remembered. One tangible reminder is wealth left to our survivors. But estate planning should do more than transfer wealth with minimum taxes.

Optimum estate planning should transfer wealth in ways that fortify the future well-being of the family clan.

--------------------------------------------------------------------------------------------

* Excerpted with permission from Mr. Le Van’s forthcoming article, CLAN PLANNING: PREPARING CLIENTS TO DISCUSS THEIR ESTATE PLANS WITH THEIR BENEFICIARIES in Koren, Estate and Personal Financial Planning Thompson-West (2007)

Wills, Families and Children: An Ounce of Prevention…

2010-02-22T14:18:00.001-05:00

Once upon a time there were three children all of whom were loved equally. One child spent his adulthood in and out of rehab all on Daddy’s tab. Another child married into a wealthy family and was in need of no financial assistance. The last child lived a happy life and over the years asked for nothing from dear old dad but when push came to shove she needed a little help getting the grandkids through college and setting up some funding for retirement. When Daddy had a heart attack and passed away unexpectedly the three siblings gathered to learn what they have been left by their father. What they didn’t know is that Daddy felt as though he spent a small fortune on child number one just getting him through rehab and whatever inheritance he had coming had long since been spent in Daddy’s mind. Daddy looked at child number two and saw a loving and stable marriage, grandkids through college and retirements already established with no uncertainties. When Daddy saw child number three he realized that here is where his money would most wisely be spent so he left the majority of his estate to this child. When the siblings gathered to learn about the will provisions, they hugged and kissed and accepted their father’s intentions and realized the wisdom behind his choices, right?

WRONG!!! WRONG!!! WRONG!!!

This is when it hits the fan and blame is distributed by spouses, grandkids, siblings, you name it. Child number three is smothered with anger and feelings of guilt and that is just the beginning of the family feud. This is where some preventative measures would have been most helpful. In 2008, writer David Cay Johnston discussed the problem and suggested that “being upfront may be hard but could serve you in the long run.” In his New York Times article he encourages sitting down with families in good times and disclosing estate plans and will distributions. At the very least this will direct the fire at the person responsible for the decision and not at the recipient.

Gerald LeVan, a family wealth mediator at the Upchurch Watson White and Max Mediation Group, strongly encourages families to sit down and talk about their plans to avoid litigation and will disputes. Mr. LeVan says that in this manner at least the families have been put on notice, they have been treated with respect and they don’t have unrealistic expectations. Recently the San Diego Estate Planning Lawyer Blog touted the importance of communication in dealing with the harsh reality of unequal will distributions.

So, take the time to sit down with your families and have that awkward, uncomfortable conversation. Be clear, be direct and be honest. Who gets what, when, why and how. As hard as it may be, your real gift to them will be a healthy and continuous sibling relationship after you are long gone.

- Sandra C. Upchurch
supchurch@uww-adr.com

Customer Reviews: The Survival Guide for Business Families

2010-02-17T13:21:00.000-05:00

If you advise business families -- or own one: read this
By: P Robert Brown (Bellevue, WA United States)

Business families are different. They have all the components of other families but they have a business. And that makes them different. It's because the two create some extraordinary opportunities and some powerful pressures at the same time. After the business has been built questions begin to arise: What would happen to the business if dad (or mom) suddenly died? When will dad and mom want to retire? How can they unlock the value from the business with safety? Who should run the business? If there are siblings - will they all be involved? If not, how can the family's wealth be fairly distributed? In the beginning business families typically seek advice from traditional advisors - the attorney, accountant, banker, insurance agent or broker. The problem is these professionals are trained to apply specific tools to achieve goals. Often discussions begin with wills and trusts, tax strategies, financing options or risk shifting with insurance. But after documents are prepared, something isn't "right" and they aren't implemented. The reason is the work was begun in the wrong place. And the goals the advisors were trying to achieve weren't the client's real goals.

This usually isn't for a lack of trying. The advisors thought they were working on the client's goals but they weren't. The proof is that the family frequently won't implement the wills, trusts and other tools. The family isn't sure what is "right" for them. And until they really work on it - they can't be.

Mr. LeVan's book is the product of working with family businesses. The first 29 years was in the practice of law. The next decade has been spent working as a consultant helping families discover what they want to do and then how to work together to find the best way to do it. He calls it their "family work" and his book carves a path through this area using 39 questions. He demonstrates with a series of steps and anecdotes from his experience how the family work is a process of exploration that helps them discover how best to merge a business plan with a family plan that will preserve the integrity of both.

I'm an insurance broker and family business owner. This book and its concepts have been helpful to me in working with clients - and with our own family business. If you're an advisor of family businesses or own one - this book can help.

Customer Reviews: The Survival Guide for Business Families

2010-02-16T10:29:00.002-05:00

Great Resource - January 12, 2010
By: B. Millard (Kansas City)

I'd overlooked this resource before since it is somewhat dated. However, it is better than many more recent resources. In fact, much better.

-------------------------------------------------------------------------------------------------

Making your family business formidable...

By: Larry A. Hollar "Author" (La Junta, CO United States)

Partly a story about a fictional family, partly instructional, The $urvival Guide has been very useful to me as a family business member. Mr. Le Van's 39 questions are a wonderful tool for finding out where your family is, and where it should be going. There will be some work involved, but if you'd like for your business family to become healthier and more successful, this is a great book to start with.

Then there is a really fun and instructive sequel named "Families Money and Trouble" that takes the same fictional family into the next generation.

Putting the Horse Before the Cart: Non-Tax Issues in Business Succession Planning

2010-02-01T14:47:00.013-05:00

The following is extracted from the ABA-PTL Heckerling 2010 Report #4 and posted with permission of the Heckerling Institute and the ABA Real Estate, Probate Trusts and Estate Section.

Presenter: Charles D. “Skip” Fox IV
Reporter: John Warnick

Charles D. “Skip” Fox has prepared perhaps the finest paper I have seen on the subject of the non-tax issues in business succession planning. His outline is heavily footnoted with many important studies and articles which aren't readily available to estate planning attorneys, CPAs, or financial planners. I believe this presentation will be one that every professional serving family business owners will want to refer to often, perhaps each time we begin a family business succession journey with a client.

The title of Skip’s paper is “Putting The Horse Before the Cart: Non-Tax Issues in Business Succession Planning.” Early in his presentation Skip makes the point that before we tackle the tax and legal issues involved in business succession planning we need to be aware of the psychological challenges which make this process so difficult. He suggests that family business succession is rife with potential conflicts between parent and heirs; between siblings; and between family members and the non-family management and employees. Surmounting the challenges of these potential conflicts requires both sensitivity to family dynamics and an extensive knowledge of a confluence of legal, financial and business issues.

The statistics about the potential for failure in business succession planning are alarming. Mr. Fox cites a 2004 Trusts and Estates article which reported that only 30% of family businesses pass to the second generation, 12% pass to the third generation, and only 3% reach the fourth generation. Skip noted that Birmingham, Alabama attorney and former President of the American College of Trust and Estate Counsel, Daniel H. Markstein, III, has observed he has never seen a family business sold to pay estate taxes but he has seen many family businesses sold out of necessity because of poor succession planning.

One of the significant highlights of this session was that Mr. Fox pointed out that in 2007 a survey found that 40.3% of business owners expected to retire within 10 years. However, less than half of those business owners who were expecting to retire in the next 5 years had chosen their successor and only 29% of those planning to retire in the next 6-11 years had selected a successor. Another 2003 study of 387 small family-owned businesses found that only 50% had succession plans. Of those without succession plans, 31.4% stated that they were “uncomfortable making the necessary decisions,” and 14.4% stated that “it’s a difficult topic to deal with.” Having raised these survey results, begs the obvious question: “Why is it so difficult to select that successor or to start a family business succession process?”

Skip lists the following factors as roadblocks to planning success: difficulties in selecting a successor; inability to let go; differing outlooks and expectations, both between generations and among the generations of each family; nepotism; sibling rivalry; and the failure to keep disagreements about or within the family business from boiling over into the home front, and vice-versa.

The hopeful news is that Skip doesn't just identify the challenges. He provides very helpful insights into the psychological and practical aspects of business succession planning which should be very helpful to advisors who are serving the family business owner(s). For instance, he notes that understanding these non-tax issues can be extremely helpful in formulating an approach to business succession planning that will resonate better with the founder, who Skip feels is the most important person in the process.

Significantly Mr. Fox noted that there are three broad categories of entrepreneurs: 1) the Basic Entrepreneur for whom the most successful succession is usually dynastic, with a particular emphasis on sons; 2) the Technical Entrepreneur whose analytical and problem-solving approach to his business decision-making means that a simple succession plan, such as cashing out, and passing the wealth on to his or her family, will most likely be most attractive; and 3) the Controlling Entrepreneur, who is generally more interested in minimizing risk going forward than shooting for large returns, and for whom a succession plan that passes the company on to the next generation with an emphasis on maintain the assets with minimal risks.

Importantly Skip cautioned, however, that focusing on the founder alone and disregarding the spouse and children is a serious mistake in formulating a successful business plan. He acknowledges the wisdom and experience of Gerald LeVan (an ACTEC Fellow) who describes the spouse of the founder as frequently being the family’s CEO (Chief Emotional Officer). He notes that LeVan’s articles and books illustrate that excluding spouses (both the founder’s spouse and the children’s spouses) from the process of formulating the business succession plan often results in the plan you propose being sabotaged by that CEO.

One very useful part of the presentation was when Mr. Fox shared three common profiles of family businesses which are defined in the pioneering work of Ivan Lansberg, a family business expert. Lansberg suggested the family business will generally consist of either: 1) a Controlling Owner; 2) a Sibling Partnership which will follow the Acknowledged Leader model or the Shared Leadership Model; or 3) a Cousin Consortium which is the model which you find most frequently when the family business has made it into the 3rd generation of the founder’s family. Lansberg has suggested a corollary concept that family businesses are either in a recycling transition--where the same profile will continue through the next generation of family ownership--or are evolving into a different form of entity and/or governance, which could be simpler or more complex than the current profile. Skip notes that appreciating both the profile of the business and the type of transition the family is most likely to find attractive is key to formulating a successful business succession plan.

Significantly Skip then asks the important question: How Can We Help? He proceeded to discuss seven steps which he feels advisors can follow to provide great value to the family business succession process:

Get a commitment from all family members to work on succession
Help family members set aside competitive ways and teach them more constructive ways to work together
Make sure the business succession planning process begins with a family mission statement and a strategic plan for the business. The stories and examples that Skip offers of such mission statements are extremely valuable. Please make sure you take the time to read the history of the J.M Smucker family in Skip’s materials.
Create a personal development plan for family members who work in the business.
Develop an appropriate governance structure for the family business
Implement the succession plan by putting in place the legal and financial structures
Create a culture in which key employees (whether they are family members or not) are expected to be owners.

As you can see from this summary if the highlights of Skip's presentation, Skip Fox’s materials are full of both important insights into the dynamics of business succession planning as well as practical wisdom. Both will be very helpful guides in our efforts to assist the owners of family businesses.

Avoiding Hostile Holidays - Step 2

2009-12-22T14:04:00.003-05:00

Holiday gatherings can heighten family tensions about family wealth or family business. Firefights can mar the Season for celebrating family and fortune.

So how to avoid hostile Holidays? How to enhance celebration and divert conflagration?

Step #2 – A Family Holiday Truce: “I no shout, you no shout. OK?”

By 1914, trenches dug by WWI combatants stretched from Switzerland to the North Sea. (The U.S. had not as yet entered the war.) At some points, forward trenches of the opposing armies (largely Germans and Austrians against English and French) were no more than seventy-five yards apart, separated by a No Man’s Land littered with unburied dead.

The 1914 truce began sporadically. As Christmas day approached, artillery and small arms fire subsided, and then mostly ceased. Here and there, small trees lighted with candles appeared on the parapets. From the German side came carols like “Stille Nacht” (Silent Night). A French opera tenor answered with “Minuit Chretiens” (O Holy Night).

With white flags raised, troops on both sides left the trenches for No Man’s land seeking to bury dead comrades, chanting “We no shoot, you no shoot”. In time, they collaborated in grisly battlefield funerals.

Conversations were mostly in English – a number of German troops had previously worked in England. A lively trade began: medals, buttons, gloves, scarves, as well as tea, tobacco, sweets from Holiday boxes sent by their respective governments. On Christmas day there were gigantic soccer matches, races on bicycles without tires, even peaceful visits to enemy fortifications.

Though high commands on both sides condemned such fraternization and threatened to court martial participants, the 1914 truce escalated. Indian Gurkhas and Garwahl troops added their exotic seasonal celebrations.

Corporal Adolph Hitler, though present at the front lines, refused to fraternize.

After Christmas day the truce began to unravel. A French warning to Germans read: “Be on guard tomorrow. A general is coming to visit our position. For reasons of shame and honor, we will have to fire.” Ordered to resume battle, a German sergeant protested, “We can’t – they are good fellows, and we can’t!” He later confessed, “We spent that day and the next trying to shoot the stars down from the sky.” Mourned the London Daily Mirror, “1915 darkens over. The lull is finished. The absurdity and the tragedy renew themselves.”

Historian Stanley Weintraub speculates that twentieth century history might have been astonishingly different had the 1914 truce held. He recounts a number of missed opportunities to foreshorten the war.

In a real sense WWI was a family war. Kaiser Wilhelm and George V were both grandsons of Queen Victoria. Troops on both sides were largely indifferent to the outcome, provided they returned home safely.

Unfortunately, too many domestic family wars escalate hostilities during the Holidays. Unless, of course, someone chances to raise a white flag. A few collegial cousins can generate a family Holiday truce. So can in-laws weary of the battle, even seniors willing to venture a late life act of tough love.

A serious family truce could begin in jest: “I no shout, you no shout. OK?”

- Gerald Le Van
glevan@uww-adr.com

Avoiding Hostile Holidays - Step 1

2009-12-16T13:43:00.007-05:00

Holiday gatherings can heighten family tensions about family wealth or family business. Firefights can mar the Season for celebrating family and fortune.

So how to avoid hostile Holidays? How to enhance celebration and divert conflagration?

Step #1: Blame and Credit – Getting Past the Past

Contentious families can hang up on placing the blame…or hoarding the credit.

The blame game is particularly injurious. Past blunders are not forgiven or forgotten during the Season. Instead, they resurface as weapons hurled in heated and hurtful arguments. As in war, truth is the first casualty. Family litigation obsesses on blame placing.

Hoarding the credit is an unhappy analog of the blame game. Hoarding credit tries to rewrite family history. Again truth is in harm’s way.

A successful entrepreneur describes how his company culture handles screwups.

“We try to forget who screwed up, and try to forget who came up with the bright idea to correct it. We just fix it and move on.”

Don’t fixate on blame or credit. Get past the past.

I put it this way to family members:

“We will challenge you to create your future. We will prompt you to identify your strengths, your accomplishments, your successes, and to bring them forward into your future. It is our strong belief that your past need not determine your future. We will encourage you to identify what has not worked for you, and to leave that behind in the past.”

Blame placing and credit hoarding invite the past to damage the future – in business, in professional practice, in personal relationships.

‘Tis the Season for getting past the past and getting on with the future.

Gerald Le Van

glevan@uww-adr.com

What’s Missing from the Balance Sheet: Intangible Assets and Liabilities in Business Families

2009-11-12T09:53:00.009-05:00

The stock market tells us that the total value of Microsoft shares outstanding (“market capitalization”) is (or was) about $85 billion. But Microsoft’s financial records say that the total value of Microsoft (“book value”) is (or was) only $7 billion.

What does the market know that the accountants don’t?

The stock market values Microsoft’s intangible assets – its enormous potential to continue domination computer software industry, while accountants struggle with Microsoft’s tangible value and historical costs.

What are the important unreported intangible values in business families?
• Is family ownership and family management a business asset or a business liability?
• Conversely, is family ownership and family management of the business an asset or a liability of the family relationship?

Some businesses are formidable competitors in the market place because of family involvement. They are managed by talented family members whose positive relationship -- though quite intangible -- constitutes a very valuable business asset. (“Green light” families I call them.) This valuable business asset exists only because the family has discovered and nurtured it. This asset is not reflected on the balance sheet. This asset cannot be acquired or transferred.

Some business families are profitable in spite of family involvement. Wracked by dissention and conflict, their family relationship is a definite business liability. (“Red light” families I call them.) I empathize with their CPAs whose generally accepted accounting principles provide no place to report this liability in the financial statements.

Then there are businesses whose family relationship is part asset and part liability. Some family employees perform brilliantly; others are coasting. There is undue tension between inside and outside shareholders. They settle for substandard business practices and less-than-satisfactory family relationships for the sake of “holding things together”. (“Yellow Light” families.) The assets and liabilities of family management and ownership are offsetting.

Is the business itself an asset or a liability of the family’s relationship? Does the business reinforce the family relationship, or disrupt it? Or is the business both a reinforcement and disruption?

Here’s a graphic way of presenting the question:

• If both are assets, congratulations!
• If one is an asset, the other a liability, you have some work to do.
• If both are liabilities, soul-searching may be in order.

Gerald Le Van

glevan@uww-adr.com

Lawyer Counseling: Part IV

2009-10-19T13:59:00.005-04:00

Shafer and Elkins conclude with some practical tips about client interviews:

25. Be especially careful with “why” questions. “Why” questions connote disapproval, displeasure, insinuate that the client has done wrong or behaved badly. “Why” questions put the client on the defensive.

26. Be aware of clients’ non-verbal communications – what people tell us without trying. Watch for tenseness, rigid posture, clenched hands, facial expressions, dress, physical condition, gait, tears. If tears come, try acknowledging them sympathetically e.g. “You’re having some feelings…” Then wait quietly and respectfully for the client’s composure to return. Keep tissues nearby.

26. Be aware of your own non-verbal communications – the unstated message of your law office environment, your dress, sitting across from instead of next to the client, extensive note-taking with eyes down, etc. Engage the client, don’t just encounter her.

27. Be especially aware of the client’s opening and closing sentences. The opening sentence may tell you what’s uppermost on your client’s mind. Her last sentence may tell you the most about her perception of your lawyer-client relationship.

28. If the client shifts the conversation abruptly, it may be a defensive maneuver, away from something he doesn’t want to discuss. Try, “Did you want to say more about _____?”

29. Listen for recurrent themes and references. They may reflect deep client concern. Try, “I believe you mentioned ____ several times. Is there something more you wanted me to know about that?”

30. Listen for inconsistencies and gaps. What the client leaves out may be most important. Try, “I’m trying to make the connection between _____ and ____. Can you help me with that?”

31. Giving the client feedback can be helpful, but be sure it’s non-judgmental. In giving feedback, stick with your reactions. Don’t try to describe the client’s behavior, e.g. “I sensed that you were distracted” rather than, “You weren’t listening”. Then follow up with something constructive, e.g. “Would it help if we went over that again?”

32. Don’t give feedback without an invitation from the client. It’s best if the feedback invitation originates with the client, e.g. your client asks, “Do you think I’m being selfish?” or “Does it sound as though I’m fooling myself about this matter?” If the client doesn’t invite feedback, you might invite yourself but first ask permission e.g. “Would you like some feedback from me about our conversation to this point?” If invited, begin with something like “This is what I’m hearing: …”

33. Like TV’s wrinkled detective Colombo played by Peter Falk, let the client know you’re struggling to understand her story and its meaning. If you discover something the client isn’t aware of, try, “Let me see if I understand” rather than, “Isn’t it true that…?” Try, “I don’t understand” rather than “What do you mean by…?”

34. Open-ended, non-judgmental questions work better. Save cross-examination and leading questions for the courtroom.

35. Let the client set the pace. If the pace is too slow, the client will become bored, which often means angry with the lawyer. If the pace is too fast, the client may become confused, and that comes across to the client as rejection by the lawyer – which it usually is.

36. Be Colombo.

Gerald Le Van

glevan@uww-adr.com

Why Mediation for Amicable Families?

2009-10-09T15:56:00.004-04:00

Confidentiality Inside and Outside

There’s no guarantee that amicable families will remain so. But sound governance encourages good family relationships to continue. In their search for sound governance most families require a skilled facilitator. Only a mediator can facilitate governance-building – and other important family deliberations -- while assuring confidentiality both inside and outside the family.

If you are healthy, why watch your diet? Why exercise regularly? Why quit smoking? Why get regular medical checkups? Indeed, why carry medical insurance? Because these are sensible precautions. No healthy person is immune from future health problems.

No amicable family is immune from future discord. Births, deaths, marriages, divorces, estrangements, alliances, unforeseen events, changes in circumstances –all can challenge the peace that amicable families enjoy today.

If an amicable family is also joined at the wallet, the risks of eventual turmoil rise sharply. Sharing family wealth or a family business should be deeply satisfying: enjoy it, use it wisely, grow it, cultivate the opportunities wealth provides. These are good signs of healthy wealth. But wealth-sharing can also generate hazards, hurts and unhappiness.

“How can we perpetuate healthy wealth? What can our family do to avoid the kinds of disputes that destroy other wealth-sharing families? How can we prevent disputes from arising? Or if they do, how can we manage our differences in amicable ways?”

Maintaining healthy bodies requires a regimen. So does healthy wealth -- but where to start? Begin by organizing around your wealth. Wise families usually choose a facilitator – a “personal trainer” of sorts to begin a healthy wealth regimen –to surface the issues, build productive agendas, guide sensitive discussions, organize ongoing family councils. Effective family governance is critically important to maintaining healthy wealth.

Various therapists, coaches, financial counselors, and family business consultants hold themselves out as family governance facilitators. Some are quite skilled. Yet non can guarantee confidentiality of the governance-building process. Should discord generate a lawsuit, neither the facilitator nor family members may claim a privilege of confidentiality.

Some lawyers would be excellent family facilitators. But they are limited by ethical constraints. Lawyers may ethically represent all family members as their clients. But whatever one family member discloses to the lawyer must be shared with all other client members of the family. Hence, lawyer-facilitated governance-building remains confidential from persons outside the family, but individual disclosures to the lawyer are not confidential inside the family. (The lawyer's dilemma deepens if some but not all family members are his/her clients.)

In my experience, this “disclose all to everyone” requirement can be a huge impediment to fruitful family discussions and deliberations. In the interest of continuing family solidarity, some confidences need to be disclosed only to the facilitator, and not shared with other family members.

Mediators alone enjoy the best of both worlds. If governance-building is facilitated by a mediator, the entire process is confidential from third persons. In addition, mediators are free to interview individual family members and to keep their confidences from other members of the family. The same is true of other mediator-facilitated discussions involving family business or family wealth e.g. family business succession, shareholder issues, distributions from estates, trusts or family companies, selection of outside directors, fiduciaries, advisors, etc.

Wise families value their mediator’s unique role as a neutral, a confidant and a patient guide through difficult but transformative conversations. Mediation makes good sense for families who yearn to perpetuate their amicable relationships down the generations.

Gerald Le Van

glevan@uww-adr.com

Lawyers' Feelings: Transference and Countertransferrence - Part II

2009-10-02T12:49:00.012-04:00

Emotions at Work in the Helper-Client Relationship

This continues a discussion of Professors Shaffer and Elkins, Legal Interviewing and Counseling (4th Ed. West Group 2004). Below I paraphrase some of the authors’ main points in bold. My comments are in italics.

This discussion of emotions and the unconscious may be unsettling.

You may prefer to deal with facts.

These are emotional facts.

18. Three things we professional helpers can do with our feelings about a client:

Repress feelings until we’re unaware of them, then find an emotional release outside the professional relationship through exercise, family life, hobbies, etc.; or

Secretly channel feelings back into the professional relationship as tools of manipulation; or

(Preferably) partner with the client: bring feelings openly into the relationship.

“Touchy-feely” has come to connote the inappropriate intrusion of emotions into an otherwise “rational” situation – as though emotions could be turned off or set aside. So long as human beings are involved there is no entirely rational situation devoid of emotion. Like it or not, aware of it or not, emotions play a powerful and ongoing role between helper and client. Injunctions like “let’s not get emotional” or “let’s be reasonable” pretend that reason can trump emotions. Too often it’s the other way around. Remember to forget the phrase “touchy-feely”. It demeans the emotional dimension in human life and advertises the speaker’s insensitivity. Better to recognize emotions and deal with them in a professional manner – and to strike “t-f-” from one’s vocabulary.

19. Transferrence is a psychological term for some of the client’s strong feelings towards the helper. Transferrence can occur in any relationship where one person is viewed as an authority figure, upon whom the other becomes emotionally dependent. Transferrence can have a positive or negative impact.

A successful helper-client relationship requires deft understanding of the client’s emotional disposition towards the helper and an appropriate reaction to it.

20. Transference is the tendency of clients to relive an emotional relationship from the past, and to (emotionally) cast the helper in an inappropriate role. The helper is made a stand-in for an important person in the client’s life, typically the client’s father. This can create an emotional dependence on the helper. As a result, choices ostensibly made by the client are, in fact, made by the helper.

A client is likely unaware that transference is taking place. It’s helpful for the helper to ask herself, “Who else might I be in the client’s story?” Elsewhere the authors insist that choice of desired outcomes belongs solely to the client. (See Part I) Though it’s sometimes tempting with a weak-willed client, helpers need to avoid the “Father/Mother Knows Best” role.

21. Countertransferrence is a psychological term for some of the strong feelings of the helper directed towards the client. These helper feelings

are linked to the helper’s other relationships (often past), or

the helper’s needs and feelings that are not specifically related to the client or

both of the above.

As a result, the client may experience the helper as being overly-helpful.

A lawyer may well ask herself, “Who else might this client be in my story?” Remember, both transferrence and countertransferrence take place outside our awareness.

22. Some signs of lawyer countertransferrence are:

Feelings of discomfort during or after client interviews.

Carelessness or discourtesy towards the client—tardiness to appointments, inconveniencing the client, permitting avoidable interruptions.

Strong affectionate feelings for the client.

Inclinations to boast about the importance of the matter.

Avoidance of the client and neglect of the case.

Gossip with others about the client.

A tendency to hammer away at minutiae in the client’s case.

Boredom or drowsiness – “almost inevitably an indicator of extreme anxiety produced in the attorney.”

23. Countertransferrence is threatening to the lawyer-client relationship because it conflicts with the role expectations lawyers consciously shape into their professional masks (persona).

A persona is an actor’s mask. We helpers wear personas that project our professional roles and insulate our privacy from clients’ curiosity. The hazard is that our masks conceal those portions of our personal stories that clients are entitled to share – our empathy, understanding, concern, our underlying humanity.

24. The unconscious is that area of human interaction that takes place outside our awareness. Lodged in our unconscious are:

Feelings of inadequacy, incompetence, impotence, or grandiose defenses against a feeling of helplessness.

Affection and sensitivity to rejection.

A need to punish or be punished.

Passive-dependent feelings, especially in men and women who aspire to high achievement.

Intense feelings of loneliness and isolation.

Qualities in oneself we can’t tolerate in others.

Feelings of unworthiness and despair.

Transference and countertransferrence both originate in the unconscious.

- Gerald Le Van

glevan@uww-adr.com

Your “Number” Part Two

2009-09-17T15:51:00.004-04:00

In his new book, “The Number”, Larry Eisenberg focuses on three building blocks to a fulfilling retirement: money, health and happiness.

In an earlier posting, I summarized Eisenberg’s stern money message about The Number — the net worth you’ll need for a financially secure retirement. Your Number can finance good health care, and it also helps if you’re disciplined about diet and exercise, and inherited good genes. But can your Number buy retirement happiness?

Baby boomers have been tagged as the Me Generation. Boomers look forward to retirement as a second adolescence. After freedom from work, with one’s life dues paid and an adequate Number, I can be who I am, do what I really want to do. A second adolescence with liver spots instead of zits — is this the self-absorbed retirement happiness a boomer’s Number is supposed to buy?

Not necessarily, say the “life planners” — financial planners who would help boomers find meaning in their retirement years as well as financial security. Life planners ask wrenching money-and-meaning questions: Why does money make us knotty? Why do we impart evil to it? Why do we anoint it with magical feel-good properties? Why do we run from it? Why do we lose love and friendships over it? Why do we work so hard to get it? Why do we waste it once we have it? Why don’t we spend more of it on things that matter? Oh, and by the way, what does matter?

Guru life planner (and philosophy professor) Jacob Needleman raises the alarm. Money has the power of giving people the idea that they are powerful, happy and important. That’s where the danger lies, because it is a false sense of comfort. We’re living and growing old in an age where everything is monetized. Yet a financial plan is fundamentally hollow unless it’s wrapped around a life plan. Your Number needs to finance a lifestyle that has meaning. Oops, are life planners playing in the sandbox where psychotherapists keep their pails and shovels?

Granted, life planner seminars may resemble group therapy, but at least the life planners are trying to connect money with meaning. Enter the happiness researchers, who’ve already learned that the happiest lives are filled with meaning, lives lived for something outside and more important than ourselves. If a meaningful life is the highest form of happiness, is it crazy to speculate that the Me Generation, in their earnest search for happiness, might just morph into a retired Meaning Generation?

Eisenberg calls these meaning-seeking boomers the “New Seniors”. Readers, travelers, and curious learners, New Seniors will want to share experiences, to teach, mentor, tell stories. New Seniors will remain productive into their eighties and nineties, be compassionate about others, be concerned about the world around them, not just themselves. Beyond Me and into meaning.

Thomas Jefferson was sixty-six at the end of his second term as president. Tired and disillusioned, he fantasized about selling his Monticello estate above Charlottesville, Virginia, to live out a well-deserved second adolescence in Paris for the rest of his days. But Jefferson knew he couldn’t abide the fools who governed France, so he retired to Monticello — at least for a while.

Nine years into retirement, a now very elderly Thomas Jefferson continued to find meaning in public service. For him, public education was always a top priority. So at seventy-five, Jefferson founded America’s first public university. He surveyed the land, worked with the architects, developed the curriculum and personally interviewed most of the professors. In 1825 the University of Virginia, visible from Monticello, opened with 123 students.

Jefferson died on July 4, 1826. Carved on his tombstone are the lifetime achievements he considered most meaningful: author of The Declaration of Independence, responsibility for the Virginia Statute of Religious Freedom and founder of the University of Virginia.

Source: “The Number: A Completely Different Way to Think About the Rest of Your Life” by Larry Eisenberg (Free Press 2006).

- Gerald Le Van

glevan@uww-adr.com

"It took years to get here. It will take time to get there - if 'there' is a better place to be".

2009-09-14T15:04:00.003-04:00

Families embroiled in a problem need to do what may be difficult - recognize that it may take time to work through it. That is a problem when the family is facing an immediate disagreement that freezes progress or destroys harmony. When something is aggravating, first preference may be to get beyond it by reaching an agreement. Or, it may be to ignore it in hopes that what is hard to face does not actually have to be faced and that somehow, the problem will just subside.

Neither approach works most of the time, if ever really. If the disagreement is just a manifestation of something grounded in years of being in the same family, it will take time to discuss "how we got here" and how to really get to a better place. If the disagreement is just one more chapter in a years long book of family, it may take a few more chapters to make meaningful improvements, some of which may be needed to solve the immediate problem.

That is why they say "an ounce of prevention is worth a pound of cure". It is as true for family health as it is for physical health.

Richard B. Lord

rlord@uww-adr.com

Reducing Compensation Without Doing More Harm Than Good

2009-09-09T13:16:00.003-04:00

There is a nexus between compensation, an individual’s sense of fairness and identity, and a company’s economic vitality. The family enterprise is not immune from needing to walk a delicate path when REDUCING compensation when economic headwinds facing the company warrant it.

The extent to which compensation should go down is company and contextually specific. THE HOW is critical. Remember, each family member will have feelings that are effected and overriding most will be a sense (assuming it is necessary) of whether it is fair. Non-family members too will react, if not overtly, than certainly internally. Perceptions impact how they feel. If non-family members are the first to feel the pinch, their receptivity, their morale, and their resultant productivity will depend on their perception (understanding) of the need and whether they feel what is happening to them is fair. It may be too much to ask that non-family members take a haircut when family member employees don’t feel the same pain. Informing all of those who will be affected with the reasons for the reduction is only part of the equation to successfully walk the delicate path. How everyone feels will be a dominant factor in whether it can be accomplished without doing more harm than good. Communication is the key.

Among the family members, this may be an opportunity to bring compensation into alignment with value to the company for the efforts expended by each effected family member. A compensation sub-committee adjunct to an existing family counsel is a valuable way to set the stage for information sharing, meaningful deliberations and decisions best tailored to the needs of the company, the needs of the family, and the needs of the individuals of that family. The information gathered and shared, the fairness of the decision making process, and the impacted family members having a seat at the table, will enhance the quality of the decision and necessary buy in of those impacted.

- Richard Lord

Your “Number”: Part One

2009-09-08T14:19:00.005-04:00

As we flew out of Phoenix, a flight attendant pointed to the book I was reading, "The Number" by Lee Eisenberg, former editor of Esquire magazine. “Oh, that's the book that got them upset on TV this morning!" she said. “The Number” is a disturbing wakeup call about our retirement security — or lack of – especially in this turbulent economy.

To me, financial security means enough to live on comfortably for the rest of your life, without working, and with a low risk of losing it. Eisenberg’s book asks "How much is enough?” or as he puts it, “What is your Number?"

Eisenberg warns that we don’t pay enough attention to our Number, and our Number is BIG. Few save. Too many spend as though we'll work and earn forever. Bumper stickers declare that retirees are spending their children’s inheritance. Eisenberg fears too many not-yet-retired are spending their retirement security.

Many in my generation are already retired on private or government pension plans that guarantee retirement income for life. Old-fashioned employers took care of their Number. That was great while it lasted, but it hasn’t. Guaranteed plans are frightfully expensive and private companies are chucking them. Some are being frozen (IBM), others chucked in bankruptcy (the airlines). Even a few governmental units, like towns or school districts, have filed bankruptcy because they can’t pay their pension benefits.

Few baby boomers (other than government employees) will get guaranteed retirement income. At best, boomers are building up company-sponsored retirement savings, like 401K plans – reduced by the current economic downturn to “101K plans”. At retirement, they’ll draw on whatever’s in their account. Boomers are solely in charge of their Number.

My boomer client Tom owns a very successful business. Tom has pulled money out of his company and socked it away in a solid investment portfolio worth $5 million. Tom thought $5 million was his Number. Tom works hard and lives well. He could have easily dribbled away that $5 million on vacation homes, luxury cars and such, but he didn't. Had Tom left that $5 million in his business, it might be larger and more profitable today. But his Number would be wholly invested in his company, and that’s too risky for Tom.

If Tom’s company folds, will his $5 million portfolio be a big enough Number? Money gurus counsel not to count on drawing down more than 4% annually from your Number. Four percent of Tom’s $5M is $200,000. Yikes, Tom is spending much more than that to live on, not counting his company expense account, company car and other perks! Real retirement security for Tom would mean cutting back on his lifestyle spending, or else enlarging his Number.

If you’ll need $50,000 annually in retirement, your rough Number is $1.25 million. That’s $50,000 divided by .04, the 4% draw down. But don’t panic yet, says Eisenberg. Part of that $50,000 may come from an anticipated inheritance, Social Security, your annual pension benefits, and expected income from part-time work after retirement.

Eisenberg doesn’t provide a recipe for calculating your Number. Instead, he suggests you huddle with a qualified financial planner who focuses on your Number instead of commissions. His book can help you find the planner you need and avoid the planner you don’t.

A wellness talk host show reminds women they’re likely to live thirty to forty years beyond menopause. A key component of your Number is calculating your anticipated life expectancy. Eisenberg cautions not to underestimate it. Women and men may live decades after retirement. Eisenberg is concerned not only with sufficient net worth, but fulfilling our “life worth”. Once we begin drawing down our Number, how can we find richer meaning by “downshifting” into retirement? Stay tuned. We’ll explore Eisenberg’s “life worth” suggestions next time.

- Gerald Le Van

Source: “The Number: A Completely Different Way to Think About the Rest of Your Life” by Lee Eisenberg (Free Press 2006).

Whose Story Is It Anyway?

2009-09-04T01:25:00.005-04:00

The client lives a story. The advisor also lives a story. What happens as their stories inevitably converge?

Professors Shaffer and Elkins, Legal Interviewing and Counseling (4th Ed. West Group 2004) introduce law students to the counselor’s role. They have much to say to any professional advisor who undertakes to counsel clients. Below I have paraphrased some of the authors’ main points in bold. My comments are in italics.

- Gerald Le Van

Your client isn’t the problem. Your client is a person who has problems.

This is the first fork in the road. Whose story is paramount: the client’s story or the advisor’s? Both play out concurrently. Which story has the higher priority? Which gets the advisor’s primary attention?

Your client lives a story (adventure, journey, drama, saga). You are part of that story.

Your story and your client’s stories are inevitably intertwined, at least for a time.

The typical lawyer selects operative facts from the client’s story, recasts them into narrow manageable categories, then channels the client’s problem into the legal system for solution. Interviewing is getting at these operative facts. Counseling is telling the client what the law is.

“If you’re a hammer, everything’s a nail”. That’s how lawyers tease life insurance agents who pitch their policies as client cure-alls. This rubric suggests the agent’s storied pursuit of commissions skews the client’s story. Other advisors share the same temptation: to view the client’s story selectively in terms of what the advisor is licensed to charge for.

Instead, try to understand the whole of the story from the client’s perspective. It’s the client’s drama. The lawyer is the audience, the client the playwright. Let the client tell the story. Become engaged in the client’s storytelling. Listen as would a sympathetic companion. Listen with, not listen at.

Good advice for any advisor. Park your own story until your client has completed hers. Listen attentively – an engaged but silent audience at the client’s play.

An authoritarian lawyer cuts herself off from the client’s story, retreating into her own world. The legal persona is a mask the authoritarian lawyer presents to the client. Unchecked, the legal persona becomes the lawyer’s world view. What I do becomes who I am.

A persona is an actor’s mask. We advisors wear personas that project our professional roles and insulate our privacy from clients’ curiosity. The hazard is that our masks conceal those portions of our personal stories that clients are entitled to share – our empathy, understanding, concern, our underlying humanity.

The authoritarian lawyer tries to take over the client’s choices and decisions. Controlling the client becomes paramount. Emotionally and unconsciously, the authoritarian lawyer treats the client as a child, and the client treats the lawyer as a domineering parent – often a father figure.

Here the advisor’s story trumps the client’s: “Father/Mother knows best.” Later on, the authors and I discuss the unconscious processes of transference and counter-transference at work in every advisor-client relationship.

Instead of an authority figure, the authors suggest that the lawyer-counselor become a temporary companion in the client’s story (though not necessarily a friend), a companion who has specialized knowledge that is valuable to the client’s ongoing story that can improve its outcome.

Here’s how I would strike the balance between the stories: the trusted advisor and counselor –companion adds his/her specialized knowledge, judgment, expertise and maturity to the client’s narrative in search of better outcomes.

Stress: Some Bad News and Some Good News

2009-08-26T15:41:00.000-04:00

In a recent NY Times article, Natalie Angier reviews recent research about how stress rewires our brains. “Brain is a Co-Conspirator in a Vicious Stress Loop” (August 18, 2009 p. D2.)

When stress overcomes our normal coping mechanisms, those portions of our brains associated with executive decision-making and goal orientation shrivel, while other brain areas linked to habitual behavior seem to blossom. The stressed brain seems to shift into autopilot. Under stress we do customary things over and over instead of thinking our way out of the stress-inducing circumstances. Adding to our dilemma, we’re lousy at recognizing that our usual stress-coping mechanisms aren’t working.

The target organs of stress dance to the beat: blood pressure climbs and drops; the heart races and slows; the intestines constrict and relax. Overreacting to stress, the human brain extracts phantom threats from ordinary circumstances that don’t ordinarily rattle us – from routine staff meetings and casual social encounters.

Happily, stress-induced brain and behavior changes seem reversible. Atrophied decision-making and goal oriented areas of the brain can resprout while overgrown habit prone areas retreat. Says one neuroendocrinologist, “The brain is a very resilient and plastic organ. Dendrites and synapses retract and reform; reversible remodeling can occur throughout life.”

Of course our stress response is essential to navigate a dynamic world. Runners need a spike in blood pressure to deliver oxygen to their muscles. But chronically elevated blood pressure is a source of multiple medical miseries. As novelist Ellen Glasgow observed, “The only difference between a rut and a grave are the dimensions.”

It’s still August, Natalie Angier reminds us.

There’s time to relax, rewind and remodel the brain.

- Gerald Le Van

Why Men Never Remember and Women Never Forget

2009-08-21T13:11:00.000-04:00

By: Marianne J. Legato, MD, FACP (Rodale 2005)

Book Review - Gerald Le Van

UWWM Family Business and Wealth Bookshelf

A man and a woman quarrel.

After the heat subsides, the man forgets what was said, what they fought about, and may even forget a fight occurred. On the other hand, the woman remembers every detail of the battle…forever.

Dr. Legato is a wife, mother and cardiologist at Columbia Medical School. She’s a leader in gender-specific medicine, a burgeoning field that studies why and how women should receive different medical treatment than men.

In an earlier book, The Female Heart, Legato pointed out that most prior medical research had been conducted on men because they were simply easier subjects – no hormonal fluctuations –notwithstanding important physiological differences between the sexes, their hearts included.

In Why Men Never Remember and Women Never Forget she explores how differences in male and female brain architecture may explain ongoing difficulties between the sexes, and how capitalizing on these differences can lead to richer relationships.

Beginning with the ABCs about men and women, she discusses what attracts us, how we fall in love and why we marry, with illuminating insights into gender differences in sexual needs, experiences, fulfillment and frustrations. As the title promises, she talks about how we listen (differently), what we hear (differently) and how we communicate (differently)…or don’t… including “Legato’s Laws for Improving Communication between the Sexes”. She rounds out her discussion with how men and women have different approaches to parenthood, different experiences of stress and depression, and how we age differently.

Dr. Legato declares that writing this book has improved her relationships with men, and even tempted her to lay aside a few feminine traits in favor of a few preferable masculine behaviors. Her fascinating book may encourage some readers to consider doing the same. Or at least to be more considerate.

As to why men forget fights but women never do, Legato suggests these may be gender-based survival skills, holdovers from our cave-dwelling ancestors. Charged with child-raising, cave women needed to remember where dangers lurked and nurturing could thrive, e.g. safe watering holes that didn’t attract carnivores. Cave
men, charged with slaying mammoths needed to forget past fears and dangers of mammoth hunting in order to summon the courage to hunt again.

Ponder this when replaying your last fight with a member of the opposite sex.

The Middle Passage

2009-07-17T15:18:00.000-04:00

Gerald Le Van’s Notes on James Hollis’ “The Middle Passage: From Misery to Meaning in Mid-life” Inner City Books, Toronto, 1993 Hollis is a psychologist and heads the Jungian Society in Houston, Texas. He writes well but some readers may be turned off by his turgid colorful psychological literary style replete with references to mythology. These notes are for those readers.

The Advent of the Middle Passage

Middle Passage begins like the grinding of tectonic plates deep inside us. The self we were meant, begins to grate and grind against our provisional self. This tectonic grinding may begin long before one is conscious of it—boredom, loss of energy, premonitions, followed by depression, substance abuse, job changes, affairs—all mechanisms by which we run away from the deep underground pressures. These beginning grindings can occur as early as the late twenties, but may be easily overlooked. A typical antidote is to do more of the same—expend more energy, have more children, work harder, override the warnings. These pressures may be healthy signs of the psyche at work.

Provisional first adulthood usually lasts from about age 12 to about age 40. It is full of blunders, shyness, mistaken assumptions, “and always the silent rolling of the tapes of childhood” says Hollis. Without those mistakes, without crashing into those walls, one remains a child.

The Middle Passage occurs when one is obliged to view his or her life as more than a succession of moments leading to some vague end, its purpose to appear in due time. The Greeks had two words for time: chronos (linear time) and kairos (time revealed in depth and dimension.) It’s kairos in the Middle Passage:

“Who am I and where am I going?”

“Who am I apart from the roles I’ve played?”

Childhood is characterized by magical thinking. The inner, outer, and wishful world is confused by the wish to be the center of the universe. In adolescence heroic thinking replaces the magic—fantasies of grandeur and accomplishment—to outstrip one’s meager parents. Heroic thinking enables the young adult to leave home and dive into life. In the Middle Passage, magical thinking and heroic thinking no longer square with experience, disappointment and heartache. Middle Passage is characterized by realistic thinking. Youthful hubris and inflation are replaced by hope based on what might be, knowledge based on the valued lessons of experience, and wisdom always humbling, never inflationary.

Projection is an expression activated by the unconscious. Projection isn’t made; it just is. For example, we project our anxieties on our parents, whom we consider omniscient and omnipotent. When we leave our parents, we project these anxieties upon institutions and other persons in authority. The most common projections are marriage, parenting, and career. In marriage based on romantic love, we project unconscious needs on the spouse, which are impossible for the spouse to fulfill. Daily living wears these projections away. We project our unlived lives on our children—a large burden for a child to bear. We may unconsciously expect that child to make us happy with ourselves, to fulfill our own lives.

In mid-life, we can accept that children only pass through us en route to the mystery of their own life. Freud thought love and work were prime requisites for sanity. But career achievement can bring a strange ennui. Like marriage, career is a prime vehicle for projection: of identity—mastery and expertise, of nurturance—fed by being productive, and of transcendence—i.e.: success will overcome the pettiness of the spirit. Eventually these projections dissolve, and cannot supplant growing dissatisfaction with how one is using his or her life. This is Middle Passage.

For men, Middle Passage may mean work that occasions depression, deflation of hope and ambition. For women, having devoted themselves to family, they may feel cheated unappreciated, underdeveloped, wanting to go back to school or finding renewing work. For couples, gender roles may draw them in opposite directions. Marriage may not survive if it hinders the growth of either.

During first adulthood, youth takes the body for granted, and time as an arena for endless play. At mid-life, the body becomes a reluctant antagonist in the drama we have with ourselves. Time becomes limited, rationed. The sudden perception is that one is mortal, there is an end, and there’s no way one will ever accomplish all the heart longs for.

To flounder amid ordinariness is the sour leaven of mid-life. The hopes of the nascent ego for immortality and celebrity are in direct proportion to the childhood fear and ignorance of the world. The greatest cause of failed marriages in mid-life is the enormity of childhood hopes imposed on the fragile structure between two people. Since others cannot meet the grandiose needs of the inner child, we feel abandoned and betrayed. Those will-of-the-wisps—immortality, perfection and grandiosity—do much to poison a person’s spirit and relationships.

Emotions are not chosen; they choose us and have logic of their own. In mid-life, the largeness of emotions breaks through ego boundaries—and we concretize [outside ourselves] what is symbolically injured or neglected. A man runs away with his secretary. A woman becomes depressed and turns her anger on the only person she has permission to attack—her husband. It is a time when the maps of reality no longer match the terrain. The gap widens between the acquired sense of self, and the demands of self that lies beneath one’s history. The frightened individual wants most of all, the self that once “worked.” If this can be faced, there is great opportunity for transformation.

The central project of first adulthood is to build ego identity. The person who has not separated psychologically from parents is still tied to them. The project of the first half of life is incomplete. Readiness for second adulthood requires a challenge of productive fulfillment, mature commitment to relationship, and some engagement in the outer world.

The deflations of Middle Passage are experienced as confusion, frustration and loss of identity. Our tacit contract with the universe collapses. We assume reciprocity—that if we act correctly and are of good heart and intentions, everything will work out. But there’s no such contract.

The greatest shock is discovering that one is not in control. Apart from shock, even panic, one is humbled. Life is unsparing in asking us to grow up and take responsibility for our own lives. This requires confronting one’s fears, dependencies, and complexes, without the help of others. All this while we still have obligations to children, economic reality, and duty. While the outer world still requires much of us, we must turn inward to find that person who is the goal of the journey.
By mid-life we have managed to mask much of our personality. Anger may erupt because we have so long been encouraged to suppress it. (Anger from the Indo-European root, Angh—to constrict—hence anxiety, angst, angina). Most socialization represents constriction of natural impulses. But where has the energy of those impulses gone? That energy may fuel our ambition, or drive us to chemical dependency, or to abuse ourselves or others.

Marriage carries great potential for hurt and disappointment in mid-life. Marriage bears the burden of the inner child. To marriage we bring so much hope, need, capacity for disappointment. Looking back at mid-life, we shudder at the enormity of choosing marriage and career, made decades ago in the unconscious. Few mid-life marriages—those that have survived—escape great strain. Either divorce launches the Middle Passage, or marriage becomes a prime locus for the tectonic pressures. Mid-life brings more reflection on intimacy. The person to whom we deliver our soul carries large weight.

Intimate relationships can never be better than our relationships with ourselves. Relationship with ourselves determines both the choice of the Other, but also the quality of the relationship. Every intimate relationship reveals who we were when we commenced it. All relationships are symptomatic of our inner life. In mid-life, the emphasis shifts from asking the other to save us, to the work of attaining a greater meaning of life.

In our culture, the model of first adulthood is fusion—together, oneness, union. Together we will be whole. In mid-life, that model doesn’t work. Each supports the other, but cannot perform the other’s developmental tasks—cannot rescue the other. “No one can give me what I most deeply want and need; only I can.” The partner is neither rescuer nor enemy; only partner. The relationship offers companionship, mutual respect and support, and dialectic of opposites. Where one wanted confirmation, one must now accept differences. Where one wanted the simple love of sameness, one must now learn the difficult task of loving otherness.

Perhaps love is really the capacity to imagine the other so vividly, that we can affirm that being—the ability to take responsibility for oneself and the courage imaginatively to validate the reality of the other. Real relationship becomes the conscious desire to share the journey with the other through conversation, sexuality and compassion. Many older couples have exhausted conversation because they have ceased to grow as individuals.

The partner is neither rescuer, nor enemy—only partner. We can’t love our partner’s “otherness” unless we understand what it’s like to be that person. Love may be the capacity to imagine the experience of the other so vividly that we can affirm that being. Concern for one’s own personal growth isn’t narcissistic so long as we grant the same right to the other. This requires double strength: to take responsibility for ourselves, and imaginatively to validate the reality of the other. The alternative is the sad state of many marriages.

It may be more difficult for women to affirm their individuation needs than men because of the enormous claims of the relationship. Feminine consciousness makes her much more aware of her surroundings and those claims. Permission to choose one’s own path may be slightly more available to women today, than in the past, most still feel constrained by others’ claims. Martyred women make neither good mothers nor good partners.

For many men, the chest is the numbed zone. Conditioned to shun feelings, avoid instinctual wisdom and override inner truth, the average male is a stranger to himself and others—a slave to money, power, and status. When asked how he feels he responds with what he thinks, or where the problem is out there. It’s difficult for women to have good relationships with men who, in turn, don’t have a good relationship with their inner selves. Men in Middle Passage need to become the child again, face the fear that power masks, and ask the old questions:

What do I want?

What do I feel?

What must I do to feel right with myself?

Without answering these questions, he is bad company for himself and others.

Many women are under empowered with inner voices of a negative animus—masculine side—that whispers “You can’t do that.” Her animus that represents creative capacity and empowerment to live her own life hides under the shadow of her mother’s model, her father’s encouragement or discouragement, and the constrictive roles offered by society. Modern women struggle to balance career and family. In mid-life the nest empties and the career may stymie. She feels abandoned. Her inner child rises to the surface. It’s traumatic. When the mantle of nurturer drops away, she’s obliged to ask again:

Who am I?

What do I want to do?

The transformation of marriage of mid-life involves three necessary steps:

The partners must assume responsibility for their own psychological well-being.

The partners must commit to share their own experience without reproaching the other for past wounds or future expectations—to try to hear the other’s experiences without feeling defensive. They must commit to sustaining a dialogue over time—“radical conversation” the only vehicle to share “what it’s like to be me.” Radical conversation is what long-term commitment is about.

The alternative is that marriages limp along or dissolve.

Middle passage is like waking up alone on a small boat in a storm. Your choices are:

go back to sleep,

jump overboard,

or grab the wheel.

By not grabbing the wheel, we stay stuck in first adulthood.

Recall the climax of the movie “The Truman Story” where Truman (played by Jim Carrey) though mortally afraid of water, sets out in a small boat to escape the artificial environment in which he has always lived—televised to the world—since birth. The “Director”, a wonderful parent image, creates an artificial storm designed to frighten him into turning back to his artificial first adult self. But Truman takes control of the small boat, sails on, and eventually escapes his artificial environment, presumably to a mature second adulthood self. The climactic storm scene is an elegant movie metaphor for the Middle Passage.

Changing jobs or partners doesn’t change one’s sense of self over the long run. When the pressure from within becomes less and less containable by the old strategies, a crisis in selfhood erupts. We don’t know who we are apart from roles and psychic reflexes. And we don’t know what to do to lessen the pressure.

One’s self is maneuvering the ego into crisis to bring about a mid-course correction. Underlying the symptoms is our false assumption that we can save ourselves by finding and connecting with someone or something in the outer world. But there are no life preservers “out there.” We are in a “sea surge of the soul” and must learn to swim under our own power. What we must know must come from within. We don’t know how free or determined we are, but are constrained to “act free.” So long as we are identified with the outer, objective world, we will be estranged from subjective reality.

“Individuation” is the process of separating ourselves from our dependent relationship with our parents to become our best adult selves. Hollis expresses the concept of individuation in various ways, e.g. from first adulthood to second adulthood. “Middle passage” is the hard part of the emotional journey to individuation.

The paradox of individuation is:

We best serve intimacy with another by becoming sufficiently developed within ourselves not to feed off others.

We best serve society by being individuals.

We are most socially useful by becoming our fullest selves.

Concern for our own individuation is not narcissistic; it is the best way to serve and support others’ individuation. “The world is not served by those alienated from themselves and others, or by those who in their pain bring pain to others” says Hollis. Individuation is a set of guiding images that are the goal and process at the same time, serving the person and culture at the same time.

To “get in touch with our feelings” asks us to define ourselves from an inner reality, rather than an outer context. Risking loneliness to achieve oneness with oneself is called solitude, and is essential to survive Middle Passage.

Mid-life is full of losses: children move away, friends die, divorce devastates. The loss of a necessary other can be as terrifying as the loss of a parent would be to a child. True, some feel liberated by these losses, but many don’t. We honor that lost relationship by feeling the loss, yet recognize that we have a larger commitment than any single relationship.

People so fear loneliness that they will cling to terrible relationships and clinging professions rather than risk the consequences of letting go of the other. There’s no substitute for the courage to confront loneliness. We will never hear the inner voice unless we risk solitude—sitting quietly: no phone, no children, nothing—listening to silence; allowing silence to speak. The purpose of this ritual is to link with the larger rituals of life. The individual must generate a ritual of personal significance; a quiet ritual of disengagement from the traffic out there and the traffic in here. Once silence speaks, one has companionship with oneself, moved from loneliness to solitude, which is a necessary precursor of individuation.

We don’t have just one child within, but a whole kindergarten: class clown, artist, rebel, spontaneous, etc. Virtually all have been neglected or suppressed. We also must deal with our narcissistic child, our jealous or enraged child whose eruptions can be embarrassing and destructive. We have likely forgotten the freedom, joy, and naivet of childhood. One of the most corrosive experiences of mid-life is the joylessness and futility that comes with the routine. We seldom welcome the free child at the office, or even in marriage.

To heal ourselves, we must ask what the healthy child wants. The talents left behind as we specialize not only at work but in intimate relationships, are left behind unless brought to the surface and utilized. Unused talents—our incompleteness—are part of the existential tragedy; but the more talents that can be lived, the richer one’s life.

Depression or boredom often blocks the flow of feeling in mid-life. This says that our own nature is too narrowly channeled, or has become dammed up. Mid-life asks: “What would my inner child enjoy?”

Borrowing from Joseph Campbell (“follow your bliss”) Hollis exhorts, “follow your passion.” Passion fuels us; it’s less like vocation than a summons. The artist is near the fire at all times. Mid-life invites us to find our passion—that which draws us so deeply into life that it hurts. Fear of our own depths is the enemy. We don’t feel like we have permission to be passionate. If we are afraid of our own depth—our passionate capacities—we are more afraid of the unlived life.

Some axioms:

Life without passion is life without depth.

Passion, while dangerous to order, predictability, and sometimes sanity, is an expression of the life force.

One cannot draw near the gods, the archetypal depths, without risking the largeness of life which they demand, and which passion provides.

Finding and following one’s passion serves one’s individuation.

Living passionately is the only way to love life.

The goal of individuation is wholeness, not the triumph of the ego. Without it, we suffer the swamplands of the soul, whose denizens are loneliness, loss, grief, doubt, depression, despair, anxiety, guilt, and betrayal, etc. Rather than run from the swampland, mid-life invites us to wade in and see what one’s psyche is saying, and what one will do about it. Meaning, dignity, and purpose compensate the terror of the swampland.

During mid-life, magical childhood thinking and heroic thinking of first adulthood are replaced by grim awareness of time and finitude. The same force that brings us to life will consume us. We are stunned by this in mid-life. We may try to turn back “where plastic surgery erases the epaulets of life’s campaigns and adolescence rules the culture.” Underneath the distress is an invitation to shift gears from outer acquisition to inner development. Seen from the perspective of first adulthood, second adulthood is a slow horror show. But we must accede to the greater wisdom of the process. Rather than operate from youth’s perspective that can only imagine security in terms of ego, we must acquire the tensile strength to affirm the larger rhythm of our whole life span.

If we were immortal, nothing would really matter, nothing would much count. But we are not immortal, so each choice matters! Through making choices, we become human and find our meaning. Thus the paradox: worth and dignity, terror and the promise of human existence depend on mortality.

We know we have survived mid-life when we no longer cling to who we were, no longer seek fame or fortune or the appearance of youth. The paradox is that only through relinquishing all we have sought, do we transcend the delusory guarantee of security and identity; all sought let go. Then the surplus of existence floods our heart. We move from the knowledge of the head to the wisdom of the heart.

A sign that one has not made the journey through mid-life is that one is still caught in the ego-building activities of first adulthood. The experience of mid-life crisis is not the collapse of our essential selves, but of our assumptions. We assume that if we follow the example of our models, we will be affirmed and find out what life means. Those who say they do are either caught in projections or are hucksters.

For those who worry about the impact of their journey on others, our best way of helping them is to live our life clearly and free them to live theirs. The hero in each of us is required to answer the call of individuation; to separate who we are from the sum of internalized experiences. We either embody some essential or our life is wasted.

The above is Hollis on Middle Passage as best I understand him. What I don’t understand will be obvious to the more sophisticated. Nor do I wholly concur with his ideas I do understand. I do know that I am now well beyond the Middle Passage and that it was a very hard time for me and most everyone around me. I understood very little about that turbulent journey in the small boat in the storm, other than the huge reality of its profound symptoms. Had Hollis’ book been published at the time (it hadn’t) his insights might have eased my ordeal.

As my clients, and indeed as my own children traverse the Middle Passage, I hope these notes will help them approach a healthy understanding of the daunting quest for the persons they were intended to become.

-Gerald Le Van

Narcissistic Leaders

2009-07-16T12:24:00.000-04:00

The following are extracts from an article “Narcissistic Leaders: The Incredible Pros, the Inevitable Cons” by Michael Maccoby in the January-February 2000 issue of the Harvard Business Review.

The author is a psychoanalyst with broad experience in counseling narcissistic leaders. The full article refers to famous narcissistic leaders past and present and should be consulted.

—Gerald Le Van

“The larger-than-life leaders we are seeing today closely resemble the personality type that Sigmund Freud dubbed narcissistic. Freud named the type after the mythical figure Narcissus, who died because of his pathological preoccupation with himself."

“Throughout history narcissists have always emerged to inspire people and to shape the future. Freud recognized that there is a dark side to narcissism. Narcissists, he pointed out, are emotionally isolated and highly distrustful. Perceived threats can trigger rage. Achievements can feed feelings of grandiosity. Yet narcissism can be extraordinarily useful—even necessary."

“Leaders such as Jack Welch and George Soros are examples of productive narcissists. They are gifted and creative strategists who see the big picture and find meaning in the risky challenge of changing the world and leaving behind a legacy. Indeed, one reason we look to productive narcissists in times of great transition is that they have the audacity to push through the massive transformations that society periodically undertakes. Productive narcissists are not only risk takers willing to get the job done but also charmers who can convert the masses with their rhetoric."

“The danger is that narcissism can turn unproductive when, lacking self-knowledge and restraining anchors, narcissists become unrealistic dreamers They nurture grand schemes and harbor the illusion that only circumstances or enemies block their success. This tendency toward grandiosity and distrust is the Achilles’ heel of narcissists. Because of it, even brilliant narcissists can come under suspicion for self-involvement, unpredictability, and—in extreme cases—paranoia."

“Given the large number of narcissists at the helm of corporations today, the challenge facing organizations is to ensure that such leaders do not self-destruct or lead the company to disaster. That can take some doing because it is very hard for narcissists to work through their issues—and virtually impossible for them to do it alone. Narcissists need colleagues and even therapists if they hope to break free from their limitations. But because of their extreme independence and self-protectiveness, it is very difficult to get near them."

“While Freud recognized that there are an almost infinite variety of personalities, he identified three main types: erotic, obsessive, and narcissistic. Most of us have elements of all three."

Erotic Personality: When talking about the erotic personality type, however, Freud generally did not mean a sexual personality but rather one for whom loving and above all being loved is most important. This type of individual is dependent on those people they fear will stop loving them. Many erotics are teachers, nurses, and social workers.

Obsessive Personality: Obsessives, in contrast, are inner-directed. They are self-reliant and conscientious. They create and maintain order and make the most effective operational managers. They look constantly for ways to help people listen better, resolve conflict, and find win-win opportunities. As entrepreneurs, obsessives start businesses that express their values, but they lack the vision, daring, and charisma it takes to turn a good idea into a great one. The best obsessives set high standards and communicate very effectively. They make sure that instructions are followed and costs are kept within budget. The most productive are great mentors and team players. The unproductive and the uncooperative become narrow experts and rule-bound bureaucrats.

Narcissistic Personality: Narcissists, the third type, are independent and not easily impressed. They are innovators, driven in business to gain power and glory. Productive narcissists are experts in their industries, but they go beyond it. They also pose the critical questions. They want to learn everything about everything that affects the company and its products. Unlike erotics, they want to be admired, not loved. And unlike obsessives, they are not troubled by a punishing superego, so they are able to aggressively pursue their goals. Of all the personality types, narcissists run the greatest risk of isolating themselves at the moment of success. And because of their independence and aggressiveness, they are constantly looking out for enemies, sometimes degenerating into paranoia when they are under extreme stress.

“Erotic personalities generally make poor managers—they need too much approval. Obsessives make better leaders—they are your operational managers: critical and cautious. But it is narcissists who come closest to our collective image of great leaders. There are two reasons for this: they have compelling, even gripping, visions for companies, and they have an ability to attract followers. Productive narcissists understand the vision thing particularly well, because they are by nature people who see the big picture. They are not analyzers who can break up big questions into manageable problems; they aren’t number crunchers either (these are usually the obsessives). Nor do they try to extrapolate to understand the future—they attempt to create it."

“As in the days of the French Revolution, the world is now changing in astounding ways; narcissists have opportunities they would never have in ordinary times. In short, today’s narcissistic leaders have the chance to change the very rules of the game. Narcissists are especially gifted in attracting followers, and more often than not, they do so through language. Narcissists believe that words can move mountains and that inspiring speeches can change people. Narcissistic leaders are often skillful orators, and this is one of the talents that makes them so charismatic. Yet this charismatic gift is more of a two-way affair than most people think."

“Although it is not always obvious, narcissistic leaders are quite dependent on their followers—they need affirmation, and preferably adulation. Even when people respond positively to a narcissist, there are dangers. That’s because charisma is a double-edged sword—it fosters both closeness and isolation. As he becomes increasingly self-assured, the narcissist becomes more spontaneous. He feels free of constraints. Ideas flow. He thinks he’s invincible. This energy and confidence further inspire his followers."

“But the very adulation that the narcissist demands can have a corrosive effect. As he expands, he listens even less to words of caution and advice. After all, he has been right before, when others had their doubts. Rather than try to persuade those who disagree with him, he feels justified in ignoring them—creating further isolation. The result is sometimes flagrant risk taking that can lead to catastrophe. In the political realm, there is no clearer example of this than Bill Clinton."

“Despite the warm feelings their charisma can evoke, narcissists are typically not comfortable with their own emotions. They listen only for the kind of information they seek. They don’t learn easily from others. They don’t like to teach but prefer to indoctrinate and make speeches. They dominate meetings with subordinates. Perhaps the main problem is that the narcissist’s faults tend to become even more pronounced as he becomes more successful."

“Because they are extraordinarily sensitive, narcissistic leaders shun emotions as a whole. Indeed, perhaps one of the greatest paradoxes in this age of teamwork and partnering is that the best corporate leader in the contemporary world is the type of person who is emotionally isolated. Narcissistic leaders typically keep others at arm’s length. They can put up a wall of defense as thick as the Pentagon. And given their difficulty with knowing or acknowledging their own feelings, they are uncomfortable with other people expressing theirs—especially their negative feelings."

“Indeed, even productive narcissists are extremely sensitive to criticism or slights, which feel to them like knives threatening their self-image and their confidence in their visions. Narcissists are almost unimaginably thin-skinned. They cannot tolerate dissent. In fact, they can be extremely abrasive with employees who doubt them or with subordinates who are tough enough to fight back. One serious consequence of this oversensitivity to criticism is that narcissistic leaders often do not listen when they feel threatened or attacked."

“Although they crave empathy from others, productive narcissists are not noted for being particularly empathetic themselves. Indeed, lack of empathy is a characteristic shortcoming of some of the most charismatic and successful narcissists. In fact, in times of radical change, lack of empathy can actually be a strength. A narcissist finds it easier than other personality types to buy and sell companies, to close and move facilities, and to lay off employees—decisions that inevitably make many people angry and sad. But narcissistic leaders typically have few regrets.
“Narcissists don’t want to change—and as long as they are successful, they don’t think they have to. Narcissistic leaders are acutely aware of whether or not people are with them wholeheartedly. They know whom they can use. They can be brutally exploitative. That’s why, even though narcissists undoubtedly have “star quality,” they are often unlikable. They easily stir up people against them, and it is only in tumultuous times, when their gifts are desperately needed, that people are willing to tolerate narcissists as leaders."

“Lack of empathy and extreme independence make it difficult for narcissists to mentor and be mentored. Generally speaking, narcissistic leaders set very little store by mentoring. They seldom mentor others, and when they do they typically want their proteges to be pale reflections of themselves. Although narcissistic leaders appear to be at ease with others, they find intimacy—which is a prerequisite for mentoring, to be difficult. Younger narcissists will establish peer relations with authority rather than seek a parentlike mentoring relationship. Narcissistic leaders are relentless and ruthless in their pursuit of victory. Games are not games but tests of their survival skills.

[The author suggests] “three basic ways in which productive narcissists can avoid the traps of their own personality.

Find a trusted sidekick. Many narcissists can develop a close relationship with one person, a side-kick who acts as an anchor, keeping the narcissistic partner grounded. Not surprisingly, many narcissistic leaders rely heavily on their spouses, the people they are closest to. But dependence on spouses can be risky, because they may further isolate the narcissistic leader from his company by supporting his grandiosity and feeding his paranoia. It is much better for a narcissistic leader to choose a colleague as his sidekick. Good sidekicks are able to point out the operational requirements of the narcissistic leader’s vision and keep him rooted in reality. The best sidekicks are usually productive obsessives.

Indoctrinate the organization. The narcissistic CEO wants all his subordinates to think the way he does about the business. [The author credits Jack Welch of GE for ingeniously indoctrinating his subordinates.]

Get into analysis. Narcissists are often more interested in controlling others than in knowing and disciplining themselves. That’s why, with very few exceptions, even productive narcissists do not want to explore their personalities with the help of insight therapies such as psychoanalysis. If they can be persuaded to undergo therapy, narcissistic leaders can use tools such as psychoanalysis to overcome vital character flaws. Leaders who can work on themselves in that way tend to be the most productive narcissists. In addition to being self-reflective, they are also likely to be open, likable, and good-humored. Productive narcissists have perspective; they are able to detach themselves and laugh at their irrational needs. Although serious about achieving their goals, they are also playful. As leaders, they are aware of being performers. A sense of humor helps them maintain enough perspective and humility to keep on learning.

“Historically, narcissists in large corporations have been confined to sales positions, where they use their persuasiveness and imagination to best effect. In settled times, the problematic side of the narcissistic personality usually conspires to keep narcissists in their place, and they can typically rise to top management positions only by starting their own companies or by leaving to lead upstarts."

“But with the dramatic discontinuities going on in the world today, more and more large corporations are getting into bed with narcissists. They are finding that there is no substitute for narcissistic leaders in an age of innovation. Companies need leaders who do not try to anticipate the future so much as create it. But narcissistic leaders—even the most productive of them—can self-destruct and lead their organizations terribly astray. For companies whose narcissistic leaders recognize their limitations, these will be the best of times. For other companies, these could turn out to be the worst.”

Managing Oneself

2009-07-13T16:45:00.000-04:00

Offered ten years ago, Peter Drucker's wise counsel is even more relevant and timely in today's turbulent economy.

Extracts from Peter Drucker’s “Managing Oneself”
Published in Harvard Business Review March-April 1999

Success in the knowledge economy comes to those who know themselves—their strengths, their values, and how they best perform.

Arrogance
“Far too many people—especially people with great expertise in one area—are contemptuous of knowledge in other areas or believe that being bright is a substitute for knowledge.”

Manners
“Manners—simple things like saying “please” and “thank you” and knowing a person’s name or asking after her family—enable two people to work together whether they like each other or not. Bright people, especially bright young people, often do not understand this. If analysis shows that someone’s brilliant work fails again and again as soon as cooperation from others is required, it probably indicates a lack of courtesy—that is, a lack of manners.”

Improvement
“One should waste as little effort as possible on improving areas of low competence. It takes far more energy and work to improve from incompetence to mediocrity than it takes to improve from first-rate performance to excellence. And yet most people—especially most teachers and most organizations—concentrate on making incompetent performers into mediocre ones. Energy, resources, and time should go instead to making a competent person into a star performer.

How do we learn?
“The first thing to know is whether you are a reader or a listener. Far too few people even know that there are readers and listeners and that people are rarely both…. Few listeners can be made, or can make themselves, into competent readers—and vice versa. The second thing to know about how one performs is to know how one learns…. Schools everywhere are organized on the assumption that there is only one right way to learn and that it is the same way for everybody. But to be forced to learn the way a school teaches is sheer hell for students who learn differently. Indeed, there are probably half a dozen different ways to learn…. Of all the important pieces of self-knowledge, understanding how you learn is the easiest to acquire. When I ask people, “How do you learn?” most of them know the answer. But when I ask, “Do you act on this knowledge?” few answer yes. And yet, acting on this knowledge is the key to performance; or rather, not acting on this knowledge condemns one to nonperformance.”

How do I perform best?
“To manage yourself effectively, you also have to ask, do I work well with people or am I a loner? And if you do work well with people, you then must ask, in what relationship?… Some people work best as team members. Others work best alone. Some are exceptionally talented as coaches and mentors; others are simply incompetent as mentors. Another crucial question is do I produce results as a decision maker or as an adviser? A great many people perform best as advisers but cannot take the burden and pressure of making the decision. A good many other people, by contrast, need an adviser to force themselves to think, then they can make decisions and act on them with speed, self-confidence, and courage. Other important questions to ask include, do I perform well under stress or do I need a highly structured and predictable environment? Do I work best in a big organization or a small one? Few people work well in all kinds of environments. The conclusion bears repeating: do not try to change yourself—you are unlikely to succeed. But work hard to improve the way you perform. And try not to take on work you cannot perform or will only perform poorly.”

Values
“To be able to manage yourself, you finally have to ask, what are my values? This is not a question of ethics…. What is ethical behavior in one kind of organization or situation is ethical behavior in another. But ethics are only part of a value system—especially of an organization’s value system. To work in an organization whose value system is unacceptable or incompatible with one’s own, condemns a person both to frustration and to nonperformance…. Organizations, like people, have values. To be effective in an organization, a person’s values must be compatible with the organization’s values. They do not need to be the same, but they must be close enough to coexist. Otherwise, the person will not only be frustrated but also will not produce results.”

Where do I belong?
“…[M]ost people, especially highly gifted people, do not really know where they belong until they are well past their mid-twenties. By that time, however, they should know the answers to the three questions: What are my strengths? How do I perform? and, What are my values? And then they can and should decide where they belong…. Successful careers are not planned. They develop when people are prepared for opportunities because they know their strengths, their method of work, and their values. Knowing where one belongs can transform an ordinary person—hard-working and competent but otherwise mediocre — into an outstanding performer.”

What should be my contribution?
“Very few of the people who believed that doing one’s own thing would lead to contribution, self-fulfillment, and success achieved any of the three. But still, there is no return to the old answer of doing what you are told or assigned to do. Knowledge workers in particular have to learn to ask a question that has not been asked before: What should my contribution be? To answer it, they must address three distinct elements: What does the situation require? Given my strengths, my way of performing, and my values, how can I make the greatest contribution to what needs to be done? And finally, What results have to be achieved to make a difference?”

Relationships
“Managing yourself requires taking responsibility for relationships. This has two parts. The first is to accept the fact that other people are as much individuals as you yourself are. They perversely insist on behaving like human beings. This means that they too have their strengths; they too have their ways of getting things done; they too have their values. To be effective, therefore, you have to know the strengths, the performance modes, and the values of your coworkers…. The second part of relationship responsibility is taking responsibility for communication…. Organizations are no longer built on force but on trust. The existence of trust between people does not necessarily mean that they like one another. It means that they understand one another. Taking responsibility for relationships is therefore an absolute necessity. It is a duty.”

Second careers
“There are three ways to develop a second career. The first is actually to start one. Often this takes nothing more than moving from one kind of organization to another…. The second way to prepare for the second half of your life is to develop a parallel career. Many people who are very successful in their first careers stay in the work they have been doing, either on a full-time or a part-time or consulting basis. But in addition, they create a parallel job, usually in a nonprofit organization, that takes another ten hours of work a week. Finally, there are the social entrepreneurs. These are usually people who have been very successful in their first careers. They love their work, but it no longer challenges them. In many cases they keep on doing what they have been doing all along but spend less and less of their time on it. They also start another activity, usually a nonprofit…. People who manage the second half of their lives may always be a minority. The majority may “retire on the job” and count the years until their actual retirement. But it is this minority, the men and women who see a long working-life expectancy as an opportunity both for themselves and for society, who will become leaders and models.”

Outliving organizations
“In effect, managing oneself demands that each knowledge worker think and behave like a chief executive officer. Further, the shift from manual workers who do as they are told, to knowledge workers who have to manage themselves, profoundly challenges social structure. Every existing society, even the most individualistic one, takes two things for granted, if only sub-consciously: that organizations outlive workers, and that most people stay put. But today the opposite is true. Knowledge workers outlive organizations, and they are mobile. The need to manage oneself is therefore creating a revolution in human affairs.”

Michelle Jernigan: Speaker at Conference for Florida Business Families

2009-05-15T14:46:00.000-04:00

Upchurch Watson White & Max Family Business and Wealth Mediation Practice Group Co-Director, Michelle Jernigan, was selected to speak at the second annual Florida Families in Business Conference on May 18, 2009 in Hallandale, Florida.

This conference provided an intimate closed-door venue for global families throughout the US and Latin America to exchange ideas and learn from each other. Principals from leading family business and industry experts joined to create a program that spoke directly to the needs of today's families as they strive to maintain and build upon their successes.

This event was organized by Campden Conferences. Campden's private meetings are an excellent way for representatives from family businesses and family offices to meet their peers and discuss all aspects of fronting a family-owned organization.

Homo Mobilis: How Wireless Communication Connects and Changes Us

2009-04-09T10:10:00.000-04:00

In the April 12, 2008 Economist, Andreas Kluth surveys the effects of wireless communication on how we work, live, love, relate to places and to each other. These are some snippets from his survey.

We “urban nomads” (homo mobilis) are no longer defined by the clumsy gear we once carried, but by what we now leave behind. We are free from land lines, fax machines, even laptops. We communicate wirelessly. We carry very little paper. The old technological hassles about wirelessness have been mostly conquered. The new questions are sociological. Wirelessness is changing human interactions.

Travel is not a prerequisite for nomadism. Remaining permanently connected is the critical thing. Our basic tool is a mobile phone. Half the world’s population, 3.3 billion people, subscribe to mobile phone service.

Nomadism keeps us closer to those already close to us, but at the expense of attentiveness to strangers. Half of one’s text messages go to the same three or four people. Sociologists argue that we need not only “strong ties” with family and intimates, but also “weak ties” with casual acquaintances. “Weak ties” are the conduits for new ideas that travel between densely knit clumps of close friends and relatives. Social systems lacking “weak ties” will become fragmented and incoherent. The fatal epidemic raging in bee colonies resulting in reduced plant pollination comes to mind.

Wirelessness encourages adolescents to become socially autonomous earlier than their parents, building their own communities though text messaging and photo sharing among their cliques. With the advent of Facebook and MySpace the Web has become an intensely personal and social medium.

One survey at a Vermont college found that undergraduates communicate with their parents on average ten times per week. Getting drunk and lost after a party is somehow different now, when one push of a button speed dials parents for emergency assistance.

Wirelessness has changed the ways we shop, bank, listen to music, follow the news and socialize. Five of the ten best selling novels in Japan last year were written on mobile phones.

Wirelessness questions our need for conventional offices, even for Dilbert cubicles, though the casual serendipity of the water cooler may be missed. Knowledge nomads spend less than a third of their work time in offices, a third at home, and a third in “third places” such as parks, libraries, Starbucks or equivalent public spaces. Nomads don’t want to be isolated in obsolescent “home offices”. They want to mingle with others. Nomadism combines the autonomy of telecommuting with mobility that allows gregariousness and flexible work styles.

With fewer flesh meetings, staffs are more “purpose driven”, less obsessed with relationships at work. Some employees have no dedicated desk but “hotdesk” from any available. Many don’t come to an office at all. Older supervisors fear they can’t manage people whom they cannot see, though most get over it. Nomading necessitates management by objectives rather than by face time.

Nomadism can create considerable stress. We who work for ourselves have a tyrant for a boss. The danger is that the anytime, anyplace wireless office will lure us into a tiger cage: the everytime, everyplace office. In simpler times, most everyone worked at home. The village blacksmith didn’t separate the physical space devoted to work, family or play. Those once separated spheres of life may be merging again. Work and family have become all one big blur. Has the BlackBerry nestled in the bedroom?

Nomads constantly juggle the social rights of colleagues, relatives and friends, as well as their own needs for down time. How much should we bother each other after hours? The boundaries of etiquette are changing. Much wireless toil is done in public places not designed for work. It’s routine nowadays to answer phone calls in movies, restaurants and public toilets – even at weddings and funerals. Rudy Giuliani famously interrupted a presidential campaign speech to take a personal phone call from home. Witnesses report that interruption turned his National Rifle Association audience into stone.

In the old days there were clear limits on personal productivity, whereas now there are none. Today people seem to judge what they should achieve by what they could achieve. More people feel inadequate, intimidated by the unlimited productive opportunities offered by wirelessness.

Nomads are driven by the illusion that more information always leads to better decisions. Wirelessness encourages addictive behaviors such as winnowing chaffs of email at all hours in hopes of finding an occasional grain. We seem obsessed to project an image of busyness. See my comments on “BlackBerry ADD”: here and here. Bluetooth ear pieces make our phones hands free, though we may appear delusional as we converse in public with an unseen someone.

In rich countries our “smart phones” are connected to the internet. Low-cost users, especially in poorer countries, rely on text messaging that doesn’t require an internet connection. In the third world, text messaging has become the standard for monitoring elections, the primary tool for mobilizing enormous crowds on short notice, for locating health care resources, and for environmental monitoring of carbon monoxide, ozone, pollen, sun intensity and temperature. By adding cheap sensors for the global positioning system (GPS) and for radiation, a network of mobile phones could discover nuclear leaks or track the transport of “dirty bombs”.

Some detect a new shift in language, thought and feeling resulting from wirelessness. Accepted grammar, syntax, spelling and punctuation are giving way to a linguistic whateverism. People write more than ever before, though the more we write wirelessly the worse writers we become. With quills, pens, even manual typewriters, people took time and care to clarify their thoughts. Nomads seem convinced that they don’t have time to care – they concentrate on speed alone. Students who can Google a snippet from Hamlet need no longer consult Cliff Notes.

Teachers complain that their students are thinking in snippets i.e. incoherently, having internalized the new whateverism. Young nomads write without thinking, leave home without planning, enter relationships without tying themselves down. Large parts of human interaction are relegated to the virtual. More and more adolescents dump their lovers by text message, or worse, by changing the status of their Facebook profile from “in relationship” to “single”. Such cyber-dumping may be efficient and instantaneous but it’s potentially traumatic.

A generation ago, we worried that television was creating a generation of unimaginative couch potatoes, if not intellectual vegetables. Today’s young nomads who read Shakespeare in snippets, may be creating an artistic culture more vibrant and arguably more imaginative than any preceding it. Creative types do more than stitch together snippets in a mash-together culture. They are forging new combinations almost as neurons and synapses create new thoughts.

Every new technology has created an excess of silliness. In time, each silliness has produced its own backlash and subsequent adjustment. Having invented the “on” button, homo mobilis nomads will likely discover an appropriate “off” button as well.

In the interest of full disclosure, some of these snippets from Kluth’s survey were stitched together in a coffee house from a paper copy of the Economist.

- Gerald Le Van

LITIGATION: The Family “Doomsday Machine”

2009-04-08T17:07:00.000-04:00

At the climax of the cult movie “Dr. Strangelove”, the Soviet Union unleashes its “Doomsday Machine”, a destructive device so powerful that once activated, it can’t be shut down. In many ways a family lawsuit resembles the “Doomsday Machine.” Its destructive power can’t be recalled. Everyone loses. Nobody wins.

Fulton Oursler wrote many books, including The Greatest Story Ever Told, a popular account of Jesus’ life, eventually made into a movie. Under an assumed name, Oursler’s second wife, Grace wrote rather torrid (for the times) love stories. Fulton and Grace had two children; Fulton also had two other children by a prior marriage. Fulton’s will left everything to Grace. When Grace later died, her will left everything to their two children, but nothing at all to Fulton’s two other children. The two omitted children claimed that Grace had promised Fulton to leave them equal shares, and brought a lawsuit to enforce their claim.

The outcome of the lawsuit is unimportant at this point. But its effect on the family presents a sober lesson. In his memoirs, Will Oursler, a son by Fulton’s first marriage describes its effects. Here are some excerpts.

“It was a battle I did not seek, did not want—brother and sister against brother and sister, love against love, hate against hate. I did not seek it, but I had no escape. The challenge was there. And if I did not wish to battle for myself, I still could not leave Helen (the other child of the first marriage) and her children to go the road alone.

“To accept passively would be to believe that my father did not love my sister Helen and me, that he loved only the children of his second marriage, April and Tony. It would be to believe that my father wanted two of his children to live in luxury on the money he had earned, and the other two to know nothing but the earnings they struggled for…”

“It is an experience to be disinherited. Of a sudden there is a brand upon you, the letter etched into your flesh. You should feel guilty. But guilty for what? Of being born? For if you had not been born, Grace would have faced no problems, no lonely set of children to remind her of an other wife.”

“You turn to lawyers and courts to seek a remedy, if remedy there be. Could I go to them and ask them to give us money their mother left to them?”

“In the hands of the law, lawyers, legalism, of procedures, delays, and tactics, you are no longer yourself or even your own master. Abruptly, you are part of this too, and your lawyer informs you that introducing testimony about some of the facts might be painful. But this is the way of the law and courts; this is the meaning of conflict between human beings, the bitterness of conflict.”

“We made our claim for a share of our father’s estate. It went on for five years, the battle that hung above our lives like a smoky cloud. Helen and I were asking only for the shares that would have come to us, and for our children the share that would have come to them, under the terms of Grace’s original will…”

“While the battle of brother and sister against brother and sister went on in the courts, so also it went on in our lives, with no word between these two sets of children beyond the legalisms of complaints and answers and pretrial interrogations…”

“All this time the case went on, the battle of briefs and counter-briefs. There was an effort at settlement, and April and Tony and Helen and I had several meetings, through which would occasionally glow the feeling that we were truly brothers and sisters.”

“For a few weeks it almost seemed as though a settlement were possible; it almost seemed as though the flickering flame of brotherhood was coming alive. But it, too died in the suffocating questions that arose—lawyers’ bills and which side was to pay them, questions of who was right and wrong at this time or that. The lawyers tried to work it out and failed; we all tried to work it out and failed. The staggering legal fees remained to be met, and unanswered questions that dogged us remained.”

“Grimly, like a Greek tragedy, the plot went on and we returned to court. For this breakdown in negotiations that could have made us all more content I don’t blame April and Tony. I blame the four of us—and Grace and Fulton, the past, all our lives.”

“There were too many problems, too much involvement with lawyers and fees and bills to be paid. And below the surface perhaps the chasm had become too great to bridge.”

“We were bothers and sisters, but we could not agree. Once more the case went back to the courts…April and Tony won, four to three and it was over.”

“There are no villains in this family story. What can I be but sorry for what Grace has done to Helen and to me, to April and to Tony, to Fulton’s grandchildren, most of all for what she did to herself? Can I find it in my heart to hold rancor, where there is only pity and sorrow for the woman of many gifts and accomplishments who suffered bitter insecurity and guilt? She was bewildered and confused, torn by conflict. And her last gesture, incomprehensible to Helen and me, left our family irreparably estranged.”*

Lessons From Geese - By Milton Olson

2009-04-03T11:32:00.000-04:00

Interdependence

1. As each bird flaps its wings, it creates an "uplift" for the bird following. By flying in a “V” formation, the whole flock adds 71% greater flying range than if the bird flew alone.

Lesson: People who share a common direction and sense of community can get where they are going quicker and easier because they are traveling on the thrust of one another.

2. Whenever a goose falls out of formation, it suddenly feels the drag and resistance of trying to fly alone, and quickly gets back into formation to take advantage of the "lifting power" of the bird immediately in front.

Lesson: If we have as much sense as a goose, we will stay in formation with those who are headed where we want to go (and be willing to accept their help as well as give ours to the others).

3. When the lead goose gets tired, it rotates back into the formation and another goose flies at the point position.

Lesson: It pays to take turns doing the hard tasks and sharing leadership—with people, as with geese, we are interdependent on each other.

4. The geese in formation honk from behind to encourage those up front to keep up their speed.

Lesson: We need to make sure our honking from behind is encouraging—and not something else.

5. When a goose gets sick or wounded or shot down, two geese drop out of formation and follow it down to help and protect it. They stay with it until it is able to fly again or dies. Then they launch out on their own, with another formation, or catch up with the flock.

Lesson: If we have as much sense as geese, we too will stand by each other in difficult times as well as when we are strong.

That‘s interdependence.

Hanging On, Letting Go, or "Letting Grow"

2009-04-02T15:49:00.000-04:00

Some thirty years ago, an anxious parent removed the training wheels from Lance Armstrong's tiny two-wheeler.

No doubt Lance wobbled, fell a few times, skinned a knee or an elbow. When Lance left the sidewalk to ride in the street, their anxiety increased.

A continual parenting dilemma is when, where or whether: to hang on, to let go, or to seek a healthy in-between I call "letting grow". As children grow older, more independent, and the risks of their bad judgment increase, our search for "letting grow" becomes more complicated.

Picture Lance Armstrong, riding a state-of-the-art racing bike in the Tour de France, but with training wheels attached. That's how some frustrated adult beneficiaries in wealthy families view themselves. The training wheels are still attached to their finances. They long to balance on two wheels and ride in the street with their financially self-parenting peers.

For some beneficiaries there is no choice. The financial training wheels are welded to frame by rigid legal documents. For others, the training wheels are bolted to the frame, removable at the discretion of fiduciaries.

Every day, those in business make a fundamental choice: operate, sell, or liquidate the company. Fiduciaries with the discretion to distribute make similar choices: hang on, let go, or "let grow". Hang on, withhold distributions, and avoid improvident expenditures by beneficiaries. Let go, pay it out, and hope that it isn't spent foolishly.

A very wise "let grow" professional fiduciary I know holds a budget conference with adult beneficiaries at the beginning of each year. Her approach over discretionary distributions is quite simple: "Please keep me from ever having to say 'No'". So long as budgeting works, the beneficiaries don't seem bothered by the training wheels.

"Letting grow" may mean including beneficiaries in investment reviews, investment decision-making, or naming them as co-fiduciaries. Eventually, "letting grow" may mean no review at all of what beneficiaries do with their distributions.

Whatever course it takes, "letting grow" is wisely proactive about removing the training wheels.

Go Lance!

- Gerald Le Van

Mediation Firm Welcomes Gerald Le Van

2009-03-02T16:10:00.000-05:00

Upchurch Watson White & Max, a Florida based mediation specialty firm and national leader in alternative dispute resolution, announces the appointment of Gerald Le Van to the firm's mediation panel. He will chair the firm's Family Business Services Group.

Since 1986, Le Van has successfully resolved family disputes about wealth and business, earning an international reputation for preventing family lawsuits.

A trust and estates lawyer, former law professor and corporate counsel, he is often quoted in the business press, speaks frequently to business and professional groups and is a dedicated coach and mentor to others in the field.

A prolific writer, Le Van has authored six books, countless articles and serves on the editorial boards of two national magazines. A graduate of Southern Methodist University and the Louisiana State University Law School, he is a fellow of the Family Firm Institute, the American College of Trust and Estate Counsel, the International Academy of Estate and Trust Law, and is an emeritus Trustee of the Presbyterian Church (USA) Foundation. His latest book is Healthy Wealth in Families.

"Gerald Le Van is an accomplished author, speaker and practitioner in the Family Business arena, and we look forward to sharing his important insights and leadership with our family business clientele," said John Upchurch, the firm's president.

With artist wife Sara, Gerald Le Van resides in Black Mountain, NC.