Aspen current thinking column


Spring 2013

October 2019 Current Thinking Column

Thursday, October 03, 2019

Leaving Your Comfort Zone: Adding Independent Directors to your Board

by Burak Kocer, PhD

International Associate, Aspen Family Business Group

The Board of Directors is where the will of owners turns into action. It is also one of the most challenging steps to take for a business owner as they may be advised to do things differently. To be more specific, in almost all family business governance assignments that I have been involved globally, the top of actionable items list has been to add independent directors to the board. Yet only a small portion of business owners easily adopt this idea to change the board composition.

In general terms, an independent director is someone who has no other roles, which might potentially pose a conflict of interest with their duties towards your company. In my experience, inviting independent directors to join the board has always been the number one subject that stands clearly outside the comfort zone of the owner.

Why to take this difficult step

We often tell our clients that adding independent directors to the board is the best way to bring objectivity to their business. In the words of our senior partner Joe Paul, “if we could recommend one action to all our clients regardless of the presented problem, it would be for them to engage three strong independent directors. They would bring the wisdom and knowledge required to manage the necessary changes in the family and/or business.” In fact, our theoretical knowledge and practical expertise confirm that sharing the decision-making authority with qualified people around the table is in the best interest of the owner. Then what is it that keeps the owner from developing a strong independent board? How can a business owner prepare to leave his/her comfort zone?

A business owner who is reluctant to change the board composition:

  • is not convinced that it is in their best interest; or
  • even if they are convinced to the benefit, they suspect that they cannot manage the process successfully; or
  • even if they have no issue with a) and b) above, the outcome is not important to them, i.e., they are not motivated by the benefit offered.

Is it in Your Best Interest?

You may start thinking about what exactly the ultimate duty of a board of directors is. The board exists to increase shareholder value, in other words, to make your company worth more. This is where you think about the future of your business and this strategic thinking allows you to move your focus from daily operations to the roadmap that will lead your business to its full potential.

Independent directors will help you define what you want your business to become in the future and the path that will take you there from where you are today. The best independent directors bring the ability to think about your business as an enterprise in the business environment in which you operate, rather than diving into the day-to-day operations. They can bring a context of how other businesses develop and what are best practices.

A strong board will also contribute to your succession plan by creating a platform for your successors to learn how to lead a business. It constitutes an invaluable resource as part of a transition plan for the development of the next generation, which usually takes a minimum of 10 years until you would comfortably delegate and finally handover the authority to your heir. Many times, independent directors can provide advice and coaching to potential successors and help to make the difficult decision of what leadership is needed by the company and who has the potential to provide that type of leadership.

Can You Plan an Effective Selection and Induction?

As the first step, think about the profile of people that would complement your skills. You can develop a Board Skills Matrix and list the qualities, qualifications, and talents which are needed to implement your strategic roadmap. People that you know and trust within your business community are a great resource. You can first look there to identify ideal candidates. You can also work with an executive search firm to propose people who will add value to your business.

While working on identifying candidates, it is also wise to consider what information they need to know about your business to be able to add real value in your board process. The position of your business as of today, competition, and future trends in the market are key information to help them understand your company and where you are heading. Creating a Board Prospectus is a useful tool to collect the information, which you can share with prospective board members or those who may share candidates with you.

Is it Important for You?

A strong board of directors can help guide the direction your business should go and what actions should be taken to get there. This is indispensable regardless if you would like to sell your business or transfer it to the next generation. If the mechanism that knows how to keep your business profitable is “you” instead of a board of directors, then you are also limiting the value proposition of your business -- anyone who is interested in buying your business, should actually buy “you” and not the business. However, your board of directors will help your business incorporate your valuable competitive knowledge, which is the key to sustainability of the distinguishing performance that you have achieved.


In summary, many family business owners hesitate to build a board of directors with independent members because of their fear of outside control or advice that conflicts with their way of operating. We have found, however, that the voices of independent directors supplement those close to the business and provide an objectivity that typically no one in the family or in the business can provide. In addition, the presence of a board increases the value of the business both of current owners and for potential buyers should that be the ultimate goal.

For more information on developing your board please click here to see a previous posting by Leslie Dashew called “Steps to Setting up a Fiduciary Board”.



August 2019 Current Thinking Column

Sunday, August 11, 2019


by Joe Paul
Aspen Family Business Group

When I shared my draft on Values with the Aspen Family Business Group, I discovered there is genuine interest in the topic and appreciated my colleague’s suggestions and input. I have integrated some of them into this article and hope that you too find them useful as a starting point for discussion in your own families and businesses.

I was reminded by AFBG Partner Leslie Dashew, that Ann Dapice, creator of the “Values Unfolding Instrument” defines a value as “that which is important to us.”

Leaders of family businesses often presume that their personal values for both the business and the family have been clearly spelled out for all of the other stakeholders to see. Unfortunately, that assumption is often incorrect, because family businesses differ widely from other families in the frequency and consequences of the decisions they make.

From an anthropological perspective, values have evolved in societies to manage the behavior of individuals in their own group, as well as among groups. Values manage the tension between self-interest and the collective interests of the group. Sometimes they give the individual or the group a competitive advantage.

Values vary from culture to culture, from group to group within a culture, and from individual to individual within the group. Variables such as history, geography, a leader’s clarity of purpose, mobility, intelligence, and the degree of trust across psychological and group boundaries can all have an influence on an individual’s and group’s values.

As our Turkish colleague and AFBG Associate, Burak Kocer, offered, “Values are intangible and invisible like an iceberg, but their artifacts are tangible and visible. We can observe the values wide spread in an organization with those artifacts like in the names of meeting rooms, paintings on the walls, or furniture. We can observe how owners’ values influence a workspace.”

Values guide one’s behavior, shaping one’s preference, and can develop and change through our lives. For example, one source of values is called “Deprivation values”. If one grows up without financial security, it can influence what values drive us forward. And once it is no longer an issue some other value may replace it becoming more important, like spending time with loved ones or philanthropy.

It can also sometimes lead to destructive entitlement. Values can be harmful leading one to doing things they might not otherwise have done or what we call thinking errors.

Values can be divided into categories.

  • Personal standards of behavior, or principles by which a person makes choices in life is one category. For instance, the statement, “Trust is more important than love in family relationships,” is an example of this type.
  • The monetary worth of something is another kind of value.

It is interesting to consider the interplay between sources of values, such as internal, family, peers, media, social institutions, community, etc., and their influence in the development of our values.

Some of these ideas have “come home to roost” for me. I have enjoyed an avocation as a whitewater rafting guide for many years. It has taken me to some remote places on earth and it is something I have been able to share with my family and children. A few years back we had a very adventurous trip in South America where I became ill the last day and which also happened to coincide with my eldest son’s birthday. It was with some trepidation I decided it was time to pass on the mantle and gave my son my river knife in acknowledgement that it was now his turn to start leading our family trips. Since then he and my youngest son and their wives have jointly taken on the responsibility of organizing and leading our annual river trips. It was partly necessitated by my Parkinson’s diagnosis but also the recognition that in spite of the bittersweet feelings for me of letting go, it was time for them to move into positions of leaders.

This year prior to our trip the kids (all in their thirties) created a river support covenant that recognized mine, my wife, and, their needs, to feel safe and comfortable on the river. At first, I thought it was a clash of our values because I was looking for personal freedom and they wanted to feel that I was safe. Upon reflection I realized their document came from a place of deep love and respect with a true desire to allow me the opportunity to enjoy time with them without a lot of unnecessary tension.

The covenant is almost two pages long, but I’d like to share an excerpt that feels like a good example of what I’ve talked about earlier. If anyone is interested in reading more of it, please don’t hesitate to ask.

Dad/Joe River Support Covenant June 2019

  • We all want the same thing—to enjoy the river together safely, with Dad/Joe as full participant within his abilities—so meeting each other where we’re at to communicate respectfully about any concerns that arise is key
  • Emotion is involved for everyone, both in terms of fear and anxiety and in terms of frustration and annoyance, but no one wants to be controlling or angry. When suggestions are made we can always talk about the suggestion versus the tone of voice as separate issues that we can improve to facilitate communication
  • In the words of Dad/Joe, which Silas and Chris remember from their childhood, “if we are yelling at each other on the river, it is not from anger but is our attempt to communicate (urgency or volume)”
  • Dad feels like he’s a burden on everyone and that it would be easier for him to withdraw
  • We should respond to the emotion he has about this rather than the behavior: “we know you want us to not feel like you’re a burden, so remember this conversation and do these things to not be a burden”
  • We can say: “You want to give your family the gift of feeling safe and good about you. One way to take care of your family is to not put yourself in a situation that causes us anxiety.”
  • Dad’s interior goal is to take care of his family. Our goal is to help Dad keep his circle big.
  • Respond to our emotion too: worry/anxiety/concern comes from a place of love and wanting Dad to be involved yet safe
  • Putting himself at risk is felt by everyone
  • Things that don’t feel like risk to Dad still feel like risk to others around him
  • Dad likes adventure and therefore doesn’t see it as a “risk”
  • Bottom line: Dad/Joe is not a burden. It is our pleasure to help keep these experiences possible for everyone to do together by putting some extra thought and work into our support of Dad/Joe.

Our family’s new mantra is “Thoughtful Risk”.

I’ve included some thoughts and exercises you can share with your family.

  • There is sometimes a gap between one’s stated values and the values that are expressed in actual behavior. Consider the definition of integrity is to live according to one’s values.
  • One’s values are often only marginally conscious. The articulation of one or another’s personal values along with the consideration of their priorities often clarifies one’s thinking.
  • An individual’s most important values may vary across separate roles and sets of responsibilities associated with those roles. For instance, one may actually have differing value priorities (perhaps even a different list of values) as a manager, owner and family member.
  • The expression of one’s values can range from active, to reactive, to responsive, to proactive, to interactive, to inspirational, depending on the psychological state.
  • Sometimes the expression of one’s values is done aggressively and designed to capture “mind space” in another person.
  • The stability of one’s values across contexts, and across roles, may be a measure of the ethical development of the individual.
  • The stability and degree of convergence of values across individuals in a group effects the functioning of the group.
  • Understanding the primary values of others in one’s group facilitates communication. For instance, when two or more people share ownership, management responsibilities and kinship it is important to have a good understanding of each other’s values.

Here is an exercise you can use to begin a family discussion. You can use the 'List of Values' chart in several ways to help understand each other’s values, and to clarify the values of the group.

For instance, you can have sub groups of the family meet. During a family retreat you can break into two groups, one for the successor generation and another group for their elders. It is important for the two groups to meet separately. Each of the groups could be directed to look at the list of values and highlight the top 5 values they want the business to be known for in the community. Once everyone has picked their preferred 5 traits they could share their individual lists. Then they could negotiate with each other to select the final 5 values. Both of the groups could then share their negotiated lists and negotiate the final 5 values.

Another use of the list of values would be for the family business leader to pick values you would want to be known for as the leader of the family business. Then pick 5 values you would like to be known for as a parent. You could then look at the results to see any differences in the 2 lists that could cause you problems in either of those roles.

Consider a third exercise, that might be appropriate to a specific issue you and your family are facing. Much as our family did with our river trip covenant, go through the list of varying values of each person and any conflict or stress that is surrounding this issue might be lessened or eliminated once each person understands why people are doing what they do.

CHART: List of Values
View/Download the aforementioned chart with the list of values




June 2019 Current Thinking Column

Thursday, May 23, 2019

Communication within Family Businesses

by Jonathan Magidovitch
Aspen Family Business Group

In his first post since becoming an associate of the Aspen Family Business Group, Jonathan Magidovitch writes about improving our communication skills, especially the listening part. For more on Jonathan check out his biography.

Communication Rule One: Be like my friend.

She does something with her communication that no one else I know does. And, she’s pretty insistent that I do likewise when we’re talking. For her, speaking, listening and thinking are three completely distinct activities. It’s noticeable but not too awkward. Among the results is that when she is listening to you, she is really listening. It’s something that you can feel. I appreciate it.

Most of us, even while the other person is speaking, we are already working on our next point. And, more or less consciously, when we hear someone, we anticipate possible next words they might say and then judge their words against our expectations. We ask ourselves tactical questions, “Are we going to respond? How? Are we going to deal with the cognitive or the emotional, with the brain or with the heart? If one, then do we dismiss the other? etc.” This happens so fast, so automatically that we believe we really had only one way to respond to what we heard; we respond on autopilot.

If there’s any old stuff that keeps going around the family meeting table, autopiloting communication will only fan it along. Like my friend, then, Rule One, make a line separating thinking….speaking...&....listening.

Communication Rule Two: Hear & Respond to everything being said.

But first, this metaphor which is a true story. In 2010, the Musical Instrument Museum opened in Phoenix, AZ. Our best visits there are when our composer son joins us. He KNOWS music and he is passionate about it. On our first visit to the MIM, he was still an adolescent male who enjoyed the gross stuff of life more than his middle-aged dad did. This brings us to Tuvan Throat Singing. It sounds gross, until you’re brought to that well often enough, and then the beauty of it shows up.

What happens in throat singing is that the performer creates a fundamental tone, and using his mouth and throat, shapes a specific harmonic of it - My son gave me that language. Key point is that we’re hearing two notes come out of one throat.

And, this brings us to any meeting of any family business. A person opens their mouth and sound comes out. Habitually, we receive it as one thing. But, (at least) two things come out. There’s the verbal. And, there’s the emotional. We want to work with both.

But, instead of hearing everything that’s being said, what we really do is pick out only one thing and hear that. For example, in a meeting of the Family Business, Cousin “X” just reported on progress in hiring a new operations manager. However, others at the table have instead heard Cousin “X” disparage their skills. This seems like a miscommunication, and it is but not in how we normally think of it. When “X” spoke, information was delivered along with emotion. For the listeners, the information was lost in emotion, Cousin “X”’s and their own. If emotion is not acknowledged and dealt with, it will disrupt whatever process is before it.

Here’s a tool that can help. For example, and the following all happens quickly, when someone says something that feels highly emotional to me, I hear it. I pause. I feel what it feels like in my chest and shoulders. I imagine that what they said is written as if in an email in front of me. No body language. No tone. Just the words. Then, I look at those words. And, I try to find the most neutral way of taking those words. And, then, I speak. I might say something about how I feel and then I respond to that “email,” as simply and honestly as I can. This takes practice.

Responding to the cognitive part of communication has its own complexity. It also takes practice. And, there is a lot of preparation required here on the part of the individual and the family.

Every family in business has its way of knowing what it knows, its own epistemology. Knowledge could be for some a hunch, for others a market analysis. Every family also has its means of engaging its members with that knowledge. That base of knowledge is the foundation on which communication is built. It’s common ground on which grows common language. It’s like people talking about winter who have only lived in either St. Petersburg, Florida or St. Petersburg, Russia, not a lot of common ground.

To understand this better, let’s take this example: the family that was hiring a new operations manager had just built an addition to their factory. In deciding to do that, the family managed the information flow of market analysis, local zoning, financing, and more. And, they interfaced with a bevy of new professional service providers on top of those regularly engaged. Doing this well requires mastery of a large body of information. And, it calls for clarity in goals, values and roles.

Being a contributing member of the family business requires commitment to the family, to its vision and to doing the work to fulfill our role. It means getting educated in the family’s ways. The aforementioned clarity and commitment define the engagement of each member of the family business. And this engagement is best when built consciously by the family and offered to its members at times and in ways appropriate to their development as members of the family business.

Specifically, family needs common ground to effectively run their business and the family has to build that common ground. These points are key to building that common ground:

  • Mapping the business including personnel and roles and what knowledge is owned, where is it and who has access. Similarly, physical and financial assets are included in the mapping.
  • History, values and vision. These are the road markers for the family business. They require codifying and regular recitation to maintain their influence on the day to day activity of the family business. They also require regular review and update to ensure their relevance. Here, creativity is especially encouraged in making family events and rituals to mark the passing along of history, values and vision.
  • Skills acquisition. The family in business continually acquires skills that enable change as desired or required. They decide whether to invest those skills in family members or to bring them in from the outside.
  • Execution. This is governance, the description of how you operate; boards, tenures, shares and their ownership, and more.

These functions are the backbone of the business. And, while they have emotional vestments, they are cognitive. So, continuing our example, when Cousin “X” reported on hiring a new manager, everyone got lost in emotion. But, after a regroup where they reviewed how the manager decision was made and got a handle on the feelings around that process, they were able to continue with their business.

This example depicts a family that has considered itself and its business in a comprehensive way. They have created a structure where listening to each other is possible. Engaged family members acknowledge emotion and they honor the shared facts that give substance to their business. This prepares them for Rule Two: Hear & respond to everything being said, both the emotional and the cognitive.

Communication Rule Three: There are many more rules.

However, communication in each family business has its own life, so rules about communication are best when custom tailored.

Our work with your family business includes checking, and if necessary, reshaping communication.

Thank you for your reading. Please be in touch with thoughts or questions.

For more on emotion in Family Business, I recommend this article: Brunden & Hartel, 2014
For more on Language Processing, I recommend a resource for this column: Rayner and Clifton, 2009




April 2019 Current Thinking Column

Sunday, April 14, 2019

Mentoring in Family Business: Key Areas of Need

by Shelley M. Taylor & Donnel Nunes, PhD
Aspen Family Business Group

As Bill mentioned in our last thinking column, the foundation to a successful plan in family business transitions is having a shared vision of where you want to go. Once we have this, we can begin to map out an “array of paths to our desired point.” A succession plan that addresses the seven dimensions of succession is one that encompasses the transition of not only leadership, ownership and management, but also authority, values, knowledge, and relationships.

Over the last year, we have been conducting interviews with leaders from successful family businesses across the country to better understand how mentoring relationships play a role in these generational transitions. Through this research we are exploring and assessing the mentoring needs in family businesses. The goal of our research is to address these family business mentoring needs with programs and tools that will improve and support family business outcomes.

This month, we are going to share some of our findings about the three key areas of need for mentoring in family business: legacy, operations, and human systems.

The legacy of a family business can be a challenging area of knowledge to capture. Family and business history, values, and stories are all part of the legacy that gets passed down from one generation to the next. As a business matures and becomes multi-generational, the family tends to view the business itself as an heirloom, something they are merely taking care of and then passing along to future generations. The more that next generation family members know and understand about the family business’s culture and history, the better positioned they are to help it grow and prosper in future generations, and they in turn can then help perpetuate the legacy.

The operational mentoring needs in a family business are similar to mentoring needs in other business environments, and should be familiar to most. These include focusing on specific knowledge and skill gaps for one’s current position and for future roles. Another operational focus of a mentoring relationship is working on one’s personal and professional growth. In a family business environment a next generation family member will work with his mentor on readiness for leadership, and charting a career development path -- these are both appropriate for the operational mentoring relationship.

Human systems mentoring includes providing a safe place for rising generations to be vulnerable as mentees and learners, and supporting the development of family members into mature and confident individuals who understand where they fit in the family business system. This is also a place where a mentee can learn about and discuss the unique challenges of coming into a business as a member of the owning family.

Up to this point, we’ve been talking about the mentoring needs of family businesses, rather than the mentors. Through our research we’ve discovered that mentors can come from several categories, and there may be some overlap among functions and persons. For instance, the legacy mentor is most likely going to be a family member, and that family member may also serve as an operational mentor. In another family the operational mentor could be a non-family member from within the business or from another business. Depending on an individual’s needs, and the experience and characteristics of others in the family, there will not necessarily be a one-for-one match of a mentor for each of the three areas of need.

While there are numerous factors that contribute towards a well-executed succession plan, the learning relationships in your family business are foundational. Ensuring that the mentoring needs across all three areas are met will contribute greatly to next generation learning and development. Intentional and thoughtful planning are key to helping you and your family realize your goals for your family, your business, and successful transitions.

As part of our ongoing research we will be implementing a survey to learn more about the challenges family businesses face when it comes to mentoring including: establishing new programs, questions about existing programs, and finding mentors. The data we collect will help inform the programs and tools we develop. This survey will be distributed to hundreds of family businesses across the United States - contact us if you want to receive the survey. We will share our full report with participating businesses.




January 2019 Current Thinking Column

Tuesday, January 15, 2019

In the following blog entry, Bill Roberts starts the year in the right “direction.” As he notes, having clarity about your destination is a key to your destiny. In a family, a shared vision is critical to harmony and prosperity.

A Shared Vision: A Powerful Family Business Planning Strategy

by Bill Roberts, CLU. ChFC
Aspen Family Business Group

We often meet with families who have embarked on a transition plan that has proven not to be the destination they intended. Whether it was a plan that was not well thought through or family issues created obstacles that later proved insurmountable, the ultimate effect is adding another negative number to the already poor family business transition statistics.

This journey might be likened to embarking on a vacation with no particular destination in mind, just a vague idea like saying “I want to go to Europe” vs the more definitive and well thought out “I want to go to Italy, particularly spending 3 days in Rome where I want to explore the historic artifacts of the city.” Add the fact that the family does not agree on the destination, and battles ensue.

One of our fellow advisors likens it to an experience almost everyone has seen in opening the MapQuest app. As we all know, after the map populates, the next icon we see is a little blue blinking spot, identifying our location. Only then can we enter our destination and see an array of paths to get to our desired point. It is foundational to a successful plan: in planning a family business transition the family must first agrees on its “location” and its destination.

What do I mean by location? Advisors often begin their discovery process by asking the family to identify the problems they wish to solve. You will be asked for your objectives in the process, “where you would like to be at the end of the process?”. All of these are good questions and certainly are ones that need to be addressed, but is this the line of questioning that leads to successfully identifying the family’s vision of the future for the family as well as the business?

As the client is describing their situation and desired solution, we as advisors are thinking about “how” we can solve the issues for the family. What solutions from our experience will magically solve all the client problems? How might we minimize taxes, maximize value to the client, move assets to the next generation all commensurate with the client’s objectives? The clients, and we as advisors, are frustrated when our clients do not follow through with our brilliant strategy or arrive at the closing table to sell the business. Instead, they push back from the table and walk away from the sale.

Maybe it was an across-the-bedroom conversation between the client and spouse the night before signing documents or closing a sale where the statement by one or the other is made....”I am not signing those documents, that is not my vision of the future!”

What clients and advisors have fallen victim to is what has been described as “below- the-line” planning. If you would, imagine a blank sheet of paper, across the middle draw a horizontal line. Below the line write the word “How”. Above the line, write the word “Why”. Advisors are trained to think in the “How”, it is why we go to solutions as an answer to our client’s issues. But study after study has shown that the “How” is not where most of us make our decisions. The “How” tends to be unemotional, fact based, but most of us make the big decisions in our life in and from our emotions. The phrase “Emotion is the Master and Logic is its Servant” has proven to be true over and over again. Our emotions and our values.

The natural question must then be, where does “the Why” come from? What really motivates you our clients to move forward and implement the strategies presented to you? What could possibly align all the disparate parts of the family and business into an agreed upon path?

My partners in the Aspen Family Business Group have found in their practice that at the heart of the alignment process are the family’s core values, those values that have been passed down from generation to generation before them. In their studies, the family values are the way a family assesses its issues and makes decisions when faced with monumental tasks like the transition of the family business.

A not so surprising discovery is that husbands and wives often come from a different set of values. They come from different families each with their own set of values. Without clarifying these differences, it can lead to a halt in the planning process or one or the other killing the solution proposed. Therefore, it is essential to understand and explore both spouses’ core values and how they differ early in the planning process.

An example might be helpful. My wife is an “equal” person. By equal, I mean in the legal sense of the word. As our two boys were growing up, leading up to Christmas morning, she kept a very detailed list of what she had spent on each of them. I can promise you that on Christmas morning we would have spent within pennies of the same amount on each. Fast forward 20+ years later, we have a son who is successful in our business, while our other son has taken a completely different path and is a pastor of a church in Sheffield, England. Two completely different situations financially and other ways.

Recently we were contemplating an update to our estate plan. We were driving to Aspen for a weekend with friends. As we started up I-70 west of Denver, we started a discussion of our estate plan update. My wife started the conversation with a “shot across the bow”, “you just don’t agree with me on how we should pass our assets to our two boys and their families.” Coming from my world, I knew we were in for at least a three-hour discussion!! Why, because she is an “equal” person, and I am an “equitable’ person. Three hours later, driving into Aspen we had come to an agreement that both of us could live with because we have a shared vision of what we want for our future generations’ legacy. But it was an arduous journey!!

Now, let’s play that out in a family business situation. Second generation business, four children, only one of whom is involved with the family business. G-2 is planning a transition for the business to the next generation. He comes from a core value that only children working in the business at a management level should own stock in the business. His wife, however, comes from my wife’s perspective, that every asset should be divided equally including the stock in the family business. Clearly if this value difference is not identified early in the process, one or the other will not have commitment to solutions that do not recognize the two sets of values. The advisors’ job is then to bring alternative solutions that satisfy both of the core values of mom and dad and bring alignment to their planning.

Hopefully you are seeing a pattern, core values are the filter that family businesses use for decision making. If they are aware of the core values, they can address their “why”. So often we observe different perspectives and different views of the future with different family members. Knowing and understanding the “why” is an important factor in helping families overcome these differences.

We have found that the key to bringing alignment is developing a “Shared Vision” arising from the shared values of the family members. The Shared Vision might be “we want the family business to remain within family ownership for at least the next two generations” or it might be “the next generation needs to pursue their individual passions but will be backed by the resources of the family.” These are two completely different visions for the future of the family and its assets. Having identified and creating their Shared Vision gives the family an excellent chance to accomplish their goal.

I liken the Shared Vision to “a lighthouse on a hill”. Once the family has identified where it is located and where it would like to be, they can begin to identify the winding path to the destination. More importantly, the family can identify the potential obstacles in their path. Such things as an estate transfer tax that could destroy the capital needed by the business to grow, or an addiction afflicting a key successor that could create mistrust among siblings, or a coming economic downturn or change in technology that could destroy the value of the business. All the obstacles become more apparent once the Share Vision is identified. Once identified, the family can begin to address strategies to deal with the obstacles.

A question that families ask us is “how do we identify our family’s core values?” We have worked with a company in Massachusetts that has done the research to develop a questionnaire that identifies the core values. The Legacy Group, led by Todd Fithian has been a valued partner in our work towards honing families in on their values and value differences. The company has questionnaires that are addressed to husband and wife, children of family businesses, questionnaires that can be used by partners in business, all focused on the subject of their core values around transition planning.

One further powerful use of the Shared Vision is to communicate the Vision to all members of the family’s planning team, attorney, CPA, financial planner, insurance professional etc., all benefit by knowing exactly where the family envisions itself 20, 30 or 40 years into the future. In our experience, it keeps the advisors focused on strategies that lend themselves to accomplishing the family’s Vision rather than strategies that represent the “how. “This saves time, professional fees and ultimately frustration with the planning process.

If your family has taken the time to identify your family’s core values and used them to craft a Shared Vision of the future, you are well on your way to a successful transition. By clarifying your “why” and forming it into a Shared Vision you have the tools to identify the obstacles in your path and using your creativity to overcome them. The result is having a plan and a path to your Shared Future. If, however, this process has not been identified in your transition planning, please reach out to us for further clarification and assistance. We would be happy to assist.




October 2018 Current Thinking Column

Tuesday, October 23, 2018

Matter Into Mind Into Matter

by Joe Paul
Aspen Family Business Group

As every flower fades and as all youth
Departs, so life at every stage,
So every virtue, so our grasp of truth,
Blooms in its day and may not last forever.

I remembered these words from Hermann Hesse about change when I was thinking about the last stages of my career and the last chapter of my life.

I was thinking of these issues because my partners and I are developing a plan for the continuation of our practice when we’re gone. Not surprisingly my own part of this journey takes me to many of the same issues our clients experience when thinking about succession. I find that I am revisiting ideas that have shaped my thinking in my practice.

My partners and I have created an ecology of data, information, knowledge, and wisdom. Each partner has a cadre of ideas that have co-evolved over decades of work. These four aspects form most of our intellectual capital providing effective tools for us working with our clients.

Knowledge can be communicated, but not wisdom. One can find it, live it, be fortified by it, do wonders through it, but one cannot communicate and teach it.  - Hermann Hesse

I’d like to share with you a concept that forms the core of my beliefs. Human beings evolved for the purpose of creating consciousness.

The evolution of consciousness happened in similar ways as the evolution of biology. Ideas compete for mind space the same way animal species compete for territory. We’ve evolved to eat matter to feed and nourish our mind and then once satiated in turn create new or different forms of matter. Matter expressed is both poetic and practical, like bees cross-pollinating we help our clients develop new ways of thinking.

My clients tell me that helping them articulate the purpose of their life in one sentence is the most beneficial outcome of my work with them. The purpose I define for myself is to create experiences that bring people and ideas together in ways that serves the common good.

Futurist Ray Kurziwell points out that technological evolution was almost flat from the Stone age to the Industrial age. Since the Industrial age began, technology has evolved exponentially. In 2029 the pace of the evolution of technology will, according to Kurziwell, be vertical, the problem is we don’t really know what that means. For ourselves or for our clients.

In a conversation I once had with a client we spoke about the future of his company, "The technology your organization depends on is going to change in ways you can't reliably anticipate, what are you going to do to prepare your company for the coming profound changes? He said, I'll just pick the people now who are smart enough to figure it out."

We're at a similar juncture in our desire to pass on what we know to our associates. In ten years we might be living in a world that is only science fiction now, and our clients who lead their companies are going to need help dealing with that world. It will become incumbent upon all of us to grasp and understand the changes that are happening. The social, political, technical and scientific evolution will take us places we've never been before. We must bear this in mind when we're offering to pass on what we know along with so much of what we don't know. Survival of our species will depend on what we learn and how we practice.

Entropy is about the dissolution of mind and matter. Evolution is about increasing complexity and growth. The choices we make will influence the form that takes. Which of these become our reality.




May 2018 Current Thinking Column

Wednesday, May 02, 2018

Timing and Transitions: Current Issues and Approaches

Editor’s Note: There are several dynamics impacting the marketplace that are effecting today’s closely held business owners as they think about their own transitions and that of the future of the business:

  • The new tax act
  • The large number of baby-boomers who are reaching “retirement age”
  • The availability of capital looking for good businesses to buy
  • The speed of change in the way we are doing business due to rapid changes in technology

Bill Roberts, describes what he is seeing and hearing as he travels the country doing private briefings of business owners in transition.

Bill Roberts
Aspen Family Business Group

There are interesting dynamics occurring in the Business Succession space. The new tax act has business owners questioning its effect on their income tax planning, the value of their business in a transition, and their estate planning documents. Unfortunately, many of the questions are still not answerable as congressional conference committees are still working out the provisions. In addition there are many questions as the current generation of owners age that arise about decisions regarding the future of their transition plans depending upon the availability of qualified successors, the future of consolidation and the expectation of another downturn in the economy.

We are involved in giving Private Briefings to owners of both family and non-family businesses. They are bright, aware and thoughtful owners all in some phase of their succession planning. The questions they are asking might very well be concerns or issues you are facing in your transition planning. Therefore, I thought I would share the questions and some of our thinking regarding the current landscape of transition planning.

From the 3,000 foot level, this is a time of enormous turnover in America’s small business. A 2015 study estimated that 75% of private businesses will change ownership by 2025. Our experience reflects activity in that space commensurate with that study. Our merger and acquisition acquaintances tell us they have never seen the buy-side activity as high as it is presently. Multiples of earnings (measured by “earnings before interest, taxes, depreciation and amortization” commonly referred to as EBITDA) being paid for operating businesses range for good businesses from 6-8x EBITDA. Some select businesses who are approached by strategic buyers pay even higher multiples. One of our clients commanded 12x EBITDA in a sale to a company in their space who wanted to fill a gap in their offerings.

One of the questions from our Private Briefings is “will this level of activity and multiples of EBITDA remain?” The answer of course is “not likely.” One very good reason is that there is a tremendous amount of cash in private equity funds and on corporate balance sheets now. As more and more businesses come to the market, the “dry powder” will eventually dry up, multiples will drop and likely only the best prepared businesses will be purchased. Even those will likely not command the level of multiples we see today. It is the law of supply and demand, as more business come to market, and the supply of buyer’s capital diminishes, fewer sales will result.

Which brings me to the question of “timing.” We field many questions such as “when is the best time to transition my business?” Or “I intend to transition my business when I retire, is that a good time?” The answers to those questions are as varied as are the situations surrounding the business. Is the business a family business? What are the family’s values around the question of keeping the business in the family? Is there a leader stepping up who could grow and run the business? If there are multiple owners, are their visions for the transition of the business in sync? There is no end to the different situations which demand much thought and thoughtful discussion to arrive at an answer. Creating a “container” for dialogue about these important issues and coming to consensus on a shared vision for the future of the business is a critical strategy for successful transitions.

However there are two considerations that exist today that make the timing an even more important question to address. One we have discussed, how long is the treasure chest of “dry powder” going to last? Do we have 5 years left in this run, do we want to be on the front end of the time frame or can we increase earnings and therefore the transition value commensurate with the risk entailed in waiting? Many economists and business leaders have varying assumptions about this question.

The second risk is unique to the world in which we now live. Is some 17-year old sitting in his or her basement creating an app or a new way of thinking or operating that will essentially obliterate the value of our businesses? We have seen multiple examples of this risk in our recent lifetime. Take the newspaper business which is struggling to remain relevant. Values have plummeted. We recently heard of a publishing company that was offered over 200m for the company and its news operation in a large city. The decision was made to pass and keep the company. Today the company is worth a fraction of that value because we do not get our news from on paper any longer and advertisers are moving away from newspaper publishers. Other more accessible and less expensive methods are available to everyone.

We think the lesson learned from both of these examples is that businesses must be more nimble than ever. Change is inevitable and the quicker we are to react and get in front of the change the more likely we are to maintain enterprise value. The second lesson is the better prepared the businesses are the more likely they are to be attractive to a next generation or to an outside buyer. The thought that we can wait to “retirement or burn out” is fraught with the danger that the business may have lost its attractiveness and consequently its value.

Which leads to the question: “What do I need to address to maximize the value of the business to my family or to a third party?” One answer is a well-run company that has the infrastructure in place to support growth. One place to begin is to have someone you know and trust perform a “due diligence” study of your business. One such study revealed that there were over 100 pirated software programs on the company hard drive. Any buyer would likely have discovered this issue and have demanded a reduction in price for the business. Another company’s revenues were dominated by one customer to the tune of over 50%. The estimate is that this one fact would cost 3 to 3.5 times the multiple of EBITDA in a sale. Generating solutions to the issues will make your company a better place to work and ready you for an unexpected offer to purchase your company.

The axiom that seems to apply to many situations but particularly in readying a business for transition is the 5 P’s of planning: Prior Preparation Prevents Poor Performance! Take the time to evaluate your business and your transition plan. If you were a third party independent appraiser, how would you grade your transition plan on a scale of 1-10. Be frank and honest, and if your grade is a failing one, take action, seek advice from your advisors. Talk to a family business consultant. If your goal is to sell, visit with a knowledgeable mergers and acquisition investment banker. Listen to their analysis of your business and then form an action plan to address the issues presented. You will be happy you did.

Bill Roberts, CLU. ChFC

Bill has recently moved from the firm he helped to found, Auctoris to Erben Associates to work with his son Korbett. This move allows Bill to continue to develop his transition plan for my clients. “Korbett, my son, is a talented advisor who, like me, specializes in working with family businesses. Together we make a unique team in working with families in transition. I am pleased and excited about the opportunities ahead of us as we expand the capabilities of our new firm to address our client’s needs.”

You can learn about my new business home at

For our Advisor friends:

We still have several places open in our program Consilience III!
Please see the brochure and let us know if you would like to join us!



February 2018 Current Thinking Column

Sunday, February 04, 2018

Knowledge Transfer: Getting a Handle on Family Legacy

Editor’s Note: Donnel is sharing important research that will help facilitate succession in the family business.

by Donnel Nunes
Aspen Family Business Group

Over the last few months, I’ve been finalizing the write up for a study on mentoring relationships between family members. Based on my findings, I believe familial mentoring relationships are very similar to the act of a craftsperson twining a handle for a basket. Where the weaver skillfully interlaces the rushes and grass to create a handle, the handle created by a mentor and protégé is woven with purposeful relationships and shared learning. In each case, a handle makes a basket easier to carry. Where a wicker vessel might contain goods from the market, the basket of the family is filled with legacy. In the case of familial mentoring, the handle provides a way for next generations to carry this legacy forward.

Just as the master weaver must learn the strands, fibers, and techniques needed to craft their wares, so must a mentor learn their craft. This month, I wanted to present a few of the mentoring fibers that are part of any highly effective familial mentoring relationship.

Highly effective familial mentors…

  • Encourage thinking of mentee: As a mentor, your job is to engage mentees through thoughtful questioning, NOT providing all-knowing direction. Skilled mentors are adept at spotting and drawing out the best in others. Lessons from neuropsychology support this claim. When people take an active role in the cognitive process of solving problems, they are more likely to build the neural pathways that will facilitate future problem solving. They are also much more likely to take ownership of the decisions they make.
    • How do you do this? Next time you want to tell someone the answer, ask questions instead. Sounds simple, but this might be one of the most challenging things you will have to learn. The key is patience!
  • Focus on solutions: The family motto from one of my cases was; “We know the problem, now let’s focus on the solution.” Once they knew the issue, they immediately turned their attention to finding solutions. Overly focusing on problems can stymie growth and creative thinking. A solution-focused mindset inspires action, creativity, and the ability to see the potential in life.
    • How do you do this? Be mindful about where you place your focus. Some problems take more analysis than others, but ultimately, you shouldn’t be spending more time on problems than you are on solutions.
  • Encourage the use of networks: In Hawaii, traditional models of mentoring view the primary role of a familial mentor to be that of a connector. The mentor’s job is to help the mentee assess his or her developmental needs and to connect them to other potential mentors who possess the appropriate expertise. One of the biggest pitfalls for family member mentors is behaving in ways that isolate younger generations from non-family mentors.
    • How do you do this? When you encounter topics that are outside of your expertise, refer-out. When you practice this in mentoring you model integrity, curiosity, and the importance of connectivity to others. You also increase the likelihood that mentees will make new connections and seek out other mentors in the future.

Whether a weaver or a mentor, the act of becoming skillful begins with curiosity. Skill evolves through sustained effort as new-found knowledge becomes a part of who we are. In my experience, effective mentoring is not something that ‘just happens.’ Becoming a highly effective mentor requires practice and a commitment to personal growth that evolves across a lifetime.



December Current Thinking Column

Saturday, December 23, 2017

Compassion Fatigue

by Joe Paul
Aspen Family Business Group

It was a standing joke in both the Mitchell Company and the family that Lenny and Fred didn’t need to talk since they obviously could read each other’s mind. They were like two puzzle pieces that fit together in such a complimentary way they were known in the community as “the brothers.” Fred knew he had a real challenge before him when his brother and business partner, Lenny, began to forget things like passwords, telephone numbers and the names of valued customers along with little symptoms like illegible penmanship. Later the symptoms would become more disabling.

However, these benign issues begin to cause frustration, resentment, hopelessness, irritability and even fear among the most senior non-family employees of the Mitchell family business. As a brother to Lenny he might protect the company yet by doing things like putting their retirement process on the fast track. But as the president of the company and the employer of over 500 people Fred knew he was ethically bound to be more direct.

Then, when Joyce, Lenny’s administrative secretary of 21 years, came to Fred’s office in tears he knew that denial of the problem would make things even more difficult for everyone concerned. Joyce’s father had died from complications of Parkinson’s Disease and she had come to the realization that with Lenny she was going to have to deal with another painful journey with this incurable disease. She could already see those who were close to the brothers trying to navigate around these complicated issues. After working with the family so long she knew that Fred would be dealing with his emotions by burying his “head deeply into the sand”.

And yet, notwithstanding that denial, she knew that he was also the best suited to protect Lenny, his family, and his company. And that is exactly what Fred did. He took on a key role as the caregiver for Lenny and worked closely with his medical team to assure that Lenny received the best care possible.

As a result, 14 years later Lenny was still involved in life. He had retired, but the progress of the disease had been significantly slowed via strenuous exercise. Ever so slowly, with the support of his family and healthcare team, Lenny’s capacity to navigate his life helped him successfully access the specialized services of a multitude of therapists including physical, speech, cognitive, exercise, a marriage and family therapist, and a social worker. His neurologist over saw all of these activities.

But Joyce also saw the toll that running the business and helping care for Lenny was taking on Fred. He was often exhausted emotionally and physically. His team at work tried to support Fred during this time as they understood how close the he was to Lenny. But his life—and the relationship Fred had with Lenny was not out of balance. This experience can be explained by something called “the Emotional Ledger” that accounts for the balance of “give-and-take” between individuals. Transactions reflected in the emotional ledger can include money, but there are many other factors such as not giving recognition for others’ contributions, harboring a sense of entitlement, mistrust, jealousy, resentment, loss of intimacy, and injustice. A chronically unbalanced Emotional Ledger eventually creates Compassion Fatigue in caregivers because they “over give” without a way to minister to their own needs. If the caregivers don’t look after their own mental health and self-care, mal-adaptive patterns begin to permeate the home and their family business.

Predictable symptoms of compassion fatigue include:

  • Friends stop coming over to visit you at home because the tension is palpable
  • Employees become distracted because they have to be vigilant about the boss’s mood
  • You find yourself looking for a fight and are cranky a lot of the time
  • You create an emotional cut off from others in order to reduce the emotional drain
  • You begin to desire isolation in many forms from others
  • You might be described as having a chip on your shoulder, or thinking the world owes you a living
  • Substance abuse is used to mask feelings
  • You begin to practice compulsive behaviors such as overspending, overeating, gambling, sexual addictions
  • Poor self-care (i.e., hygiene appearance)
  • Legal problems

It goes without saying that when we treat our loved ones with respect, compassion, emotional support, honesty and truthfulness we are investing in our relationships. When we fall upon hard times this reservoir of good will sustains us and our relationships. Yet it is still important that the caretaker find a way to keep his or her own “balance” while honoring this imbalanced relationship. Reaching back to our own “sense of purpose” and making sure we are still living congruently with that purpose is one way of assuring balance. My mother-in-law told me several times that what one requires to have a good life is: Something to do, something to look forward to, and someone to love. Being able to sustain those three things during these times is particularly important.

by Joe Paul



December Current Thinking Column

Wednesday, December 13, 2017

Views from around the world: High Growth Family Business

by Burak Kocer & Leslie Dashew
Aspen Family Business Group

We are delighted to share that the Aspen Family Business Group engaged in a study of emerging leaders in business in Turkey. Our associate, Burak Kocer, conducted the study and partner Leslie Dashew wrote a foreword on preparing the family business for the future.

Here are a few highlights of the report

  • Statistics indicate that small businesses (SMEs), which are all family-owned, are the backbones of growth, job creation and innovativeness in Europe and in the UK. This is evidenced as they outperform large-scale companies in the market in terms of new job creation and introduction of new products.
  • This is even more critical during times of economic uncertainty, which does not come as a surprise to us as family business advisors. We know how dedicated families in business are to create value and sustain it throughout generations. This characteristic becomes visible to the market with new job creation, finding new ways to compete in the market (with new products or in new consumer markets based on their core competence), which is more difficult for risk-adverse (and less agile) giant companies.
  • Thus, the economic prosperity in macro terms strongly depends on mobilizing the strengths of families in business and mitigating the potential inefficiencies, which are inherent to working as a family.
  • For example, according to Companies to Inspire 1,000 report, the fastest growing companies in the EU countries performed an amazing 3-year compound annual growth rate (CAGR) of 103% (730% for top 100 companies). Their two-year new job creation equaled 43%. These 1,000 companies hold 4,884 patents in total, almost 5 patents on average per company.
  • AFBG undertook the preparation of the Turkish version of this study and found similar results in Turkey. Turkish SMEs, all family businesses (or “Emerging Leaders of Turkey” as we named them) outperformed their large-scale counterparts in terms of 3-year CAGR of net sales (25 per cent) and new job creation (13 per cent).
  • The fact that the CAGR of overall job creation in Turkey during the same period was 3.41 per cent underscores the power of the Emerging Leaders to act as an accelerator in revitalizing the economy.
  • They also proved to be highly dynamic in terms of new investments. The strategic plans of the Emerging Leaders for the next three years indicate that 52 per cent of them plan to make a new facility investment inside the country and 25 per cent of them plan to invest abroad according to the results of our survey. This fact renders the dynamism of the Emerging Leaders even more valuable, given the sense of uncertainty in the global trade as a common theme around the world.
  • As family business advisors, we focused our attention to potential pitfalls in sustaining this amazing performance. 73% high-growth companies are run by the first-generation and a quarter of them state that they will have to come up with transition plans in the next three years. Thus, succession planning constitutes a critical success factor for sustaining this fast-paced growth performance.
  • In planning this transition, the Emerging Leaders must identify both what has made the business successful to date and scan the environment to determine new dynamics that will change the success formula.
  • Critical in this transition is understanding the knowledge and leadership skills that successors must possess in the future: often different than what contributed to success in the past.
  • The transition of ownership must be planned in a way to address the needs for control of those operating the business, while satisfying the needs of transparency for more passive owners and identifying their benefits.
  • A new governance system often needs to be put in place, which assures that the oversight, advice and decision-making processes are achieved with the greatest degree of professionalism.
  • Effective systems of communication must be established within the company and with stakeholders including family members, advisors and employees.

The business world and the world in general are more complicated and more connected than ever before. There are lessons that we can harvest from our counterparts around the globe. These studies help us see the commonalities as well as different strategies that can help us flourish. We hope you will find this work of interest. In a future blog, Bill Roberts will share some additional lessons from our program in Greece.

The 22nd Annual Women in Family Business Conference in Tucson, Arizona, is less than three months away. Register before it is too late!

Go to for more information and to register.




Design by Brand Navigation