Aspen current thinking column


Spring 2013

July Current Thinking Column

Monday, July 28, 2014

Assessing the Family in Business

By Joe Paul

“A problem well-stated is a problem half-solved.”

-Charles Kettering

What would you think if you went to a medical specialist who diagnosed you without asking questions or administering any tests? Trusting that doctor would be challenging and you would have cause to question his conclusions.

When I began counseling families in business 25 years ago, I was struck by the dearth of assessment resources specific to the issues these families were facing. However, as the field developed, individual advisors began to create protocols, and if you do a search on the internet for “family business assessment,” you can see how far the field has come. My impatience with the available instruments prompted me to draw upon my experience in neuropsychological evaluation to develop an assessment device designed to reveal knowledge gaps, differences in perceptions/assumptions, the presence of incompatible memories about the family, and areas of agreement and disagreement. As my assessment protocol evolved, I began to notice an interesting dynamic. The process of administering the assessment protocol itself triggered a change in the client family. This can be seen in the following short story: 

For 40 years, Steve worked hard building the business his uncle originally started in his garage. Steve had taken the company from a mere two employees to a 500-employee manufacturing company. A year before I met the family, a multinational corporation unexpectedly made a remarkable offer to purchase the company at a premium price. Steve and his wife, Jane, were overjoyed because it would allow them to fulfill their dreams of creating a very well-endowed charitable foundation. However, there was a dark lining to their silver cloud due to good estate planning, ironically. 

In order to manage the estate tax liability, they had transferred a significant percentage of the company stock to their four children long before the unexpected offer was proposed to them. When they began gifting processes years ago, their goal was to bequeath approximately $2 million to each child. The unanticipated growth of the company coupled with the windfall purchase price, however, resulted in over $35 million in shares for each child. 

While Steve and Jane had always wanted to provide their children with a comfortable lifestyle, it was inconsistent with their values to render their children so excessively wealthy. Suddenly, Steve had an epiphany. They would create a charitable foundation to which they would contribute $100 million. Their four children would then also contribute $10 million each. Together, the six of them would become Directors of the Foundation. After a few years, Steve and Jane would retire from the Board of the Foundation and their four children would continue as stewards of the family legacy. Jane and Steve were optimistically excited about making this offer as all four children were already philanthropically inclined.

Jane also hoped that this would draw the family closer. There was some estrangement between Steve and their only son, Jake, since Jake quit working for the company a few years back.

To the parents' great disappointment, Jake declined the invitation to join and contribute to the potential family foundation. He told his parents that while he appreciated the offer, he wanted to carry out their charitable work separately from the family. Jane was heartbroken and Steve was angry with his “ungrateful” son.

As is often the case, an attempted solution to a family problem (i.e. creating a foundation to draw the family together) ended up making the problem worse. This often happens when there is an underlying issue that fails to be addressed.

We are frequently invited to work with a family when they are at such an impasse. In order to avoid the distractions of “red herring” issues and delve into the core issues, we have developed a battery of assessment devices to make the assessment process more efficient.

  • The Aspen Family Business Inventory
  • The Aspen Family Wealth Inventory
  • The Aspen Estate Management Inventory
  • The Aspen Family Foundations
  • The Aspen Future Foundation Inventory
  • The Aspen Heirloom Property Inventory

These instruments are very good at identifying:

  • The strengths and weaknesses in the family/assets 
  • Who agrees or disagrees with whom on what issues
  • Where the information and knowledge gaps are
  • What the core issues are
  • Issues that are risky to discuss

Steve and his family went through this assessment process using the Aspen Future Foundation Inventory. With the report present to guide the private individual interview, Jake was able to communicate, for the first time, the reason he did not want to participate in his father’s next great idea. He was halted by uncertain feelings towards himself and his father, attributing the foundation experience as another instance of “being a minor character in ‘The Story of Steve.’” By this, he meant that since childhood, Jake felt his father’s finger prints on everything he did—from being Jake’s first grade soccer coach to promoting him to manager of one of the company’s plants—it all felt like Jake (and the rest of the family) were supporting actors in “The Story of Steve.”

Jake loved his dad deeply and admired the heroic way he lived his life, but the vividness of his charismatic father was tangled up in Jake’s blurry image of himself. After our private interview, Jake realized that his dilemma was not whether he would join in the foundation, but rather if he could be his own person while having a relationship with his father. He realized that he often felt like an adolescent when he had an issue with his dad, and that his “rebellion” about the foundation was just a manifestation of that. He began to see that the issue was not his father, but rather his own reactivity to his father. Jake’s challenge was to let go of his adolescent patterns of behavior and be a calm, purposeful, and thoughtful adult while dealing with emotionally-charged family issues.

During the following family meeting, much was shared. One of the most important clarifications was Jake’s new self-awareness. He said, “This morning I realized I had three versions of my own story from which I could choose to respond. I could respond as a rebellious adolescent and refuse to take part in the foundation. I could be an obedient child and just go along with everyone to keep the peace. Or I could respond as a thoughtful adult who could decide based on the merits of the proposal. When I looked at the situation from the latter story, I realized I liked the concept of the foundation. However, I have several issues that need our attention and think we should clarify our goals by developing a strategic plan for the project.” 

With this story, we do not mean to suggest that all family business problems can be remedied by one family assessment retreat, but we think when the timing is right, the process of a family’s self assessment itself can create new possibilities for change. 

The following are some of the issues that can be assessed with the instrument:

  • The match of advisor skill and expertise to client needs
  • Identify specific expertise needed by family
  • The degree of congruity in attitudes and feelings
  • The presence of a strong minority view
  • General perceptions about the level of family and business functioning
  • The perceptions of the family regarding their strengths
  • Their perceptions regarding issues that are a problem
  • Detailed measures of individual differences on all 100 issues
  • Issues where there is great difference of opinion on specifics
  • Gaps in the knowledge of individuals
  • Individual discomfort in expressing opinions
  • The general level of trust in the family 
  • The presence of serious problems such as chemical dependency
  • Which individuals think alike and which differ
  • Differences between subgroups such as males/females, owners/non-owners, employed/unemployed, different generations, branches of the family, etc.
  • Multiple administrations for benchmarking annual changes, before and after project results, developmental milestones or leadership transition, etc.
  • Predicting areas of disagreement
  • Identifying possible alliances and subgroups in conflict
  • Identify family “blind spots”

Process Facilitation:
  • Structure the initial stages of the engagement
  • Structure a series of meetings based on client identified issues
  • Allow individuals to digest family issues calmly and privately
  • Manage the anxiety of the group
  • Private individual interviews based on the person’s responses
  • Organize family retreats
  • Define issues to be addressed
  • Present issues before the group while respecting privacy
  • Provide detailed view of diversity/congruence within the family 
  • Identify problems that can be resolved and those that must be managed
  • Create projects that address identified issue clusters
  • Empower family to create their own agendas
  • Create context for issue-specific discussions with relevant people
  • Simplify the process of self-awareness
  • Facilitate dialogue between people with divergent views
  • Engage participation of less vocal members
  • Help the family confront chronic serious problems more safely
  • Allows individuals to decide how candid they want to be

Interdisciplinary Collaboration:
  • Create a common ground for interdisciplinary conversations
  • Establish cross-disciplinary case profiles for clients
  • Establish disciplinary boundaries and issues
  • Coordinate stages of engagement
  • Integrate presentations to clients
  • Coordinate sequence of specific disciplinary activities
  • Assure that all advisors have same information
  • Facilitate trust among advisors

If you have any questions about our assessment process, visit our website at


June Current Thinking Column

Tuesday, June 24, 2014

Revisiting the Painful Truth: It Must Be Heard

By Leslie Dashew

In the recent past, I had the honor of working with a new client and a client from some time back, who were both suffering from pain within the family. In both cases, each family implemented many solid business and family business practices that demonstrated their deep caring for one another. However, issues arose in both circumstances when members of the family felt unheard.

In one scenario, a family member examined the decline in business volume during this past recession and feared the family leadership had not done all that could be done. Left with good ideas that failed to be implemented during the recession, the family member felt frustrated and hurt. 

In the other situation, a rift from the past that was allegedly repaired seemed to trickle into the next generation, as younger members of the family sensed continued angst. Once again, the original issues stemmed from incomplete communication about what was going on in the business and why certain business decisions were being made. Subsequently, family members felt marginalized and threatened.

There is something about full communication that conveys respect.

If I respect your role and/or your competence, I will hear you out—I will include you in the circle of communication. If I do not feel heard or included, I feel ignored and powerless. When this threatens my well being, I may take legal action, which is often the beginning of the end for families in business.

Obstacles to Open Dialogue

There are many obstacles to having the open dialogue that eventually leads to the healing process. Fortunately, in the case of the two families, both found the courage to revisit the painful truths and acknowledge shared responsibility for the situation. The types of obstacles that can inhibit open communication include:
  1. Fear of things getting out of control—We are opening up “Pandora’s Box” by raising old issues and it may be something we will not be able to get over.
  2. Judgment—Members of the family will dismiss the concerns or issues and discount my point of view, making me feel unimportant or not valued.
  3. Feeling misunderstood and frustrated by lack of acceptance in the family.
  4. Lack of time and having so many stakeholder groups with whom to communicate.
  5. Inability to clearly articulate a point of view and stumbling over how to say what I want to communicate.
  6. Thinking we are communicating more than we are—I could have sworn I told you that!

Creating Safe Environments

Many of these issues and obstacles speak to the need to create a setting that is safe enough for participants to take the risk to be open and vulnerable. The others speak to the need to have a structure that assures good coverage of parties with whom you need to communicate. In both of the family situations alluded to above, having the opportunity to privately talk through concerns and issues with an independent advisor allowed each individual the chance to be heard without judgment and illuminated the challenges and the feelings associated with them. This preliminary dialogue reduced the anxiety surrounding the issue making it easier to clearly articulate the problems at hand. 

Safety is also a necessary component, which can be achieved by a set of ground rules. For example, it is helpful to have an agreement about what content is confidential and what information can be shared outside of the room. This helps to assure that participants can share openly without fear that private matters may become public.

Rebuilding Trust, Openness and Safety

In some situations where safety and trust have declined, utilizing a facilitator to create a safer environment is essential. A facilitator can help encourage active listening and paraphrasing, which assist in feeling heard while fostering true mutual understanding. When family members fall into old habits of impatience or dominating the conversation, the facilitator can shift the conversation back to a more balanced and constructive one. There are people who find it disconcerting to think their family needs an “outsider” in order to communicate. Under “normal” circumstances the climate may be sufficiently safe for conversation without the need for a facilitator. However, if the direct, open and compassionate dialogue that needs to happen is not occurring, then help may be required. 

Rebuilding trust requires acknowledgement of what was done to lose the trust and its subsequent impact. Approaching the situation with an open, vulnerable attitude is an important tool in building a safe, trusting environment. As my colleague Joe Paul says, “It takes courage to trust again.” Often, the most telling sign of real leadership is one who takes the risk to be vulnerable or unpopular by raising necessary issues. When others respond with compassion and a willingness to address these issues, trust can be rebuilt. 

In both of the aforementioned situations, the families felt relieved that the air had been cleared and that everyone felt heard. Concrete steps to move forward with both ideas and communication improvements will add substance to the ephemeral feelings of the day. Fears that opening “Pandora’s Box” would permanently increase distance and discomfort were proven to be unfounded. In fact, by and large, both sets of family members felt more comfortable and connected.

Boundaries that Support Openness

One of the most difficult aspects of a family-owned business is having partners or colleagues whom you might not have chosen in a non-family business. You have multiple relationships with each. You may not respect their competence or insight as much as a more “independent” colleague or partner. However, in successful family businesses, there is a respect for one’s right to be heard. The right to be heard, however, must be governed by boundaries and context. As a family member, my vision for the future of the family and its assets should be heard as part of a collective dialogue that provides a foundation for direction. As a shareholder, my interests in the business must be understood by the board and again communicated to business leadership as part of a collective perspective. The board must be governed by the “NIFO” perspective: nose in, fingers out. Boundaries must be honored. There is a time and place for every type of dialogue: it is important that in our complex family business systems, we find the right time and place.

Lessons from Consensus Decision Making

The most effective form of decision-making is consensus. Once a team assures that all parties have been heard, a decision is made through total accord, rather than by voting (when decisions are made by vote, it sometimes prematurely ends dialogue, while excluding all points of view from consideration). With a consensus model, when my point of view does not prevail, I feel confident that the rest of the group fully understood my point of view and in their collective wisdom, decided another direction was more appropriate. I trust the thoroughness of the process and respect for my point of view. Consensus decision-making provides a lesson for families in business: when I feel heard and my perspective is considered, it is much easier for me to support an outcome that might not be my choice. And, once we leave the room where we explore many different perspectives very openly, we speak with one voice, supporting the team’s decision.

The main breakdown of the process includes the following:

  1. In the appropriate venue, raise issues to be addressed.
  2. The group paraphrases the issue (sometimes using a flip chart to capture the thought) to assure it is heard accurately.
  3. All points of view are considered and the group collectively evaluates the options.
  4. A decision is reached in which all members are comfortable supporting.
  5. The team communicates their collective point of view to other stakeholders with one voice.
Many years ago, Scott Peck wrote in his book The Road Less Traveled that if you want to show someone that you love him, listen to him. If you want to effectively navigate the challenging twists and turns of the family business path, listening respectfully is essential.

See Also: 
by Leslie Dashew, Fall, 2004 AFBG Newsletter
by Terri Bennink (archived newsletter)


May Current Thinking Column

Thursday, May 29, 2014

Which Values Do You Attach to Your Business?

Motivation for Sustainability in a Family Business

by Burak Kocer, PhD

Fuat and Metin Ayhan, brothers and founders of a successful manufacturing business in Izmir, Turkey, started transitioning their company into a new period under the management of their children. In some 35 years, the two brothers had brought the company to a reputable position in the market place with long-established customer relationships. Yet two of their four children have started to complain about the way they manage the company. Ahmet and his younger cousin, Efe, have recently failed to show up to work, often times without an excuse. In due time, Ahmet told his father that he is no longer sure about pursuing a career in the company. On the other hand, Ahmet’s frequent absenteeism and lack of commitment concerned Fuat about his readiness for leadership. Furthermore, Efe’s lack of attachment to the company was equally concerning. Relying on revenues from the business, he had not developed an alternative career, yet he simply refused to take responsibility in the company. 

When we are talking about sustainability, to which the discipline of family business itself owes its recognition, we are most aptly referring to people’s motivation to stay together. During times of transition, multi-generational collaboration is fundamental to ensure that the younger generation is ready and qualified to assume more critical responsibilities. However, it is equally important to create an atmosphere in which the potential successors feel that their voice is being heard and recognized.

Having worked with the company for 8 years now, Ahmet has been complaining to his sister, Leyla, that he has virtually no control over managerial decisions. Additionally, despite all his hard work and “know-how” he has accumulated since joining the company, Ahmet’s salary is nearly equal to his cousin Cem’s salary, who joined the company 3 years ago following his college graduation. The most recent controversy occurred over a bank loan, which fueled Ahmet’s resentment toward his father and uncle. Essentially, Ahmet secured an international order from a reputable French company that required an extension to the production line. He planned to finance this additional investment with a bank loan, which would only equal a minimal portion of their balance sheet. However, Fuat and Metin refused this financing and missed the export opportunity, undermining all of Ahmet’s work.

The problem faced by the first and second generations of the Ayhan family is not unusual. The transfer of managerial control from senior to younger generations is the most critical phase in securing the sustainability of a family business. Many financially successful family businesses do not survive simply due to the lack of people’s motivation to stay together. Most likely, the sustainability of the Ayhan family business will depend on Ahmet’s decision to stay with the company. Understanding the precedents of his motivation will help us identify possible arrangements and practices that favor sustainability. 

Psychology scholars have developed various theories to analyze why individuals choose to follow certain courses of action. Particularly, the Expectancy Theory, popularized in the 1960s by distinguished Yale professor, Victor Vroom, has a great deal of practical value with its three-level approach: 

1. Expectancy: Our own perception that our effort will result in performance 
2. Instrumentality: Our own perception that performance will result in a certain outcome 
3. Valence: The value we attach to that outcome

What this three-level approach implies is that we do not bother putting effort in something, if we know there will be no performance at the end. Even if we anticipate the performance, we again are not motivated to put effort in something if we know that the performance will not bring achievement. Finally, achievement itself is not sufficient for motivation if we do not value that achievement. 

1. Expectancy:

The perceived relationship between effort and performance for Ahmet was most likely the opportunities made available to him where he could possibly make an impact on the company’s future (e.g. achievement). The business must grow to keep pace with the expanding family. Despite all those years he spent preparing for a managerial position, Ahmet still had no control over making a meaningful difference in the company. What was perceived by Ahmet as being “over-protective” was actually his father and uncle continuing the business practices with which they founded the company, including avoiding risks with rapid growth and external financing. Throughout the years, Fuat and Metin have adopted a well-known Turkish idiom as a principle: “Roast with your own oil,” which roughly translates to “Stand on your own feet.” To make sure that the company was run properly, they have tried to actively manage the company along with their children until they felt that their children were ready.

Nevertheless, the failure to differentiate between monitoring and executing has the potential to risk the sustainability of the business rather than creating a healthy environment for control. Combining these two functions also delays the finalization of transition. Corporate governance offers a useful tool to manage this issue—a board of directors. Equipped with the necessary experience, boards are there to provide guidance and monitor the performance of the employees. By identifying certain matters reserved for a board of directors according to the level of risk involved with a certain business decisions, the company could provide a clearly defined space for the members of the younger generation. 

2. Instrumentality:

Ahmet was also asking himself, “What is the difference if I could make an impact on where we are going?” The perceived link between performance and achievement disappears in the absence of policies and practices that make family members feel recognized and rewarded accordingly. In Ahmet’s case, the family recognized their children as future and equal share owners of the company. Yet the problem lies in the fact that these people were not only the future share owners, but more importantly for the moment, also employees (or managers) of the company. As such, employees are compensated with salary, but not dividends. Dividends are equal for the holders of the same class of shares, while salaries are much more complicated to shape. The consequences of this failure to differentiate the rights and responsibilities of an employee from those of a share owner may be intolerable in terms of the sustainability of a business. 

3. Valence:

Of the three prerequisites for motivation to stay together, valence is the most crucial in fostering sustainability. The Ayhan family can create structural arrangements and policies, such as a functional board or an effective compensation policy, so that two generations are able to cooperate effectively in managing the company. These arrangements could secure Ahmet’s motivation to stay with the company up to a certain level. Even in the presence of an environment where his efforts would bring high performance (e.g. increased sales) and in turn, successful results (e.g. growth of the business), he should value this achievement to be motivated enough to accomplish it. In the case of the Ayhan family, Ahmet’s de-motivation was caused by factors related to the first two prerequisites, expectancy and instrumentality, whereas the problem with Efe pertained to the third prerequisite, valence. 

To a large extent, sustainability is related to what a family’s business means to them. Is it merely a career alternative that provides good living standards? In that case, sustainability stems from the family members’ reluctance or inability to seek/maintain the same standards elsewhere. In most cases, the most powerful valence is the attachment to a family’s most valuable asset: its legacy. Carrying out a business that is perceived as a “tradition” or “defining role in society” serves as the strongest factor leading to sustainability. Furthermore, this sense of ownership is fostered by governance mechanisms in the family, such as family council meetings, which help younger generations truly internalize the meaning of what they own.


April Current Thinking Column

Wednesday, April 16, 2014

It's the Consequences, Not the Statistics!

by Williams E. Roberts, CLU, ChFC

In this historical moment, our families are experiencing what will soon become a tidal wave—a wave that is already causing overwhelming difficulty for millions of American families. Currently, over nine million Americans, age 65 and over, are in need of care on a long-term basis. It is estimated that 34 million Americans are caregivers, who provide assistance and care for someone over the age of 50.

The often untold story, however, is the emotional, financial and physical toll this tremendous task eventually takes on the caregivers. Children, most often the daughters of the elderly, put their lives on hold, sometimes moving across country to provide care for their parents. Meanwhile, they leave a family behind, causing a gamut of emotional issues for the caregiver and their family members. Already tight financial situations are stretched even thinner than before. The constant burden of care ultimately wears one down physically and is only exacerbated by the emotional and relational issues that can arise.

The emotional dimension of caregiving can be equally as impactful as the physical strain.
Deciding to remove driving privileges is often heart-wrenching on both the parent and child, who is forced with a difficult situation. Decisions about to whom and how care will be provided have to be discussed with the elderly. Often, the elders overestimate their capability to live on their own, causing conflict upon suggestion of an assisted living facility, nursing home or memory care center. These decisions wear on everyone involved and often ignite disagreements among the siblings making the decisions.

It is not that the caregivers are resentful of their responsibility to provide care for their loved ones, but the constant need to look after the elderly is physically exhausting. Emotionally, the impact of watching a loved one physically and mentally degrade can drain the caregiver. It has been estimated that it takes three years or longer for the caregiver to recover and rebuild a life once their roles ends.

In attempt to avoid this future turmoil, predetermining a game plan developed by all members of the family (including those needing the care) before the crises arises can go a long way toward mitigating the inherent stress that surrounds the situation. Providing financial instruments such as long-term care insurance can help alleviate the fiscal strain and generate options that relieve pressure on family members. New products that combine life insurance and long-term care riders are becoming more popular due to the combined benefits of these two cases—either way, the client receives a benefit. While this addresses the financial issues, the emotional and physical components of caregiving still weigh heavily on families.

There is no simple answer to this crisis. Hopefully, identifying this as an issue for families to be aware of will educate and help prepare them for a trying, sensitive situation. 


March Current Thinking Column

Thursday, March 20, 2014

Ceremony, Commitment and Intent

by Joe Paul

As family business issues become more complex, the notion of ceremony grows even more important. Eight years ago, the Smith family found themselves in chaos over ownership and management troubles. As of today, they serve as a role model for family governance. 

At the 7th annual gathering of the Smith Family Assembly, the six members of the Smith Family Council coalesce around a circle of six chairs in the center of a hotel meeting room. The six council members span two generations: three from generation-3 and three from generation-4. The remaining 18 members of the assembly quietly take their seats and prepare to observe the annual meeting of their family council. 

One at a time, in no particular order, each family member crosses the boundary of the circle of chairs. As they cross the boundary, each person repeats, “As I enter the circle of our family council, I promise to be a steward of our legacy and to always act in the best interests of our family.” 

Harold Smith, age 68 and a member of generation-3, is the Chairperson of the Council. He calls the meeting to order and proclaims, “As is our custom, we begin each annual family council meeting by hearing our mission statement and the code of conduct for council members read aloud. Cousin Ellen, would you do us the honor?” 


The power of a ceremony is derived from intent, organization and symbolic meaning along with patience and creativity. At first glance, many of us are predisposed to devalue ceremonies as frivolous rituals from exotic places or practiced by impressionable, irrational people in our culture. However, ceremonies are not necessarily religious -- they can be very practical in helping people connect with what is most important within their family system. Ceremony is used to communicate a message in a lasting manner by differentiating an object, a place, an event or person in a memorable way. We remember it because in a ceremony, the object, place, action, event or person becomes symbolic of an idea. Family legacies are collections of memories that usually stand out because of remarkable events that were either intentional (ceremonial) or accidental. 

For example, an annual tax exempt gift check that comes from your grandmother’s accountant leaves much less of an impression than that same check handed to you personally by your grandmother. Or, interrupting the normal work day by publicly displaying your appreciation for a dedicated employee with a vase of flowers rather than simply mumbling “attagirl” as you pass her desk garners more positive attention and motivation. 

And in the Smith family described above, everyone, both council members and observers alike, are more likely to feel they are a part of something serious and important because of Harold’s ceremonial way of leading. It would be much less memorable if Harold had said, “Well folks, we have a hell of a list to get through today so I suggest we get started.” 

If you are interested in being more purposeful in the events connected with your family and business, you will enjoy a recently published book called The Power of Ceremony by Linda Neale.


February Current Thinking Column

Monday, February 24, 2014

Facing the Troisième

by Leslie Dashew 

The French have a concept called "Le Troisième." It refers to the third stage of life. If we anticipate that we may live to be 90, that third stage refers to the years between 60 and 90. (On the other hand, if you think you only have 75 years, it would be 50-75). Where the first stage may be one of building capacity and gaining competence, the second chapter may be one of fully utilizing that capacity and accomplishing our greatest achievements.

What of the 3rd stage, then? Is it one of decline? As our bodies lose some of the hormones that keep us youthful and vibrant, are we destined to become marginalized as younger, sharper colleagues (or the next generation) replace our roles? Does our focus inevitably shift from making things happen to merely making our bodies function by shuffling from doctor to doctor? Or are we too consumed with grief from the loss that we unavoidably experience at this time of life?

Like so many other challenges, opportunities, and transitions in our lives, much of this appears to be a function of attitude. Do we look at past generations who lack the longevity expected of today and assume we will be gone at a young age and therefore retire? Do we have a sense of grace that suggests we can move through the next stage with security and acceptance, allowing us to enjoy what comes? Or do we "take it on" by optimizing our health, staying engaged, and using our wisdom and relationships to continue to make a difference? Or, rather, some combination of the three?

Erik Erickson, the famed developmental psychologist, referred to these later years as one of "integrity vs. despair.” Can we look at our lives and feel that we have lived by our values and thus have a sense of integrity? Or, do we feel a sense of despair that we have not accomplished what we should and our legacy is not one for which we feel pride? The resolution of this question manifests in how we choose to spend the later years of our life. Can we make a difference by using the "capital" we have accumulated to have an impact? The capital to which I refer is not only financial or material assets, but also spiritual capital, relationship capital, intellectual capital, etc. We are able to leverage these resources towards that ultimate sense of integrity.

There may be a lesson from the opposite end of life that could be instructive as we consider how one comes to terms with this final stage. In the 1970s, researchers investigated why some youngsters growing up in impoverished, obstacle-laden conditions became very accomplished, while others fell victim to drugs, crime and/or disease. The "invulnerables" had more positive self-esteem and a sense that they could impact the world, while the others felt constrained by the world and powerless against their circumstances. The concept became known as an "internal locus of control" for those who felt they could have an impact, while those who felt victimized had an "external locus of control.”

If accepting aging is in part accepting that we may not be able to do things we once could with the same physical prowess, the question becomes: Can I make a difference? Accomplish some "bucket list" items? Enjoy some activities that I did not have time for in earlier years? I recently heard of a man who was a master scuba diver, completing thousands of dives. He was still diving well into his 80s, and he only started in his 60s! The Peace Corp is another example where elders are able to actively participate and make a difference in programs all over the world. Mentoring, consulting, and sharing one's caring, concern, and wisdom all add value as well. 

I also believe there is a parallel to how we address health issues: do we feel doomed and just accept a dismal diagnosis? Or do we engage as partners in our health with a team of medical professionals/friends to explore the range of options to address the challenge? Are we defined by a diagnosis or do we see it as a challenge and opportunity to learn? I do not think we can minimize the impact of pain, disability, and loss as reckoning with them is undeniably difficult. However, we have seen people move through them to function in new and inspiring ways.

Just like we do not have to allow a diagnosis define us, I do not believe we need to let our age define us either. My 80-year-old neighbor still trims her trees in a dress. My 92-year-old grandmother helped implement activity programs for the elderly known as "The Tigers' Den." My father started his sixth business at age 90. My 70-year-old friend just bought a catamaran and sailed down the east coast for nine months with his wife. The reality is that statistically we will continually live longer and also in better health. Defining ourselves in the troisième is key. Recognizing that we may have 25-30 years beyond what used to be called "retirement age" to work with in our lives means we have the opportunity to decide what is important and how we use that time.

If integrity means living according to our values, what defines our "values?" The best way to determine someone's values is to look at how they spend their time. If they value financial security, they work hard to earn and save money. If they value helping others, they spend their time volunteering or working in the helping professions. If they value beauty, they are artists, frequent museums and/or organize their worlds in an aesthetically-pleasing manner. If they love recreation and reading, but providing for their family took precedence during one's working life, then spending their time in the troisième playing golf and reading is what is important.

So perhaps the resolution of the "integrity vs. despair" dilemma is to define that which is most important at this stage of life, believe that you can make it happen, and spend your various types of capital to do so. The so-called "Serenity Prayer" may be applicable here: “God grant me the serenity to accept what I cannot change, the courage to change what I can, and the wisdom to know the difference."

And with any luck, we have harvested much wisdom as we move into the troisième. 


December Current Thinking Column

Sunday, December 22, 2013

Musings from 35 Years

by William E. Roberts, CLU, ChFC    

Our company recently celebrated its 35th year in business.  We had a wonderful event at the Donald Seawell Center for the Performing Arts in downtown Denver.  Our guest performer from Australia, Van-Anh, mesmerized the audience with her marvelous renditions of classics from Chopin and Ennio Morricone, as well as her original works.  She also captivated us with her descriptions of her family’s history.  Her parents were boat people who escaped from Vietnam when the Communists overran Saigon.  They spent five days at sea before being picked up and deposited in a refugee camp where they spent several months before immigrating to Australia.  Both are professional musicians—he a concert guitarist and her mother a professional opera singer.

She shared stories of how her parents overcame the difficulties of starting over, raising their children in a new homeland, and beginning Van-Anh’s musical training on the piano at 13 months of age.  Her parents’ relentless desire to see her succeed was heartwarming and brought many of us to tears.

In many ways, it reminded us of the difficulties we have listened to clients describe as they tell us the stories of their entrepreneurial start and the challenges that kept them awake at night—wondering where they would get the capital to survive the start-up days, paying payroll on their credit cards, following up accounts receivable to collect checks to cover bills long overdue.  Her stories resonated because they mirrored similar difficult experiences others in the room had overcome.  It was an incredible evening.

Preparing for this event was a time of reflection.  We thought back on our beginnings, the lessons learned, the mentors who came alongside to lend a hand and teach us valuable lessons, the principles that governed us from the very beginning and the strategies that became foundational in the way we conduct our business provided a remarkable tapestry to view.  The power of this reflection for us was the humbling effect of knowing that so many good things had affected us and brought us to the celebration that wonderful evening.

In listening to families tell the stories of their beginnings, the pain of the start-up years, the courage to persist in the face of sometimes insurmountable difficulties attests to the power of the human spirit.  This indomitable drive to succeed—a relentless drive to overcome—seems to be characteristic of entrepreneurs who just never hear the word “quit.”  There were sleepless nights in our first years and voices of friends discouraging us of ever succeeding.  Somehow though, those of the partners who stayed simply pulled down their siege helmets and proceeded to prove the naysayers wrong.  

There was also a sense of fierce independence that permeated through the organization.  We see that same sense of independence in every client we encounter.  While beholden to a strong set of morals and values, there is a deep-seated desire to not be under the thumb of a company or “a boss” but instead serve their client with an unbiased view driven only by the client's values and objectives.  

We identified early in our business life the importance of the team we work with and the corporate culture permeating our office, one of teamwork and caring for each other.  We made a few hiring mistakes, but the corporate culture weeded them out when it became evident that despite talent, their self-interest was not a fit for us and they needed to be elsewhere.  We are far more cognizant of involving our team in the vetting process as we consider additional staff and it has limited our hiring mistakes.

As we begin our next 35 years, the lessons learned and the values and principles that are part of who we are will help guide our future direction and decisions.  We feel a real kinship with the families that have experienced their own travails and have come through better for the adversity they experienced.  We hope you can have your own “35th anniversary experience” as you enjoy reminiscing over your experiences and the wisdom gained from them.  It is a rewarding journey.

We wish you and your family a wonderful holiday season and a healthy and happy new year.


October Current Thinking Column

Wednesday, October 23, 2013

In this month’s column, Joe Paul takes a look at the different types of family business owners and how understanding the different sources of motivation that drive owners can impact the continued success and harmony of a family business.


Frank was excited about the upside potential of acquiring one of their competitors. He had prepared a great presentation to share with his fellow board members about this opportunity. The two independent board members had arrived early but his sister Karen was, as usual, 45 minutes late already. He was managing his anger with her pretty well as she arrived and he could finally call the board meeting to order.

During his presentation he could see the troubled look on the face of Jane, his other sister.
As he invited questions, Karen was checking e-mails and Jane was scowling at the agenda she had in hand. When Frank asked for his sisters’ thoughts about the opportunity Jane said, “All I know is that Dad would never have considered buying a competitor. He was a very wise business man and I don’t feel comfortable with doing something he never did.” Karen responded with a thumbs-up to Jane.

Frank kept his cool because he knew that he had the votes of the independent board members. But he was sick and tired of his sisters’ approach to being an owner and a member of the board. Their behavior was so consistent that he knew what they would say before they opened their mouth.

As we can see in this story, there are a number of ways to be in the role of a family business owner. In our story, Frank was in the role of “the Investor” while Karen was “the Grudge” and Jane was “the Keeper of the Shrine.”

The following list demonstrates how different the experience and motivations of family business ownership can be.

1. Operating Owner

This owner manages the family’s business. Day-to-day management issues and the requirements of the business are paramount to him or her. There may be tensions between this owner and passive owners who are more motivated by income from the business than by reinvestment in the business.

2. Governing Owner

Board member but not employed in the business. His or her interest is shareholder return on investment, supporting senior management and holding them accountable for performance.

3. Interested Owner

Actively interested, attentive and supportive but not employed in the company or as a board member.

4. The Steward

One who has a multi-generational perspective. He or she believes his or her responsibility is to enrich the most beloved assets and pass them on to the next generation. Long-term stability always trumps short-term return on investment. The purest example might be a trustee or a most trusted family advisor who has no personal ownership of equity but is dedicated to sustaining the legacy of the family.

5. Obedient Owner

Not particularly interested in the business. He or she votes as instructed by the parents or siblings who work in the business. He or she is often driven by the desire to create or maintain family harmony and often don’t really feel like an owner.

6. The Investor

Interested primarily in return on investment. The company is merely an asset that needs to be managed for profit. This owner has no emotional tie to the company.

7. The Grudge

Is an owner in name only. He or she doesn’t really feel empowered to act like an owner. He or she may frequently miss meetings and have to be reminded to sign documents, harbor ill will or have a grudge toward other family members, and may often express him or herself in a passive-aggressive manner.

8. Heritage Owner

This owner sees the company is a civic responsibility and feels a strong sense of responsibility to the community. The business is often seen as a memorial to the founder. This type of owner often resists change in the ways things are done.

9. Trustee/Owner

Has a fiduciary duty to manage the trust for the best interests of the beneficiaries. He or she must comply with the language of the trust document and be vigilant concerning the demanding ethical obligations.

11. The Chess Player

This owner’s attitude toward the company based on some injustice in the past. This owner uses ownership as leverage in the ongoing drama of the family. This owner is comfortable being in overt conflict with other owners and appears to take pleasure in being in contentious relationship within the family.

12. Hostage Owner

One who feels burdened by ownership and would sell if he or she were free to do so. This owner may have values that are not compatible with the nature of his or her business.

13. The Captive Partner

Siblings or cousins who would never have picked one another as business partners but have been made so by an elder’s estate plan.

14. Entitled Owner

Has expectations of others that is out of balance with their actual contributions. For instance, this type of owner might expect to be paid much more than they should be just because they are a second generation owner. They tend to have poor boundaries.

15. The Social Entrepreneur

This owner will say that he or she is in business in order to do good in the world and the business is a tool to do this.

16. The Status Seeker

This kind of owner uses business ownership to facilitate access to things like membership in exclusive clubs, serving on boards, being appointed to advisory positions or seeking public office.

17. The Keeper of the Shrine

For this owner, the business is a living memorial to the founder. They may be too attached to keeping everything just as it was when the founder was in charge. This resistance to change can create significant risk to the business.

18. The Padrone

This type of owner is often the founder and is like a village elder in the way he or she thinks about ownership. This type of owner may have done many things to help the employees of the company out of a sense of indebtedness to them and is often concerned about whether the successor can sustain these relationships and cope with the emotional demands of this way of ownership.

If you are an owner in a family business, you need to be clear about what type of owner you are. Many of your values and behaviors will be predicated on your type. This is especially true if you one of several partners.

You might consider an ownership exercise. In a shareholders meeting, present the following list to your co-owners. First, have each individual owner decide which one or two types best describes his or her way of ownership. Then, have everyone write down the types of owners they think their partners are and share the conclusions with the group.

Any group of owners may have differing motivations. If you know what motivates your partner(s), you can collaborate with them more effectively. And with this kind of insight about yourself and others, you can predict ahead of time where decision-making processes may get derailed because of some fundamental differences in each owners’ motivations.


  • Seek to understand your partner’s motivations before you try to satisfy your own.
  • Never assume that your partner’s motivations are just like yours. 
  • Your assumptions about your partner’s motivations may not be accurate.
  • Don’t assume that your partner is necessarily fully aware of his or her own motivations. 
  • Keep in mind that you may not be totally aware of all your own motivations.
  • Your partner (or you) may harbor conflicting motivations in your own mind about an issue. 
  • If you both have similar mixed motivations about an issue (i.e. you both feel like being a Steward and an Investor), you will tend to take a side with one of your motivations and artificially polarize with one another and take a stronger position than you actually feel.


September 2013 Column

Sunday, September 29, 2013

Seven Dimensions of Succession Planning in Family Business

When leaders of family businesses think about succession planning, typically they are thinking of who will replace the President or CEO. Some go further to think about who will own the business when the current owners are gone: succession of ownership. But we have found that transitions from one generation to another require succession in seven areas, not just those two. Any program for succession must encompass the following considerations:

1. Succession of Leadership

Organizations need leadership and effective organizations have a plan for both a thoughtful, step-by-step transition to a new leader as well as an emergency plan for an unanticipated transition.

When we think about leadership for a family business, it may be take a different form than other types of organizations. Leadership includes defining a vision for the future of the organization, developing a plan to get there and enrolling followers in collaborating to achieve the vision. In family businesses, the functions of leadership may be shared among owners and/or family members who run the business (these may or may not be the same people). Thus, transitions in leadership can be complex in that it may not be one leader passing the baton to a single successor.

The establishment of a board to help plan the transition of leadership (particularly when it is a situation where leadership will be shared) is an important tool. Often, the Board of Directors and the CEO share the leadership function. The Board, representing owners, may help to create the vision for the future of the business. The CEO is typically responsible for leading the charge.

2. Succession of Management

Leadership determines where the ship is going. Management assures that the proper steps are taken to get the ship to its destination. In small family businesses, the same person may serve as leader and manager of many functions. But oftentimes, he or she fails to step back and work on the business (i.e. leadership) vs. work in the business (i.e. management). Assuring that there is clarity of direction as well as the management to achieve it requires that succession planning be completed for all functions.

3. Succession of Authority

One of the challenges of closely held business, particularly entrepreneurial ventures, is the inability of a leader to let go of control. The leader may recognize the need to have a successor; that he won’t live forever. However, identifying a successor and letting him or her have the power and authority to take the business in new and different directions is another matter! We have found that there are two sides to letting go: first, the leader who is stepping down must have a compelling activity or project to move on to...He or she has to have roles or projects that take attention from the business he or she has led. Second, there must be a trusted successor whose knowledge, competence and values give the departing leader the confidence that his/her “baby” (the business) will be well cared for. Then—and only then—will authority be transferred. The presence of a trusted board of directors who will also be overseeing the successor helps as well.

4. Succession of Values

As alluded to above, for leadership succession to occur, a successor must demonstrate that his or her values are congruent with that of the predecessor. For example, if I have taken good care of my employees and they have been loyal to me and helped me build my business, I want to be sure that my successor places the same importance on caring for employees. I will not turn over the control of the business otherwise. If I believe that my success was due to micro-management of customer relationships, I will expect my successor to have that value as well.

One of the challenges we see between founding generation leaders and their successors (especially when the successor is an offspring) is a difference in value placed on “balance of life.” Entrepreneurs are known to be workaholics; their offspring often resent the absence of parent(s) because of the business. When they have their own families, they strive to have family time as well as business time. We often hear founders complain that their kids will ruin the business because they don’t work hard enough. Having a thorough dialogue about the values that will guide the business going forward and having the opportunity to observe some non-core values change and not destroy the business is essential to successful succession.

5. Succession of Knowledge

One reason leaders can’t let go is that they feel the successor doesn’t know enough. How can the successor be trusted to care for the business if he or she has not developed the knowledge and skills the founder had acquired while building the business? Frequently, the out-going leader is wonderful at building a business, but often not great at the “maintenance functions” such as planning and teaching. The next generation may have learned a lot over time, and have gotten formal education that helped, but the transition of knowledge and wisdom from elders may have been spotty.

It is critical that the succession planning process include an assessment of what competence and knowledge a leader will need to take the company where it is going rather than where it has been. Further, documenting what knowledge the elder feels is critical and developing a curriculum to assure the knowledge is transferred must occur. Finally, the younger generation must have clearly defined benchmarks that demonstrate the acquisition of required knowledge and skills to earn the trust of the prior generation of leadership.

6. Succession of Relationships

The transition also requires that key relationships be turned over to successors. Customers, suppliers, employees, owners and advisors must all see that the successor is truly in charge and leading the charge. If he or she is “President” in name only, the relationships will stay with the predecessor and the transition will fail.

The transition is a gradual process that requires effort both on the part of the departing leader as well as the successor. The successor will have to earn the trust of all of these stakeholders, which will be facilitated if the prior leader fully supports him/her. When a supplier makes a call to the founder, he or she must say, “Jane is now President and is handling the decision making in that area,” rather than falling into the habitual behavior of making the decision.

There is a loss experienced by those letting go of power, identity and relationships as one steps out of a leadership role. That is why it is so important to have the next stage of life designed to be interesting and engaging.

7. Succession of Ownership

Finally, succession of ownership is another component of transition from one generation to another. If this transition has not been considered many years prior to a transition happening, tax consequences may make the other transitions very difficult. Family relationships are often impacted by “who gets what.” If the business represents the largest asset of the current owners, there is often in inclination to share ownership with the next generation in the business as well as those who are not in the business. This can lead to sibling power struggles and frustration for all.

If the ownership transition is not structured well, the outgoing leader may not have sufficient capital to sustain his or her lifestyle, or the successor may not have a business sufficiently capitalized to continue successfully. There are many considerations and strategies that can lead to successful succession of ownership, which accountants, attorneys and financial planners address as they organize the business and plan for these transitions.

Planning Succession

These seven dimensions of succession planning should be addressed in a process that begins with a vision: what is the future that family envisions for itself and its assets. When the family considers this future together (rather than just the family leader), it increases the odds that the transition to the next generation will be successful. Having an open dialogue that includes the individual and collective dreams and goals of family members helps everyone consider how they can support each other in achieving individual dreams and how the family assets play into this future.

The open dialogue should be continued in exploring what talents and perspectives are needed in all roles in order to achieve a shared vision for the family and the business. Quite often, family members lack a clear understanding of the skills and dispositions required to successfully lead a business, particularly a family business. A careful assessment of talents needed and then discussion of this with the stakeholders will lead to greater probably of success in the business and harmony in the family.

Leslie will be presenting these concepts on a panel at the Arizona Community Foundation on October 2 and at the Hawaii Tax Institute on October 29.


August 2013 Column

Wednesday, August 07, 2013

Welcome to the New Aspen Family Business Group Website

Both our work and team have evolved and after 25 years it was time for us to refresh our image and update our website. We hope that you will find it easier to access us as well as our knowledge and that you will enjoy exploring our library of ideas. 

Among the changes is a new column entitled, “The Aspen Current Thinking Column.” Here, the AFBG partners and guests will periodically share new ideas and reflections with you. If you sign up for the column, we will let you know when we have posted a new paper!

We are also expanding our reach by collaborating with select colleagues around the world. Our newest associate, Burak Kocer, PhD, will work with us from his base in Istanbul, Turkey, to provide services in the Balkans, the Middle East and Central Asia. Burak has an impressive background in governance, as a professor, an independent director on several boards and as a consultant. Burak is using his prodigious linguistic abilities to help us develop new books in Turkish and English. He is also translating our existing books and newsletters into Turkish.


Are your family relationships the biggest liability that you are facing in your family business?

“The lower the level of differentiation, the more likely the family, when stressed, will regress to selfish, aggressive, and avoidance behaviors; [and] cohesiveness, altruism, and cooperativeness will break down.”  

-  Murray Bowen

In our annual AFBG Spring meetings, we invite a small group of colleagues to share new ideas and expand our thinking. In this year’s Spring meeting, we explored the topic of differentiation. The term “differentiation” describes the complex interaction of two forces in life: centrifugal force and gravitational force. Centrifugal force pushes things apart, while gravity holds things together.

Human behavior, emotions and thought processes emerge from the interaction of these two forces along a continuum that spans from enmeshed group thinking to rigid emotional cut off from those around you. Enmeshed families, where the gravitational pull is too great, have trouble allowing space in relationships and restrict independent action. Disengaged families are pushed apart by the centrifugal force and have little interaction among members. This is manifested in lack of communication, trust and collaboration.

Differentiation is also a very useful concept when applied to the study of subsystems in family businesses. We look at the family business both as a group of individuals striving for self-definition, and as a larger system composed of sub-systems (e.g. the Board of Directors, the shareholders, the successor generation, the in-laws, the employees, the management team, etc).

Differentiation relies on boundaries. An individual or sub-system that is well-differentiated is one with healthy boundaries. While functional boundaries may be permeable (i.e. allow for input from others), they are not so open that they are overwhelmed by the opinions, personalities or anxieties of others.

You are a well-differentiated individual if you:

  • Have a clear sense of purpose

  • Can separate your ideas from your emotions 

  • Do not have an excessive need for approval

  • Are able to manage your emotional state, i.e. be responsive, not emotionally reactive

  • Can stay calm and think clearly during a crisis

  • Have well-defined values and principles, which are consistently maintained in word and deed

  • Are a reflective decision-maker; thoughtful in consideration of others without caving to relationship pressures

  • Have the ability to maintain objectivity 

  • Can stay connected and civil even in disagreement 

  • Can make autonomous decisions and accept accountability for results 

  • Balance the rights and responsibilities of self and others

  • Possess the courage to make unpopular decisions for the sake of the greater good of the family and business

A well-differentiated system (or sub-system) is characterized by:

  • Clarity of boundaries, agreements (e.g. shareholder agreements), consequences, roles, authorities, goals, mission/vision and ownership of assets

  • Maintaining boundaries flexible enough to allow for the inflow of information, ideas, skills, etc.

  • The ability to be independent and stay connected to the rest of the system (communication processes, clarity of information flow)

  • High trust/low anxiety/open communication and sharing of knowledge, creativity and appropriate level of risk

  • An awareness of and adaptation to the environment (e.g. anticipating marketplace/outside forces) 

  • The ability to incorporate increasing complexity and internal specialization in response to organizational growth

The process of development of individuals progresses from undifferentiated to differentiated. As we mature, we move from being part of our mothers, to dependent upon our mothers and families, to being able to be more independent and ultimately, interdependent. Given adequate support, individuals can become better “differentiated.”

Similarly, business systems typically emerge from the mind of a creator (think entrepreneur) and as it grows, it can become more differentiated with effective structure, clearer organizational boundaries, job descriptions, etc. We see these kinds of processes in families, businesses, trusts and partnerships. Understanding the concept of differentiation helps us grasp the complexity of family businesses and provides a foundation for facilitating their growth.

The work of the Aspen Family Business Group is about helping families to learn how to become better differentiated through:

  • Clarification of individual, family and business purpose

  • Identification of core values

  • Creation of organizational structures, boundaries and processes

  • Facilitation of communication and constructive conflict resolution

In future columns, we will show you more about how to make your families an asset rather than a liability.

Welcome to the newly defined and designed Aspen Family Business Group Website!



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