A Shared Vision: A Powerful Family Business Planning Strategy

family business planning strategy
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A Shared Vision: A Powerful Family Business Planning Strategy

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.


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.

For more on the topic you should watch the video interview of William Roberts on the power of a shared vision.

william roberts
About the Author

Bill is a partner with Aspen Family Business Group. For over 35 years, Bill has devoted his career to the service of others in the area of wealth transition planning.    ( view bio )

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