A Presentation By “Preserving an Endangered Species… Gordon Wusyk Of Predictable Futures Inc. -...
Transcript of A Presentation By “Preserving an Endangered Species… Gordon Wusyk Of Predictable Futures Inc. -...
A Presentation By
“Preserving an Endangered Species…
Gordon WusykOf
Predictable Futures Inc. - The Business Family Centre
If you think…
Are “OPTIONAL” EVENTSYou’re in the WRONG room!!
Retirement & DeathRetirement & Death
FAMILY BUSINESS SUCCESSION PLANNING
. . . “70% of all Family Businesses never make it to the second
generation
And 90% fail to reach the third.”
Family Enterprise in Canada• Canada’s family businesses employ 4.7 million full-time and 1.3 million part-time
workers• Total annual sales of Canada family-owned businesses: $1.3 trillion• Most family enterprises are highly dependent on their current leader• Major leadership change in Canadian family businesses
– 27% of family business leaders will retire in next 5 years– 29% will retire in 6-10 years– 22% will retire in 11-15 years
• Most have no contingency plan covering the death or the disability of their leader• Only 29% have a succession plan• Unlike US counter part, Canadian family business owners see the generation of
wealth as the primary role for the business. Keeping business in the family is a lower priority
• Source: BDO Dunwoody/ Compass Report on Canadian Family Business(2003 & Survey of Canadian Family-owned Business by Deloitte& Touche for Tax Educationand Research at the University of Waterloo (1999)
From ‘FAD’ to ‘FIELD’ of study• Research over the last 25 years provides new understanding of family business
& their issues• Growing number of family business advisors coming from a variety of
disciplines– Family Firm Institute: Founder in 1983 by 22 professionals, now has 1200
members– Certification program now available for professionals
• Clients are more knowledgeable and sophisticated than 10 years ago: – Families have access to many different educational opportunities– Families have access to many networks:
• PFI • Family Business Network (FBN)• CAFÉ• BFF• ABFI• CEFE• FFI
• Clients now expect advisors to be well informed
Source: CALU May 2005 – Evolution of the Family Business Field
All about PERSPECTIVE
The Interdependence of our Family,our Ownership and our Business
Entities
Ownership
BusinessFamily
Perspective of Each Entity
Needs / Priorities:•Strategic Planning•Market Value Compensation•Results (targets)•Profits (retained earnings)•Competent, Competitive Staff•Systems for Management & Control•Marketing•Quality Product/Service•Accountability•Regular Reviews•Solvency•Cash Flows•Entrepreneurial Perspectives•Fast, Efficient Decisions
Business
Family Perspective
Needs / Priorities:• Nurturing• Communications• Affection and Love• Equality of Affection• Individual Needs• Personal
Development
Family
Ownership Perspective
• Needs / Priorities:• Return on Investment• Return of Investment• Equity Growth• Stewardship of Assets• Reputation of Owners• Diligent Management• Timely Reporting• Responsible Board• Selection
Ownership
Neglect one…
and risk destroying the whole system
Ownership
BusinessFamily
FAMILY BUSINESS SUCCESSION PLANNING A “Multi-Dimensional” Process
Family/PersonalRelationships
Family/PersonalRelationships
Protection FromFamily Law
Protection FromFamily Law
Wealth Management“Game Plan”
Wealth Management“Game Plan”
LegalDocumentation
LegalDocumentation
CreditorProtectionCreditor
Protection
RetirementStrategies
RetirementStrategies
“Death Tax”Liabilities
“Death Tax”Liabilities
EstateEqualization
EstateEqualization
Tax Planning/Minimization
Tax Planning/Minimization
Your Family Your
Business
Charitable GiftingCharitable Gifting
IMPORTANT PLANNING DECISIONS
Are Often Made One At A Time
… But Even A Series Of What Seem To Be Quite Reasonable Decisions, Taken In Isolation,
Can Produce A Result That Is Unacceptable When They Are Combined …
What You Wanted
What You Got
The Enigma of the Business Owner
1) The Owner– ROI– Growth– Income– Exit strategy
2) The Aging Male/Female– Physiologically– Psychologically
3) The Best Employee– First in, last
out
4) The Manager– Hires– Fires– Organizes
The Four Part Personality*
The 7 F’s of Balance
Family
Fitness
Friends
FinancesFirm
Faith
Fun
The Natural Conflict…The Family
Goals: Support Family members
Rules: Informal expectations
Evaluation: Rewards for who you are – unconditional
Succession: Caused by death, divorce or illness
Relations: Deeply personal, of primary importance
Authority: Based on family position of seniority
The Business
Goals: Profits, revenues, efficiency & Growth
Rules: Written & Formal w/rewards & punishment
Evaluation: Support conditional on performance
Succession: Retirement, promotion or departure
Relations: Semi Personal or impersonal, of secondary importance
Authority: Based on formal position in the organization’s hierarchy
Conflict is healthy…Unresolved conflict is not
Roots/ Principles
• M Make Things Happen• A Achieve Significance (vs. Success)• X X out the Negatives• I Internalize Right Principles• M March to a Mission• I Integrate all of Life• Z Zero in on Caring for People• E Energize the INNER Life• R Re-align Rigorously• S Stay the Course
If you don’t have PROCESS
you have a PROBLEM
The Process1. Clarification of
founder’s dreams of the future
2. Clarify family member’s personal vision – for
business & at a personal level
3. Aligning the business strategically to support
family & founder’s dreams and goals
4. Prepare the successors5. Choosing The New Leader
6. Choosing and Training the New
Owners
7. Building the Legacy – review of estate plan
A Game Plan..
Or it’s GAME OVER
Ownership/Governance SystemLawyers
AccountantsEstate Planners
Business SystemsBusiness/OD Consultants
Family SystemsFamily Therapists
Role of the Family Business Consultant
Family Business
Consultants
JAW BONE
BACK BONE
WISH BONE
How to Contact PFI
Predictable Futures IncThe Business Centre
Suite 1211 10104 103 AveEdmonton, AB
T5J 0H8