Facilitating difficult conversationswith 2nd generation Canadian

business owners

The silent paradigm shiftin Canadian family wealth stewardship

A tax-free “gold mine” you may be sitting on

Part 1

The Silver Lining...and what it means for your family wealth.

Exclusive to private clients & professional associates of PANGEA Private Family Offices2014

Family Wealth Journal

FAMILY WEALTH JOURNAL

Family Wealth Journal

Insidethis issue

This article is based on a real family business situation. The names and

figures used in this article have been altered to maintain

family and business confidentiality.

4 2014

PANGEA Private Family Offices

52014

TRUDY PELLETIERPresident of Simply More Inc. FAMILY ENTERPRISE ADVISOR™ and Certified Executive Coach.

Trudy is a member of PANGEA’s Private Family Offices Council of 12.

Questions for Trudy can be e-mailed to: thought.leadership@pangeafamilyoffices.com

Jewellson Family’s Courage is Producing Miracles!The 2nd generation continues to resolve issues from the past enabling collaboration as a team.

Profile: Company 14M gross revenues – Manufactures a product for pipeline, oil and energy, agricultural and construction industries.

Family: George (71) - founder, wife Sally (69) – both in the business. The 2nd Generation (G2): Suzanne (45) & Kyle (44) don’t work in the business, Kevin (43) and Bernadette (41) work in the business

A family conflict in the Jewellson family prompted a call to me in June 2013. Kevin says in despair, “dad is shoving the business down my throat - it’s his dream, not mine.” Disparate goals for the future of their manufacturing business are evident. Being familiar with these types of family conflicts, I recognized that a structured approach was required to arrive at a successful resolution. Drawing from my experience in the Family Enterprise Advisor program, I facilitated what is called a ‘chemistry meeting’ attended by all family members. As a recommended step in the model designed by Jane Hilburt-Dave and W. Gibb Dyer Jr., authors of Consulting to Family Businesses, the purpose of a chemistry meeting is to introduce all stakeholders to the facilitator, educate the stakeholders regarding relevant statistics, highlight the study of experts’ philosophy in the field of family enterprises and share the processes and tools utilized throughout the engagement. Further goals of the process are to open the lines of communi- cation, to answer questions, and to address concerns in order to increase buy-in and commitment among the stakeholders.

Through the chemistry meeting the family learned about the 3-Circle model, continuity planning, and the discovery process (confidential individual interviews with stakeholders). The 3-Circle model shows there are 3 systems (family, business, and ownership) that interact with each other and, in order to function effectively, must consider a 4th system, the “whole” system. Each system has permeable boundaries impacting the other systems and each requires its own structure, planning and governance. One’s position within the system affects one’s perspective; and it’s critical to manage different perspectives.

The model shows that conflict is inevitable and, as such, well- developed communication and leadership skills are required in order to be effective.

The final step, Discovery, is a presentation of both findings and recommendations for each system. In the case of the Jewellson family, the interview revealed that each family member was harbouring some resentment and/or hurt from past experiences that had never been addressed. The interviews revealed each family member was harbouring some resentment and/or hurt from past experiences that had never been addressed. As a trained facilitator of Fierce Conversations, we call these “missing conversations”. In other words, we procrastinate and in many cases put off engaging in the conversation with the person; and instead carry it around in our head consuming our time and energy. The private conversations disclosed that there were unexpressed personal aspirations that could affect the future of the business if shared and explored. Effectively managing these complex family issues requires more in-depth conversation that goes beyond the confined questions asked in an investment policy statement.

The foundational philosophy guiding what we do at my firm, Simply More is this; Communication can resolve anything - the problem is when we stop talking. Again, more often than not, when faced with tough issues where emotions may escalate, we withhold communication, withdraw from the person or issue, and settle with a list of “undiscussables”. This thwarts relationships and blocks real communication. While the Jewellson family needed a process and guidance for succession planning, the critical first-step challenge was opening lines of communication. To accomplish this, we used a “coach approach” to increase the family’s listening levels and build trust. We introduced 7 elements (tools and processes) of Personal Mastery which moved the reactive nature of their communication style to one of responsible and responsive communication.

Our expertise creates conditions in the conversational environment, such that family members take on the “missing conversations” and engage in Meaningful Dialogue™ -- frank conversations about tough issues. By assuming the leadership role of a “coach” in the family conversion we ask big questions to get the heart of real issues. A few examples of big questions are “What are you pretending not to know?”, “How have contributed to the conflict?” and “What is the issue that you don’t want to talk about?”

| FAMILY GOVERNANCE

, Be More , Do More

, Have MoreTrudy Pelletier

Certified Executive Coach

FAMILY ENTERPRISE ADVISOR™ Certified Facilitator of Fierce Conversations®

Certified in Emotional Intelligence

www.simplymore.ca

6 2014

Asking these types of big questions gives family members and business leaders the experience of being heard, seen and understood by all. They generate new perspectives, discover their own solutions and see each other newly.

Our Discovery with the family identified key challenges in each system:

Family: Communication and Conflict Disparate vision, goals & values Mistrust

Business: Reliant on founder Lack of vision, mission, business plan and infrastructure (systems and processes) Poor communication -- no process for conflict management and decision making

Ownership: Lack of clarity about whether or not the business should remain a family business G2 has different levels of understanding about their parents’/ the owners’ wishes and plans G2 has wishes and dreams for their future (in or out of the business) that had not been shared with parents/owners

Actions and Results:

1. Our firm designed a custom 2 day family communication workshop to develop communication skills and address conflict within the Jewellson family. The value received by the family from participating in the session is evidenced in their feedback:

• “ I learned there is strength in each and every one of us; and my dad loves us a lot.”

• “ This was really positive, dynamic and engaging. My personal experience was powerful as I learned how to communicate tough issues.”

• “ Our family needed to mend some broken emotional connections. We did that; now we have more effective communication.”

• “ The truths we faced as we overcame our fears and shortcomings freed us from many unmentioned hurts/conceptions and barriers.”

Refining your game requires a deliberate decision to expand your perspectives in order to increase your self-awareness and personal effectiveness.

Trudy Pelletier, Simply More Inc.

2. We directed the family to participate in a family conference to develop a family charter. This included a shared family vision, mission, values, success statement, beliefs, aspirations and code of conduct which is now used as the guiding posts for decisions.

3. Part of our recommendation included a SWOT Analysis on the business. SWOT is an acronym for Strengths, Weaknesses, Opportunities & Threats. For this SWOT analysis the family invited employee and outside participation.

4. We engaged in a strategic planning conversation which included developing a business vision and mission. The 2nd generation continues to resolve issues from the past enabling collaboration as a team. Now each family member sees the possibility of working cohesively in the business. G2 is now executing a plan with key strategic initiatives and accountabilities.

5. We highlighted that having the right people on the bus in the right seats is critical to any business. The G2 group are currently undergoing a series of Leadership Assessments to understand the natural talent and strengths in the family. The results of the leadership assessments will be used to design a leadership developmental plan and considerations for future leadership of the family business. The family agreed to consider bringing in outside talent if the right talent isn’t in within the G2 group.

The Jewellson family is courageous! They say miracles have occurred for them as they fulfill their commitment to strengthen their communication muscles to expand the health of the family relationships, secure a flourishing business, and fulfill the legacy George and Sally have for both family and business. Simply More considers it a privilege to be a trusted advisor to this Canadian business family.

7Spring 2014

Contents Copyright © 2014 by PANGEA Private Family Offices Inc.; may not be reprinted without written permission. PANGEA Private Family Offices Inc.

is a Canadian company.

The information in the PANGEA Private Family Offices Family Wealth Journal is for informational purposes only and is not intended to provide specific financial,

investment, tax, legal, accounting or other advice to you, and should not be acted or relied upon in that regard without seeking the advice of a professional.

Your advisor can help to ensure that your own circumstances have been properly considered and any action is taken on the latest available information.

PANGEA Private Family Offices does not make any express or implied warranties, representations, or endorsements with respect to the information, processes,

products or advertisements included in this publication. PANGEA Private Family Offices is foremost a private, family wealth strategy firm serving first and second

generation creators of significant wealth with independent thinking that redefines their family wealth experience. We specialize in resolving complex family wealth

issues for global families with thoughtful guidance and insider perspective. Our purpose is to help global families flourish.

Helping global families flourish.

Publisher: PANGEA Private Family Offices Inc. Editor: Charity Slater Editorial: Declan Ramsaran Design: Joe Cordeiro

Website: www.pangeafamilyoffices.com LinkedIn: PANGEA Private Family Offices Twitter: @WealthRedefined