Family Businesses Aren’t Dysfunctional. They’re Disastrous

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week J gos and special guest Kathy Carol talk about family businesses with Jay asserting that they are even more combustible than most people realize and with Cathy offering some smart coping strategies we start with Cathy explaining how her own experiences in a family business propelled her to write a book hug of war and to become a family business coach why are family business is so difficult well says Kathy it's because you're trying to combine a family mindset with a business mindset which she says is a little like living in socialism and capitalism simultaneously of course she says it also has to do with mixing love and money you're just going to get Sparks and with the brutal challenge of transitioning from one generation to the next when every decision can feel like a repudiation or rejection still it was that stew of anxiety resentment and trauma that helped Kathy find her calling which is to help others do in their family businesses which she could not in hers even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which magazine named the best newsletter for business owners and which you can subscribe to for free at 21h hats.com where you can also find trans scripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast are Kathy Carrol a family business coach and author of hug of war and J goz CEO of the gos group whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home the episode is titled family businesses aren't dysfunctional they're disastrous before we get started I want to tell you about an upcoming event that you should know about it's the great game of business conference this year's theme is navigating an uncertain future which I don't know seems kind of timely to me as always the conference will focus on how you engage and educate your staff to build a company culture where employees feel valued and where owners don't have to solve every problem going back more than 15 years I've been to this conference more times than I can remember and I've seen some great speakers great presentations great discussions I've even led a few of them but here's the thing that's not why I love this conference I love it because it attracts an amazing array of entrepreneurs and business owners I've made countless friends there and I've learned so much from the willingness of great game businesses to share their Journeys The Good the Bad and the Ugly this year's conference is in arlingon Texas it runs from September 10th to 12th you can get more information at Great game.com but if you do sign up be sure to use the code 21 hats that's the number two the number one and the word hats all run together which will get you $150 off the list price and now on to Today's Show welcome Kathy and Jay it's great to have you here um maybe we could start Kathy with you telling us a little about your own experience in a family business I'd be happy to uh I actually grew up in a family business my grandfather was the original entrepreneur in our family and to be honest there was a lot of drama in my father's generation so when I graduated from school I went corporate for 20 years started as an actuary got an MBA spent 12 years in the travel industry then I'm sorry I got to stop you was that a deliberate decision to get as far away from the family business as possible is that what you're telling us uh yes Lauren that is exactly what I'm telling you I wanted to make sure yes uh you you are ding right um so anyway in 2009 I was mid-level executive at United Airlines and uh sort of like the Godfather my father sucked me back into our family business uh and I was really reticent about doing it I had some concerns at a professional level I had some concerns at a personal level uh but uh net net I decided to give it a shot my siblings and and my mother were supportive um and it was a really interesting experience um to say the least that's how I got in tell us a little bit how how it went so my father and I are opposites at almost every level um if he's about privacy I'm about transparency if he's about um disruption I'm about calming uh if he's about raising your voice I'm about Whispering just we are sort of on the opposite ends of everything so as you can imagine uh the tension that we experienced when we worked together was pretty real um and of course at the time I thought I was absolutely right and he was absolutely wrong uh and I was bringing in the counterveiling energy that was needed in order to make the business function very very well um my father's really strong at marketing I was really strong at finance and operations um and so we just buted heads uh throughout the entire three years that we worked together Kathy if I can stop you for one second could you tell us he brought you in because he felt he really needed your help right and he pretty much gave you the key to the business and you kind of turned it around if I'm remembering your book correctly am I right you are right yeah he needed some professional leadership in the business so a little bit of background about the business it's a rodeo equipment manufacturing business we make ropes and Saddles uh and training equipment for team Ropers which is one of the eight competitive Rodeo Sports and my father got into it uh shortly after my parents divorced and everyone in our hometown sided with my mom so my father kind of reinvented himself self as um not the gentleman uh Country Club golfer but really more the cowboy and fast forward a few years uh his new close Cowboy friends were running the businesses and super talented very bright people and didn't have formal business training and the businesses weren't thriving so he uh looked around and said I need to bring in professional manager uh and decided to bring me in sort of a side story that I don't mention in the book is that he hired a recruiter to find a um a professional leader and the recruiter ended up hiring me and my father paid the recruiter $75,000 to H God bless those recruiters yeah wait how old is your father at this point during the story that when he brought you in uh that's a good question so I would put him in his mid 70s at that time okay so there was clearly also a succession thing that he had a problem with it wasn't just he needed professional help he also he's in his mid-70s he knew that he needed to do something for succession he did yeah he did it's a good point um yes so that's that's how I joined the business and then Lauren remind me the question that you asked because I think I got off track well I was asking you about how why you were brought in and the business was struggling a little bit you uh straightened things out and it started performing much better but then you ran into a problem with your father after that yeah I mean there had always been tension in the relationship but what really started to get South is when we had done a series of strategic planning sessions and uh he was involved in every strategic plan and bought into what we were doing we were executing on the plan and suddenly the general managers who reported to me called me and said you know your father just told me to do the 180 degree opposite of what we decided in the Strategic plan and I said wait what and uh so I'd try to sort it out and then another couple weeks would go by and the same thing a different general manager would say oh your father's telling going to do the opposite of what we had all agreed to do and this kept happening week after week so after a few months I said I think it's time to talk to my father I got on his calendar we actually met and I said hey you've been talking about wanting to spend more time golfing more time with your wife uh my parents said divorced obviously and he remarried um and I'd like to help make that happen let's talk about what success looks like and then you can hold me accountable to results and he said are you asking to be the CEO and I was my title was president and Chief Operating Officer and I said no no my title doesn't matter I just think we're confusing the team because we're speaking out of two leadership mouths and we need to really align uh with one strategy to support the execution and he said absolutely not I am the leader of this business and everybody needs to know it and that's when I realized there was no room for me anymore and I stepped out of the business which was Soul crushing to be honest cuz I had really built an identity around being the family hero you know like my siblings were really keen on me leading the business uh most of them at least because they saw their inheritance slipping away and they felt confident I had the skills um to help support uh a more productive outcome in the in the family business and turns out the turnaround that we put in place was successful um but not from my father's perspective it was you know my father I think what was far more important to him than profits was having a relationship with his friends and I think what happened was two things first his friends started to call me a lot more than they called him they were getting the leadership and the support that they needed so uh they really didn't contact him and that challenged his relevance and his identity uh and I think it triggered the uh memory of when he got divorced and everyone in our hometown sided with my mom and the divorce and this time all of his friends were siding with his daughter and that was too much for him to Bear now whether that's actually true or not I don't know it might have been a sense that he felt I don't think it was true I think he he still has great relationships with those folks but then the other thing that that took place was related to me because when I was leading the business my mindset was I need to lead this despite my father to make it successful even though he's going to do everything to mess it up so every time the phone rang or an email came in my mindset was H what does he need this time which is really not a very good uh partnership mindset with the CEO and the full owner of the business so my ego was out front I was in my own way and it actually took me many years after I left the business to to be able to see that how did the business do after you left well Lauren that's a good question um my father terminated every single person that I hired wow and the business kind of slipped back to where it was before sort of bumbling along some better years some worse years but really not not thriving the way it had the potential to thrive does it still exist it does it does and I'll be honest I don't know much about it these days uh for one important reason my father is actually suffering from dementia and so he doesn't have the cognitive skills to lead the business uh he doesn't have the cognitive skills to communicate about business it's Advanced enough that I don't think he even remembers that he owns them I mean occasionally he'll remember me when his wife says look who's here it's your daughter Catherine and then he'll say hello Catherine and then he'll encourage me to talk to his wife so it's a a a pretty Advanced stage of dementia um so he doesn't provide us any information so I guess two questions one what did you take from this experience what did what what do you think the lessons are and two how did you make the leap from that to being a coach for family businesses uh so first question gosh I learned so much it's even hard to to say in a simple podcast um I think at the at its root I think I learned that family business leadership is Double Black Diamond hard compared to leadership in a in a corporation without family members and it's hard because all of my childhood nonsense was in the way you know I was in my mid-40s at the time when I was leading the business and all my childhood injuries were just as alive then as they were when I felt them in the first place when I was a kid so I think it creates an incredibly emotionally complex Dynamic and when you think about family business you're really Crossing two of the most emotional things on the planet love and money and when you cross love and money you're just going to get sparks you're going to get a ton of emotion and the Neuroscience shows that when we're flooded with emotion our executive skills really diminish we don't have the same capacities to think in Creative innovative ways when our our brains are flooding with cortisol and adrenaline and I think that happens quite often in a family business now there are some family businesses who don't suffer all those challenges but I want to meet who those people are because I think most of the ones that I'm familiar with uh really face a lot of the challenges I think this another thing that I learned was how I lived in a story of being innocent and pure-hearted and well-intentioned and I think that I still think that I am but the reality is is my behavior didn't line up with my self-image and it's so common for us to live in these uh innocent lamb stories about ourselves when our Behavior doesn't actually demonstrate that um and that took me a long time in a lot of humility and and soul searching to acknowledge and recognize so those are probably two two of the biggest reasons and probably the perfect segue into why I got into this work um when I left my father's business uh I had this newfound confidence that I could lead and that was really exciting I'd always envisioned myself as a good number two um but not as a leader but in effect even though my father was CEO I was really running the show and um I had this this really genuine self-confidence that I could lead uh that I didn't have before so at first I looked for a business to buy but it was during was shortly after the financial crisis and there was nothing really good out there uh and eventually all those uh paths kind of dried up and I said all right what do I want to be when I grow up and I said I think I want to be an executive coach but I didn't really what that was so I applied to Georgetown University to uh for their leadership coaching training program and I'm so grateful to have been accepted because it completely changed my world and I learned that coaching is not at all what I thought it was I thought I'd get to tell people how to lead just do it way I did it that is not coaching coaches don't have all the right answers coaches have all the right questions which is a very different uh way to support the development of leaders that's true of podcast hosts too is it that's a great point yeah great podcast those that have great questions yeah um I also learned that I needed a coach when I was working for my father and I think my life could have been different if IID had a coach I think if my father had had a coach honestly I'm not sure he's coachable but my even if my grandfather two generations ago had had a coach before the coaching uh profession even existed we could have had a really different life outcome for our family so uh I started to see the value of coaching the impact it could have over Generations uh and I looked at my life and I said oh my gosh this is my calling this is what I meant to do and so I opened up my practice on July 1st of 2013 that was 11 years and two days ago and I've never looked back Jay have you ever thought about hiring a coach no well yes and no the reason that Kathy's on the podcast is I had reached out to someone I knew who was involved with the university in the neighborhood and said you know what I wouldn't mind talking to somebody that gets involved with family business and they sent me to her so I I did in fact talk to her about the whole family business succession planning thing so yeah which is the Crux of what we're going to talk about today she's given you the perspective of being the kid and walking into the family business and I have a opposite perspective of being the business owner and having the benefit if that's the right word of looking at I'd say 10 other people I've known in business over the years and how did that whole family transition thing work out and it ain't pretty I only have one story honest to God I only know one person who took over the family business it wasn't from his father it was from his grandfather and it's worked out beautifully he did some issues with his brother but they worked it out but I have six other examples of people that I've known well who family disaster nothing less than family disaster not talking to the brother not talking to the father in one case suing the the parent suing the father and the brother so um it's fraught with uh danger and that's what I want to talk about today because I think uh Kathy obviously has more perspective than I have because she's dealt with a lot of businesses so I want to just see what the options are out there well in fact one of the things that I really liked about your book Kathy is that you do have a lot of great examples uh sadly uh as J suggested of family business dysfunction you know as a coach you've obviously seen the inside a ton of family businesses can you connect the dots for us a little bit is there one main typical problem that you see over and over again are there you know lots of different problems how do how do you think about that my experience there are a lot of different problems but there are some themes that emerge um one of the most common themes and this isn't going to surprise anyone who's listening is how hard it is to actually step out of the leadership role um it's it's a real challenge to transition a business that has become a part of who you are to your children or your nieces and nephews or to anyone else uh because you're giving up your identity uh and anytime someone makes a decision that's different from how you would have done it it feels like a rejection and a repudiation of your leadership which can be really hard uh on the leader and the founder particularly the founder um but anytime you have regardless of the generation anytime you have a really strong identity attachment to the business that letting go is brutal think about it from a a trapes you're swinging on a trapes you're having a lot of fun and then somebody's asking you to let go and grab the next trapes but there's no bar in front of you there's no trapas bar to grab onto so you're like grabbing it air going wait a minute what's going on and you feel like you're falling and hopefully you fall into a net that's going to help you uh but it's it's a it can be a really um fraught time because quite often the leading generation has a a beautiful image of transferring the business to their children and it's really this romantic ideal but when it comes to rubber hitting the road that transition is really hard and so instead instead of thinking about it as a passing a baton from one generation to the next which is an event that's like a one-time moment uh it can be helpful to think about it as a transition over time um which creates the conditions for the rising generation to grow into and build the capacity to take on the responsibilities of leadership and for the leading generation to find their purpose beyond their role as leader of the business okay now that's perfect seg we I'm going to give you the complete other perspective as being a business owner I have concluded after looking at lots of businesses and being in business groups with businesses that there's three problems that are that are very common which is why and I think you'd agree with this number you've heard 80% of businesses don't get to the second generation that seems to be true right that data's been de debunked but let's go with it anyway more or less it's not 50% a large percentage of businesses if it's not 80 it's certainly not so whatever it is here's here's my uh my observation there's three problems here number one the kid is not necessarily A wir to take over the business maybe they'd be a wonderful musician a wonderful school teacher a wonderful lawyer doctor stock broker they just don't have the innate skills or mindset or stomach to run the business that and it's just the way it is a large part of Entrepreneurship I believe is genetics and some people simply don't have the stomach for it so that's the first problem the second problem is Lauren you said dysfunctional that's not even close it's not dysfunctional it's disastrous I I never understood and now I do the damage that can be done by bringing your kid in with long-term employees that have you know given their heart and soul to your company is far more than eye rolling and nonsense it could be super serious key people could leave it could be throwing a monkey wrench into the engine and then lastly I don't know that you're doing your kid a favor maybe you should find something maybe help them ease into another profession or something but like you think you're doing them a favor and maybe you're not so this is very tricky and um you spend your entire career doing business and let's say it's like you know playing basketball you've got your team and then all of a sudden you're playing basketball except you're wearing roller blades now so now while you're playing basketball you have to worry about falling and cracking your head open that's kind of what it's like you're going to go from all business to now all of a sudden you're not bringing one person and there's a fallacy you're bringing in a lot of people now you're bringing in the kid the kid's mother or father meaning your spouse your ex-spouse uh maybe the spouse of your kid maybe the in-law J you don't mean bringing them in literally in terms of giving them jobs no but they're involved yeah no I'm talking involved directly because their opinions matter and they talk absolutely my lawyer just told me a story that his he has a client his daughter worked for him and she got into a big fight with his secretary of 20 years and he sided with his secretary and now she left and the wife is divorcing him her book's filled with stories like this this isn't dysfunctional this is disastrous trying to get a square peg and a round hole so I think so my question to you Kathy is how often does this work well I I agree with everything you said Jay you summarize some of the really intense complexity so beautifully and and I'll put slightly different language on it it's when you transition to that next Generation you're wearing a parent hat and a boss hat at the same time and those two hats are in constant conflict absolutely and that's what makes it so hard because the rules of the game of the family are different from the rules of the game of the business and so you create this incredible strain in the leaders and in the all of the familyes members because you've got these two completing right answers you've got the competing right answer of business which is about profits and competition and meritocracy and then you've got these family right answers which are all about fairness and sharing and unconditional belonging and those if you think you can run a family business just like a business I think it's a fallacy especially in the early years maybe when you're a professionally run like Ford example is considered a family business the motor company right and that is run like a business there there are few I would and I don't know anyone at Ford so I'm not guessing but I think for the most part the family Dynamics are at Bay there but for most family businesses that are not at that level of professionalism you've got these really complex competing dynamics that are in play now what the Ford family probably deals with is those Dynamics at the family office level which is a whole another level of complexity because when you're talking about a family business you've got some of the same tensions as you have when you're talking about a family office because again you've got the rules of the business and the rules of the family and they are competition so with all of that said uh you know what what does it take for it to be successful it takes a lot of really hard work I think a lot of patience a lot of tolerance for um Duality for Paradox I talk about it in the book and I call it polarities it's it's two opposing truths that that coexist at the same time when you you want to pick an either or your D your brain wants to choose one or the other and the reality is in a family business you have to hold two opposing truths together at the same time and it takes a lot of uh I would say not just brain capacity but heart capacity to do it well but I want I want to hear you say it doesn't always work does it always work it does not always work it does not always okay that's all I wanted to hear because I believe that to be true and I'm going to tell you what really bothers me about books I read they'll say oh if you have family members that aren't doing the job you need to fire him that's the end of that's that's the entire analysis instead of they're your kid for God's sakes I think that maybe deserves another couple of sentences it's not that simple for God's sakes it's your kid and your kid paid the price in a lot of cases for you having a successful business you weren't home during Saturdays and Sundays you were constantly Under Pressure so there's it's it's it's it's not that simple at all that just goad and dismiss oh if you got family members that aren't working out you need to fire them oh great I mean that I mean that's just it it might be that simple but it certainly doesn't reflect the pain and angst of that whole thing Jay I couldn't agree more I think you hit the nail on the head uh and and one of my hopes and wishes with this book is that the professionals who serve family businesses will get out of this simplistic thinking just fire him if he's not perform and get rid of them it's way more simplistic than the reality is it's a complex Dynamic and the too many of the professionals who serve family businesses oversimplify that complexity and and make it well just run it like a business right and it that's that's naive in my opinion wouldn't it be nice if if these professionals that say well you just have to run if they said listen Bob I know this is difficult but I just want you to think about this are you sure this is best for your your son or daughter and on top of that let's just try to be objective here is there any reason to believe this is you're going to be able to fix it help them work through this in their head just don't go throw out a well you know Bob well if this wasn't your son would you have fired him well that's the answer okay it's just not that simple this is extremely difficult and tricky and requires both a business sense and a People sense and I believe some of the quote unquote professionals are out there could be doing better with this subject that's all Kathy I really like the line you had in the book about how working in a family business is like living in socialism and capitalism simultaneously uh because you got the business interest and the and the family interests I I don't remember if it's chapter one but very early you deal with the issue of compensation and how family members are paid are they paid at a market rate or are they paid at a family rate I'm curious do you see that as a kind of a key dividing line that separates uh one family business from another and is there a right answer or a wrong answer to how family members should be paid I love this question and this is chapter one actually so let's talk about it from the business mindset how do you pay your children you pay them a market wage duh from a mindset how do you pay your children well you know I don't want them to think I love one more than the other and I don't want to create competition amongst my children and you know they're all raising my grandchildren I want them all to go to good schools so I'm not gonna I'm just going to pay them all the same let's just pay them all the same it'll be fine and everyone will get paid the same well that works for maybe one or two generations but by the third generation it tends to fall apart part and is there a right answer there isn't a right answer because every family has to figure it out for themselves and the way I describe it in the book I say well let's get really clear about what are the benefits of um Market pay talk about it and you just ident and each family identifies what those benefits are and then order what are the benefits of equal pay if you paid everyone the same and you get everyone in the family agreeing to what those benefits of equal pay are and then you change the question from should I pay equal or pay market and you change it to how do I get the best of equal pay and the best of Market pay at the same time and it creates a completely different set of creative problem solving Innovative thinking that says you know maybe I'll pay them all the same base but then we'll bonus differently or maybe we'll pay bonus the same and we'll give different bases you know based on the the market wage and there are Infinity number of different ways you can do you can construct compensation that gets the best of equal pay and the best of Market pay or the fact the matter is many of these business owners are older the fact of the matter is they might have enough money and it might simply be a case of okay here's what your salary is going to be but the profit we're going to split up as The Inheritance your sister's going to get a portion she doesn't work in the business your brother doesn't work in the business and so you get this but then as far as well I want my grandchildren okay well they can get up the same percentage of the business is profit sharing or inheritance so it takes care of that problem and it two different things the fact of the matter is I got to think most business owners if they're successful when they get into their 60s 70s they don't have to pull as much money out and for a estate tax purposes of not paying a state tax they'd be better off paying it out to their kids but they could simply pay it out as the percentage of the family ownership that's all and that takes care of some of the cash problems of it yeah I think Jay that's a really common way to think think about it and what's interesting is that family businesses are a system and it's a Dynamics system that changes over time so now fast forward another generation and you have a son who is an employee of the business and an owner and you have a daughter who is not an employee but she's an owner right so if there aren't regular distributions what relationship does she have to this business she may be multi-millionaire on paper but she's got nothing she's got no connection to the business other than distributions and so what when you get into the conversation about all right we've generated x million in profits are we going to reinvest it in the business or are we going to harvest it for the family wrong question it's you put you set it up as a polarity you say well what's the best part of investing back in the business what's the best part of harvesting and how do we get the best of both so it um it creates an I love that example because in the short run it may it may address one issue but then it sets up the conditions for a different poity that needs to get managed and these tensions are constantly getting managed in different ways over time based on the needs of the family and the needs of the business in summary it's very tricky let me ask you about another situation Kathy I know someone who has a construction business when this happened he was probably mid-60s three sons he kind of decided to have a bake off to see who would take over uh running the business with the three sons but he decided to stipulate that the first thing you need to do if you want to compete in this Bake Off is you have to promise that when you get married you will have your spouse sign a prenup the only problem with that was that his oldest son was already married so in that case uh it had to be a postnup which proved to be extremely uh extremely difficult I'm curious if you have any reaction to that situation yeah that that actually happens quite a lot uh and it's this really challenging it's another polarity big surprise it's doing what's right for me and doing what's right for us there's a tension between me and we or me and us uh and what's right for us the family concludes is to do this prenuptual or postnuptial agreement and it it makes all kinds of sense there's tons of justification for it and that might not be what's right for me if I'm the older son and I've already been married and it creating the conditions for a postnup is massively disruptive to my marriage again it's really really hard because you've got two truths it's right to do what's right for me and it's right to do what's right for us you see how that's like a a this incredibly complex tension that's constantly being managed it's just another example of a polarity that needs to get uh addressed so how do you do it what are the upsides of doing right by me what are the upsides of doing right by us and how do you get the best of both and the problem is a business owner if you if you gave Equity away to your kids and they now are part own the business and one of your kids gets divorced you're in the middle of the divorce they're going to want to appraise the business and all of a sudden you have your future ex-daughter-in-law or ex-son-in-law their lawyer is now has rights to go look through your book so it's so that's a whole another issue do you actually give your kids stock in the company and how does that all work and then what about the ones that don't work in the company and then you've got one kid that wants to grow grow grow into your point the other one would like to take some cash out so they could move or put their kids in a better school or whatever and my whole point is is it worth it all wait wait Jay when you say is it worth it all do you mean starting and building a business is that worth it all no is it worth it all to bring your kids to go ahead and attempt to get your business to get to the second generation if they want to come in could you imagine telling them no you can't come in I think that happens absolutely does that happen Kathy absolutely yeah 100% wow and then there's the whole thing about you know being in business business requires you know you have to be devoted to taking care of customers some kids don't can't get that you got to support and respect your employees some kids don't get that and you have to have the stomach for it business goes up and down and here's an interesting genetic piece of it you know the old expression Opposites Attract well opposites get married so the entrepreneur whether it's the wife or the husband probably is independent and takes risks and you know has a strong stomach and the spouse perhaps is the opposite of that well when you have kids which one's coming out of the womb the the one who doesn't like risk or the one that thrives on risk so like there is a genetic problem here it's not like you're breeding horses where you take the two fastest horses and put them together I mean if you have three kids it is unlikely that all three of them maybe none of them are going to have the same stomach for business that the mother or the father has it's just simple genetics and that's partially why this whole thing is is so fraught with potential problems here's the family hat thing I've got three kids and you know what I'm a little worried that one of them's going to really struggle in the world so I'm going to create a really successful bat family business to create a safe place for all three of my children to thrive especially the one that I'm the most worried about and that can be really really problematic because you are undermining their ability to build their own self-confidence if they know that the business has been created to create safety for them then they live in a story of not good enough I was never good enough my parents had to give me this business in order for me to live and it's not uncommon for these businesses to go through there was there was one I write about in the book where the business got massively disrupted by technology and the son was in his 40s raising his own children and he was just so disappointed in his life disappointed in the choice that he made to join the family business uh disappointed that he was letting his kids down letting his parents down letting himself down letting his wife down he was miserable uh because he felt so much of an obligation to step into the business that the parents created for him there's another client that I know they have three kids one is really not thriving uh and he's miserable because he feels like the his two siblings can't stand him because he's not performing and delivering the same way his siblings are delivering and he doesn't know how to it's an industry he doesn't really like he doesn't know much about it he just wants to be a part of the family he wants to belong and he doesn't feel like he belongs uh and and so he's in absolute misery and the the rest of the siblings are miserable too because they're sick of carrying his dead weight which is why I say this isn't about dysfunctional this is about disaster it's Way Beyond dysfunctional this is about ruining people's lives and I know off the top of my head six families that have been destroyed where they don't talk to each other um one of them is a cousin of mine when his brother just just died a few months ago his brother didn't list him in the obituary like he didn't exist it's lawsuits never talking to them the father dies they have to have two separate um funerals because the brothers won't be in the same room together I mean this is not an uncommon story and I don't know I I doubt that there's as much out there in the world that could rip apart a family as badly as a family business Kathy you give a great example in the book correct me if I get any of this wrong but I think it's a successful serial entrepreneur who sells his businesses decides he wants to start one more specifically he wants to uh start a business for his daughter to take over um she brings in her husband his father's son-in-law and it just goes all wrong and the uh the founder wants to fire everybody especially his son-in-law but he knows he can't do it because he's the father of his grandkids and everybody's angry was there a resolution to that situation it's a good question I actually caught up with him about a year ago yes I think there was a resolution the husband left the business and the daughter left the business so I guess Jay's right yeah yeah yeah and they are going to sell the business they're going to sell it into a rollup a strategic buyer so yeah they're they're not going to go down the family business route so here's the interesting part which is right into The Sweet Spot of 21 hats an extremely accomplished successful entrepreneur might not be equipped to deal with this they have absolutely it's like they're a great golfer they're used to getting in the water in the sand except now there's a hurricane they're not used to playing golf on a hurricane this is not something that the typical entrepreneur is equipped to deal with because to Cathy's point now with your family it has nothing to do with business on some level so this is not something that that most people have the skill set the mindset and then you got your husband or wife going you can't do that well they need a new house and you might even hear from the laws of your your your daughter-in-law your son-in-law I mean it's like I said it's not one you're bringing your whole family into the business which is why I contend yeah sometimes yeah um find a different path so Kathy for somebody listening to this podcast who's thinking oh my God this is all about me I'm living that life right now what hope can we offer um I guess to start is there some sort of thought process that you suggest people go to to assess what their next step might be if they sense they're headed in this unhappy Direction yeah fortunately the Consulting uh space in family businesses has actually matured quite a bit in 30 years so there are some really wonderful family Business Consultants out there that can support families that are dealing with these complex challenges because as Jay said it's really hard and when you bring in a third party who has not just uh experience but has some wisdom to access it can be really supportive to facilitating a successful transition if everyone decides that that's what they want to do and what's beautiful about the Consulting world is that they will support the family to not pursue the family business if that's what the family wants to do as well um so I think yeah the and if you Google family Business Consultants there are a bunch of them that come up do your homework and and find the right people I I don't do Consulting I'm a coach so I'm really in The Head and the Heart and the soul of the leader what's the distinction you're drawing there Kathy what's the difference between a consultant and a coach yeah good question so Consultants are professionals who are giving people a path forward they're giving people the right answer they may do it in the form of asking some really good questions but the end game is for the consultant to guide the family towards a a solution the coach is in the space of development it's development of the leader capacities to lead in the way that they want to lead um and it might be for the leading generation expanding their leadership toolkit for the rising generation preparing for greater leadership responsibilities and I I actually do I love working with non-family Executives in a family business because they are they're witnessing this complex Dynamic and it's incredibly challenging and there are often some super talented people who have specific uh industry expertise that the family wants to leverage but they might be derailing as a leader in the business those are some of my favorite clients to work with so I would say you're doing coaching versus strategy these other people help more with the strategy as to what are the different ways you can solve this which makes perfect sense you're the people that you're dealing with I presume have made the decision we're going to pursue this this this particular strategy and help this person do that and the other people are trying to figure out what should our strategy be and maybe it's get the kids out of the family business I mean at the oversimplified level coaches have all the right questions Consultants have all the right answers that's an oversimplification that's a way to think about it well actually let me ask you a further question about that Kathy you you started when I asked you about what somebody should be thinking about if they're struggling with this and your first response was uh there are a lot of great family Business Consultants out there why did you start by recommending a consultant as opposed to someone who does what you do well because I'm shy and humble and I want to make it about me no I mean that's a good question Lauren and I'd say if a leader is really struggling with a decision then a coach can be a brilliant place to go sit in the question and and determine what is holding that person back from making it a choice coaches slow the conversation down they poke around on the emotions they try to help clients get clear on the definition of terms and they're really holding a container for the client to do the hard work I know it sounds like goofy coachy mumbo jumbo but and that's kind of how I see it Jay I think I know the answer to this question but can you tell us what's your general reaction when someone suggests to you that you hire a consultant to help you with a particular issue I have PTSD from the half a dozen Consultants I've hired over the years for whatever and I'm sure there's some wonderful ones out there but I'm also sure there are some not wonderful ones out there that will start sending you $88,000 invoices every month and um I'm sure there's some great people out there that have changed people's lives that are great but I cringe a little bit Kathy do you have any advice for how to hire a good consultant uh to me the best Consultants keep the decision Authority in the hands of the client um they can make recommendations and they can make observations and ask good questions kind of like coaches coaches has different questions the Consultants are asking more I don't know maybe it's more itic questions maybe it's more um I don't know the coaching questions are are more about the person more about the leader more about what's making it hard more about the internal dialogue the Consultants questions are more about the situation the circumstances what do they want what are their choices that kind of thing gosh what advice do I have uh I'd say interview a bunch and let your trust your intuition that you'll find the right person you made me think of what what bothers me with this whole with this this subject and it goes with with lawyers accounts everyone else any professional you hire it depends on your personality I want the kind of person who's going to spend some good time you know looking at the situation I want the person who's going to look me in the eye and go Jay I think you're kidding yourself if you do this this this this is a b this is going to work versus what I've learned like I've talk to accounts about this they don't want to lose the account and they know that if they tell you the truth you might get mad and the account so they just don't tell you they just play along and I that's a real problem for me I want someone that's that that's going to say you're being an idiot you better put some controls in for your inventory you're gonna have a problem I think it's a good point Jay I I agree that there are a lot of Consultants who are scared to speak the truth for fear of losing the job but the ones that I hire are the ones that don't need the money so they can speak the truth great and I think that's could help interviewing people to ask them do you ever tell the client that um I don't think this is going to and and see what they say I mean I I if nothing else don't be naive as in everything else to your point interview three or four of them and ask them tough questions ask them tell me about a time where you told the the owner of the business that you're wasting the time and they fired you tell them has it ever happened and see what their reaction is they might be dumb enough to go oh no I would never tell a client that okay that's all I need to know Kathy to kind of wrap up a little bit do you have a success story that you could share with us an example of some somebody who struggled a little bit but figured it out and got it right let's finish on the positive yeah yeah I do one of my very first clients uh she's just Fierce she's just phenomenal she's she was 27 when I met her and she was locking horns with both her father and her father's wife which was not her mother and I worked with her for about 18 months uh and she oh she's just a spectacular human being she is now the president of the organization she's got four kids of her own she's rocking and rolling she is taken the World by storm and I just adore this person she's extraordinary in so many ways and man it did not look good for her when we first met what did she do right uh she looked inside she looked inside herself and she got really clear on her priorities and she found some humility uh uh and she thought about the long game she's definitely playing the long game and is very clear on what it's going to take to get to get the success that she wants she's got Jay's hunger her her passion for uh entrepreneurship um and she's smart enough to make it happen and she's doing exactly that did you help it all in getting because this is really interesting to me so you you obviously helped her but was any of this did you help the father and the stepmother figure out how to work better together or was it all just from working with her was mostly working with her at one point they asked me to to facilitate a family conversation and I said that feels a lot like therapy and I'm not a therapist so I'm sorry I'm not going to be able to do that and they said the father said well Kathy I appreciate your your honesty there but we really only can use you because you're the only person that my daughter trusts and I said okay well there's another reason I can't work with you guys as a family and that is I have a real problem with your wife wow and he said well now I know you're the right person for yeah no good for you and good for him that's what I'm talking about good for you for saying that to him God Bless you that's that's the person I want to work with I ended up doing that doing that work supporting the family in that way and it was actually I think a really critical piece of the puzzle so in retrospect I'm glad I did it and I didn't I did not offer therapy I was just a facilitator on that note my thanks to Kathy Carol and Jay goz and to our sponsor the great game of business which helps businesses use an open book management system to build healthier companies you can learn more at Great game.com thanks everybody wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's l r n at21 hats.com do it now before you forget and don't be afraid to tell J what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess tharon founder of blank word Productions okay now you can leave thanks for listening everyone