Dean Fowler, Ph.D. 

Spring 2008

Family Business Matters

eNewsletter from Dean Fowler Associates

We hope you enjoy the articles in this issue of our eNewsletter. Please consider forwarding this newsletter to others that would be interested by using the "Send this to a Friend" option above.

Women of Wealth

The Three Forces of Success

Holistic Estate Planning

Upcoming Events 

Baby boomers are retiring -- and dying -- and transferring an estimated $41 trillion from one generation to the next.

A recent report based on a survey and follow up interviews with women of wealth identified several critical issues facing these women:

1. Too often, women take a back seat to their male counterparts (husbands or significant others)  when it comes to making major wealth management decisions
2. Women recognize that knowledge is power and are committed to more financial education so that they may manage their own wealth more effectively.
3. Approximately 70% of these women indicated that they have control over their own wealth.
4. Compared with their parents' generation, women are discussing issues of wealth more openly with their own children, and taking an active role in sharing their values and expectations concerning wealth with the next generation.
5. A majority of the women interviewed are mothers and feel strongly that their children should be raised with a strong work ethic. They did not want their children to suffer from "affluenza" by having a sense of entitlement or dependence on wealth.
6. These women want to leave a legacy to their children by passing on values and encouraging financial independence by having their children earn their own livings.
7. Philanthropy and a strong commitment to giving back to society was important. They admired others for what they did with their wealth, rather than merely for being wealthy.
8. Family fairness and maintaining family harmony are central values for these women. They  plan to have their children inherit their wealth equally and they want to prevent family conflict in the future.

To read the entire report on Women & Wealth click here. 

Women of Wealth share their concerns in a recent survey

The Three Forces of Succession

In several past issues of our eNewsletter - "Family Business Matters"- I have emphasized the importance of the role that successors must take in the process of intergenerational transition planning. If successors have no voice in designing the future, the likelihood of family conflict and business failure is extremely high.  The most successful transitions occur when the successors are pro-active and embody what I have called "the seven habits of highly successful successors."

For a past article on Successful Successors click here.

To order our CD on the Successful Successors click here.

Based on my extensive work with families-in-business, it is clear to me that three forces need to be working effectively together to successfully transition the business and wealth to the next generation -- the force of passion, the force of family, and the force of legacy.

At one of our recent Forum for Family Business meetings (click here), we discussed these three forces in some depth with examples from the family businesses represented in our group.

The Force of Passion - With out passion and commitment to a career in the business, successors are unlikely to become "pro-active" and work to design their future. For many of our Forum members this includes implementing changes in the business and their respective roles to be more in alignment with their own desires and interests.

The Force of Family - If the senior generation is not committed to fostering the success and interests of the next generation, it doesn't matter how proactive the "children" are during a transition -- the senior generation has the power. Successful families create an environment of open discussion and dialog through regular Family Council meetings where the needs of both generations are integrated into a plan for the future success of the business.

The Force of Legacy - The historical legacy of family values and the particular business focus that has developed over years, or generations, needs to be in alignment with the values and interests of the next generation. One of our Forum members referred to his family business as similar to "an arranged marriage."  As he put it, you might not have chosen her, but you learn to fall in love with her.

Testimonial references are available upon request by sending us an email for more information.

To learn more about the Forums for Family Business click here. 

Holistic Estate Planning - Designing Legacies

Family Governance

In the early years of my work with family businesses,  I was often asked to resolve major conflicts among siblings or cousins who had recently inherited the family business. The estate plan went into effect, and litigation was on the horizon. I was asked by the estate planning attorneys to mediate a family solution to avoid a costly court battle and the inevitable fracturing of the family.

In fact, the opening story in our book Love, Power, and Money is based on a composite of several real cases where the siblings had reached an impasse and could not agree on the future of the business based on conflicting needs, divergent strategies, and very different assessments of who should be President.

Unfortunately, too many estate plans are designed without any input from the beneficiaries of the plan. Do the siblings working in the business really want to be business partners? Do they share a common vision?  How about the inactive siblings? And what will be perceived to be fair?

Based on these early experiences resolving conflicts among shareholders, I found a better way -- a holistic way -- to deal with estate planning issues.

Why not "mediate" the estate plan before the final draft is written? 

Why not invite the adult family - the parents and the adult siblings - to discuss their goals and objectives and then design a plan for the future that makes sense for the whole family as well as the needs of the ongoing business?  By discussing potential conflicts in advance and finding common agreed upon solutions now, we minimize the risk of future conflicts and a catastrophe in family relationships.

Holistic planning not only addresses the transition of tangible assets and business interests, but has the advantage of also addressing the "soft-side" issues of family culture, values and the family's legacy.  We explore diverse family perspectives on issues involving individual needs, family values, business objectives, and the ownership and governance design for the future.  We provide a framework -- what we call "Designing Legacies" -- for a discussion among all generations of the family about the future and how that future should be designed to meet the goals and objectives of the both the family and the business.

To learn more about our holistic approach to "Designing Legacies", click here.

To read an in depth article on Holistic Estate Planning,  please click here.

Please call us at Dean Fowler Associates 262-789-7367 to discuss Holistic Estate Planning or email us by clicking here.

_________________________ 

Upcoming Events Of Interest

• Forums for Family Business meet every month for a half-day. Membership is limited to family managers, presidents, or owners and non-family executives in family owned businesses. Please call if you would like to be invited as a guest  262-789-7367 or send us an email.
  
• SFSP Financial Planning Day - May 14th - Dean Fowler will be a featured speaker dealing with the emotional dynamics of family business planning at this Milwaukee conference.
• Family Business Symposium - October 8th  - Mark your calendars now for this Wisconsin Symposium. More details will be available later in the year.
• SIFMA Small Firms Conference October 15 - 17 at the Marriott Harbor Beach - Fort Lauderdale - Steve Riege will be a featured speakere at this conference dealing with Assessment of Family Businesses. 
  

• For additional information on any of these events please call us at 262-789-7367 or send us an email.