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conflict resolution in family business Archives - Page 21 of 23 - David Werdiger

Family business ‘value’ and externals

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While the family business may be delivering good returns, how much is it actually worth? Often, family members are disappointed that the market value does not reflect a large enough multiple, because they are unable to look at the business as an outsider (and potential buyer) would. The first article has some classic ‘value drivers’ expressed in terms of growth and risk reduction. What I think this is missing from this model is the most…

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But I don’t want to take over!

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A common challenge for family businesses is when the rising generation have no interest in taking over. This can be especially common in sectors like manufacturing or farming which may be considered an attractive or exciting career path for younger family members to join. There are two concerns for the family members currently in control: (a) who will look after the business? (b) who will look after the customers? Both of these are important, because…

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The Most Valuable Thing to Your Children

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As a wealthy family, what is the most valuable thing you can give your children? One sure way to find out the answer is to ask (too often parents don’t bother). According to a Wells-Fargo survey of Millennials, more than 90% of children say they want to inherit their parents’ values, not their wealth. Some 84% want top sustain and build on their family’s legacy. This should be very heartening news for parents. In a…

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Family Business or Business Family?

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According to Camden Research’s recent report, succession is a greater priority for families than wealth preservation. Of the two, succession is surely the harder to achieve. While we all push cliches and statistics about the survival of family businesses over three generations, perhaps we should be broadening our perspective? A family operating business is one store of wealth for a family, and one which is capable of employing multiple family members. Another phrase currently doing…

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The Next Generation of Givers

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Philanthropy can be a great way to engage different generations in a wealthy family, and for family members to find purpose where there is no imperative for paid employment. It’s worth keeping in mind the intergenerational differences and trends in giving so that the family giving experience can be as positive as possible. The Blackbaud Institute’s report on the next generation of American giving has some useful insights. Giving priorities differ by generations, but health,…

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Conflict of Interest

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The essential problem family businesses must deal with is conflict of interest, which arises when people have multiple roles – in the business, as an owner, and as a family member – that can potentially conflict. Thinking about the issues of a family business in this way is a good path to mitigating the challenges they can bring. Establishing explicit rules is a good start, and this article covers several good ones: only put family…

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What Next?

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We’ve previously discussed the effect of increasing life expectancy on wealth transition – the ‘problem’ of the ageing family member who refuses to step aside is more prevalent than ever (the popular TV series Succession makes for great watching on this topic). Traditionally, roles within families have very long tenure, For someone who has been managing the family wealth for many years, the thought of leaving a job they have become very good at can…

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Talking about Money

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Money is one of the few remaining taboo topics for discussion, but in wealthy families, it’s something that eventually does need to be discussed. The challenge is to develop a greater comfort in discussing it. The first step towards this is to understand the reason for discomfort, and it is usually because discussions about money bring on fear: fear that there isn’t or won’t be enough, that the next generation might be spoilt by excess,…

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Rich kids relying on rich parents

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According to a Merrill Edge report, one third of “mass affluent” (mid-range wealth) Americans say their financial stability depends on their inheritance. But interestingly, this is more a result of prevailing economic conditions (markets, unemployment, weak wage growth) than the generation being brought up with a silver spoon sense of entitlement. Economic conditions for creation of wealth have been challenging for the rising generation. There are even signals of a decline in social mobility. The…

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Politics and Family

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With the recent US midterm elections in the news, there is talk of generational shifts in the electorate (which will take some time still to have a significant impact), and with the further polarisation within the US, the way political affiliations have come between friends and family members. This fascinating NPR podcast discusses how political preferences are driven by hidden moral frameworks. The nation is often described using the family as a metaphor, with terms…

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