January 27, 2021 • 42 mins
Working in or dealing with a family business can get rough and messy. In this episode of the ROI Online Podcast, author of Shift Your Family Business Steve Legler talks about the importance of creating the harmony you need to support the legacy you want.
Steve Legler was born into a family business and also married into one. He learned along the way how important good communication is for families who want their legacy to continue as the business is transferred to future generations. Now, he’s a coach and advisor who works with business families and their members to ensure a successful transition.
People work really hard their whole life to build a business and a legacy for their families. They dream about working together but forget how messy it is to mix family relationships with business. If you want your family business to succeed, Steve can help.
Among other things, Steve Brown and Steve Legler discussed:
- The reason behind Steve L’s affinity for coaching families
- The Shift Process and why can it help you excel as an entrepreneur
- The importance of all family members working together as a team
- What a family constitution is, its myths and truths
- The Family Systems Theory
- Why it’s so important to plan a transition in advance
- How Steve L can help your family business succeed
You can learn more about Steve here:
Follow Steve on LinkedIn
Send Steve an Email
Learn more about Shift Your Family Business here:
https://shiftyourfamilybusiness.com/
Read the books mentioned in this podcast:
The Golden Toilet by Steve Brown
Shift Your Family Business by Steve Legler
Interdependent Wealth by Steve Legler
Enroll in the QuickStart Academy today to learn how to develop and implement a proven growth strategy that grows your ROI, your business, and your confidence. Learn more HERE.
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Transcript
Episode Transcript
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Steve Legler (00:04):
But often families don't get out in front of it
soon enough or early enough. Andthen they end up doing a
transition in a crisis whensomeone has a health event, or
someone gets divorced. And nowthere's new ownership structures
and, and new things come intoplay. So I always try to help
people get a longer termperspective on things and be
(00:26):
objective and sort of look at itand plan it on a longer term
basis to make sure you get andyou alluded to it earlier, you
talked about transitioning theleadership and the ownership.
And those are two differentthings. And they don't always
happen at the same time. Andthat's another thing people
don't always realize.
Steve Brown (00:43):
Hi, everybody, welcome to the ROI Online
Podcast where we believe you,the courageous entrepreneurs of
our day, are the invisibleheroes of our economy. You not
only improve our world with yourideas, your grit and your
passion, but you make our worldbetter. I'm Steve Brown and this
is a place where we have greatconversations with winners just
(01:06):
like you while we laugh andlearn together.
Steve Legler, welcome to the ROIOnline Podcast.
Steve Legler (01:21):
Steve Brown, thank you for having me. It's always
good when there's more than oneSteve.
Steve Brown (01:26):
Right? More Steve's more better.
You know, the folks that listento this podcast, they're
obviously it's just part of thedeal, that they're wondering why
they should invest in thisepisode. Here's something really
struck me. I wasn't aware that90% of the businesses in the US
(01:47):
specifically are family owned.
And I didn't realize that thereare about 5.5 million family
owned businesses. And that'scrazy when you think about the
perception that most people havea business is like these big,
giant, evil, faceless, greedyorganizations, right? And the
(02:09):
truth is, no, it's a bunch offamilies doing the best they
can. And yet you deal withprobably the thing that I would
want to avoid the most is how doyou transition ownership or
leadership in an organizationthat's family ran? I mean like,
Dad, come on, let put me incharge. Please no, Steve, we've
(02:32):
known you since you were like alittle kid, and this is what
you. I can't imagine what it'slike, Why in the world, would
you choose to plant your flag inthe middle of that chaos?
Steve Legler (02:47):
Steve, you've brought up so many points that I
could riff off of. But yeah, Ihave chosen to plant my flag
into what we call, some peoplecall the family circle. So
there's, there's this model offamily business that came out of
Harvard back in the 1980s, JohnDavis came up with the three
circle model. And it's basicallythere's the business, there's
(03:11):
the family, and there's theownership, and they overlap, and
some people are owners, and theywork in the business, but not
family, some people are familythat you know. So there's seven
different places in those threecircles. And that's what makes
everything interesting. And whenI got into this gig of working
with families, I actuallydecided consciously to plunge
(03:31):
directly into the family side ofthings, in the family circle
because I realized that it isthe most important circle in
many, especially when there'supcoming transitions from one
generation to the next. Andalso, it's the most neglected
side, like every business willhave their lawyer their
accountant and other people thatare outside advisors to help
(03:53):
them with that. And they don'toften think that they want help
or know where to find help onsome of the more family stuff.
And so I've gotten into thewhole coaching and mediating
game on that score, because Igrew up in a family business, so
I have the lived experience, andthat was a perfect connection
from the early part of my careerto this later part.
Steve Brown (04:15):
And you wrote the book on this.
Steve Legler (04:18):
Yeah, well, I did write a book called SHIFT Your
Family Business back in 2014.
This was geared to people likemy father, who was an
entrepreneur who had started abusiness. Yeah, and also my
father in law who had started abusiness, and I often find
basically something you werejust starting to hit that is
like sometimes people say, Hey,Dad, you know, give the business
(04:39):
to me or whatever, is thattransitioning from the first
generation to the second isreally tough. And often that the
wealth creator, theentrepreneur, the one who caught
lightning in a bottle is veryreluctant to want to leave. And
so the shift your familybusiness, the letters in the
word, shift are actually anacronym for a process that I was
(05:00):
laying out there. So the Sstands for start, H stands for
help, as in get help get a guideto come and help you. I is for
invest, invest the time and somemoney in it. F is for flexible,
you've got to remain flexibleand not think you're going to
(05:20):
put this plan together. And it'sgoing to work exactly as
planned. And T is for talk, it'sactually could have been C for
communicate. But shifc doesn'tmake a very nice word, and most
of the important communicationin families is talking so that's
what it ended up being.
Steve Brown (05:41):
Well shift from the C would be more like German or
one of those Nordic languages,right?
Steve Legler (05:46):
And believe me, I've had people say, What if you
remove the F for flexible? Whatwill you end up with? I'm big on
the bathroom humor too, but notfor the name of my book.
Steve Brown (05:58):
Well, me too, as the name of my book. So that's a
universal way.
Steve Legler (06:02):
Exactly. I can you can put my book in your toilet
and yeah.
Steve Brown (06:10):
Well, then, give us some backstory, because all
right, you grew up in a familybusiness. Was it that bad that
you thought I gotta go andchange the world?
Steve Legler (06:19):
No, oh, no. So my dad was an immigrant
entrepreneur who had arrived inCanada in the early 50s. And
about 10 years later decided tostart his own business after
working for somebody else, hebecame their biggest competitor.
So that was the early 60-63. Iwas born in 64, business was a
(06:39):
year old. I have two oldersiblings, but they're both
sisters. And this was a steelbusiness, steel fabrication so
it was a dirty business, it wasthe 1960s so I was immediately
viewed as the heir apparent, myfather finally had, you know,
the person who's going to takeover his business, and guess
what his name was Steve? Hisname was Steve so I went through
most of my life as Steve Jr. Andso from my earliest memory, the
(07:06):
expectation was clearly drawnout for me that you will come
and work for me, and you willjoin the business. And so in
high school every summer, andyou know, right through to
through college every summer,what did I study in, in college
business, because, hey, well, Iwas basically told this is what
you're gonna do. And it was likethe path of least resistance for
(07:28):
me. So I did that went to workfor the company for three years,
right after getting mybachelor's degree, and then it
was time to go do my MBA so Iwent off to do my MBA and came
back and an interesting thinghappened on my first day back
when I walked by my dad'soffice, and he said, Steven,
come here, sit down, close thedoor. And I had no idea what was
(07:51):
coming, and he said, you know,the last two years, you've been
gone, the business has beengoing downhill, we've been
losing markets here and there.
So we're probably going to haveto close or sell or merge or do
something. And I would like,Okay, look, if that's what you
got to do, I've been planning tocome back here, but it's
certainly, my heart hasn't beenset on it. And so long story
short, six months later, we'vegone from 250 employees down to
(08:15):
four. And two of us were namedSteve Legler. And I ended up as
we might call it now managing asmall family office. But nobody
knew what a family office was in1991, least of all me. And I
mean, even today, most peopledon't know what it is but it's
basically I was managing theaffairs that the family owned,
(08:36):
because we still had some realestate, we had some patented
products that were licensed thatwe had some money from the sale
of the operations to invest. Andso that became my job, totally
unexpected, and not what I was,you know, what I really wanted
to do, but there was too much towalk away from and not enough to
get excited about.
Steve Brown (09:00):
You know, the typical image of the son who's
going to take over or the familywho's going to take over is like
they don't deserve it. Theyhaven't worked hard, they're not
bought in I think of Caddyshackmovie where the lazy son I
forget what I don't know if it'sDanny Boy or I'm trying to
(09:22):
remember his name, but that'susually the image of who's going
to take over and often there'ssome version of that going on
where the the energy and theoriginal drive doesn't exist.
But yet the father or maybe thestarting one, like you said that
had the lightning in a bottle,they feel somewhat obligated to
(09:45):
pass it down, even though thatmaybe the horsepower doesn't
exist in the next heir.
Steve Legler (09:51):
Exactly. And in fact, for me, it was probably a
blessing in disguise because Ireally didn't have the
entrepreneurial spirit that myfather had. And, you know, he
had, by that time, he hadalready sort of moved himself up
to like Chairman and CEO, andthen hired a professional
(10:12):
president, because I was comingback and I was 27. Even if the
business had stayed reallyviable on its own, he had
already hired someone to be thepresident, my role was to shadow
him and be the Assistant to thePresident for a few years, until
I was old enough to take over.
But, you know, many familiesdon't have that all figured out
that way, right. And so justhelping them, what I do now is I
(10:36):
help families look at that wholeprocess on a much longer term
basis than they probably are. Soa proper transition from one
generation to the next should belike a minimum of five years, if
not 10 years in the planning,but often families don't get out
front of it soon enough or earlyenough. And then they end up
(10:59):
doing a transition in a crisiswhen someone has a health event,
or someone gets divorced, andnow there's new ownership
structures and new things comeinto play. So I always try to
help people get a longer termperspective on things and be
objective and sort of look at itand plan it on a longer term
basis to make sure you get andyou alluded to it earlier, you
(11:22):
talked about transitioning theleadership and the ownership,
and those are two differentthings. And they don't always
happen at the same time. Andthat's another thing people
don't always realize.
Steve Brown (11:33):
Wow, you know, so many hurdles that businesses
face just to stay in business.
And then you add this additionallayer of complexity on top of
it. There's a lot of thingsagainst a business, and then
they have the family componenton top of that, seems like a big
minefield that you have tonavigate. So help us envision
(11:55):
what would like the, first ofall, who is it that finally says
calf rope? That's a Texas term,okay? Finally says, Hey, we
really need to address this,we've been avoiding it for a
long time, you know, theelephant in the room, so we need
to address it. Who is it? Is itthe mom? Is it the kids? Is it
(12:19):
the dad, who is it that usuallybrings it up?
Steve Legler (12:24):
It can be anyone.
I like the fact that your firstone was the mom, because I still
remember one of my firstmeetings with my first major
client, it was supposed to bewith the mom and the dad and the
accountant. And I showed up andthe dad didn't show up, because
he had to put out a fire at workor whatever. So there I am with
the mother and their trustedadvisor. And, and the mother
(12:48):
says, I've been thinking aboutthis for 10 years, and I've been
talking to my husband about itfor five years. And now we're
finally doing something. And sooften the mother will have that
CEO role as a chief emotionalofficer. And this was a
particular case where the motherhad seen how having this
(13:10):
business in their family hadadversely affected her husband's
relationship with his siblings.
And she had basically said, damnif I'm going to let that happen
and let this business screw upmy kids and their relationship
amongst themselves. And so theygot out in front of it, and
(13:32):
hired someone, me, to work withtheir sibling groups. So here
was two brothers, two sisters,in their late 20s, early 30s.
And I just worked for them forfour years, helping them to
learn to work together, becausethat's what it is like, people
don't think, they think of thebusiness itself, and how the
business will survive. And Ialways try to gear them towards,
(13:55):
well, don't forget the familyalong the way. And so this
particular business had three ofthe four kids worked in the
business and one didn't and soyou have that one outsider. And
there's this whole imbalance, aninformation asymmetry, I call it
and you've got to work on thatyou can't have somebody feeling
left out. So we worked on, Icoached them and facilitated
(14:18):
with them, that they took forthem to learn to work together
as a team because as I explainedit to them, Look, fast forward a
few decades, your parents are nolonger in the picture, who's
looking after this? It's not himor her, it's all of you. And if
you only start to work togetherafter a funeral or after
(14:39):
something happens, you're notgoing to be able to figure out
how to work together as a teamand learn who can play what role
well and how to relate to eachother to keep this whole big
train on the track because thereare a lot of obstacles. And you
really don't want the familyrelationships to become the
(15:00):
obstacle that derails the train.
Steve Brown (15:04):
So seems not only that, here's the hurdle that I
imagine that you encounter isthat you're not only need to
understand business succession,but you have to be a therapist
in some way because I imaginethere's a lot of times where
you're being lobbied for somesort of influence on, you know,
(15:30):
somewhat one of the siblingswanting to get you to sign off
on them. And they're missing thepoint of the bigger
conversation. How do you avoidthat? How do you resolve that?
Steve Legler (15:44):
It's, it's not easy, and the first step is, you
need to figure out who theclient is. And for me, the
default is, my client is thefamily. It's not Dad, it's not
the person who first contactedme, it's the whole family. And
it's not, I mean, it's easy tosay, it's not always as easy to
(16:05):
do, right? But I need to come inthere and have everyone like me
and trust me enough, and respectme enough that I can deal with
them, and it's could betheoretically really easy for me
to screw that up. And if I screwit up with one person, I've
screwed up the whole thing. LikeI've I've put too much salt in
(16:29):
the soup that you can't take outafter as soon as I do that. So
I'm very, very conscious of it.
I have a network of people thatI know that do similar things
that I've met through anorganization called the family
firm Institute. And we have likean online study group where we
compare notes and talk aboutthis kind of stuff. But when you
say that, you know, you almosthave to be like a therapist. And
it's true. And there are peoplewho work in this field as well
(16:53):
who do have on their businesscard, Dr. So and So PhD, I don't
consider them necessarily mycompetition, because I like to
hope that only the families thathave really gotten into the deep
end will be calling them. Butit's interesting that a lot of
(17:14):
the things I deal with are moreof the personal nature, and
that's why I did the one of thefirst things I did when I
decided to go down this road wasto start taking coaching
courses, and getting a coachingcertification, to learn how to
listen to learn how tofacilitate, to learn how to play
(17:35):
that interpersonal role. Andlike I said, you know, there is
the business circle, which forthe first, you know, four
decades of my life, I thoughtthe business circle was the only
circle and certainly the mostimportant circle. And it was
only later on that I realizedthat it's the family circle,
where the interesting stufftakes place.
Steve Brown (17:57):
Hey, I wanted to pause right here and tell you
about a book that you need toget today. It's the funniest
book on marketing. It's calledThe Golden Toilet, stop flushing
your marketing budget into yourwebsite and build a system that
grows your business. And guesswho wrote it? That's right, I
wrote it, and I wrote it justfor you because I want to help
(18:18):
you get past the last hurdles ofsetting up your business and
getting it squared away. I wroteit so that you can avoid time
wasting time wasting money,wasting frustration, get the
book on Audible, you can get iton Kindle, you can get it on
Amazon, but get the book takeadvantage of the insights in
(18:40):
there and let me know what youthink. And now back to this
excellent episode.
So you know when you'renavigating, so a lot of folks,
you're not the only one thatnavigates very dangerous waters.
I mean, being in your positions,almost like being a an executive
(19:02):
director of a nonprofit, youcould be fired. And you know,
the decision makers change oftenor maybe flow and you'd be fired
on him on a whim of someone whowasn't in the conversation at
the beginning came along later,didn't understand where you
going and is not clued in. But Ithink one of the things that
(19:24):
enlightened about the way thatyou're approaching this is you
have a framework that you'veidentified and codified called
SHIFT. So I think that affordsyou or brings you authority, and
brings you respect that showsthat you have a process and it
takes you a lot of just you andwhat your whims are that date
(19:48):
added the conversation whenyou're focusing on a process
with steps.
Steve Legler (19:54):
You know, you're bringing up an interesting thing
about that, what I call thedifference between art and
science, two different extremesof one continuum of what this
work is, and I almost prefer tothink of myself more as an
artist of that I do this veryintuitively and I flying by the
(20:15):
seat of my pants, and I'm notsure I could train someone to do
it. But the difficulty with thatis, you know, it's very hard to
define what the deliverable is,when I meet with a family like
my deliverable is that onChristmas day, when Uncle Bob
pulls up to grandpa's house, ifhe sees aunt Sue's car in the
(20:39):
driveway and says, You knowwhat, let's come back a bit
later because I don't want to,you know, that's what I'm trying
to deliver family harmony. Now,how do you put a deliverable on
that? That's the difficult part.
And there are more and more nowstructured ways that people are
coming up with to sort of say,this is what you need to do. But
it can be a little bit dangerousthere, there's a whole area of
(21:00):
what people call a familyconstitution. That sounds like a
really sexy thing for a multigeneration family to have. And
so some consulting firms havedecided that, you know what, if
family businesses want aconstitution we'll sell them a
family constitution. And they'llhire people to write up this big
(21:24):
document. And they do it andthey have the consultants and
the professionals do it. And thefamily has very little input.
And you can guess what the valueof that document to the family
will be afterwards, if they'vehad no input into it. It's zero
or less, right? It's like, Yeah,but I never signed that bs that
piece of paper, right? So yes,family constitution makes sense
(21:47):
for a family that's been inbusiness for a few generations.
And they need to sort of, youknow, codify all their
guidelines of how they've agreedto work together. But any family
who says, Oh, let's start with aconstitution, oh, my god, no, I
just wrote a blog recently thattalked about a family's
declaration of interdependence.
(22:10):
So the family needs to cometogether and declare that they
are interdependent, and thatthey want to work together. And
then what was, how many yearsbetween the declaration of
independence in the US 1776, theConstitution wasn't till more
than 10 years later. So yeah,you can have a constitution. But
that's not where you start, youstart with figuring out how
(22:32):
you're going to work together,and start to figure out your
family governance, which is akind of an ugly word that people
don't like the word governance,I've learned to start to like
it. But I've kind of defined itin ways that are easier to grasp
about how you make decisionstogether and how you communicate
together.
Steve Brown (22:50):
Yeah, I think that constitution would be important,
but it's my overarching theme inmy book is, it's not one silver
bullet, it's not one tactic,that's going to resolve a very
complicated issue. But there's alot of risk if you don't get
this right. And it's more of acomprehensive system. And so
(23:10):
that's why I was attracted tothat you had a process that you
can go step by step, and come upwith a more healthy,
comprehensive resolution for avery complicated issue.
Steve Legler (23:23):
And every family is going to do it differently.
And what I also try to reinforceis that this should evolve very
slowly. It should be co createdby the family members who are
affected by it. It's iterative,you have to keep going and come
back and have a meeting, figureout what you've done, what you
want to do next, come back threemonths later, have another
(23:45):
meeting, talk about whathappened. Things change, people
need time to absorb and digestdifferent changes, people have
to learn how to react to eachother. And as I was talking
about earlier, having siblingsworking together on things where
they're forced to work togetherto organize things, and then
they learn which siblings theycan count on to respond quickly,
(24:09):
which ones are always going toneed a reminder. But all these
things are very important forthem to learn to do so that they
learn how to behave as aninterdependent group of people.
Steve Brown (24:21):
So that's an excellent segue to introduce
your other book InterdependentWealth, and I would imagine that
the genesis of this book camefrom your insights after
applying your your insights fromyour first book, no?
Steve Legler (24:41):
Yes, and the biggest thing, that the
Interdependent Wealth book, soit's got a long secondary title.
It's How Family Systems TheoryIlluminates Successful
Intergenerational WealthTransitions. So that's a
mouthful, well the key is familysystems theory. So when I first
(25:03):
got into this area, I kepthearing about how there's
something called Bowen FamilySystems Theory started by Dr.
Murray Bowen back in the 50s inthe US, and I kept on stumbling
across little things that said,you know, if you're working with
families that are in businesstogether, it's really good to
(25:25):
know this Bowen Family SystemsTheory stuff. So I said, Okay,
let me hop on Google and juststart, I want to find a book
that's going to explain to mewhat it is about this Bowen
family systems theory, that's sointeresting are so important for
people working with business.
Well, guess what, I did not finda book that did that. There were
books about Bowen Family SystemsTheory, but there wasn't
(25:47):
anything that was to answer myquestion. So I decided to learn
about it enough and then fouryears later, I wrote the book
that I had been looking for. Andso what I discovered with the
Bowen Family Systems Theory, thepeople who live in the Bowen
Family Systems Theory world thatI was exposed to through my
(26:09):
Bowen training, I would say morethan half of them are
therapists, so they are socialworkers or other kind of masters
in social work, and or clinicalpsychologists that use Bowen
Theory, then there's anothergroup, that's maybe 30%, from my
just guesstimate that our clergypeople, okay, so so I was
(26:31):
training at the Bowen Center atGeorgetown, and I was sitting in
a group where everyone was partof a church either as some kind
of Rabbi or Minister orsomething else. And I was
sitting there thinking, youknow, my grandmother, my
maternal grandmother, who livedwith us, when I was a kid, she
used to tell me, you shouldbecome a priest, you should
(26:54):
become a priest and I would justlaugh at her. And here, I was,
like, 40 years later, and I'msitting there, and I was the
only one who wasn't from achurch. I fit right in with
these people. But so anyway, thenumber of people in the Bowen
world who are actually have theoverlap with the family business
space is actually maybe five or10%. And so what I realized was
(27:14):
I'm in this minority place. Buthaving learned about family
systems theory really helps mewhen I sit with a family, and I
have to be that independentoutside person who's not part of
their family system, I'm comingin and observing their family
system. And I don't want tochange. But as soon as I'm
(27:37):
there, I'm modifying the systemin a certain way, even though
I'm trying to stay on theoutside. And I have to be very
conscious to stay on the outsideand observe it. But it allows me
to look at the relationshipsbetween the people and that I
wrote the book for other peoplewho do this kind of work to sort
of help them understand some ofthe things I've learned from
(27:59):
this systems theory. And so thatthey could have a basic
education and maybe it's enoughor maybe they you know, what
their beacon said, Hey, you knowwhat, I want to learn more about
this, and then they can go andfind a training program to learn
some of it themselves.
Steve Brown (28:15):
So what are some statistics? How many families
actually take advantage of thistype of planning in transition
or transition planning? It seemslike it'd be an extremely
competitive advantage.
Steve Legler (28:30):
You know, you're good. I like that question
because I actually, usually hatequestions where people ask me
what are the statistics? ButCraig Aronoff is a man who
founded one of, he was one ofthe founders of The Family
Business Consulting Group, whichhas been around for 25 or 30
(28:52):
years. And it's like the topBain family business consulting
group, although I know peoplethat work in a lot of the other
top ones as well. But he wasgiving a presentation once and
he mentioned that his estimatewas between two and 4% of family
businesses hire a consultant.
And he said, he looked at, Ireally liked the way he said it,
(29:16):
he looked at it as someone asthe ones who would hire a
private teacher. It's like, ifyou want to learn to play a
musical instrument, you can justgo to YouTube and find some
lessons or you can buy a book tolearn certain things. But for
having private lessons, nowyou're engaging, you're going to
another level. And so he wassaying only two to 4% so that's
(29:37):
one out of every 50 or one outof every 25. Now most are too
small, right? Every the mom andpop shop is a family business.
And I have that problem too,right? People say well, who can
afford to hire someone just tocome and look after their family
stuff? And you know A familythat has a business that's doing
(30:00):
a million dollars a year. Idon't think I fit in their
budget, you know, add anotherzero starting to get there. Add
another zero, yes, of course,you really should be thinking
about at certain stages in yourfamily's lifecycle. It really
makes sense to bring someone in,who's going to be objective and
help guide you through all theimportant parts of this
(30:22):
transition.
Steve Brown (30:25):
Yeah, it's more than just the family, the
clerical thing, you need to havean understanding of actual
business you need to actuallyhave been in, there's a lot of
insights that you can't, itseems like one of the dilemmas
would be for the one that wasconvinced they need to implement
some sort of transition planwas, who do I pick? Because if I
(30:47):
pick a dud, that's going to be awaste of time and money?
Steve Legler (30:51):
Yes. And so we were talking before about people
who have like a psychologydegree. Okay, great. But you
know, I've been to, there'sanother organization I'm a part
of called The PurposefulPlanning Institute. And I was at
one of, the first time I went toone of their meetings, and we
were doing an icebreaker thingaround the table. And it was
that question where, like, ifyou had a magic wand, what would
(31:12):
you fix? And this woman who wasa psychologist said, If I could
wave the magic wand, allpsychologists would be
financially literate. And I waslike, Wow, what? And then I
realized, you know what, some ofthe people with whom I'm
competing for a seat at thatfamily table, don't really know
(31:34):
the difference between a milliondollars and a billion dollars.
And you know, there's a bigdifference. And it's not just
the three zeros, it's in what,and so someone who does not have
that ability and shows up at thetable, will not be able to get
the respect of the people aroundthe table. And so I talked about
(31:55):
my willingness and my desire towork in the family circle.
Luckily, for me, I have somecredentials on my business card,
that allow me to go through thebusiness door to get to the
family. So I have an MBA, I havea CFA (Chartered Financial
Analyst), so I can talk to theperson who may not want someone
(32:15):
to deal with their family, but Ican earn their trust by being
able to talk business with them,and then work my way into the
family system issues later on.
Steve Brown (32:25):
That knowing or needing to know have a financial
acumen, I think it's soundervalued and missing in most
of these business coaches thatyou see packaged everywhere on
LinkedIn, it's something thateven I'm in sick, I run a
(32:47):
business, right? For years andit's an area that I wouldn't
ever present myself as someonethat's an expert in financial
stuff, but let me tell you, ifyou miss leave that component
out in the planning and whatyou're doing the year, you're
really, you're setting a trapthat you're going to step in
(33:07):
later.
Steve Legler (33:08):
But the other thing is, I always like to say
that if someone had met my dadat the time, when we were
planning a transition before wesold out, and if they had said,
Oh, I got this perfect personyou should talk to to work with
your family. And they say,here's this card is so and so
Dr. So and So PhD, you know, mydad would have said, EFF you,
(33:29):
we're not crazy, we don't need ashrink. And I think a lot of
people would would feel thatway.
Steve Brown (33:39):
Yeah. So what's it look like, engaging with you,
Steve?
Steve Legler (33:45):
It's uh, so the the lead time is very long. And
that makes sense. And I don'tstart running a meter, I usually
spend, I usually like to say,let's have a quick call, just to
get to know each other, thenwe'll take like an hour to go a
little bit deeper. And thenlike, I have one where I just
(34:09):
had a half hour zoom call witheach of the four kids. And we
have not engaged we haven'ttalked money, we it's like,
let's make sure that you're theright person for us. And then
once we figure that out, thenit's let's figure out what we
can do in a year. And how manymeetings that would be and how
many zoom calls and then wefigure out a quarterly retainer
(34:32):
and get to work but that only,that talk about how much and how
long only comes after at leasttwo or three calls to make sure
that they understand who I amand I understand who they are,
and that we are meant to worktogether. Because I've had
clients where they say oh, weneed someone to referee our
(34:54):
family meetings. And I was like,Oh my god, that that didn't last
that long. I mean, I did Helpthem a bit, but it just, you
know, I'd rather, and there arepeople who do that there are
mediators who are specialistsin, I prefer not to deal with
them when they're already toxic.
I've had one that came to me alittle while ago. And when I
(35:14):
realized I had to refer thisguy, tell him to find a lawyer,
because he was about to getscrewed by his brother and his
father. I also realized not onlyam I handing this guy to a
lawyer, I'm, I'm checking outbecause at this point, I want to
help families who want to worktogether, get through that and
work together. If they'realready past the point, then
(35:35):
there's other people who candeal with them better than me.
Steve Brown (35:40):
So I'm, you know, I get asked a bunch, Steve, what
kind of, what do you guysspecialize in? And it's like
they're expecting the answer tobe, we specialize in attorneys
or age management practices, orwhatever. But what I realized
was we specialize in progressiveminded leaders that have
(36:00):
realized they need to takeaction on this. So they're
already convinced. They'realready doing research. They're
already investigating andreading. And they're like, a
beautiful fit for what we have,because they can appreciate and
apply their insights faster. AndI would imagine it's similar in
your case.
Steve Legler (36:19):
Well, so yes, somebody in the family has to
come to the realization that,hey, there's a lot at stake, we
need to do something about this.
And on our own, we're not goingto get there. And so that those
are the people who aresearching, and that could be
mom, like we said, it could bedad, sometimes it is. A lot of
times, I got an inquiry twoweeks ago from the guy said, I'm
(36:44):
the son and me and my sister,and I talk with my sister about
this but my parents don't wantto talk about it. Right? And so
I've got a call with them nextweek to see how, so sometimes it
comes from the younger people,which is sometimes encouraging
and sometimes discouraging,right? Who makes the first call
is less important than afterboth generations are brought
(37:14):
together, do they both see thelogic and have some willingness
to commit to going forward?
Because if they still don't seeit then that's a bigger
obstacle. But sometimes, theparents might have just been
waiting. Right? Like it's awaiting game, the parents don't
(37:34):
want to bring it up, becausethey don't want to set too much
of an expectation. The kidsdon't want to bring it up
because they don't want theirparents to feel like they're
trying to push them out. And soeven just asking questions,
sometimes is discouraged. And sothey sometimes reach out to
someone to help them have thoseconversations, because, you
(37:56):
know, we were talking earlierabout the statistics of family
business survival are really notgreat. And that's because there
are a lot of obstacles, and mostfamilies left to themselves
only, will not be able to havethe kinds of conversations that
they ultimately need to have.
And so the more that's at stake,because the wealth has grown,
(38:17):
and the business has grown, themore complex it is with the
number of people and then inlaws and their kids and who's
expecting what the more complexit is. And the bigger it is, the
more I really think you shouldat least start looking for
someone to help you.
Steve Brown (38:34):
Excellent. So you have two books. Tell us about
your books, your website wherepeople can find you stumble
into, you actually initiatemaybe a conversation.
Steve Legler (38:46):
So I like to say that I have a really good name,
Steve legler. It's short. It'snot complicated. It's not that
hard to spell L E G L E R, butit's not common. So if you just
Google me, Steve Legler, Ishould show up and if you put
anything about family business,I'll definitely show up. So the
(39:08):
name of my website isshiftyourfamilybusiness.com
because that was the name of myfirst book. So you can find me
there. You can find me onLinkedIn, and I accept 99% of my
LinkedIn invitations, becausethere are some that just look
too spammy, but most peoplecould, but I don't you know,
it's tough for me, right?
Somebody hits me up on LinkedInand they're like, they're
(39:30):
remember, they're in the army,like, it doesn't feel like it
fits but maybe dad owns abusiness. So I'll usually say
yes, because I don't know. Andso LinkedIn, I post a lot on
LinkedIn, because I read a weekweekly blog, my website, if
you're, my website has probably400 blogs on it now because I've
been writing once a week forseven, eight years. I've got
(39:53):
videos on there. There's otherpodcasts I've done. There's all
kinds kinds of information. AndI know that I'm not the perfect
fit for everybody. But I knowthere's other people out there
that don't know me yet for whomI would be a really good fit.
And so if you're out there, andyou think that's a possibility
after having heard this hit meup, but let's start talking.
Steve Brown (40:17):
And his books are, SHIFT Your Family Business,
startup, you go with thissubtitle there, Steve.
Steve Legler (40:25):
Oh, yeah. So this, so SHIFT Your Family Business,
stop working in your familybusiness, start working on your
business family. So that's thetwo part thing there's the
working in and working on thateverybody knows about. But then
there's the other one is, Areyou a family business? Is the
business the most importantthing? Or are you a business
(40:46):
family? And I think that often,as I was saying earlier, that
the entrepreneur who starts thebusiness, that business becomes
like their favorite child, andthey're more concerned about the
business and not enough aboutthe family. And so the mental
shift that I'm asking thesepeople to take is, okay, stop
worrying about making the piebigger, and start figuring out
(41:07):
how this pie is going to get,you know, run by your kids.
Steve Brown (41:13):
Awesome. Steve, I'm jealous, your name is Steve, is
a great name. I can relate, butyour last name is uncommon, mine
is common. So I have to like,you know, I'm Steve Brown. And I
have to put ROI Online after itso that I can be found.
Steve Legler (41:31):
Yeah. Cuz when I when I looked at my calendar,
and I saw, oh, I googled SteveBrown podcast, and there's some
religious guy that's a years oldthat said. So I thought. I am
talking to that guy? And I wasrelieved that it was that it was
the ROI Online guy.
Steve Brown (41:50):
Yeah, me too.
Although Steve Brown has gotsome books out there, too. So
yeah, great conversation. You'vebeen an excellent guest Steve,
thanks for being on the ROIOnline Podcast.
Steve Legler (42:03):
Thank you, Steve.
Steve Brown (42:05):
That's a wrap.
Thanks for listening to anotherfun episode of the ROI Online
Podcast. For more, be sure tocheck out the show notes of this
episode, and feel free toconnect with me on LinkedIn
where we can chat, and I canhelp direct you to the resources
you're searching for. To learnmore about how you can grow your
business better be sure to pickup your copy of my book, The
(42:27):
Golden Toilet at surprise,thegoldentoilet.com I'm Steve
Brown, and we'll see you nextweek on another fun episode of
the ROI Online Podcast.
But often families don't get out in front of it
soon enough or early enough. Andthen they end up doing a
transition in a crisis whensomeone has a health event, or
someone gets divorced. And nowthere's new ownership structures
and, and new things come intoplay. So I always try to help
people get a longer termperspective on things and be
(00:26):
objective and sort of look at itand plan it on a longer term
basis to make sure you get andyou alluded to it earlier, you
talked about transitioning theleadership and the ownership.
And those are two differentthings. And they don't always
happen at the same time. Andthat's another thing people
don't always realize.
Steve Brown (00:43):
Hi, everybody, welcome to the ROI Online
Podcast where we believe you,the courageous entrepreneurs of
our day, are the invisibleheroes of our economy. You not
only improve our world with yourideas, your grit and your
passion, but you make our worldbetter. I'm Steve Brown and this
is a place where we have greatconversations with winners just
(01:06):
like you while we laugh andlearn together.
Steve Legler, welcome to the ROIOnline Podcast.
Steve Legler (01:21):
Steve Brown, thank you for having me. It's always
good when there's more than oneSteve.
Steve Brown (01:26):
Right? More Steve's more better.
You know, the folks that listento this podcast, they're
obviously it's just part of thedeal, that they're wondering why
they should invest in thisepisode. Here's something really
struck me. I wasn't aware that90% of the businesses in the US
(01:47):
specifically are family owned.
And I didn't realize that thereare about 5.5 million family
owned businesses. And that'scrazy when you think about the
perception that most people havea business is like these big,
giant, evil, faceless, greedyorganizations, right? And the
(02:09):
truth is, no, it's a bunch offamilies doing the best they
can. And yet you deal withprobably the thing that I would
want to avoid the most is how doyou transition ownership or
leadership in an organizationthat's family ran? I mean like,
Dad, come on, let put me incharge. Please no, Steve, we've
(02:32):
known you since you were like alittle kid, and this is what
you. I can't imagine what it'slike, Why in the world, would
you choose to plant your flag inthe middle of that chaos?
Steve Legler (02:47):
Steve, you've brought up so many points that I
could riff off of. But yeah, Ihave chosen to plant my flag
into what we call, some peoplecall the family circle. So
there's, there's this model offamily business that came out of
Harvard back in the 1980s, JohnDavis came up with the three
circle model. And it's basicallythere's the business, there's
(03:11):
the family, and there's theownership, and they overlap, and
some people are owners, and theywork in the business, but not
family, some people are familythat you know. So there's seven
different places in those threecircles. And that's what makes
everything interesting. And whenI got into this gig of working
with families, I actuallydecided consciously to plunge
(03:31):
directly into the family side ofthings, in the family circle
because I realized that it isthe most important circle in
many, especially when there'supcoming transitions from one
generation to the next. Andalso, it's the most neglected
side, like every business willhave their lawyer their
accountant and other people thatare outside advisors to help
(03:53):
them with that. And they don'toften think that they want help
or know where to find help onsome of the more family stuff.
And so I've gotten into thewhole coaching and mediating
game on that score, because Igrew up in a family business, so
I have the lived experience, andthat was a perfect connection
from the early part of my careerto this later part.
Steve Brown (04:15):
And you wrote the book on this.
Steve Legler (04:18):
Yeah, well, I did write a book called SHIFT Your
Family Business back in 2014.
This was geared to people likemy father, who was an
entrepreneur who had started abusiness. Yeah, and also my
father in law who had started abusiness, and I often find
basically something you werejust starting to hit that is
like sometimes people say, Hey,Dad, you know, give the business
(04:39):
to me or whatever, is thattransitioning from the first
generation to the second isreally tough. And often that the
wealth creator, theentrepreneur, the one who caught
lightning in a bottle is veryreluctant to want to leave. And
so the shift your familybusiness, the letters in the
word, shift are actually anacronym for a process that I was
(05:00):
laying out there. So the Sstands for start, H stands for
help, as in get help get a guideto come and help you. I is for
invest, invest the time and somemoney in it. F is for flexible,
you've got to remain flexibleand not think you're going to
(05:20):
put this plan together. And it'sgoing to work exactly as
planned. And T is for talk, it'sactually could have been C for
communicate. But shifc doesn'tmake a very nice word, and most
of the important communicationin families is talking so that's
what it ended up being.
Steve Brown (05:41):
Well shift from the C would be more like German or
one of those Nordic languages,right?
Steve Legler (05:46):
And believe me, I've had people say, What if you
remove the F for flexible? Whatwill you end up with? I'm big on
the bathroom humor too, but notfor the name of my book.
Steve Brown (05:58):
Well, me too, as the name of my book. So that's a
universal way.
Steve Legler (06:02):
Exactly. I can you can put my book in your toilet
and yeah.
Steve Brown (06:10):
Well, then, give us some backstory, because all
right, you grew up in a familybusiness. Was it that bad that
you thought I gotta go andchange the world?
Steve Legler (06:19):
No, oh, no. So my dad was an immigrant
entrepreneur who had arrived inCanada in the early 50s. And
about 10 years later decided tostart his own business after
working for somebody else, hebecame their biggest competitor.
So that was the early 60-63. Iwas born in 64, business was a
(06:39):
year old. I have two oldersiblings, but they're both
sisters. And this was a steelbusiness, steel fabrication so
it was a dirty business, it wasthe 1960s so I was immediately
viewed as the heir apparent, myfather finally had, you know,
the person who's going to takeover his business, and guess
what his name was Steve? Hisname was Steve so I went through
most of my life as Steve Jr. Andso from my earliest memory, the
(07:06):
expectation was clearly drawnout for me that you will come
and work for me, and you willjoin the business. And so in
high school every summer, andyou know, right through to
through college every summer,what did I study in, in college
business, because, hey, well, Iwas basically told this is what
you're gonna do. And it was likethe path of least resistance for
(07:28):
me. So I did that went to workfor the company for three years,
right after getting mybachelor's degree, and then it
was time to go do my MBA so Iwent off to do my MBA and came
back and an interesting thinghappened on my first day back
when I walked by my dad'soffice, and he said, Steven,
come here, sit down, close thedoor. And I had no idea what was
(07:51):
coming, and he said, you know,the last two years, you've been
gone, the business has beengoing downhill, we've been
losing markets here and there.
So we're probably going to haveto close or sell or merge or do
something. And I would like,Okay, look, if that's what you
got to do, I've been planning tocome back here, but it's
certainly, my heart hasn't beenset on it. And so long story
short, six months later, we'vegone from 250 employees down to
(08:15):
four. And two of us were namedSteve Legler. And I ended up as
we might call it now managing asmall family office. But nobody
knew what a family office was in1991, least of all me. And I
mean, even today, most peopledon't know what it is but it's
basically I was managing theaffairs that the family owned,
(08:36):
because we still had some realestate, we had some patented
products that were licensed thatwe had some money from the sale
of the operations to invest. Andso that became my job, totally
unexpected, and not what I was,you know, what I really wanted
to do, but there was too much towalk away from and not enough to
get excited about.
Steve Brown (09:00):
You know, the typical image of the son who's
going to take over or the familywho's going to take over is like
they don't deserve it. Theyhaven't worked hard, they're not
bought in I think of Caddyshackmovie where the lazy son I
forget what I don't know if it'sDanny Boy or I'm trying to
(09:22):
remember his name, but that'susually the image of who's going
to take over and often there'ssome version of that going on
where the the energy and theoriginal drive doesn't exist.
But yet the father or maybe thestarting one, like you said that
had the lightning in a bottle,they feel somewhat obligated to
(09:45):
pass it down, even though thatmaybe the horsepower doesn't
exist in the next heir.
Steve Legler (09:51):
Exactly. And in fact, for me, it was probably a
blessing in disguise because Ireally didn't have the
entrepreneurial spirit that myfather had. And, you know, he
had, by that time, he hadalready sort of moved himself up
to like Chairman and CEO, andthen hired a professional
(10:12):
president, because I was comingback and I was 27. Even if the
business had stayed reallyviable on its own, he had
already hired someone to be thepresident, my role was to shadow
him and be the Assistant to thePresident for a few years, until
I was old enough to take over.
But, you know, many familiesdon't have that all figured out
that way, right. And so justhelping them, what I do now is I
(10:36):
help families look at that wholeprocess on a much longer term
basis than they probably are. Soa proper transition from one
generation to the next should belike a minimum of five years, if
not 10 years in the planning,but often families don't get out
front of it soon enough or earlyenough. And then they end up
(10:59):
doing a transition in a crisiswhen someone has a health event,
or someone gets divorced, andnow there's new ownership
structures and new things comeinto play. So I always try to
help people get a longer termperspective on things and be
objective and sort of look at itand plan it on a longer term
basis to make sure you get andyou alluded to it earlier, you
(11:22):
talked about transitioning theleadership and the ownership,
and those are two differentthings. And they don't always
happen at the same time. Andthat's another thing people
don't always realize.
Steve Brown (11:33):
Wow, you know, so many hurdles that businesses
face just to stay in business.
And then you add this additionallayer of complexity on top of
it. There's a lot of thingsagainst a business, and then
they have the family componenton top of that, seems like a big
minefield that you have tonavigate. So help us envision
(11:55):
what would like the, first ofall, who is it that finally says
calf rope? That's a Texas term,okay? Finally says, Hey, we
really need to address this,we've been avoiding it for a
long time, you know, theelephant in the room, so we need
to address it. Who is it? Is itthe mom? Is it the kids? Is it
(12:19):
the dad, who is it that usuallybrings it up?
Steve Legler (12:24):
It can be anyone.
I like the fact that your firstone was the mom, because I still
remember one of my firstmeetings with my first major
client, it was supposed to bewith the mom and the dad and the
accountant. And I showed up andthe dad didn't show up, because
he had to put out a fire at workor whatever. So there I am with
the mother and their trustedadvisor. And, and the mother
(12:48):
says, I've been thinking aboutthis for 10 years, and I've been
talking to my husband about itfor five years. And now we're
finally doing something. And sooften the mother will have that
CEO role as a chief emotionalofficer. And this was a
particular case where the motherhad seen how having this
(13:10):
business in their family hadadversely affected her husband's
relationship with his siblings.
And she had basically said, damnif I'm going to let that happen
and let this business screw upmy kids and their relationship
amongst themselves. And so theygot out in front of it, and
(13:32):
hired someone, me, to work withtheir sibling groups. So here
was two brothers, two sisters,in their late 20s, early 30s.
And I just worked for them forfour years, helping them to
learn to work together, becausethat's what it is like, people
don't think, they think of thebusiness itself, and how the
business will survive. And Ialways try to gear them towards,
(13:55):
well, don't forget the familyalong the way. And so this
particular business had three ofthe four kids worked in the
business and one didn't and soyou have that one outsider. And
there's this whole imbalance, aninformation asymmetry, I call it
and you've got to work on thatyou can't have somebody feeling
left out. So we worked on, Icoached them and facilitated
(14:18):
with them, that they took forthem to learn to work together
as a team because as I explainedit to them, Look, fast forward a
few decades, your parents are nolonger in the picture, who's
looking after this? It's not himor her, it's all of you. And if
you only start to work togetherafter a funeral or after
(14:39):
something happens, you're notgoing to be able to figure out
how to work together as a teamand learn who can play what role
well and how to relate to eachother to keep this whole big
train on the track because thereare a lot of obstacles. And you
really don't want the familyrelationships to become the
(15:00):
obstacle that derails the train.
Steve Brown (15:04):
So seems not only that, here's the hurdle that I
imagine that you encounter isthat you're not only need to
understand business succession,but you have to be a therapist
in some way because I imaginethere's a lot of times where
you're being lobbied for somesort of influence on, you know,
(15:30):
somewhat one of the siblingswanting to get you to sign off
on them. And they're missing thepoint of the bigger
conversation. How do you avoidthat? How do you resolve that?
Steve Legler (15:44):
It's, it's not easy, and the first step is, you
need to figure out who theclient is. And for me, the
default is, my client is thefamily. It's not Dad, it's not
the person who first contactedme, it's the whole family. And
it's not, I mean, it's easy tosay, it's not always as easy to
(16:05):
do, right? But I need to come inthere and have everyone like me
and trust me enough, and respectme enough that I can deal with
them, and it's could betheoretically really easy for me
to screw that up. And if I screwit up with one person, I've
screwed up the whole thing. LikeI've I've put too much salt in
(16:29):
the soup that you can't take outafter as soon as I do that. So
I'm very, very conscious of it.
I have a network of people thatI know that do similar things
that I've met through anorganization called the family
firm Institute. And we have likean online study group where we
compare notes and talk aboutthis kind of stuff. But when you
say that, you know, you almosthave to be like a therapist. And
it's true. And there are peoplewho work in this field as well
(16:53):
who do have on their businesscard, Dr. So and So PhD, I don't
consider them necessarily mycompetition, because I like to
hope that only the families thathave really gotten into the deep
end will be calling them. Butit's interesting that a lot of
(17:14):
the things I deal with are moreof the personal nature, and
that's why I did the one of thefirst things I did when I
decided to go down this road wasto start taking coaching
courses, and getting a coachingcertification, to learn how to
listen to learn how tofacilitate, to learn how to play
(17:35):
that interpersonal role. Andlike I said, you know, there is
the business circle, which forthe first, you know, four
decades of my life, I thoughtthe business circle was the only
circle and certainly the mostimportant circle. And it was
only later on that I realizedthat it's the family circle,
where the interesting stufftakes place.
Steve Brown (17:57):
Hey, I wanted to pause right here and tell you
about a book that you need toget today. It's the funniest
book on marketing. It's calledThe Golden Toilet, stop flushing
your marketing budget into yourwebsite and build a system that
grows your business. And guesswho wrote it? That's right, I
wrote it, and I wrote it justfor you because I want to help
(18:18):
you get past the last hurdles ofsetting up your business and
getting it squared away. I wroteit so that you can avoid time
wasting time wasting money,wasting frustration, get the
book on Audible, you can get iton Kindle, you can get it on
Amazon, but get the book takeadvantage of the insights in
(18:40):
there and let me know what youthink. And now back to this
excellent episode.
So you know when you'renavigating, so a lot of folks,
you're not the only one thatnavigates very dangerous waters.
I mean, being in your positions,almost like being a an executive
(19:02):
director of a nonprofit, youcould be fired. And you know,
the decision makers change oftenor maybe flow and you'd be fired
on him on a whim of someone whowasn't in the conversation at
the beginning came along later,didn't understand where you
going and is not clued in. But Ithink one of the things that
(19:24):
enlightened about the way thatyou're approaching this is you
have a framework that you'veidentified and codified called
SHIFT. So I think that affordsyou or brings you authority, and
brings you respect that showsthat you have a process and it
takes you a lot of just you andwhat your whims are that date
(19:48):
added the conversation whenyou're focusing on a process
with steps.
Steve Legler (19:54):
You know, you're bringing up an interesting thing
about that, what I call thedifference between art and
science, two different extremesof one continuum of what this
work is, and I almost prefer tothink of myself more as an
artist of that I do this veryintuitively and I flying by the
(20:15):
seat of my pants, and I'm notsure I could train someone to do
it. But the difficulty with thatis, you know, it's very hard to
define what the deliverable is,when I meet with a family like
my deliverable is that onChristmas day, when Uncle Bob
pulls up to grandpa's house, ifhe sees aunt Sue's car in the
(20:39):
driveway and says, You knowwhat, let's come back a bit
later because I don't want to,you know, that's what I'm trying
to deliver family harmony. Now,how do you put a deliverable on
that? That's the difficult part.
And there are more and more nowstructured ways that people are
coming up with to sort of say,this is what you need to do. But
it can be a little bit dangerousthere, there's a whole area of
(21:00):
what people call a familyconstitution. That sounds like a
really sexy thing for a multigeneration family to have. And
so some consulting firms havedecided that, you know what, if
family businesses want aconstitution we'll sell them a
family constitution. And they'llhire people to write up this big
(21:24):
document. And they do it andthey have the consultants and
the professionals do it. And thefamily has very little input.
And you can guess what the valueof that document to the family
will be afterwards, if they'vehad no input into it. It's zero
or less, right? It's like, Yeah,but I never signed that bs that
piece of paper, right? So yes,family constitution makes sense
(21:47):
for a family that's been inbusiness for a few generations.
And they need to sort of, youknow, codify all their
guidelines of how they've agreedto work together. But any family
who says, Oh, let's start with aconstitution, oh, my god, no, I
just wrote a blog recently thattalked about a family's
declaration of interdependence.
(22:10):
So the family needs to cometogether and declare that they
are interdependent, and thatthey want to work together. And
then what was, how many yearsbetween the declaration of
independence in the US 1776, theConstitution wasn't till more
than 10 years later. So yeah,you can have a constitution. But
that's not where you start, youstart with figuring out how
(22:32):
you're going to work together,and start to figure out your
family governance, which is akind of an ugly word that people
don't like the word governance,I've learned to start to like
it. But I've kind of defined itin ways that are easier to grasp
about how you make decisionstogether and how you communicate
together.
Steve Brown (22:50):
Yeah, I think that constitution would be important,
but it's my overarching theme inmy book is, it's not one silver
bullet, it's not one tactic,that's going to resolve a very
complicated issue. But there's alot of risk if you don't get
this right. And it's more of acomprehensive system. And so
(23:10):
that's why I was attracted tothat you had a process that you
can go step by step, and come upwith a more healthy,
comprehensive resolution for avery complicated issue.
Steve Legler (23:23):
And every family is going to do it differently.
And what I also try to reinforceis that this should evolve very
slowly. It should be co createdby the family members who are
affected by it. It's iterative,you have to keep going and come
back and have a meeting, figureout what you've done, what you
want to do next, come back threemonths later, have another
(23:45):
meeting, talk about whathappened. Things change, people
need time to absorb and digestdifferent changes, people have
to learn how to react to eachother. And as I was talking
about earlier, having siblingsworking together on things where
they're forced to work togetherto organize things, and then
they learn which siblings theycan count on to respond quickly,
(24:09):
which ones are always going toneed a reminder. But all these
things are very important forthem to learn to do so that they
learn how to behave as aninterdependent group of people.
Steve Brown (24:21):
So that's an excellent segue to introduce
your other book InterdependentWealth, and I would imagine that
the genesis of this book camefrom your insights after
applying your your insights fromyour first book, no?
Steve Legler (24:41):
Yes, and the biggest thing, that the
Interdependent Wealth book, soit's got a long secondary title.
It's How Family Systems TheoryIlluminates Successful
Intergenerational WealthTransitions. So that's a
mouthful, well the key is familysystems theory. So when I first
(25:03):
got into this area, I kepthearing about how there's
something called Bowen FamilySystems Theory started by Dr.
Murray Bowen back in the 50s inthe US, and I kept on stumbling
across little things that said,you know, if you're working with
families that are in businesstogether, it's really good to
(25:25):
know this Bowen Family SystemsTheory stuff. So I said, Okay,
let me hop on Google and juststart, I want to find a book
that's going to explain to mewhat it is about this Bowen
family systems theory, that's sointeresting are so important for
people working with business.
Well, guess what, I did not finda book that did that. There were
books about Bowen Family SystemsTheory, but there wasn't
(25:47):
anything that was to answer myquestion. So I decided to learn
about it enough and then fouryears later, I wrote the book
that I had been looking for. Andso what I discovered with the
Bowen Family Systems Theory, thepeople who live in the Bowen
Family Systems Theory world thatI was exposed to through my
(26:09):
Bowen training, I would say morethan half of them are
therapists, so they are socialworkers or other kind of masters
in social work, and or clinicalpsychologists that use Bowen
Theory, then there's anothergroup, that's maybe 30%, from my
just guesstimate that our clergypeople, okay, so so I was
(26:31):
training at the Bowen Center atGeorgetown, and I was sitting in
a group where everyone was partof a church either as some kind
of Rabbi or Minister orsomething else. And I was
sitting there thinking, youknow, my grandmother, my
maternal grandmother, who livedwith us, when I was a kid, she
used to tell me, you shouldbecome a priest, you should
(26:54):
become a priest and I would justlaugh at her. And here, I was,
like, 40 years later, and I'msitting there, and I was the
only one who wasn't from achurch. I fit right in with
these people. But so anyway, thenumber of people in the Bowen
world who are actually have theoverlap with the family business
space is actually maybe five or10%. And so what I realized was
(27:14):
I'm in this minority place. Buthaving learned about family
systems theory really helps mewhen I sit with a family, and I
have to be that independentoutside person who's not part of
their family system, I'm comingin and observing their family
system. And I don't want tochange. But as soon as I'm
(27:37):
there, I'm modifying the systemin a certain way, even though
I'm trying to stay on theoutside. And I have to be very
conscious to stay on the outsideand observe it. But it allows me
to look at the relationshipsbetween the people and that I
wrote the book for other peoplewho do this kind of work to sort
of help them understand some ofthe things I've learned from
(27:59):
this systems theory. And so thatthey could have a basic
education and maybe it's enoughor maybe they you know, what
their beacon said, Hey, you knowwhat, I want to learn more about
this, and then they can go andfind a training program to learn
some of it themselves.
Steve Brown (28:15):
So what are some statistics? How many families
actually take advantage of thistype of planning in transition
or transition planning? It seemslike it'd be an extremely
competitive advantage.
Steve Legler (28:30):
You know, you're good. I like that question
because I actually, usually hatequestions where people ask me
what are the statistics? ButCraig Aronoff is a man who
founded one of, he was one ofthe founders of The Family
Business Consulting Group, whichhas been around for 25 or 30
(28:52):
years. And it's like the topBain family business consulting
group, although I know peoplethat work in a lot of the other
top ones as well. But he wasgiving a presentation once and
he mentioned that his estimatewas between two and 4% of family
businesses hire a consultant.
And he said, he looked at, Ireally liked the way he said it,
(29:16):
he looked at it as someone asthe ones who would hire a
private teacher. It's like, ifyou want to learn to play a
musical instrument, you can justgo to YouTube and find some
lessons or you can buy a book tolearn certain things. But for
having private lessons, nowyou're engaging, you're going to
another level. And so he wassaying only two to 4% so that's
(29:37):
one out of every 50 or one outof every 25. Now most are too
small, right? Every the mom andpop shop is a family business.
And I have that problem too,right? People say well, who can
afford to hire someone just tocome and look after their family
stuff? And you know A familythat has a business that's doing
(30:00):
a million dollars a year. Idon't think I fit in their
budget, you know, add anotherzero starting to get there. Add
another zero, yes, of course,you really should be thinking
about at certain stages in yourfamily's lifecycle. It really
makes sense to bring someone in,who's going to be objective and
help guide you through all theimportant parts of this
(30:22):
transition.
Steve Brown (30:25):
Yeah, it's more than just the family, the
clerical thing, you need to havean understanding of actual
business you need to actuallyhave been in, there's a lot of
insights that you can't, itseems like one of the dilemmas
would be for the one that wasconvinced they need to implement
some sort of transition planwas, who do I pick? Because if I
(30:47):
pick a dud, that's going to be awaste of time and money?
Steve Legler (30:51):
Yes. And so we were talking before about people
who have like a psychologydegree. Okay, great. But you
know, I've been to, there'sanother organization I'm a part
of called The PurposefulPlanning Institute. And I was at
one of, the first time I went toone of their meetings, and we
were doing an icebreaker thingaround the table. And it was
that question where, like, ifyou had a magic wand, what would
(31:12):
you fix? And this woman who wasa psychologist said, If I could
wave the magic wand, allpsychologists would be
financially literate. And I waslike, Wow, what? And then I
realized, you know what, some ofthe people with whom I'm
competing for a seat at thatfamily table, don't really know
(31:34):
the difference between a milliondollars and a billion dollars.
And you know, there's a bigdifference. And it's not just
the three zeros, it's in what,and so someone who does not have
that ability and shows up at thetable, will not be able to get
the respect of the people aroundthe table. And so I talked about
(31:55):
my willingness and my desire towork in the family circle.
Luckily, for me, I have somecredentials on my business card,
that allow me to go through thebusiness door to get to the
family. So I have an MBA, I havea CFA (Chartered Financial
Analyst), so I can talk to theperson who may not want someone
(32:15):
to deal with their family, but Ican earn their trust by being
able to talk business with them,and then work my way into the
family system issues later on.
Steve Brown (32:25):
That knowing or needing to know have a financial
acumen, I think it's soundervalued and missing in most
of these business coaches thatyou see packaged everywhere on
LinkedIn, it's something thateven I'm in sick, I run a
(32:47):
business, right? For years andit's an area that I wouldn't
ever present myself as someonethat's an expert in financial
stuff, but let me tell you, ifyou miss leave that component
out in the planning and whatyou're doing the year, you're
really, you're setting a trapthat you're going to step in
(33:07):
later.
Steve Legler (33:08):
But the other thing is, I always like to say
that if someone had met my dadat the time, when we were
planning a transition before wesold out, and if they had said,
Oh, I got this perfect personyou should talk to to work with
your family. And they say,here's this card is so and so
Dr. So and So PhD, you know, mydad would have said, EFF you,
(33:29):
we're not crazy, we don't need ashrink. And I think a lot of
people would would feel thatway.
Steve Brown (33:39):
Yeah. So what's it look like, engaging with you,
Steve?
Steve Legler (33:45):
It's uh, so the the lead time is very long. And
that makes sense. And I don'tstart running a meter, I usually
spend, I usually like to say,let's have a quick call, just to
get to know each other, thenwe'll take like an hour to go a
little bit deeper. And thenlike, I have one where I just
(34:09):
had a half hour zoom call witheach of the four kids. And we
have not engaged we haven'ttalked money, we it's like,
let's make sure that you're theright person for us. And then
once we figure that out, thenit's let's figure out what we
can do in a year. And how manymeetings that would be and how
many zoom calls and then wefigure out a quarterly retainer
(34:32):
and get to work but that only,that talk about how much and how
long only comes after at leasttwo or three calls to make sure
that they understand who I amand I understand who they are,
and that we are meant to worktogether. Because I've had
clients where they say oh, weneed someone to referee our
(34:54):
family meetings. And I was like,Oh my god, that that didn't last
that long. I mean, I did Helpthem a bit, but it just, you
know, I'd rather, and there arepeople who do that there are
mediators who are specialistsin, I prefer not to deal with
them when they're already toxic.
I've had one that came to me alittle while ago. And when I
(35:14):
realized I had to refer thisguy, tell him to find a lawyer,
because he was about to getscrewed by his brother and his
father. I also realized not onlyam I handing this guy to a
lawyer, I'm, I'm checking outbecause at this point, I want to
help families who want to worktogether, get through that and
work together. If they'realready past the point, then
(35:35):
there's other people who candeal with them better than me.
Steve Brown (35:40):
So I'm, you know, I get asked a bunch, Steve, what
kind of, what do you guysspecialize in? And it's like
they're expecting the answer tobe, we specialize in attorneys
or age management practices, orwhatever. But what I realized
was we specialize in progressiveminded leaders that have
(36:00):
realized they need to takeaction on this. So they're
already convinced. They'realready doing research. They're
already investigating andreading. And they're like, a
beautiful fit for what we have,because they can appreciate and
apply their insights faster. AndI would imagine it's similar in
your case.
Steve Legler (36:19):
Well, so yes, somebody in the family has to
come to the realization that,hey, there's a lot at stake, we
need to do something about this.
And on our own, we're not goingto get there. And so that those
are the people who aresearching, and that could be
mom, like we said, it could bedad, sometimes it is. A lot of
times, I got an inquiry twoweeks ago from the guy said, I'm
(36:44):
the son and me and my sister,and I talk with my sister about
this but my parents don't wantto talk about it. Right? And so
I've got a call with them nextweek to see how, so sometimes it
comes from the younger people,which is sometimes encouraging
and sometimes discouraging,right? Who makes the first call
is less important than afterboth generations are brought
(37:14):
together, do they both see thelogic and have some willingness
to commit to going forward?
Because if they still don't seeit then that's a bigger
obstacle. But sometimes, theparents might have just been
waiting. Right? Like it's awaiting game, the parents don't
(37:34):
want to bring it up, becausethey don't want to set too much
of an expectation. The kidsdon't want to bring it up
because they don't want theirparents to feel like they're
trying to push them out. And soeven just asking questions,
sometimes is discouraged. And sothey sometimes reach out to
someone to help them have thoseconversations, because, you
(37:56):
know, we were talking earlierabout the statistics of family
business survival are really notgreat. And that's because there
are a lot of obstacles, and mostfamilies left to themselves
only, will not be able to havethe kinds of conversations that
they ultimately need to have.
And so the more that's at stake,because the wealth has grown,
(38:17):
and the business has grown, themore complex it is with the
number of people and then inlaws and their kids and who's
expecting what the more complexit is. And the bigger it is, the
more I really think you shouldat least start looking for
someone to help you.
Steve Brown (38:34):
Excellent. So you have two books. Tell us about
your books, your website wherepeople can find you stumble
into, you actually initiatemaybe a conversation.
Steve Legler (38:46):
So I like to say that I have a really good name,
Steve legler. It's short. It'snot complicated. It's not that
hard to spell L E G L E R, butit's not common. So if you just
Google me, Steve Legler, Ishould show up and if you put
anything about family business,I'll definitely show up. So the
(39:08):
name of my website isshiftyourfamilybusiness.com
because that was the name of myfirst book. So you can find me
there. You can find me onLinkedIn, and I accept 99% of my
LinkedIn invitations, becausethere are some that just look
too spammy, but most peoplecould, but I don't you know,
it's tough for me, right?
Somebody hits me up on LinkedInand they're like, they're
(39:30):
remember, they're in the army,like, it doesn't feel like it
fits but maybe dad owns abusiness. So I'll usually say
yes, because I don't know. Andso LinkedIn, I post a lot on
LinkedIn, because I read a weekweekly blog, my website, if
you're, my website has probably400 blogs on it now because I've
been writing once a week forseven, eight years. I've got
(39:53):
videos on there. There's otherpodcasts I've done. There's all
kinds kinds of information. AndI know that I'm not the perfect
fit for everybody. But I knowthere's other people out there
that don't know me yet for whomI would be a really good fit.
And so if you're out there, andyou think that's a possibility
after having heard this hit meup, but let's start talking.
Steve Brown (40:17):
And his books are, SHIFT Your Family Business,
startup, you go with thissubtitle there, Steve.
Steve Legler (40:25):
Oh, yeah. So this, so SHIFT Your Family Business,
stop working in your familybusiness, start working on your
business family. So that's thetwo part thing there's the
working in and working on thateverybody knows about. But then
there's the other one is, Areyou a family business? Is the
business the most importantthing? Or are you a business
(40:46):
family? And I think that often,as I was saying earlier, that
the entrepreneur who starts thebusiness, that business becomes
like their favorite child, andthey're more concerned about the
business and not enough aboutthe family. And so the mental
shift that I'm asking thesepeople to take is, okay, stop
worrying about making the piebigger, and start figuring out
(41:07):
how this pie is going to get,you know, run by your kids.
Steve Brown (41:13):
Awesome. Steve, I'm jealous, your name is Steve, is
a great name. I can relate, butyour last name is uncommon, mine
is common. So I have to like,you know, I'm Steve Brown. And I
have to put ROI Online after itso that I can be found.
Steve Legler (41:31):
Yeah. Cuz when I when I looked at my calendar,
and I saw, oh, I googled SteveBrown podcast, and there's some
religious guy that's a years oldthat said. So I thought. I am
talking to that guy? And I wasrelieved that it was that it was
the ROI Online guy.
Steve Brown (41:50):
Yeah, me too.
Although Steve Brown has gotsome books out there, too. So
yeah, great conversation. You'vebeen an excellent guest Steve,
thanks for being on the ROIOnline Podcast.
Steve Legler (42:03):
Thank you, Steve.
Steve Brown (42:05):
That's a wrap.
Thanks for listening to anotherfun episode of the ROI Online
Podcast. For more, be sure tocheck out the show notes of this
episode, and feel free toconnect with me on LinkedIn
where we can chat, and I canhelp direct you to the resources
you're searching for. To learnmore about how you can grow your
business better be sure to pickup your copy of my book, The
(42:27):
Golden Toilet at surprise,thegoldentoilet.com I'm Steve
Brown, and we'll see you nextweek on another fun episode of
the ROI Online Podcast.
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