The Peril of Collusion in Family Business

In the following family, once again, the father is performance oriented; and the mother is more focused  on the relationship between her children, but their problems are more complex and far harder to resolve:

After Alice and Harvey retired from their family real estate business, their older daughter, Susan, and her husband, Ed, continued to work in the business, as did their only son, Kenny. Ed was always highly effective but was also emotionally and psychologically overbearing towards Kenny, who was not much of a worker. Alice and Harvey had two other daughters, both younger than Kenny. One worked outside the business; the other was a stay at home mother.

Because Kenny was their son, Alice and Harvey were never able to come to terms with his weaknesses. They compensated him commensurately with Susan, a much harder worker. Although they didn’t accept Ed’s behavior towards Kenny, they liked that Ed generated a lot of money. Comfortable with their cash flow, they were never able or willing to resolve the tension or to make a decision about who would eventually end up with what stock.

Kenny is now in his fifties, and Susan and Ed are close to sixty. Recently, Harvey died and Ed became terminally ill. Alice, influenced by her two other sons-in-law, decided to split the stock among her four children. Unsurprisingly, Susan feels betrayed by Alice’s decision. She and Ed worked their entire adult lives for the family business and were never able to get any kind of footing. Not wanting to spend the next twenty years of their life making her brother and sisters rich, her only alternative is to sell the business.

The primary source of the family’s problem is that Kenny never wanted to work in the family business. He was forced into it by Harvey, who believed it was Kenny’s responsibility to work in it. After refusing to pay for Kenny’s college tuition, Harvey disapproved of Kenny’s poor performance in the business, not realizing that Kenny was acting out his anger at his father by not performing. For a man, independence is the root of self esteem. Kenny felt emasculated for years.

The parents’ failure to assess honestly Kenny’s talents, weaknesses, and desires, and to respond accordingly, underscores the importance of original placement. Alice colluded with Harvey. They both remained in denial about the consequences of forcing Kenny to work in the business. Worse, they let the conflict fester unresolved for thirty years. When they were ready to pass the business onto their children, the issue came back to haunt the whole family.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  For more visit:  www.patriciaannino.com




Women In Family Business-Separating Apples From Oranges

Frank and Sally, who are retired, built a chain of sporting goods stores. Their older son, Stephen, currently runs the business, makes all the major decisions and acts as the business’s visionary. Through good times and bad, Stephen makes sure that his parents and his younger brother, Michael, who also works in the business, have their income. Stephen owns sixty-five percent of stock. Michael manages one of the stores, earns a salary that is almost twice what it would be were he not a family member, but owns no stock. 

Sally is focused on family harmony, specifically, her sons’ relationship. She believes that Stephen is stepping on Michael, and that Michael is entitled to some of the remaining stock. Stephen already makes more money than Michael, who has also committed his life to the business and is an asset to the company.  She also believes that Stephen doesn’t give Michael enough credit. 

Frank, on the other hand, is focused on his sons’ performance, and is making judgments about what is fair based on that. He believes that Stephen is being very generous to Michael, since he’s overpaying him for his skill level; he could hire a twenty eight year old to fill Michael’s job, while Michael would not be able to find another job that would pay him anywhere near what he is making.

 How do Frank and Sally resolve their differing points of view? 

The first step is to understand that they are fighting for different things, with different priorities, but that they both have valid points of view and reachable goals. 

The second step is for Stephen and Michael to substantiate clearly and unemotionally what their respective roles are. Once they articulate how they each contribute to the business, they are more likely to respect and appreciate each other, which in turn will help them resolve issues of control and compensation. They can then talk about whether or not Michael is being overpaid and how he can share the responsibility of the risk more equitably.

 In terms of the stock question, it’s not unusual for the sibling who enters the business first, who has the more entrepreneurial spirit, i.e. makes the decisions and takes the risks, to get the bulk of the stock. But if Michael, who also lives and breathes the business, agrees to carry some burden of risk, he can make it easier for his father to give him some percentage of the remaining stock, which is what Sally is bucking for. Should Stephen wish to be the sole owner when he faces the question of succession, he can even buy Michael out. In sum, as long as the parents separate out business issues from family issues and the brothers communicate, Sally, Frank, Stephen and Michael can find a number of ways to solve their problems. 

Patricia Annino is a nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  For more visit:  www.patriciaannino.com



Cracking the Code: Good is Often Good Enough!

Money is a measure of how you value your own worth and the services you provide. Women tend to undervalue themselves and their contributions. And so it is not surprising that many women tell me billing is a tricky and sometimes stressful topic.

If 100% of your clients pay 100% of every bill you are sending out without any complaints, your bills are too low and you should take a second look at the way you are charging for your services.

About 10 years ago I had lunch with one of my mentors – a very accomplished woman who understood this very well and was watching me struggle with economics and relationships in the practice of law. She had a present for me wrapped up and in a box. As she handed me the box she said to me, “Whenever you do your monthly client billing, take this and put it in front of you and look at it for 60 seconds before you begin the billing process.

I opened the box and inside it was an engraved plaque shaped like a ruler, on it the words:

“I WILL NO LONGER DO PRO BONO WORK FOR MULTIMILLIONAIRES.”

I try very hard to be fair to myself and to my clients when I bill. On those occasions when the amount of the bill is challenged, my policy has always been to stand by the billing decision I have made, tell the client that and leave it up to them to pay what they think is fair for the services provided.

Good Is Often Good Enough

For many women the desire to do the best they do puts them in the box of mastering the project. In life there is a time when “good is good enough” and it is important to move on. When I began to write a two volume, 1800 page technical book (from scratch) for a premier legal publisher, I wanted it to be the “best book” out there on the topic. It took me seven and a half years of nights and weekends to complete that project.

In hindsight, while I can understand wanting to create an extremely good product,

                                  I realize that striving for perfection was going overboard.      

Authoring a book that was good enough in a shorter time frame would have brought the book to market sooner, served its purpose, educated the lawyers who could have used it earlier and freed up my time to focus on other projects.

Patricia Annino is a nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  For more visit:  www.patriciaannino.com


Women versus Men: Connection and Success

Women spend a significant amount of time focusing on the needs and wants of everyone else in their lives. This is a key strength, but it is also a key weakness. If you don’t make a conscious, disciplined effort to shift that focus back to yourself and think about the importance of protecting yourself when you are connecting with others, there is a great risk that you will undercut yourself.

All women need to remember what the flight attendant says at the beginning of each flight: “If you are traveling with a small child and the oxygen mask drops, put that mask over your own face first.  It is only when you are strong enough to take care of yourself that you will have the strength to take care of that child.”

Those instructions are valid for women in more situations than a crisis in the air.

They apply to a women’s role at home, at work and in the community.

Psychoanalyst Jean Baker Miller, the author of Toward a New Psychology of Women, and first director of the Stone Center at Wellesley College, developed the “Relational-Cultural Theory” with her colleagues. Their work suggests that all growth occurs in connection, that all people yearn for connection, and that growth-fostering relationships are created through mutual empathy and empowerment.

The other side of this is disconnection.

That is when relationship connection no longer works or has become uncomfortable. When this happens, if the less powerful person is able to express her feelings and the other person is able to respond empathetically, disconnection can actually lead to a strengthened relationship and a strengthened sense of relational competence. If however the injured or less powerful person is unable to express her feelings or receives a response of indifference, she will begin to keep aspects of herself out of the relationship in order to maintain the relationship.

This very complicated analysis is at the heart of the difference between men and women in the work force.

Because so much of what a woman values is the connection and the relationship with others, when that is not reciprocated or encouraged, it impedes a woman’s ability to succeed. Men, on the other hand, don’t have that problem. They measure their success on their individual ability to get ahead and are not as bogged down by how they are judged in relationships with others.

Men are not afraid of ruffling the feathers of those they work with to achieve success.

Patricia Annino is a nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  For more visit:  www.patriciaannino.com



Cracking the Code: Connections Build Business

Men take the importance of connections seriously and put together a game plan on how to leverage them and make them effective. One of the first law firms I worked in had an annual Christmas party for its important clients. The lawyers in the office were handpicked. You were selected that year if you were a “star” and if you had the opportunity to increase the depth of the relationship between the firm and the clients.

The managing partner of that firm took building those relationships and the money expended to make it happen very seriously. Each year on the day of the Christmas party he would call into the conference room all of the selected lawyers – most of whom were older than I was and most of whom were men – and he would remind them of the rules that were to be followed at the party:

  1. No lawyer was to eat the shrimp-that was for the guests and too expensive.
  2. You had to have a glass of beer or wine in your hand so the guests felt comfortable, but you were not allowed to drink it
  3. No lawyers were to congregate and speak to each other; the point of the evening was to connect with clients.

His preplanning and “lecture” worked. Every year the firm achieved new connections, strengthened existing relationships and increased revenue from the party.

Men also understand that the entire world is connected and positive connections may prove useful later on. One of the first firms I worked in had a policy that whenever an attorney left (unless the attorney was fired) there was a lunch in his or her honor where the attorney’s contributions to the firm were applauded. That firm knew that it is a small world. That attorney could very well end up in a position to refer business back or to recommend someone in the firm for a position.

Patricia Annino is a nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  For more visit:  www.patriciaannino.com

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