4th Generation Inheritor, Coach & Author of Disruptive Successor

Mike0:00Welcome to The Business of Family. I'm your host, Mike Boyd. Multigenerational wealth creation involves so much more than capital accumulation. The most successful families cultivate values, stories, knowledge and resources to pass on to the next generation, and they do it very intentionally. On this show I sit down with members of some of the world's most interesting business families to hear how they do it. To see where your own family stands, take the Business Family Diagnostic at businessoffamily.net.

0:42Jonathan Goldhill is an experienced coach to entrepreneurs and family-owned businesses. He states that the dwindling chances of multi-generational success are due in large part to the issues unique to family businesses, which are often wrapped up in a tightly woven knot of unspoken plans. In his new book, Disruptive Successor, Jonathan offers a proven framework and playbook for unwinding this knot, scaling up your business, and planning your exit.

1:17Jonathan, thanks for being with us today. It's great to have you on the show.

Jonathan1:20Thanks a lot, Mike.

Mike1:22Love to start with a bit of an overview of your background. I understand that you're an experienced coach today, but you've had many and varied roles, and I'd love to understand where your experience come from.

Jonathan1:32Sure. So, I have literally about 30 years of consulting and coaching experience, which is half my life. And I started consulting at a young age, having come out of an entrepreneurial business school here in Southern California with an MBA in entrepreneurship and management consulting. And actually, I had a passion for family business. I ran into a guy named John Davis, who was working in a small office at USC doing some doctoral thesis work. And I found out that he was into family business. He was the only guy in that whole school. And I was like, I want to learn what you know and what you're doing.

2:16And little did I know he was going to head off to Harvard to finish his PhD and become a successful global consultant. So, Mike, I had a real passion for family business probably because of my family background. My family built a very large clothing manufacturing business, and it was started in the early 1900s. And it was my great-grandfather and his three sons. And it was called Joseph H. Cohen and Sons. And these were basically Jewish immigrants from Russia who were peddlers on the street selling suits for, I think they had a three-piece suit for $9.99. That's $9, folks, and 99 cents. So this business grew and grew and grew, and it grew very successfully through the

3:06World War II, supplying coats, overcoats to the army. And then they opened up a large factory in Philadelphia. They took over the old Ford Motor Plant, which was also a Sears factory. And this was a 500,000 square foot building, multi-floor, triangular shaped, and is a landmark building today in Philadelphia in what is a very burned out neighborhood in Philadelphia, because most of those textile and similar type manufacturing businesses left.

3:42But it was a business that would have been in excess of $300 million in revenue in today's dollars. And they had many of my uncles, my father, who was a son-in-law, and many family members. I always remember, I would ask my mom, like, well, so who exactly worked in the family business or who didn't? And she said, what do you mean who didn't? Like, everybody worked in the family business. And I think that's the nature of large, multi-generational family businesses.

4:16as they keep growing and growing and growing, they can keep adding more and more family members. But what happened in our family business, not too dissimilar for many others, is there was a loss of interest, I think, from the children. It was the in-laws, my father, my uncle, who was an in-law, sort of marrying into the family and going into the business.

4:40But the next gen was not so keen on it. I don't know exactly why that is, but I suppose that there was maybe a certain amount of wealth accumulation already. And by the time the third generation was entering into it, I think maybe they saw some of the damaging, like the downsides of being wealthy, which is wealthy people can be very busy. My grandfather was a very successful executive who became quite a philanthropist and a socialite. And I don't think he spent much time with his children. And I know my mother suffered from that. And I know her brother did as well. So I think that there's just kind of a loss of interest to carry it on.

5:25So the story, to wrap it up, is that they sold the business in 1966. They operated under lifetime employment contracts and purchased the brands of some large, famous one name here, Botany 500, was the men's clothing retailer to all the TV game shows and the types of TV shows that I grew up on as a child in the 60s and 70s. And so that business just basically closed in 1986. It shuttered its doors because I don't think anyone wanted to make the move to moving the manufacturing over to Europe and Asia and places like that. And other family members that were still in the business took jobs in other companies. And I always wanted to be part of that business.

6:18So I think that was this love and fascination with family business because our business was so successful that it afforded me some inherited wealth, which gave me some freedom. And I knew I always wanted to give back because that was part of my DNA. And so ever since I was 20, I was doing a lot of community service type work, nonprofit. It wasn't so much philanthropic, but it was philanthropic with my time. And so, I was involved in a number of cause-oriented organizations.

Mike6:53You would have been which generation had the business continued?

Jonathan7:00I would have been the one, two, three, fourth generation.

Mike7:04Right. Okay. So, was it the third generation that decided to sell?

Jonathan7:08No. It was really technically the second generation, but I don't really know the history behind my great-grandfather and his involvement because I always looked up to his children, which were his boys, as being, you know, they were like 13 and 19 when they started in the business. So we know that it really was started by their father. But to me, they were the executives and they got, they were the CEO and COO and they got lifetime employment contracts. The great-grandfather was long since deceased. And they were in their 1966. They were almost 70 years old selling the business and getting lifetime employment contracts.

Mike7:57So that's interesting. The lifetime employment contracts, that's for them to continue on as executives running the business, but that's for new owners. When the business effectively shut its doors 20 years later. Is that also because the new owners didn't have anyone to replace executives or the business had just waned or how did it come to that conclusion?

Jonathan8:19I don't actually even really know. A lot of this, I had to do some research. I know there's a lot of family journals. I really recommend to families that they do a good job of archiving this data. And I'm sure that we had journals and I saw some of them. They were too lengthy to want to read.

8:40Our generation wants it in short form or in video. So I found a long blog on Tumblr about a year ago that gave a whole history of North Philadelphia, the manufacturing, my family's business. And they had done a lot of research on my family's business sale. So I don't really know exactly how they closed it down because in 1986, my grandfather would have been 87 years old and would have been suffering already from having had multiple strokes.

9:17But I know they still had the office in Manhattan because that's where the youngest of the three brothers was still going. And so I'm guessing that it was just shut down by him. there just no longer was like there wasn't anyone to take it over and move it somewhere else.

Mike9:34It's an incredible story. And I love the encouragement to create a family archive. It's something that we've spoken about on the podcast before. And I think it is a great contributor to building family history. We've heard from some that have actually said that subsequent generations that can read stories about the trials and tribulations of the generations before them actually build resiliency and are inspired to go on and pursue their own path, having learned of what their ancestors had pursued before them. And I think you're a great example of that. You've come across your own history. You've taken a fascination. You would have been fourth gen. You were inspired and wanted to join the business. And I think it's only because you had

10:20documented family history that we can even have this conversation today.

Jonathan10:23Yeah. As a little kid, I always really looked up to my grandfather a tremendous amount. He was a short, stout, and strong, and big personality, very colorful. And he was a prolific artist and a very big philanthropist. And he literally was a self-made man. And I've read articles that described him as such. And while he might not have been the greatest father to my mother, he was really larger than life.

10:57And I always wanted that. And so maybe in a few moments, I'll tell you about where I thought I was going to relive and bring that to life in my own embodiment many years ago as an entrepreneur. But that was just someone I thought that I really aspired to. So perhaps all multi-generational businesses should have a family constitution.

11:21And in that constitution, while we're naming secretaries and treasurers and things like that, why not name a historian who really likes that? There's someone who's probably not that interested in the business, but they're interested in the history and the personalities. And what a good job that is and how valuable that is.

Mike11:40We all need history-less teachers, right?

Jonathan11:43Yes. And it's much easier to set aside some history in small increments each year than to be trolling backwards and trying to document the last 30 years.

Mike11:51100% agree. So I'd love to get into what you were just alluding to, where you thought you might evolve into as a young man and follow in his footsteps by the sounds of it. Can we hear that story?

Jonathan12:03It was 1986, no coincidence. And actually, that is coincidental. I was living near Venice Beach, California, and I was kind of bit by this entrepreneurial bug. I had been doing a lot of work in my early 20s that was basically starting organizations. They were mostly what I would call grassroots nonprofit-type organizations. and suddenly I went to this party and I met this artist and he painted art on clothing.

12:41And he painted art in the traditions of Picasso and Chagall and Benchon. And these were all artists that I grew up admiring. They adorned the walls of my grandfather and grandmother's house because they were big art collectors. And I thought, this is it. I am going to make clothing with art on it. And my partner said, yes, I call this wearable art. And I thought, this is going to be amazing. I'm going to raise money for this business. The first person I'm going to turn to is my family. Of course, my grandfather had suffered many strokes, so he was a little bit too senile. And the family accountant wrote me a letter basically saying, look, grandpa is not able to make these type of decisions at this time.

13:30And I think you should really think about the business and whether this is really the right business. And this was my first learning lessons in the difference between a family business and a non-family business. And the downfall was that even though this partner and I became very close, there was a huge schism between the two of us.

13:55We came from very different backgrounds. I came from a upper middle class affluent background. He grew up on the streets of Hollywood and was around like the rock and roll music industry. And he was literally like a street artist and he went rogue a bit. And the problem I found very quickly was that he had problems that I could not manage.

14:22Namely, he had drug problems. I didn't know that he was quite a womanizer, but I didn't know that he also had children and a wife and he brought over. And I just that was when I realized that I was like funding this artist's like hobby. But honestly, I had the business skills and the acumen to think through business planning and financial management.

14:45And he was intuitively felt cash flow. There are very few people that I have done business with as a coach for 30 years who really can feel the cash flow in their business. Most of us need visual charts and graphs with the auditory lecture from our accountant to explain what's going on in our business. But this guy, like my business school professor said, he felt the cash flow.

15:11He knew what went in and what went out that day. And so I thought we would make a great success. But ultimately, I think drugs and my inability to manage and control his spending, it kind of blew up in my face, which is what sent me back to business school. It was a great lesson. We learn more probably from our failures.

Mike15:33Absolutely. And this was in your early 20s, was it?

Jonathan15:36Yeah, I was 26 years old or 27 years old at the time.

Mike15:43And I'm curious to go back to, you touched on earlier, you were fortunate enough to inherit some wealth and you also talked about the impact of wealth on your mother growing up and the role that your grandfather played as a big personality, but not necessarily the father figure. Would you mind expanding on that a little bit for us and maybe, are you referring to the impact that wealth has had on your journey growing up?

Jonathan16:08I think it had a big impact on me growing up. I was always brought up with a keen awareness that we were a very privileged family. We did ski trips to Switzerland, to Aspen. We did vacations to the Caribbean. We got to go into New York City and go to the theater and go out to restaurants and I always had really nice clothes and got to go to tennis camp and just really, I recognized that privilege. And I always used to say, I felt maybe that I was spoiled. My mother said, you're not spoiled. You don't take this for granted. And I didn't because I always felt that there was like an obligation of, you know, they call it noblesse oblige, right? An obligation

17:01to give back. And I think my grandfather did what all smart, wealthy people did was, you know, he set up trusts for all of his children. He had, I believe, 14 grandchildren, and he set them all up with trusts. And I think that at the time, that might have seemed like the right thing to do. And, I certainly think it was a blessing, but also a curse in my life.

17:30And so I watched what happened to some of my first cousins. One died of an overdose. One was a heroin addict who has since recovered. One went off to the Caribbean to live a very bohemian lifestyle. There's good and bad in all of this, by the way. Some became artists and photographers and college professors, and some were lawyers to the indigent, the underprivileged.

18:02So none of these became entrepreneurs or business owners in their own right. I mean, also, I had a family member who was in the finance industry and was convicted of a white-collar crime and served time. I mean, so I think that money in and of itself, there's no evil to money, but it's the absence of management or the absence of – management's not maybe the right word.

18:34It's the absence of instilling good values as to what the significance of that money means. And I think that there's lots of misinterpretation of younger generations when they inherit that wealth. One is that they might interpret that, oh, wealth comes easy, it's fast. It grows on trees is the old expression. or similarly, you don't have to work that hard for the money. There was another point I was trying to make, but I don't recall what that was. But I think there's a requirement of the older generation that if they're going to leave money to a younger generation, that they provide some guardrails around it. They provide some education around why and what. I mean, the questions that

19:28came to my mind, the questions I think that arose from some of us was, was our family, like, did they exploit the labor? There was an attempt to unionization. My understanding was my grandfather was really friendly with the union and was friendly to unionization of his shop. But then there was some other controversy was like, no, he wasn't. He was pretty hard on them. So I think those are debated topics. And is this blood money, so to speak, or is this fairly earned?

20:00And so wealth that just sort of suddenly shows up in the lap of an 18 or 21 or 25-year-old, unless it's explained and unless maybe some guardrails are put around how it's utilized, I think it can be very damaging. And what seems like is a blessing could also be a curse. I wondered whether in my 20s, having access to this wealth, which created basically a cushion, a safety net, it allowed me to pursue my passions and my interests, which I was always encouraged to do.

20:37But did it take away some of my drive, my hunger? Did I not need to create enough money to save up for a house or provide for a family? Consequently, I got married late and I was mid-30s and didn't have a mortgage over my head until around that same time. So I got to feel like I was living a pretty free lifestyle up until my 30s.

21:01And I don't regret that. But probably if I didn't have the money, I probably would have become an accountant because I think you could always be employed as an accountant and you could make the leap to entrepreneurship. from there, especially if you're a little bit of a maverick like I am.

Mike21:21Fascinating story. And I appreciate you sharing that with us because these are the stories that we try and uncover at the intersection of family and business and wealth. I'm curious how the story evolves now. You've been a coach for 30-odd years, you said. So, how did you progress and take some of this formative experience from your own family to now be working with other business families and helping them through some of their situations?

Jonathan21:45I think what happened was most of the wealth that I thought I had. And by the way, when you're 21 and you inherit, I don't know what the number was, but if it's $100,000, it seems like it's a lifetime supply of money, but it's not really as much as you might think. And so by the time I was 31 and come out of business school and joined an economic development firm to help build, to do small business consulting and entrepreneurial training and small business financing, I had to work hard. And so my answer to your question is over the last 30 years, I've worked hard. I've always had some comfort. I came from a good family. I never had to worry if they ever got into a pinch or anything like that, but

22:35I've worked hard for the last 30 plus years. I built a consulting firm from three to almost 40 people from nothing in assets to 7 million in assets. And from, I think we were doing $100,000 in business the first year I got there. When I left 10 years later, we were doing 4 million. So not a big firm, but we became nationally recognized and it was a well-funded, highly regarded organization providing economic development. And so I left that. I joined an internet company thinking that in the internet 1.0, which was the late 90s, early 2000. And I watched the revenues of our company plot very nicely against the same plot line of the NASDAQ, which so it went up and then promptly fell. And that's when I went to everyone at that point in

23:301999, 2000, everything was B2B, B2C, B2B. And it continued. It was back to banking or back to consulting. And so I went back to consulting B2C. And so over the next 20 years, I honed my craft as a business coach working with small entrepreneurial family businesses, some of them quite large, some of them multi-generational. King's Hawaiian Bakery was an accidental client that I was with for 18 months. Little did I know I was providing them with coaching that were in the area of best practices. I literally did the consulting where I would research what are the KPIs for a bakery, a large bake. King's Hawaiian, just so you know, I think it's a multi-generational family business. It probably employs about 2,000 people in Southern California.

24:28and I was helping each of their department leaders identify KPIs when they had none in the manufacturing facility at that time. Today, I would make everyone in every department leader would have cascading priorities and KPIs and huddles and all the stuff that we learned from methodologies like the scaling up book. And they would measure output and yield and waste. And they would have lean management running through the organization. So that was an interesting business. But many of the companies were smaller family businesses run by what I would call craftsmen, technicians, plumbers, roofers, landscapers, lawyers, marketing firms. And some of them had brothers, siblings. Some of them were started by a father who was a good

25:26landscaper, plumber. And then there was a next gen that was taking over.

Mike25:32This is a good point, right? Because we often think of multi-generational family businesses as the big ones, but there are so many across the spectrum of the economy and there's far more SMEs than there are conglomerates. And I think that I'd love to hear from you about the experiences that you've had as a coach, particularly with the relationships around founding generations and next generations and succession issues or managing expectations, because I imagine it transfers irrespective of the size of the business.

Jonathan26:01Yes. Let's be clear. You're 100% right. I mean, And the statistics are supposedly 96% of all businesses in the United States are under a million dollars in revenue. And most businesses, 64% of the GDP in the United States is coming from family businesses as well as the job creation. We also know that middle market companies create the most jobs, but the small businesses create the most jobs too.

26:35They create the most jobs just in terms of numbers, but not in terms of at each company. And so there's a situation where the family, especially you see it in new immigrant families, and we have a lot of new immigrant families in Los Angeles, probably like maybe the other major metro, like New York, places like that. So family members join the family business out of a should or a must.

27:05And you have to, partly maybe because they can't really afford to hire someone. And look, partly we can't have a babysitter for you to be at home. So you're 14, come and work on the floor and come and work in the shop. And there's no child labor laws when you're employing your own family. So I think family business is an important fabric in our country.

27:28And I think I lost the question, Mike.

Mike27:31I'm curious, the relationships and the issues that they manage with founding Jen going on next gen.

Jonathan27:39Yes. So I think for me, what's worked really well is I relate well to all their people and I play well and well in between the spaces between the two of them. So oftentimes, there are unspoken conversations between these generations. A father and a son, for instance, could be a father and daughter. It doesn't matter. There's a generational gap.

28:08And so they're not talking to each other like peers. The businesses that I've worked with that have the healthiest transfer, they don't refer to themselves as mom and dad and son and daughter in the floor. They're Mike and Mark and Bob and Sue. They call each other by their first names. And in the business, outside, it's nice.

28:34I don't really hear it. I don't know. I hope they call them mom and dad. But inside the business, around everybody else, there are Kendall and Justin as an example of a client of mine, where the son plays a very important role and has grown the business well past what the dad wanted to grow it. And that passing of the baton, you know, passing, handing off of the baton took time. So it takes time for one generation to let go and release and enjoy what they built and trust the next generation to grow it even bigger and to do it safer and to do it safely, I mean, right?

29:18Because that's the big fear of the preceding generation is the younger generation might be more careless. They didn't earn, they didn't make this money. They didn't earn it themselves. Are they going to make foolish decisions? We have a lot of agriculture businesses here in California, so we could use the phrase, you know, they don't want their children to bet the farm.

29:40And because that's what it feels like, you know, when you're 60 and you know what the business is throwing off and it's consistent and reliable, do you really want to relinquish control to the next generation leader when they might not share the same values or might not make the same investments? I just was speaking to and interviewing actually for my podcast, a multi-generational advisor who specializes in real estate. He helps families understand what to do, What's your portfolio worth? How do you manage it? What are the different generations' shared values or differing values on what they want to do with it? And a lot of wealth in Los Angeles is created in real estate. Many operating companies are no longer operating. They're

30:28just holding companies with real estate assets. And some just started out with real estate portfolios. So these are difficult transitions for a lot of people. And what needs to happen is there has to be a willingness and openness to be engaged in an honest conversation. And it can't be done in a patronizing or it can't be done in an angry or an entitled kind of place.

30:58It has to come from a place of maturity. So both the older and the successor generation need to have a maturity. They need to be almost, they're not equals, but they need to talk as peers with each other.

Mike31:12And is that part of the work that you facilitate? Do you help them try and bridge this communication gap and put some mature plans in place as to how a transition might occur?

Jonathan31:25So I'm not a succession coach, and I do pay respect to those who do that as a business. I hope to be able to offer that to clients at some point. And coming from my experience, what I am, I'm really more of a growth coach. I know, what do you want to call it, a scale-up coach or an implementer of best practices that are going to help fuel the growth of the company?

31:55But I do, like I said, play well in the spaces between the family members. And so I do find that they invite me into their homes, into their conversations, into facilitating dialogues when there's blocks. They're not turning to the lawyer, the accountant, the insurance guy, although those guys might be chiming in. I tend to be sort of the first person that they might bring into that conversation.

32:24And this is usually at a family or owner board meeting and where they're bringing up a touchy subject. And touchy subjects namely are around money. And so it's either compensation or it's transfer of equity. It's not the shareholder agreement or other more buy-sell type stuff, state planning.

Mike32:48And who typically engages you? Who's the client? Does it tend to be the successor generation that almost wants someone to run interference and sort of say, hey, can you help me convince dad that it's time for change or convince mom that it's time for change? Or is it the baby boomer generation that's just spent 30 or 40 years building everything and they're concerned about letting go?

33:11Are you engaged on both sides typically or who brings you into these businesses?

Jonathan33:15I don't know the answer to that question at this moment because in the past, I had more of the boomers that were hiring me and they wanted me to coach up some of the next-gen millennial leader. More recently, it's the millennial leader that's hiring me to communicate upwards, but really because I lead with, do you have a roadmap for growth? What is your roadmap for growth? And do you have core values and do you know what your purpose is and what's your plan?

33:50And, oh, and by the way, like, let's talk about succession. What's happening there? Normally, I mean, currently, the older generation is sort of fading a little bit into the background. And they're either doing it with control of all the equity and they're, you know, they still kind of control some of the relationships. And sometimes it's difficult for them to say, you know, okay, we're not going to use the family accountant anymore.

34:14We're going to get someone who really knows how to do a good set of financial records for this business. can provide insights, who's got entrepreneurial, who's going to help us do the things that more older conservative accountants might not do. So I'm playing in the space between both and we'll see. But right now, my book, which I've just written, is clearly marketing towards that next generation disruptive leader who's a millennial probably, because we know boomers are not disrupting the landscape today.

Mike34:45Absolutely. So let's touch on the book now, The Disruptive Successor, it's called. Tell us the impetus for why you wrote it, what gap it fills, what's the specific that you're targeting there? Is it these successes in small businesses that are looking to take the reins of something and put it on a new path to growth?

Jonathan35:07100%. First of all, millennials are entering the entrepreneurial workplace or becoming entrepreneurs at a faster rate than anyone. Second of all, the statistics on entrepreneurs in the United States are, they are multi-ethnic, multi-colored, multi-gendered. I mean, we are seeing it's a much greater, broader field. I mean, this is an entrepreneurial country, and we are living that entrepreneurial dream, I think, pretty strongly.

35:37So my book was an opportunity for me to stand out from all the other coaches out there that are focused on just scaling up methodologies or getting traction in your business methodologies for middle market companies. And I really wanted to work with and speak to my ideal client who is a family business because I enjoy the dynamics of a family business.

36:08I feel more valued personally, and I think they value me more. I think that business coaching for me is not about hitting a mass number of people, but it's about the business of the family. and it's, you know, so I don't know if I'm in the business of, I'm not in the business of family coaching. I'm in the, you know, I'm in families doing business coaching. So.

Mike36:29I like that. And I think, you know, with the types of families that you're working with, one of the things that you're battling against constantly is this challenge of unspoken plans or unwritten plans. And you may have the founding generation fading into the background, as you said before, and a disruptive successor who's eager and wants to take control, that bridging those two would be challenging. And I think one of the things to help with that is providing some structure, which is exactly what you're offering.

Jonathan37:09Yeah. I'm offering it in having a weekly business therapist to go talk to about stuff that's bothering you, but also in terms of like, here's a playbook, here's a roadmap for how to scale a business. And by the way, the book is really doing well in categories that I didn't expect so much, which is it's like number one on Amazon in conflict resolution and mediation.

37:37So I was like, oh, and business quality control. Okay. That I can understand, but it was the conflict resolution and mediation. I thought, you know, maybe I should go back and reread what I wrote because I know I talked about some really interesting personality types and some emotional behaviors that we've seen. We've all seen it in either partnerships, marriages, behaviors like stonewalling, where you don't respond to someone's requests for whatever it is, whether it's the big thing of equity or it's a small thing of, hey, could you go take care of this thing for this customer or whatever. So I think families need that.

38:19Families need to have conversations, difficult conversations. I mean, the hardest part, I think, of running businesses is managing the people and is getting the right people in your company. And then I think if you're not having important conversations, then you're not really building a healthy business. And so I think that's where I focus on this family dynamics from how healthy is your family and how healthy are the dynamics. And so I think of a business that I just worked with last year where there was a father, a son, and a stepson. And the son and the stepson were co-CEOs or co-presidents running the business. And the father really still controlled the finances. He signed all the checks and he controlled any decisions that were of impact to

39:19their assets, if you will, or their bottom line. And there was a distrust between the father and the stepson that as soon as I came onto the scene, my job, number one, was to try and either heal this distrust, but bring it out into the open or make it resolve it by having it go away. And it did blow up in their faces, if you will. The stepson left the business, but it was the right thing for him to leave the business because he just wanted to do something else or do something different. And there was a distrust between the two of them. Now, unfortunately, the family that plays together stays together. And so they didn't play together and they're

40:09having trouble staying together. And so there's a lot of work that needs to be done, but you move it outside of a business coaching therapy consultation type of situation, and you move it into just a pure family therapy systems coach situation. And hopefully, they'll heal, you know, the wounds, you know, that occurred between the two of them. But the business is doing a lot better now that that sort of cancerous piece of the equation is not in.

Mike40:41It's interesting, isn't it? I think there's a time for family, a time for business, and then there's time for the family business or the business of family where they overlap in between, but both still need to be healthy in order to make the biggest contribution.

Jonathan40:56Yeah. I was talking earlier today with a professor who runs a family business program here in the United States, actually at Cornell, and he was referencing someone who had talked about the different cultures that exist. And so in the Asian culture, there is like an honor and respect and obligation. And so children might be joining that business out of obligation. And so I recently had a chance to coach someone who's in a family, multi-generational family business. He's Filipino know, and he's very unhappy in the business, but he's unwilling, and I was really gentle with him, unwilling to confront his father on his unhappiness and his desire to take the consulting business and the services business or product business and separate the two, where he would

41:55run one and someone else, a family member could run the other. And we talked about this pattern that happened with his father and his father's father. And so, I said, do you see how you're repeating this pattern? He says, yes, of course, Jonathan. I see that I'm repeating this pattern, but I just don't think I can have that conversation with my dad. And so, there's that honor and respect. And then in the United States culture, obviously, we have this very individualistic kind of culture. So if a kid today is not happy with the way the predecessor generation is running the business, then they think, you know what? What I learned is that I'm an entrepreneur.

42:45So I'm going to go off and create some other business. And they're what we call transgenerational entrepreneurs. And so they go create another business and maybe they get some support from the family. But if that doesn't work out, or if they go and do a few different things, maybe a few jobs, which by the way, every child should do that. They should never go right into the family business. Or if they do, they should leave for a period of a few years. It should be a requirement that they go outside and then they come back into the business. And they can bring so much more value to the business from what they learned on the outside if they went and got a

43:21smart education, a really, and I don't mean a school education. I mean, go to work at either company in the industry or a better company in another industry that's similar, you can bring those lessons back on leadership and on management and on accountability, all useful and transferable skills.

Mike43:40So we've actually had, I interviewed Dr. Jim Grubman on the podcast not so long ago, actually, and it's his research. He wrote a book called Cross Cultures, and we touched on this honor or face-based culture, individualistic. And there's a third one that escapes me now, but it's a fascinating piece of research, particularly as families start to combine and they're cross cultures where someone from a different culture is marrying into the family or the kids are sent overseas for education and they're bringing back pieces of other types of cultures and blending that into a very global citizen view. It's creating a whole new universe of the business of family to deal with?

Jonathan44:22Well, I think that's really fascinating. Yeah. The notes I have was there's an honor culture, which is India and also the Latin countries, South America. There's respect and obligation culture, which is the Asian, and there's the individual culture. So now we're talking about different cultures blending into a family business. And so I think here's where the rub is, are they in-laws or are they, you know, do they marry into the family business?

44:55And so they're still never family or are they embraced as family? And I think this becomes like, this is individually defined by how we define family. If family is like absolute 100% pure blood, then becomes problematic. And I saw in my own family business, and I saw it in my own becoming an adult, I thought there was a certain divisiveness in my family.

45:24My grandfather and his brothers, they were thick as thieves. And I don't mean that they literally stole, but that's an expression to say that they did really well. But my great uncle, I mean, he was an impossible character. And he was loud and troublesome and boisterous. And he got thrown out of the White House when President Nixon was giving a talk at one point because he asked, he was too challenging. And it was kind of an embarrassing moment, even though we weren't fans of Nixon. But my uncle, my grandfather was like the life of the party, everyone loved him. And so there was dividedness between the two of them. And then there was a third brother and he always seemed like the black sheep of that family. And so then

46:09I saw it carry on to the next generation. My cousins and my aunts and uncles always seemed like there was backtalk after we got together a family reunion. Well, this uncle, he's like that, and that aunt and this, you know, those cousins. Like that type of behavior is, I don't think that was endemic to our culture per se. I think that's an individually chosen. I don't know where it comes from. I haven't looked at it. But it depends on how you define family.

Mike46:41One of the biggest challenges for multi-gen families as families grow, because families grow fast, often outstripping a business and defining family as to whether or not it includes in-laws, stepchildren, same-sex partnerships, all sorts of difficult topics. Families actually have to sit down and define these things, particularly as you're getting into third, fourth, and fifth generation, because there's oftentimes hundreds of people to take into consideration depending on your definition.

Jonathan47:09Yeah. And if you consider that, and I'm going to just throw out some general statistics, if you consider that one in 10 people is gay, and if someone in the family doesn't accept that, that maybe one in I don't know how many are transgender, that might not be accepted, or cross-culture or cross-religious. You know, they married in, but they're not like they never accepted.

47:36Or someone's got mental illness or drug addiction. I mean, these are all things that break up and divide and destroy a family first and a business to follow.

Mike47:49Jonathan, it's time for our final question. This has been a tremendous conversation, but this is a question I ask all of our guests. Imagine you're writing a letter to your children. What is one lesson or idea that you don't think many parents would mention, but you consider important to understand?

Jonathan48:07I think this is over said, but life is hard work. And if you're not working on yourself, then nobody else is going to. You're always going to feel pushed from the outside. You'll feel victimized by people's criticisms. if you take your own life and look at it as a project, as a piece of art, that's a work of art, that, you know, there's no perfection. We're perfectly imperfect, but we can get better and we can improve, that we can learn, and that that's going to improve our ability to lead, to manage. It'll improve our ability to understand and empathize with other people, and that more people will follow you and you'll be trusted and respected and loved and adored.

49:01Not because you were great in your accomplishments or your achievements, but because you were great as a human being. So I think don't underestimate that hard work doesn't just look like the form of long hours and physical toil. it comes from commitment and dedication to improve oneself and to always be better. We can always have one conversation that would be better than maybe we would have approached it like a year ago at this time. And that conversation might turn around an employee, it might turn around a child, a family member, and it might get them to follow you and for you to gain respect. So, use some wisdom in looking at how and be humble in where can I learn and

49:59where can I improve.

Mike49:59Fantastic lesson. Jonathan, thank you again for being with us. I've really enjoyed this conversation.

Jonathan50:04Me too. It was a lot of fun. Thank you.

Mike50:09Thanks for listening to The Business of Family. You'll find the transcript and key ideas from this conversation at businessoffamily.net, along with the Business Family Diagnostic. It's free, and it shows you where your own family stands. And if someone in your family should hear this episode, please send it to them too. I'm Mike Boyd. Until next time, take care.