Family offices were the subject of the latest Fried On Business show, but we took a unique approach to dealing with the topic.
You see, it’s not always about the dollars and cents. When dealing with a family office, it’s often about the family dynamics – things that are in the background but very relevant to management of the enterprise.
Our good friends Michael Cooper, founder of Human Performance Mentors and The Missing Playbook, and Don Weidenfeld, Managing Member at Magnum Energy Solutions, came into the studio to help us sort it all out.
The first generation usually puts the blood, sweat and tears into the business, Cooper said. The second generation, not so much.
Therein lies a tremendous source of conflict, he said, as the first generation ages and begins to wonder about the fate of the business when the heirs haven’t been challenged to perform.
“There is so much focus on the wealth, on the money, and there needs to be more focus on the relationship,” he said.
But, I wondered aloud, what is a good way for the founder to approach the next generation about these issues without alienating them?
Cooper said they need to spend more time building relationships and establishing the purpose of the organization.
“There’s a higher purpose that’s being served. It’s not just about the money. It goes beyond that,” he said.
“Most of the time, you go in and start talking to an organization, and they’re drifting because they don’t have definiteness of purpose.”
Sometimes the first generation has low expectations of the second, Cooper said, thus the tolerance of behavior that might be counterproductive to the organization as a whole.
In that situation, he said, it’s time to raise the bar. Communicate higher expectations and be willing to address any relational deficits as part of the process.
All communication, he added, needs to be done in love. Even when direction and commands are necessary, they need to be wrapped in compassion and pureness of heart.
As for Weidenfeld, you may not know that he is also a wealth manager and deals frequently with high net-worth investors and family offices.
“It’s all about getting to know the client. It actually has to be a fit on both sides,” he said.
Now, Weidenfeld is an avid boater, so the boat has served as a way to break the ice. He tends to like easy-going people, folks who aren’t high-strung by nature.
Weidenfeld and his team often handle the sale of a client’s business and then manage the proceeds for the long term.
That management can sometimes be complicated, he said, adding that his in-house staff of professionals handles many types of trusts to address many situations.
This was a great show that included Weidenfeld’s discussion of how Magnum Energy Solutions’ products can save property owners 50% on their energy bills.
Contact Weidenfeld at 561-702-9000 or magnumenergysolutions.com.
Cooper provides free training videos to student athletes at missingplaybook.com and and intensive leadership training course for the adults at hpmentors.com/5.
Click here to listen to the entire show with Don Weidenfeld of Magnum Energy Solutions and Michael Cooper of Human Performance Mentors and The Missing Playbook.
