From 2000 to 2018, Scott was a professor of Law at the University of Chicago where he focused on Bargaining, Dispute Resolution, Translational Law, and the complexities of multigenerational family enterprises. Scott speaks regularly on Family Offices, Private Trust companies as well as Intergenerational Leadership while also maintaining an active website.

Scott is a G2 family member. He is Sam Zell's son-in-law, having married Sam's eldest daughter.

Standout Quotes:

• "Business works on short wavelengths and family works on very long wavelengths" - [Peter Evans, Scott]
• "What does it mean to try and help family members really develop and really take ownership, so they can figure out how to deploy what they have?" - [Scott]
• "There are many different kinds of wealth… you probably aren't put on the earth to grow the financial capital, there's lots of professionals who can help you do that" - [Scott]
• "Too often, the implicit message sent to family members is 'this system is really here to steward the money" - [Scott]
• “Families rarely fail for taking too much risk, they fail for taking too little risk” - [Scott]
• "My goal is to create a family-focused office, not a family office, and a trusted company, not a Trust company" - [Scott]
• "If you want to succeed you have to have a family that understands what you're doing" - [Scott]

Key Takeaways:

• Scott is the President of Chai Trust Company, LLC, the private trust company that serves as the family office for Sam Zell and his family. Equity Group Investments, a division of Chai trust, provides investment management services on its behalf. From 2000 to 2018, Scott was a professor of Law at the University of Chicago where he focused on Bargaining, Dispute Resolution, Translational Law, and the complexities of multigenerational family enterprises. He speaks on Family Offices, Private Trust companies as well as Intergenerational Leadership while also maintaining his active website. Scott is a G2 family member, as he is Sam Zell's son-in-law.
• Scott got married to Sam's older daughter 20 years ago while he was already teaching as a Law professor. Since then he got increasingly curious about family enterprises till he fully transitioned into working in the family enterprise. After a few months of knowing each other, they started dating but Scott had no idea about her family wealth till she opened up about it.
• About Sam Zell: Sam is a serial entrepreneur, who first built a business in Real Estate, following which he turned to distressed Corporate Investing in the 80s, and then in the 90s, he created some of the largest REITs in the US today. He has continued to work on REITs and corporate investing since then. He has done several businesses over the years. Sam is also known for his straight talk, always making his stand clear in any discussion. He is also very astute and broad in his thinking.
• As a Law professor, Scott worked on conflict intervention with corporations all over the world. When he started having kids, he got curious about how the family wealth could be managed productively for the family, especially for the kids. Sam encouraged him to work on it. Some authors that stood out in Scott's study were Jay Hughes and John Davis.
• Scott describes the family structure; at the time Scott joined the family, Sam was 59 years, his 3 children were in their 30s, and as of now, there are 9 grandchildren. There was a form of governance structure, a board with his 3 children which wasn't functional as Sam made most decisions. However, now there has been a need to rebuild the structure as the company has evolved and this has been a huge part of Scott's focus since he moved full-time into the family enterprise. He has had to put in a lot of work to fully understand how the family enterprise functions; to make things change in a family system that often moves very slowly, you have to know where you're going. It involves a combination of urgency and patience, while thinking long-term, steps need to be taken early and consistently. Most of the family members are not employees, some of them are on the board. There is one board with both independent and family directors.
• The business continues to be eclectic, investing across all kinds of sectors, especially with the benefit of permanent long-term capital. At the same time, complex actions and decisions can be taken quickly. Also, family learning and development are being built as the kids grow to become adults.
• In the inflationary period currently, the business finds smaller companies that need capital and expertise to grow to the next level; companies that would rather grow their equity than sell to a PE company. These companies are great partners for the business since their interests are already aligned to grow the equity.
• While most families would rather have more joy over more money, the reality is that many family members Scott has met around the world don't have that much joy or self-possessed ability to do things in the world. They often feel enmeshed in a family structure they have little control over. This is not good for the family or the external world that could be benefitting from the good such families could accomplish.
• Laying the foundation for the next generation practically, Scott uses some rules. The first is based on the 5 Capitals; Not everyone is supposed to grow financial capital but they can add to the overall well-being of the family by building on the other forms of capital. Unfortunately, the experience in most families is that stewarding the money is the main goal, which is an implicit frame that must be dissolved. The second one is that each family member should participate meaningfully in every learning experience. Doing this means creating activities or agendas that are not solely about financial capital or the enterprise, although as the kids get older they get interested in the business itself.
• To assess how well you're building human capital, score how often you were talking about money over the last few years in your family meeting. Most times it forms a huge percentage of those meetings, but in a setting where money isn't the focus, there is a push to find other topics that can help people open up. Scott's family has started experimenting with these kinds of meetings interspersed with other activities.
• These kinds of meetings expose several overlapping purposes, help family members connect, offer a chance for content transfer, and contribute to self-development and self-growth. Different topics are often discussed and it becomes obvious how they are related. Listeners are encouraged to check Scott's curriculum diagram on his website.
• There is often a dichotomy between responsible stewards and lazy inheritors, however, managing inherited wealth can be complicated. The general goal is to cultivate engaged owners and integrate financial capital into their lives productively, but there is no concrete formula on how to do it.
• Most family offices should just be Money offices because all their time is focused on financial capital and legal risk such that the family itself is secondary. On the other hand, a family-focused office is there to grow the family's human capital as much as the financial capital.
• Trust companies around the world have become ubiquitous in wealthy families although they often don't have much life in them. However, a trusted company is a part of the family ecosystem which goes beyond managing money to a level of trust-building with the family. That forms the basis of how Scott decides on whether or not progress is being made; 'what is the level of trust in the system?'. Not to downplay the role of financial investment, but there has to be synergy within the system.
• Over the long term, families rarely fail for taking too much risk, they fail for taking too little risk. They focus so much on preservation because they are afraid of taking risks, and they wither in the end. Sam Zell still takes as much risk as he used to, not as a gamble but with a critical assessment of each situation. It is important to preserve the investment company with its risk-taking culture, and at the same time grow a family that can continue such activity over time.
• The family enterprise avoids governing by committee, especially on the investment side, so as to move quickly. Having family members behind an entity is not a bad idea but there's no point in having many family members making every investment decision. In Scott's family enterprise, this bureaucracy is avoided by ensuring decisions are narrowed down to the exact professionals. Other bigger family questions can be discussed by the family as a whole. Mike's family employs Adhocracy which encourages a culture to challenge the slow slide into bureaucracy.
• The team behind the family enterprises consists of about 85 people and functions as one entity that is the trust company, the family office, and the investment management company. There are investment professionals, lawyers, a family office and operations group, and accountants. All of these are interdependent. The company is mostly focused in the US but there are also real estate investments in other countries.
• As an outsider joining the family, it is easy to simply be a critic which will result in pushback from the family. From the onset, Scott acted from a place of love for the family and was concerned with how to continue to build productivity within the family. He intentionally took time to study the family business all the while continuing his profession as a Law professor. He advises inlaws to keep their jobs for as long as possible till they are sure they can add value to the family enterprise. He also understands that being an inlaw comes with restrictions from certain roles, but rather than get overly perturbed about it, he focuses on the ways to be helpful in the family.
• Scott has a background in communication, mediation, and negotiation which has been pivotal in building consensus in the family business. Ultimately, there is no playbook to navigate the complexities in a family enterprise.
• A typical day in Scott's life involves some time spent on investments, working with boards or committees, family learning and development, as well as time spent on management. He has come to understand that his job is to get a grasp of the system as a whole; Sam explained to him that it will change from obligation to opportunity.
• There are a few family heirlooms and the family has also documented some of its history like the story of Sam's family leaving Poland for the US. They do this mostly by putting together short films. It also serves as a way to communicate family values; Sam has always used art to communicate.
• Scott's letter to his kids: We have the capacity as humans to grow into something greater, more awake, and more alive than we are now, into a different kind of existence. This is the uniqueness of being human; the constant evolution makes life wonderful.

Episode Timeline:
[00:50] Meet today's guest, Scott Peppet.
[02:00] Scott's relationship with Sam Zell.
[04:54] How would you describe Sam Zell?
[09:18] Did you develop an interest in how family enterprises function before or after meeting the Zell family?
[12:35] How complex was the family when you joined?
[16:44] Did you have to contend with people with multiple hats in the family business?
[19:04] What does the office look like today?
[21:40] Is there any particular industry that has growing potential now as regards investment?
[24:40] How do you plan to raise the next generation in the family enterprise?
[35:17] Going beyond stewards' first inheritors.
[37:35] Creating a family-focused office and a trusted Company.
[42:10] How do you manage risk in the family ecosystem?
[44:37] How do you fight bureaucracy as the office gets bigger?
[49:05] How big is the family enterprise team?
[51:50] What was it like joining the family and navigating the complexities of a family enterprise?
[55:20] How helpful was your career in Law and conflict resolution in the family business?
[56:55] A day in the life of the President of Chai Trust.
[01:00:50] Is the family intentional about keeping things for historical sake?
[01:05:02] Scott's letter to his kids

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Special Guest: Scott Peppet.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• Scott Peppet's website — Shifting from Obligation to Opportunity - Helping family members integrate and deploy their resources for their own and the world’s benefit.
• Sam Zell - Personal Website
• EGI - Equity Group Investments
• Forbes - Sam Zell

Peter is also part of a legacy family himself; he is a 5th generation member of a 7th generation American enterprise established in 1885. Peter married into this family and was astounded by the welcoming and inclusive nature of his wife's large family. The family enterprise is now a holding company with over 500 shareholders, all of whom are family members. Of particular interest are the Family Summits held annually, which are designed to re-engage family members, partake in family traditions and rituals, discuss philanthropy and reset for the year ahead.

Peter shares his experience of what it was like to join a well-established legacy family and how he has used this unique experience to pivot his career and help other legacy families flourish.

Standout Quotes:

• "We can't really plan significantly for longer than 5-10 years, you just learn that along the way, things change; the world changes" - [Peter]
• "I'm really interested in making sure that the family's values are aligned with their actions" - [Peter]
• "To have some sort of formal way of telling stories, I think, is critical" - [Peter]
• "The most important thing you'll do are these rituals" - [Peter]
• "If we have the privilege of having wealth and means, we have an obligation to give back" - [Peter]

Key Takeaways:

• Peter is the 5th generation member of a 7th generation American enterprise established in 1885. He is an adviser, consultant, and speaker to legacy families, family offices, and multigenerational enterprises globally. He became a part of the family when he married his wife and was included.
• The company began as a group of lumber companies started by two brothers who liquidated everything after 45 years to invest with their partner, Friedrich Weyerhäuser in 1901. Peter's family had continued to be involved with the business as it expanded, although there were no male heirs in the second generation, till the 3rd generation. The family later started a private trust company in 1964, at which point they became the 3rd largest retailer of building materials in the US.
• Today with diversification, they are now a holding company with over 500 shareholders, all of whom are family members. Peter's children are already involved with the family business actively and eagerly look forward to partaking in the annual family meetings.
• The Family Summit: This annual family meeting usually runs over 3-5 days, on the same weekend every year, with activities like the coming-of-age ritual and elders’ ritual, Olympic games, business meetings, philanthropy group meetings, and talks by guest speakers. The goal is to make it so interesting that people want to come back.
• Planning Never Stops; the family forms a long-range planning committee every 5 years to have a clean slate to think through everything. A pattern of liquidating a significant resource once every 20 years was also observed; this 'Generational Harvest' would provide liquidity to each shareholder, giving them the freedom to make their own investments.
• The family investments today are largely in Real Estate, like residence halls or low-income housing units, all intentionally inclined towards 'doing well by doing good' which is a value the family holds.
• Peter left his role as president of the family enterprise in 2003 and has since then helped other family enterprises manage their multigenerational interests. He believes families with vast amounts of capital can make decisions that affect millions of lives and works to ensure that these families act in accordance with their values. "I can hold a mirror up to you so that you can begin to see yourself, your family system, and your footprint in the world; the other thing I can do is open the window so that you can look out into the world and see how other families made choices during different transitions"
• Peter's most satisfying work is sitting with family members and watching the interactions; his work is focused on helping build bridges in communication and relationships. His role is a position between being a business consultant, priest, and therapist all of which require a deep level of trust and respect. At its core, his work is about relationships.
• Peter’s role as a 'Personne de confiance': This is a confidential advisor based on their trust, respect, and honesty. The way to get into that role is to come into the family that needs help, taking time to build trust and confidence. Very often Peter has to model a way of doing things like chairing a meeting, inclusion, and effective decision-making while keeping in mind that the goal is to pass on the mantle of leadership. Most of the time, the G2 generation is the one that reaches out to him, however, in some cases when the patriarchs are comfortable giving up authority, this spurs the G2 to take up the mantle and learn how to hand over to G3. Sometimes, the G2 has even already made the transition in their lifetime, adapting to the values and culture while the G3 grows up having a completely different experience.
• Storytelling is critical in documenting family history. Peter uses this both in his family enterprise and while working with others. His family works with a full-time archivist who helps research the lives of people such that detailed questions can be asked and stories can be told more deeply. It also offers an opportunity to share lessons from the failures, trials, and tribulations of family members.
• While still active in his family he was always open to learning from other families and when he left his role, he wanted to be involved in creating the consciousness in families that they can impact the world. Based on Peter's background, he has the experience which gets him into those family spaces after which he starts work.
• From Peter's experience, when it comes to cultural mindsets like having female leaders, and diversity, there is a lot more openness in the US than in most other places. Although he tries to encourage such views, some cultures are just not ready for it. However, families of significant or multigenerational wealth are naturally global these days, hence it is becoming increasingly difficult to avoid influence from other cultures.
• Family Rituals are the most important way to bring the family together continuously over the years because they help young people feel acknowledged. Peter's family has a children's program packed with several activities that keep them eager to return. After the age of 14, they can start going to business meetings. These activities help the family familiarize themselves with teenagers and create a more welcoming environment in the business meetings.
• It is necessary to identify who is family and the kinds of roles available to different members. Each family does this differently, but Peter's family has selected the option of Inclusion.
• Building Family Governance starts with having a reliable cadence of meetings quarterly, as well as major annual gatherings; this goes hand and hand with excellent communication. The next step would be to memorialize family values and have a direction and then this can be the foundation of a constitution. The constitution is a living document and should be examined and changed as required.
• Peter also uses the concept of the "5 Capitals" within his family and the families he works with.
• Philanthropy is another tool Peter has been familiar with. It is fun to watch families come together to figure out ways to give back based on their different interests and drives.
• Very often, families look at their business as heirlooms which begs the question "Is the business an heirloom or an investment?" Sometimes it is hard to sell a business because it's been our identity for years; thus, selling is easy if the business is only an investment but if it functions as an heirloom then it may not be advisable. In some situations, the business is on the spectrum in-between, which means only certain objects or aspects may be more valued as an heirloom. Mike's family takes pictures yearly on the same spot on a piece of land which over time has taken up the role of an heirloom too.
• From Peter to his children: "This is your life, do what you love and do it often. If you don't like something, change it; if you don't like your job, move on. If you don't have enough time, stop watching TV. If you're looking for the love of your life, stop, they'll be waiting for you when you start doing the things you love. Stop overanalyzing; life is simple. All emotions are beautiful, when you eat, appreciate every last bite. Open your mind, arms, and heart to new things and people; we are united in our differences. Ask the next person you see what their passion is, and share your inspiring dream with them. Travel often; getting lost will help you find yourself. Some opportunities only come once so seize them. Life is about the people you meet and the things you create with them, so go out and start creating. Life is short, live your dream and share your passion."

Episode Timeline:

• [00:52] About today's guest, Peter Evans.
• [02:44] Peter shares his family history.
• [07:10] What makes your annual family meetings appealing to the younger generation?
• [12:28] Does a value system guide the investment making decisions?
• [14:00] Peter's work helping other family enterprises.
• [18:40] Peters role as a 'Personne de confiance'.
• [24:22] Family Storytelling as a tool in Peter's work with family enterprises.
• [29:08] Was it your experience with your own family that led you to work with other families?
• [31:39] What are some of the differences in culture that showed up during your work with different families across the world?
• [34:50] How important is it to have traditions that bring the family together?
• [38:41] Who is a Family member?
• [39:17] Building blocks of Family Governance.
• [44:10] Philanthropy in the family enterprise.
• [46:16] How shared experiences come into family meetings.
• [48:14] What is the role of Heirlooms in the family enterprise?
• [50:47] Peter's letter to his kids.

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Special Guest: Peter Evans.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• Laird Norton Company — Laird Norton Company is a family-owned enterprise that provides long-term capital and resources to empower companies to thrive—and we’ve been doing it for seven generations.
• Peter Evans | LinkedIn

Standout Quotes:

• "The process of how you manage a company is not taught anywhere; the process for how you manage people is not taught anywhere so these are things you need to learn by watching" - [Srinath]
• "Unless all of us are good human beings, we cannot work in a group" - [Srinath]
• "If the family is not in one piece... the businesses are going to fall apart" - [Srinath]
• "I don't worry about control, I worry about what's best for the business" - [Srinath]

Key Takeaways:

• Srinath is a 4th generation member of the TVS and Sons Family. He talks about a historic date when the family will finally be breaking up the company and separating after 111 years. Unlike many families which split with resentment and animosity, this breakup is rather amicable which sets the stage for growth in the next phase.
• The seeds for the separation started in 1974, although from the onset, at a point when the Founder of the company had his influence waning as a patriarch, there was already a lot of mistrust. It was in 1974 that it became clear that there was no future for the company to continue as one large family which is now manifesting.
• Over the 48 years since the first conversation was had about splitting up, the company has lost opportunities to advance in IT, however, they were able to structure the core competence of the existing companies.
• The first phase was in 1927 when the company became the dealer for GM in South India. The next phase was automotive component manufacturing which continues to be the most profitable aspect of the business. The third phase is a two-wheeler operation, which is the largest and most valuable company. Most recently, the supply chain has also been racked up, which is the TVS Supply Chain.
  
• About the two-wheeler operation: in 1972, as a young teenager, Srinath had discovered what looked like an electric bicycle which his grand-uncle was creating as a cheap way for people to move around. The engineers had said it would not be possible, but he invested energy, time, and money in it based on his conviction. By 1978, he passed on 10 days before the company was opened. The group was also into all sorts of automotive industries.
• The strategy for the separation was that whoever is managing will continue to look after business till the separation, then the valuation was done in 2014, and the difference would be settled in cash. The Indian legal system encourages families to have such a business understanding, which was not initially accepted by all 64 shareholders but with persuasion, they agreed to implement it. The company also has very strict requirements regarding competence and experience to join in the business such that family members are not guaranteed an automatic seat.
• Some of these requirements for joining the family business include Graduation from an Ivy League school, a minimum of 3 years of work experience outside the family business with no help getting the job. These and more only qualify members to apply, after which a competency board will assign a mentor who looks after the possible future leaders, and then they can grow from there. These new family members entering into the business start with a small responsibility like one of the smaller subsidiaries and are mandated to only report to a professional, not their parents.
• Based on these requirements, most family members are only qualified to apply by their early 30s, which is beneficial for the company because emotional maturity is also critical.
• Although G4 wasn't particularly groomed for management, they intend to identify those things they lacked and make them available for G5. Since the process of managing companies or people is not taught anywhere, G5 has to be properly introduced by participating as observers in top review meetings. Most of the methods and practices being implemented to groom G5 are ideas from John Ward.
• Even though many families apply all sorts of family governance structures, not many are successful, meaning those structures do not guarantee anything. The question is "How do you make this work?". The first requirement is trust; without trust, none of these things can work. Next is transparency, and the third is to be Just and Fair. People working together must be good people who like being around each other. Additionally, fairness, compassion, and carrying people along, have been more efficient than any of these structures.
• To address the issue of power grabbing in the 60s, a change in the business system was made such that no decision can be made without the unanimous consent of the members present. It protected the person managing the subsidiary such that they could not be fired easily but the bureaucracy at the same time restricted opportunities for risk and growth. Hence the success of the group depended on the competence and ambition of the people running each company. However, while the trust was lost and growth was delayed, the companies held on better to funds for reinvestment which promoted overall growth. This however created problems and resentment from the shareholders.
• When John Ward came along, he increased the dividends to the non-working shareholders from 10 to 25%. Dividend taxes were also removed from the income. His approach was to make the family happy knowing that most of their problems could be addressed with cash. Some of the dividends were also used to take care of the educational needs of non-working shareholders.
• The family has about 80 shareholders, and after the break-up, things will fragment, and there will not be the usual large family get-togethers. Nonetheless, there will still be some rearrangement because some of these small businesses will come together to work to be more efficient. The strength of emotional bonds will also determine the interaction between these subsidiaries in the future.
  
• Unlike the previous structure of the large family where there was no exit clause, Srinath's family business will have one for the shareholders. The company will also take advantage of the newfound freedom from the bureaucracy of unanimous decisions, to take risks and opportunities to grow.
• In Srinath's family enterprise now, G4 members are only allowed to pass the shares to the linear descendants. Spouses, sons-in-law, and other members cannot enter the family business. This doesn't necessarily guarantee any birthright for the G5; some G4 members have donated all their shares to charity. The G5 is guaranteed to get no more than a decent standard of living and good education.
• When it comes to lineage, no differentiation is made between sons and daughters, it is simply a factor of competence. TVS has a balance between business and compassion, rather than overly tilting in any direction.
• Unfortunately, the larger family has never compiled books, photographs, or formally tried to document the family history; this has been a huge disappointment. However, Srinath's uncles tell him not to worry about the past, but to focus on what he can now do in the future.
• The logistics business was a brainchild of Srinath's cousin, Danesh, and started 10 years ago. The business supplies anything anywhere and unlike FedEx, they can design something and assemble it at the destination. The Rajam family only is entitled to the IPO; they are buying out the shareholding of everyone else.
• One of the most important things to imbibe is to be fair and just, whether at work or in personal relationships. It goes a long way to make people trust you and builds the energy of people around you.
• From Srinath to his children: Firstly, be fair and just, be a good person. Secondly, you must add value to the community; do not chase wealth, chase the creation of jobs. Be a positive person always.

Episode Timeline:

• [00:50] Meet today's guest, Srinath Rajam.
• [02:33] What led to this amicable speciation agreement?
• [05:54] What are the main pillars that have made up the conglomerate over the last 100 years?
• [08:02] About the two-wheeler operation.
• [13:50] How have you decided where and how to draw the lines in separating this conglomerate?
• [16:42] What are the requirements for family members to join the business?
• [19:56] Are there comparisons between the success or failure of G4 and that of G5?
• [21:30] Where did the inspiration for this approach towards onboarding come from?
• [23:30] What formal family governance structures do you have in place?
• [26:32] What method hasn't worked well in keeping the family together?
• [34:00] How big was the wider family assembly?
• [37:50] After the split up, will you carry on the current family structures to your Family Enterprise?
• [40:38] How do succession and shareholding occur in your new family enterprise?
• [42:40] How do you view lineage in terms of sons and daughters?
• [45:51] After the separation, how does the thread of family history and storytelling continue?
• [49:22] Discussing the family logistics business.
• [54:40] From Srinath to his children.

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Special Guest: Srinath Rajam.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• kwikpatch.com | India — Srinath Rajam is the Chairman and CEO of Kwik Patch (a JV with MYERS Industries, USA) and Director in TVS Mobility .

As his career has evolved, he has developed a true passion for governance and operations. One of his current focuses is the codification and institutionalization of the key elements that differentiate his family’s enterprise. At its core, this speaks to their desire to remain a purpose driven enterprise focused on the preservation of their servant heart culture for generations to come. This spans the continuum of the impact that they have on their associates, their clients, and the communities that they serve overlayed by a holistic approach which incorporates environmental, social, and governance considerations.

In addition, his passion for governance and operations has evolved beyond that of traditional corporate. For the better part of the last decade, he has led their family’s formalized family governance efforts. As they continue the transition from the 4th to the 5th generation, it was paramount to Anthony, and his generation, that they build the requisite operational and governance structures to ensure success in succession not just for their generation but for generations to come. With the collective support of the 4th and 5th generations, He has allocated a considerable amount of my time establishing their family office and formalized governance structure and framework.

Although he feels blessed to be able to serve his family and family enterprise in a variety of roles, the role he is most proud of is that of a devoted husband and loving father. He is married to his best friend and soulmate, Melissa Contrucci (nee Schrage) and has been blessed with two loving children.

Standout Quotes:

• "I really believe our success as a family kind of exists at the crossroad of this desire to be civically involved" - [Anthony]
• "That formula of putting people before profit is how you build long term sustainable value that transcends generations" - [Anthony]
• "In order to be successful in succession, you have to be intentional and you have to be strategic" - [Anthony]
• "If you think about the destination, you'll never start the journey" - [Anthony]
• "If you're trying to solve a problem that you can solve during your lifetime, you're thinking too small" - [Anthony]
• "Success requires action" - [Anthony]
• "You can't appreciate something if you don't know how hard it was to have or you didn't have to work for it" - [Anthony]
• "During times of dislocation, there's always opportunity" - [Anthony]
• "The most important investment I've ever made is my time in my children" - [Anthony]
• "Never try to replace your net worth for your self-worth" - [Anthony]

Key Takeaways:

• Anthony is a 5th generation member of the Schrage family currently serving in the role of President and Board Director of First Bank Shares, a bank holding company with a primary operating asset "Centier Bank" which was founded in 1895. They are now the largest private family-owned bank in the state of Indiana.
• The Schrage family came over from Germany into the US in the 1800s, and over time the family has always been passionate about the community. This alongside the risk tolerance accounted for the success of the family because being involved with the community helped identify needs and create solutions. The name "Centier" Bank was coined intentionally to represent a century of service, the founding of the bank on Center Street, and that the bank strives to be the premier provider of financial services for the communities. The headquarter is in Merriville Indiana.
• Despite the pandemic, banking is a good business to be in right now. Data from the bank shows that Centier Bank tends to outperform during times of market dislocation or pain. Clients are put even before the shareholders in the business, and this is how long-term sustainable value is built over generations. 2020 has been the best year financially in the history of the bank.
• This success was achieved by consciously and emphatically considering the safety of clients and workers physically while also keeping them confident about their finances. They set out to help communities through different programs, mortgages, credits, and low-interest loans.
• Anthony met his wife and her family at the age of 20 and she was his best friend before becoming his wife. Anthony had no intention of working in the family business but wanted to chart his course in life. He had always been in the financial sector, including commercial banking and investment. Later he started with wealth management in the family business, and then the investment services division. After a while strategic intentional steps were taken to ensure an impact in the community. Currently, Anthony spends time in the financial holding company level, family governance, and the family office.
• Although the family has grown since the first generation, there are 27 family members and 16 shareholders. There is a family assembly every year, and also a family governance structure.
• The goal of the family assembly is both business and to bring the family members closer together. One of the main reasons for starting the family assembly was communication flow. Success and succession in a family business is literally the equivalent of fighting gravity; only about a third of family businesses make it from generation to generation.
• As a broader family, the family meets monthly with specific agendas and occasionally invites subject matter experts. There is also a family business consultant and a family psychologist as well as other subcommittees. There are G5 monthly check-ins with no formal agenda.
• About the Family Portal: While trying to organize family documents that have piled up over many years and made work inefficient, Anthony came up with the idea of the Family Portal. This has been a great tool for increasing efficiency and improving workflow.
• When it comes to starting Family Governance, "you've got to go slow to go fast". Even it is a small start, it's about building the behavior; for Anthony's family, the starting point was about Mission, Vision, and Values. This is where to start to build a foundation with simple things like a code of conduct or attendance policy. It gives some wins and then these goals can be dialed up to more complicated plans.
• The Emergency Transition Planning (ETP): This refers to very detailed planning done such that in the event of the demise of a leader, things can be set in motion to instill confidence in multiple audiences across multiple mediums. It's a succession plan on steroids.
• The family psychologist has been very valuable especially in helping family members communicate effectively. This also includes constructive conflict, which is the most important thing in communication and trust-building. Additionally, having a facilitator around when the family constitution was created was very helpful. However, the values or by-products of this exercise are less important than the journey. Families are encouraged to start this process and take their time.
• After attending a family business conference where he was introduced to the concept of a Family Book, Anthony applied it in documenting the family history to ensure that future generations would understand how hard the journey was. While collating different materials to create the family book, an enormous collection was accumulated and Anthony had the idea to get a corporate historian to manage the collection. This brought the next idea to have a "Centier Museum" for these family artifacts.
• Using the idea of cohesion dynamics which include the family aspect, as well as the business, financial and emotional aspects, Anthony understood that it was paramount to use the family history to keep family members emotionally tethered to the family business. This determines the filter they would use in making decisions regarding the family business because rather than simply thinking like investors, they would think like stewards if they felt emotionally tethered to the family enterprise.
• The 6th generation is currently between the ages of 8-18years. For a long time, the family legacy was the bank, but now there's so much more opportunity for the G6 to get involved with the family enterprise and create an impact.
• Advice for someone looking to lay the foundation for a Family Enterprise: Slow down; "you have to be patient and focus". The other thing is to save; "live below your means and always have reserves because having that additional financial capacity allows you to be opportunistic".
  
• There has had to be a shift from being a family that operates a business to a family that has an enterprise. "We had the belief for so long that the legacy was the bank but now I believe that the legacy is the culture that fuels the enterprise" Thinking about it this way gives the motivation to lean into Family Governance and Family Office. It also shifts the mindset from being competitive to being more collaborative. All of this takes curiosity, communication, working through conflict, and never being afraid to fail, knowing that growth comes from failure.
• Anthony's letter to his kids: Happiness comes from the important things in life; love, health, the time spent, and experiences created with loved ones. True fulfillment comes from finding something you're extremely passionate about, that is meaningful but extremely hard; if you don't grind, demonstrate grit, fail, and pick yourself up, you will never find fulfillment and self-actualize. If you always lean into what's important in life and push yourself, you'll find that fulfillment.

Episode Timeline:

• [00:50] Introducing today's guest, Anthony R Contrucci.
• [02:05] The history of Anthony's family business.
• [08:20] How is the banking industry right now?
• [12:16] Anthony's entrance into the family and the family business.
• [17:40] The structure of the family enterprise.
• [29:28] How has your governance structure taken shape since its implementation?
• [37:55] Where did you start in terms of Family Governance?
• [41:34] The Emergency Transition Planning (ETP).
• [45:00] Discussing the role of the family psychologist.
• [48:30] How did the family constitution come to be?
• [51:14] About the Family structures put in place to guard the family history.
• [57:54] With regards to the 6th generation, how do you look to the future of the family enterprise?
• [01:00:21] What advice would you give to someone looking to lay the early foundation of a Family Enterprise?
• [01:05:08] Is there a new habit you've adopted that was meaningful to your journey?
• [01:09:16] Anthony's letter to his kids.

For more episodes go to
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Sign up for The Business of Family Newsletter

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Special Guest: Anthony R Contrucci.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• Centier Bank - A Family-Owned Indiana Bank Since 1895. — Michael E. Schrage, CEO and Chairman of Centier Bank
• How Centier Bank celebrated its 125th anniversary

With over a decade of experience working with select business families in Africa, Nike Anani helps owners lead their family organizations to long-term impact and legacy.

Her clients choose to engage her, not only because of her extensive professional training, but also because of her practical experience as both a business founder and a NextGen. This allows her to uniquely empathise with both generations and act as a connector to the Founding generation.

Standout Quotes:

• "And that's an observation I have of founders and entrepreneurs, they're just amazing people that have an eye for opportunity" - [Nike]
• "As most founders do, it was about giving me the best opportunity to set me up for success and often in their minds, success is going as far away from the business to get the best experience...so they can come back" - [Nike]
• "In Nigeria, 90% of indigenous businesses are family businesses, but only 2% survive beyond the founder" - [Nike]
• "Family businesses are so key to the community, if they keep failing after a generation, then what's that doing to the economy?" - [Nike]
• "I think that starting from a relatively small base, the best way to build anything is with community, and actually building what that community wants rather than just dictating something that you found off the shelf from another culture" - [Mike]
• "If you've seen one family business, you've seen one family business" - [Nike]
• "A friend of mine says whenever you wake up is your morning, some people don't wake up until they're 85, they don't know what they want" - [Nike]
• "I need to be in the best version of myself so I can serve people to the best of my ability" - [Nike]
• "There's always something new to learn, we've never arrived, we're just on this ongoing journey of endless learning, in my view" - [Nike]
• "There's no position that's guaranteed in life, whether it be a position of material success or honor, today you might be celebrated but it doesn't mean tomorrow you will be" - [Nike]
• "It is important to ensure that people's external projections don't become your internal story, because your story is the most powerful thing that you can give yourself" - [Nike]

Key Takeaways:

• Nike is a 2nd generation family business owner, and she narrates how her father started the family business initially as a side-hustle.
• Describing events around her entry into the business, she shares the plan was to only stay for a few months in Nigeria, gain exposure to business in general, and move back to the UK eventually. However, she was drawn to the spirit of entrepreneurship there and felt more liberated as a young black female.
• Nike explains that while her father had expressed general support for her in any field she was planning to go into, she had never expected she would work in the family business.
• A glaring disparity in the decision-making process between her former place of work and the family business was the time taken which could be much shorter or longer in different scenarios, leaving her befuddled about family business as a whole. This encouraged her to get professional education at the Family Firm Institute in Boston.
• Employing her knowledge in her family business, Nike started the process of "Governance" which involved her siblings more, intending to avert the typical dissolution that plagued most Nigerian family businesses after the founding generation.
• Another strategy adopted involved starting the conversation by creating a community called "African Family Firms" for African families facing similar challenges to meet and navigate through these issues.
• Nike highlights various peculiarities of African families, noting how these have to be put into consideration when trying to find solutions to the survival of family businesses in Africa.
• You won't know what you want until you come together as a family, have open conversations, and plan for different scenarios. Get clear as a family on who you are, what your values are, the goals of the family, and the purpose of the family business.
• Emphasizing the importance of continuous learning, Nike embraces the process as a part of being the best version of herself.
• A significant failure that set her up for success took place in school, where the result she got at some point would not be good enough for the jobs she wanted, and this motivated her to push herself harder than ever before to achieve her desired goal.
• Nike’s parents impressed upon her certain values described as 4Hs and 2Ps. The 4Hs are Honesty, Hard work, Humility, and Harmony while the 2Ps are People and Places. All of these were included in the family constitutional value system when the formal family enterprise was set up.
• It is important to understand that while people can project their weaknesses onto you and vilify you, their external projections should not become your internal story because your story is the most powerful thing you can give yourself, and you have to hold on to that story.

Episode Timeline:

• [00:50] Meet Today's guest, 'Nike Anani'.
• [01:56] Nike's personal and professional background.
• [08:30] How did the family make the jump from medical consumables to construction and building hospitals?
• [16:55] How were you inspired to learn more about the Business of Family?
• [23:00] Since the wake-up call that you received, what did you do about it for your own family or your friends' families?
• [29:50] Do people document entitlements for kin or rather more of a bloodline lineage?
• [32:53] Challenges surrounding Real Estate planning in Africa.
• [39:18] An overview of Nike's different roles in family business generally.
• [50:15] Has there been a specific failure that you've learned a great deal from?
• [56:00] Apart from education, what else came through as fundamentally important from your parents?
• [59:40] Nike's letter to her kids.

For more episodes go to
BusinessOfFamily.net

Sign up for The Business of Family Newsletter

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Nike Anani.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• Nike Anani — Nike is the founder and CEO of Nike Anani Practice, Ltd. With over a decade of experience working with select business families in Africa, Nike Anani helps owners lead their family organizations to long-term impact and legacy.
• Nextgen – the turning wheel | Nike Anani — Nike Anani's clients choose to engage her, not only because of her extensive professional training, but also because of her practical experience as both a business founder and a NextGen
• Building a Generational Bridge in Africa - Women in Family Business
• Podcast: The Connected Generation with Nike Anani — The Connected Generation Podcast with Nike Anani

He has been active in the business of education since 1994 when he and his wife, Arabella Peters, co-founded Apollo English and then the British University Vietnam. Since then they have invested in a number of businesses all focused on education.

Khalid and Arabella see themselves as the founding generation of their family enterprise and intend to never sell their Dragonfly Education hold co. They’re actively involving their young children in business conversations and laying the foundation for generational wealth, legacy and impact.

Standout Quotes:

• "What's your biggest headache?"
• "Learning from successful family businesses; so many of them do not load up on debt" - [Khalid]
• "The future of education is blended, that means you've got to incorporate online with offline" - [Khalid]
• "Sophisticated multi-generational families.. have taken generations to figure out that they need to separate the Governance from the Operations, and that the family needs to be excellent stewards and owners first before they can consider playing an active role in Operations" - [Mike]
• "A well-run family business is difficult to beat, especially during downtimes" - [Khalid]
• "Why trade anything in, when we've found purpose?" - [Khalid]
• "If you’re building any business, I'd say that 'Focus' is the thing that's often lacking, especially if the entrepreneur at the beginning thinks they have to say yes to everything" - [Khalid]
• "Look for the good in life... because it really helps you enjoy the journey" - [Khalid]

Key Takeaways:

• If you want to be truly in control of your journey in a business, you need to be the owner, not the manager.
• At the very beginning, the vision was simply to get the business to survive.
• It's only when you move from surviving to thriving that you can ask, "what do you want to do?"
• When asked "what is your biggest headache?" at an event, many of the entrepreneurs answered "My father".
• If you're not happy with 60000 pounds per year, then any more money might not change anything.
• Khalid describes the challenges of Covid-19 as a learning period for the business as a whole.
• Finding a way to create balance and incorporate online with offline learning is pivotal, that will be the future for the family business.
• Khalid and his wife, Arabella involve their kids as much as possible in the family business even at the early ages of 8 and 10, with some tests to determine their level of interest and perception of the business as a whole.
• In the future, the key role for the kids is going to be "Good Owners"
• The stewardship role is critical
• One of the tips to help foster togetherness among children is that if one of them does something wrong, punish them all.
• Other points to note is to never elevate one sibling above the other and to always leave them to sort out their arguments without being the judge.
• Khalid shares that the preferred investments taken by DragonFly are those in which a controlling stake can be bought.
• A major mistake that was made at some point was accepting an offer from Nokia when it should have been turned down because it was distracting from the core competency of the business.
• Khalid shares that his source of knowledge includes mentors, peer to peer learning, and mistakes.
• From Khalid to his kids: Look for the good in life because it really helps you enjoy the journey.

Episode Timeline:

• [00:49] About Khalid Muhmood and the inspiration for starting the business of education
• [06:01] Khalid explains some of the reasons behind the choice of Vietnam as a location for starting the business
• [08:59] What was the vision at the time of starting the business
• [15:03] The new vision for Dragonfly Education Group
• [19:41] How did the business hold up in this period of Covid19, do you have an interest in online learning?
• [24:34] Is there a vision of bringing your kids into the business if they're interested?
• [31:20] Do you have any other family structures aside from stewarding Dragonfly as the main asset?
• [32:53] Khalid shares some of the values, principles, and parenting approaches to raise well-rounded children amidst wealth.
• [36:37] Where does this family business DNA come from?
• [41:17] Where do you think you'll make the next operational or financial investment?
• [43:01] One of the major mistakes made in running the business: Losing focus
• [47:50] A letter from Khalid to his kids

For more episodes go to
BusinessOfFamily.net

Sign up for The Business of Family Newsletter at https://www.businessoffamily.net/newsletter

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Khalid Muhmood.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• Khalid Muhmood — Khalid is the Founder and Investor in education with a passion for delivering education that develops global citizens and fosters prosperity.
• Trung Tâm Anh Ngữ Apollo | Chương Trình Học Tiếng Anh Với 100% Giáo Viên Nước Ngoài — Khalid has been active in the business of education since 1994 when he and his wife, Arabella Peters, co-founded Apollo English and then the British University Vietnam. Since then they have invested in a number of businesses all focused on education.
• Dragonfly Education Group — Khalid is from the UK and through the family business holding company Dragonfly Education Group, is an operational investor in education.

Standout Quotes:

• “Multi-family businesses are acts of inadvertence in the initial years or the initial generation, they're usually a force of necessity, and then it becomes more opportunistic as the family gets bigger, and by the time you get to the 3rd generation it's more process-driven and ultimately becomes strategic” – Spencer Burke
• “At the end of the day, it's not about having a board and all that, it's about the quality of the people, the vision, the culture and purpose of the organization; that's what creates great companies of all kinds and family business is just a large subset of great companies in the world” – Spencer Burke
• "In the United States, you can own 100% of the votes and not own any of the economics of a company" – Spencer Burke
• "I don't think there's anything better to own than your own company and the ability to compound earnings" – Spencer Burke
• “When it is time to sell the business that's great, that's not a failure” – Spencer Burke
• “The key to happiness is, don't let other people be the measure of your success; If you're not happy doing what you're doing, go do something else” – Spencer Burke

Key Takeaways:

• Some families walk away from a wealth of knowledge because they don't know what they're getting; although they need the advice, they just have the wrong person giving it to them
• Multi-generational family businesses are acts of inadvertence in the initial years or the initial generation, but get more opportunistic as the family gets bigger, and by the third generation, ultimately becomes strategic and process-driven.
• “Hygiene" refers to some cost-free measures that can be set up in the beginning to increase your chances of getting beyond the 2nd and 3rd generation, however, if not taken care of, you have no chance of success
• The key characteristic shared by enduring companies whether family business or not is "Total Control by One Person”
• In most families where there are issues, how the socio-emotional wealth is getting shared is just as prominent as how the money is being shared.
• To succeed over long periods (100 years), successful families have extracted a great deal of wealth out of the business so they have the resources to protect the business when necessary.
• The 3 fundamental factors that may impede the success of a family business; the Family tree is the first because it tends to grow faster than most business
• One of the number 1 keys to family business success is "Set the policies for the future when there are no names attached to them".
• The matriarch of the family is usually the keeper of family harmony, the patriarch of the family is usually the keeper of running the great business, but the patriarch more often than not, does not have the power in that family.
• The three interest groups represented in a family business; the people in the business, the people that own the business, and the people that are just in the family neither as owners nor in the business.
• The key to happiness is ‘don't let other people be the measure of your success; If you're not happy doing what you're doing, go do something else’

Episode Timeline:

• [01:28] A concise overview of Spencer's professional background
• [07:55] Spencer's thesis on starting a multi-generational family business
• [10:50] Instead of a Family Business Course, Spencer calls his course Ownership Insights
• [11:36] Common characteristics shared by enduring companies whether family business or not
• [14:19] The concept of Spoils of Ownership
• [16:35] The 'tyranny of the internal rate of return' versus 'creation of real wealth'
• [20:41] The 3-circle diagram in family business education depicts Family, Business, and Ownership, with how they interact.
• [22:32] The 3 fundamental undertows that affect a family business
• [28:57] The continuum of behaviors; a Business Family and a Family business.
• [35:20] The tradeoff between running a great business and maintaining family harmony
• [38:00] How is family harmony maintained as businesses progress through multiple generations?
• [53:40] A letter from Spencer to his kids.

For more episodes go to
BusinessOfFamily.net

Sign up for The Business of Family Newsletter at https://www.businessoffamily.net/newsletter

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Spencer Burke.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• The St. Louis Trust Company Multi-Family Office — We provide holistic, high-touch client service combined with customized, independent investment management and a full range of family office services.
• Washington University's Olin Business School

It was Rob who first introduced me to the phrase "The Business of Family" and ignited in me a passion to explore this topic deeply.

The Robson Family approach to structuring their family partnership and stewarding their assets for succeeding generations is some of the best work I've seen in this area. I have no doubt that you'll have many take aways from today's conversation.

Key Takeaways:

• The growth strategies you can employ to sustain and expand your family business
  
• How to apply the two concepts of business of family and family business in your business
• How to make your business a great place to work and entice the family to want to work there
• Learning to let go off your dream for the greater good of future generations
• The importance of putting as much effort in the business of family as the family business

Standout Quotes:

• “We made it a goal to make our business interesting for our children…our children really became great critics of our business and that was pretty tough on the business.”- Rob Robson [16:46]
• “Give as much attention to the business of family as you would to the family business.”- Rob Robson [34:57]
• “Sometimes life isn’t fair but it’s livable and it’s the ability to adapt and change.”- Rob Robson [42:14]

Episode Timeline:
[0:49] Intro
[1:40] He explains how and why he and his wife travel the world sailing 5-7 months a year.
[4:55] He narrates how he and his wife expanded his parent’s grocery business by researching and employing innovations over the years.
[11:01] The two aspects of the business of family and the family business explained.
[14:30] Rob explains how he and his wife made an intentional decision to actively involve their children in their business from a young age.
[16:43] How they made the business an interesting place to work over the last 30 years and how the ownership of the business is distributed across the family.
[19:58] He describes the process of his family counsel partnership and how it works.
[22:47] The four rules of Harvard on the relationship between the family and the family business.
[25:16] The change of generations as time goes by in a family business.
[28:24] Why it is not automatic for a family member to be offered a position in Rob’s business.
[29:04] He explains how they handle the family business’ funding among the family members.
[33:27] How and why they invested in a family business.
[34:55] Lessons you can learn from Rob on how to grow a multigenerational business.
[37:44] He describes his legacy as having put the effort in both the business and the family.
[40:25] Rob shares what he would include in a letter of a life lesson he believes many parents don’t teach their children.

For more episodes go to
BusinessOfFamily.net

Sign up for The Business of Family Newsletter at newsletter.mikeboyd.com.au

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Rob Robson.

Sponsored By:

• The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations.

Links:

• Book: Family Wealth - Keeping It in the Family: How Family Members and Their Advisers Preserve Human, Intellectual, and Financial Assets for Generations: James E. Hughes Jr. — The landmark book that changed the way exceptional families think about their heritage, their wealth, and their legacy to future generations.