Back again

It’s almost been a year since my last post.  The cancer treatment is now done and it’s time for healing to begin.  I’m finally feeling strong enough to start posting and sharing thoughts how private business integrates with our personal lives.

During the past year I’ve had personal experience with not being able to work, trying to work and having to take a rest and just plain old starting and stopping.  I keep thinking I have the energy and stamina to get back to only find out another setback is waiting for me.  One would think this would lead to frustration.  Instead I have learned patience and had to become more humble and ask for patience from those who have wanted to work with me.

When our health is good, we don’t think for a second about going the extra mile.  When our health is compromised like mine has been I’ve had to learn to think in a different manner.  I’ve had to learn to say I can’t do that right now and I’ve had to learn to go back and ask for more time and patience.  It’s not something that I’ve enjoyed learning.  I and I think most owners of private businesses don’t like to make excuses and ask for more time.

When one has limited energy and personal resources we have to learn to think about what is really important versus what others would like us to do.  The arbitor of what is really important becomes our own inner thoughts and value systems.

I’m hoping that over the next few months all of my energy returns.  If it doesn’t I’ll have to continue practicing prioritization in my life as well as my business.  I’m sure there will be lessons that will be learned.  Hopefully I’ll have some wisdom that comes which will be useful to share.

I’m happy to be back and have enough energy to start on life once again.

Josh

Two Worlds

So many outcomes in life depend on the way we address the world, the unconscious rules by which we play.  The rules may not be immediately obvious to others, but sooner or later our external actions and attitudes betray the unspoken. 

Online friend Dan Oestreich http://www.unfoldingleadership.com/blog/ offers this description of two radically different worlds:  the world of the strong and the weak and the world of transcendent values. 

  

Dan writes that most organizations have elements of both worlds. 
“In most organizations I’ve known, leaders endeavor to speak from the world of transcendent values. And they believe in them. But they often also find that at some level they must deal with the other world, focused as it is on strength and weakness, on power without any particular moral code. “

This comment seems to me to be right in line with our thread on collaboration and client service.  Each world’s values struggle for dominance in the workplace, in our working relationships with colleagues, and in our client relationships.  I believe that when we operate from a firm stance in the world of transcendent values, we do the best for ourselves and for others.  When we tolerate the opposing values of the world of the strong and the weak, we are all diminished. 
Dan illustrates the difference with this legend.  A Cherokee elder was teaching his children about life. “A fight is going on inside me,” he said to them.

“It is a terrible fight and it is between two wolves. One is evil – he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego.” He continued, “The other is good – he is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion, and faith. The same fight is going on inside you – and inside every other person, too.”

The grandchildren thought about it and after a minute one of them asked, “Which wolf will win?”

The elder simply replied, “The one you feed.”

 

 

 

Karen Lynch 

 

 

When collaboration becomes really important

I’m about to head into a vortex where collaboration is going to be really important. Unfortunately, the medical community doesn’t seem to do collaboration even as well as the financial advice industry does. And, this might be a real problem.

I’ve recently been diagnosed with cancer. For years, I’ve been using the medical community as a great example of diagnose before prescribing and for working in a collaborative manner to work with one on managing their health. It appears that the medical community struggles with this process at least as much as we do in the financial services business.

During the diagnosis period for my medical condition we would often tried things to see how they worked out. The diagnosis wasn’t especially thorough and the result was not great. I just happened to get lucky that my particular diagnosis was done relatively quickly. And, that may be how it works for all of us, we just get lucky in our diagnosis in both the medical and personal sense.

This leads me to wonder if that’s how it works with our Clients as well. Do they mostly get lucky that we help them do things that lead towards where they want to go? Or, do we tend to put our Clients in a box and make decisions about what’s important for them?

It seems to me, that we often put our Clients in a box and then decide what’s important for them. I’m not sure this is the most appropriate way for us to help our Clients reach their goals.

Just asking the question, if we were to get together three years from now, what has to happen for you to feel like you’ve been successful is powerful enough to help us all be on the same page. And, it’s all being on the same page that is important.

For example, it’s just as important for me to make sure my affairs are in order as it is to get medical treatment. Both are at a ten in importance and both must be addressed. Otherwise, I’ll not be able to put my full attention on the medical portion of this deal.

The medical community is likely to be only focused on the medical stuff and never find out about the other part of what’s important for me. It will become my responsibility to point this out. We often expect our Clients to tell us what’s important to them. The issue with this is our Clients often don’t know how to tell anyone, much less what’s important. And, isn’t that what our primary job is? We must find out what’s important for our Clients and we must be through in this activity. Doing so will allow us to all focus the appropriate amount of energy in getting the right outcome.

Josh Patrick

Philanthropy and the third generation

I had the opportunity to talk with a TEC group in Michigan last week. During the workshop, we got into a conversation about the role of philanthropy for teaching money values for younger generations.

I found the two companies in the room that were third generation businesses were the most interested in this topic. I suspect this is because these companies are highly successful and the owner/managers are worried about their children not understanding the value of money and the hard work that it takes to produce the money that the family enjoys.

The two companies that were most interested in this topic had a problem that first and second generation companies don’t have. Both businesses had a high level of success the entire time their children were alive. The children of these companies had a world view that money grew on trees and making money was not an especially difficult proposition.

Most business owners we speak with are so focused on keeping their business healthy that they have no time or energy to consider serious philanthropic activities. What I learned from my workshop last week is that third generation owners are more likely to consider philanthropy as a method of helping them achieve several of their goals.

The future will tell us how this theory works out.

Josh Patrick

Even more on collaboration

Collaboration is truly not for the faint of heart.  When we collaborate—even within our own firm—we temporarily hand over the care of our Client to someone else.  We may hold our colleagues in the highest regard, and yet when it comes right down to it, we may not be aware of how little we trust them until it is time to collaborate. 

 

Sometimes dividing up the labor is relatively easy—“You do the lawyer stuff, and I will take care of the financial strategy.”  If I know my attorney colleague is an excellent attorney, I may be happy to collaborate with her.  But if we are all working on various aspects of a complex case, we run the risk that critical pieces may fall through the cracks.  We need to build trust, and we need systems. 

 

It is when we attempt to collaborate with a colleague for the first time that we become aware that effective professionals can have remarkably different work styles.  If I am a person who checks on a Client project every three days no matter whether what, I am going to be uncomfortable working with a person who waits until there is something new to report to communicate with the Client.  Both professionals may be effective in their own practices, but if we are going to work together collaboratively, we need to have some kind of agreement about communicating with the Client.  At least, if we want to derive the real benefit of collaboration we do.

 

When we walk into a Client meeting on our own, we know what we want to accomplish and how to get there.  When two (or more) of us walk into a Client meeting, we need to be on the same page before we get there unless we want to confuse the Client and undermine the value that we are trying to bring. 

 

Collaborating requires an initial leap of faith in our colleagues, but to really harvest the benefit of collaboration we need to conscientiously build trust.  There need to be rules about who does what.  There need to be meetings to plan for meetings.  We have to hash out expectations that we may not be aware we had until they clash, preferably not in front of the Client.  It can be a lot of work at first.  Now that I think about it, maybe that’s why we spent so much time on group projects in the old days in b-school. 

 

It’s easy to lose heart in the first efforts to collaborate.  Those of us who have learned to be effective solo practitioners may legitimately wonder if all this cooperation and collaboration is worth the work it requires.  I am fortunate to have worked many years in a company that had well-established systems for collaboration in place, and I can report that the results for the Client are unsurpassed when you can bring the right professionals to the table and orchestrate the perfect solution.  And isn’t that what this is all about?  Bringing the very best solutions to our Clients.  That goal is probably worth a little discomfort as we learn new ways and build trust. 

 

The good news is that successful collaboration builds greater success.  It does get easier as we learn how to apply each team member’s strengths to the problem at hand. 

Karen Lynch

 

 

 

More thoughts on collaboration

Collaboration is one of those words that we are afraid of saying we are not in favor of. In many respects it’s like apple pie or mom, just one of those things that we all should embrace.

So, the question becomes why is collaboration so rare and why is it so hard to institute in our practices?

I was having a conversation the other day with a friend of mine and we were talking about a group of people where collaboration should be the rule. As it turns out, only about 25% of the people in this group practice collaboration. I have a couple of thoughts about collaboration that might shed light on this issue.

First, we are afraid that if we collaborate then we will lose a certain amount of business. This is a rational fear if you believe and have evidence that there is only so much business. Those who are afraid of losing business tend to live in a world of scarcity. We often believe that if we don’t get ours, then there won’t be enough to go around.

Second, if we collaborate we will be seen as being weak by our Clients. This certainly is a reasonable fear. Our Clients expect us to be “experts”. When we bring in others to work with us, we might not be seen as that expert anymore. I believe that if we set expectations for collaboration from the beginning, we will not have as much an issue with our Clients not seeing us as the expert.

Third, the problem is not big enough to afford collaboration. Collaboration is expensive for the Client. Unless the payoff is large enough, there is not a good reason for the Client to fund a collaborative effort.

Fourth, and probably the most important, we don’t know how to collaborate. I believe that collaboration starts at home. How many of us truly involve everyone in our firm in decision and Client service in a collaborative manner. Most of the time we want our co-workers to do their job and not make too much noise about it.

The more we can build an internal collaborative culture, the better chance we get to practice collaboration. We then have the opportunity to move from collaboration within our firm to collaboration with our Clients. Finally, we are now ready and able to collaborate with the outside world.

I think it makes sense for us to consider practicing internally in a collaborative effort. The more we do this, the better our collaboration will be with others.

Josh Patrick

We all need a Dr. House

Last week I had an interesting health experience. On Monday night I thought I was having a heart attack. We called 911 and were transported to our local emergency room. I was screened and a heart attack was ruled out. But, I was admitted and sent to the cardiac floor for further tests on Tuesday.

After extensive testing, the cardiac people determined that I didn’t have any heart or blockage problems. (the good news) At the same time, they had no interest in discussing or understanding why the symptoms I displayed happened. Their only comment was to go back to my GP and let him work on it.

I started to think about how this experience related to the work we do in the wealth management process. Often our Clients go to a specialist, but that specialist never really tells the Client that they don’t work and don’t understand all the areas the Client should be concerned with. In our world, the specialists often think their specialty can solve all of the Clients problems.

In reality our Clients need someone who is like the good old family GP, but with a much higher level of competency. Someone who has a good understanding of all of the wealth management activities our Clients could participate in and how the different wealth management activities can affect our Clients.

This brings me to the concept of need Dr. House in our industry. Our Clients need a clinician who not only understands, but can also diagnose and implement with specialists the solution that will give our Clients the outcome they desire. The person who coordinates the process needs to understand the roles and what actions the specialists can bring to the table. At the same time, the clinician can communicate with the Client how all of the different strategies and specialists are necessary in providing an outcome that our Clients desire.

If we as comprehensive wealth managers concentrate on the end result, we will help our Clients have a different experience than I had last Monday and Tuesday. Instead, our Clients will achieve the outcomes they desire without the confusion that comes from wandering from specialist to specialist without anyone coordinating the final outcome.

Josh Patrick

The psychosis of selling a business

It seems that when a business owner decides to sell a business that a certain amount of psychosis accompanies the sale.

This psychosis fits in with what we know about having a sudden money experience, or for that matter a sudden change in what is “normal.”  There are expectations that the buyer is going to believe everything the seller says and that the buyer will go along with whatever crazy demands the seller makes as part of the sales process.

I see that a major role the intermediary plays in the sales process is to help the seller keep the demands and irrational behavior to a level such that the buyer won’t walk away.  I also believe that the reason many businesses never make it to a sale the first time around is that the seller has false expectations as to what the process entails.

It doesn’t matter how many times we’ve told the seller what to expect, the seller still feels they are being personally attacked during the sales process.  I also see that sellers conclude that the way to counteract questions during due diligence is to make demands on the buyer that the seller really has no reason to make.

The simple fact is that sellers going through the sales process move through a series of emotions that often manifest themselves as irrational behaviors.  The buyers often just have to sit on the sidelines while the seller goes through the process of deciding whether it’s more important to market their business or to act out their frustration and emotional changes.

It seems that one of the jobs we have in helping our Clients market their business is to help them manage their emotions.  Many people think that selling a business should be a rational process.  The fact is that most of the time it is anything but.  And, having an understanding that the seller will be on a roller coaster ride can help those who advise the Client make it through this very difficult period.

Good intermediaries are the ones who can help their Clients manage their emotions while going through the sales process.  If we can’t help our Clients manage their emotions, then we won’t be able to help them move their business through a liquidity event.  Sometimes we just have to live through the first failed sale attempt and use that failed attempt as a learning experience for the second time we try to sell the business.  Or, better yet, finding a Client who had a failed attempt and helping them understand why it didn’t work the first time can lead to a more satisfying engagement than working with a first time seller.

The one thing I can say with certainty is that intermediaries earn every cent they make in the business sales process.  Not only is it difficult to sell a business, it’s even more difficult to manage the emotions of the seller.  Without managing those emotions there is no chance the sale will ever take place.

I’m now more convinced than ever that a business owner should never attempt to sell their business without the help of a pro.  This includes those who want to sell the business to their managers as well as selling to an outsider.  Even internal sales fall apart because of mis-communication and failed expectations on both sides.

The bottom line………don’t let your Clients sell their business unless they have a pro guiding them through the process.  There are just too many pitfalls to act as your own intermediary.

Josh Patrick

Are you ready to revisit 1985?

My guess is that in the coming year we will start to hear much more about that dreaded word – inflation.  The Clients we work with who live in basic industries are seeing significant price increases come through every day.  These increases are of a magnitude such that they are having a hard time raising prices fast enough to stay ahead of the price increase curve.

The government tells us that inflation is under control, except of course, for those two evil areas of food and energy.  Unfortunately, many of the people we work with are seriously affected by both of these.  Of course there also is the issue with housing and mortgages.  This has a “minor” affect on the construction business as well.

My title for this post is just a reminder that if you didn’t operate a business in the early 80’s, you might want to find someone who did.  This was the time when inflation was running out of control and no one could really increase prices fast enough to stay ahead of the curve.

I’m afraid that we are now quickly moving into a time where the economics of the early 80’s are going to reappear.  The skills that are necessary to operate in a high inflation environment are different than the skills that have been needed for the past fifteen or twenty years.

We will all need to be able react more quickly.  I also believe that for the first few years of our new inflationary economy we will see major resistance from our Customers.  We will need communication skills that allow Customers to understand our increased costs.  After the Customers understand our increased costs, we then will need them to allow us to raise prices.  If we don’t re-learn how to do navigate this process, our business future could be very grim.

I think the name of the game is just to hold on for the ride.  This particular ride might get a little rocky.

Josh Patrick

Are your Clients ready for collaboration?

While I was writing my last post on advisors and the different levels of cooperation exist I started thinking about our Clients and their role in the collaborative process.

The thought occurred to me if our Clients are not collaborative ready, then it makes little sense for the advisory team to collaborate on their case.  Collaboration must start with the Client.  When they are ready to collaborate with you, it’s likely they will accept and embrace collaboration from their advisory team and those they work with.

We were working with a sibling partnership several months ago.  I suggested that we bring in some collaborative team members and as a result of the recommendation ended up getting fired.  The Client said that because I wanted to bring in other team members it was obvious that I was not competent to solve their problems.

At first I was confused by the statement.  In the last week my thinking on collaboration and how it works best has helped me understand the dynamics of what happened.  The Client in this particular situation was not ready to work with me in a collaborative manner.  They expected that I would be able to read their mind and instantly put together and implement a plan that would magically solve all of their needs.

As I reviewed their actions with other advisors it was obvious that these Clients were not willing to work in a collaborative manner.  They had not shared information they had with their attorney who had worked with them for over twenty years.  We were not allowed to share our preliminary report with this attorney or the CPA who serviced them.  In fact, it took us over thirty hours to piece together the information they sent into a format that we could understand.

This family purposely kept their advisors at arms length and only shared a little bit of information with each.  We were the first advisors they worked with that reverse engineered their entire situation and was able to show them where they truly stood.   Once we understood the information it became apparent this Client could gain a great amount of value from their advisors working in a collaborative manner.

The problem was the Client wasn’t willing to work with anyone in a collaborative manner.  Even the relationship between the brothers was one of distrust and lack of communication.

I’ve recently come to understand that the reason this relationship didn’t work out was because the Client was not collaborative ready.  They weren’t willing to share information or look at their options in an open manner.   This was a guarantee that they would not get an elegant result.  We could provide them with a result, but not one that would provide a fraction of the true value they could receive.

The lesson that I’ve learned is that before we move the Client towards a collaborative relationship with other advisors they need to be ready to collaborate with us.  Our practice requires a collaborative thought process with our Clients.  We now need to develop tools that help us understand whether a Client is truly collaborative ready.  If not, we then need to let those Clients know we aren’t the right place for them to be.

Josh Patrick