Crossing The Line of Confidence: Transforming Family Inertia into Collective Action

Welcome to Legacy Builders, strategies for building successful family enterprises. Brought to you by Beacon Family Office at Assante Financial Management Limited. I’m your host, Cory Gagnon, Senior Wealth Advisor. And on this show, we explore global ideas, concepts, and models that help family enterprises better navigate the complexities of family wealth.

Today, we welcome Daphne McGuffin, a Learning and Development Consultant and Family Business Facilitator at D3 Learning Solutions who brings over two decades of expertise in family enterprise advising. After directing the Learning Centre and Thought Leadership divisions at The BDO / SuccessCare Program for nearly 20 years, she founded D3 Learning Solutions, focusing on practical transitions of both tangible and intangible assets in business families. A Kolbe Certified Consultant and Fellow of the Family Firm Institute (FFI), Daphne is known for her expertise in helping multi-generational families create alignment in communication, governance, and leadership succession. 

My goal is to be the most curious person in today’s conversation with Daphne McGuffin, as we explore her fascinating work at the intersection of family dynamics and business success. We’ll delve into her innovative approaches to family enterprise development, including her practical “napkin tools” that transform complex concepts into visual frameworks. Together, we’ll uncover Daphne’s insights on how families can learn and grow together, her unique perspective on crossing the “Line of Confidence,” and her strategies for building what she calls “socio-emotional wealth” across generations.

Now, let’s dive in!

Cory: Alright. Well, welcome, Daphne. We’re excited to have you here today to share your wealth of knowledge and experiences with us. Let’s dive in, shall we?

Daphne: Sure.

Cory: Now, Daphne, imagine you’re delivering the commencement speech to the graduating class of 2025, and you have the chance to inspire them with your story. How would you begin your speech to convey the incredible lessons and expertise that you’ve gained along your career?

Daphne: Well, given my background, Cory, I’d want to tell them that continuous learning is essential to success, but they may not be ready to hear that. They’ve just spent so many years learning and acquiring knowledge, so they can be forgiven for thinking they’re now done with studying. But with the hindsight of my own journey today, I would start with a story that illustrates that self-fulfillment stems from knowing who we are and trusting our instincts. Know thyself, as Aristotle put it.

The path to fulfillment is full of twists and turns, but for those that choose to follow their instincts, those twists and turns will eventually lead to where I believe they are destined to be. I believe our formative influences play a big part in moldiness, which is basically a mixture of nature and nurture, if you like, what we’re born with combined with what we’re exposed to. So while we might grow up with a limited view of what career options even exist, we are still able to develop a sense of how we want to contribute to life in general.

Here’s my story about my path to self fulfillment. I was about eight years old when I announced that I wanted to be a teacher when I grew up. So, funny enough, that Christmas, Santa brought me a custom-made wooden pint-sized teacher’s desk. It even had a pencil drawer. Just a little note in there, my father was a carpenter. Just the real thing. So I think my parents’ recognition and support for my interest fueled that passion onwards. I would spend my summer holidays playing school.

Unfortunately, my sister and the neighborhood kids didn’t have that same interest and weren’t very willing students, but that didn’t deter me. That interest in teaching continued, never waned until I finished school. And at that time, I had to decide between teachers college, which meant a number more years of studying, or enrolling in a paid career development position with one of the top banks that apparently, I’m told, would use my mathematical and critical thinking skills. Guess what? I opted for the latter. I know, I know. It’s all about payment, right?

But it turns out what seemed at the time to be a completely different highway was more but a roundabout that eventually brought me back to my original starting point. So when I look back on that first career choice, it’s not surprising that in a short time, I was actually assigned the responsibility of training the new recruits. Now, teaching adults proved to be much more rewarding because they actually wanted to learn.

A few years later, I find myself on a plane to Canada, where my career path took a different detour into computing and analyzing market research data. But very shortly, once again, someone recognized the teacher in me, and I was asked to design and develop a learning curriculum. So there I got back on my original track. That continued for a number of years after my kids were born. It’s funny because my own kids were the impetus for me, ultimately taking a very fulfilling position that combined curriculum design with teaching, this time training adults who were changing careers and needed expertise in this growing personal computer field. It’s a long story, but it started from being asked to help in the classroom at school using a desktop computer that I really didn’t know very much about.

A few years after that, I had the opportunity to join an organization that was committed to helping family enterprises and their trusted advisers navigate the complexities around succession planning and governance. So, for the past two decades, I’ve really been lucky and really enjoyed developing and delivering learning opportunities for families and business together.

So there you go. Despite the many twists and turns, I ended up where I believe I was meant to be. It wouldn’t have happened if I hadn’t known myself enough to trust coming back to those instincts, and of course, being committed to lifelong learning even though I didn’t spend all those years at teacher college. I would encourage the graduation class to do the same.

Now I appreciate that not everyone knows exactly what they want to be at age eight. Certainly, we’re told that from ages eight to eleven, we do get more clarity about ourselves and what we like. And usually by 14 or so, we’re able to set goals and work towards those goals. So we are in the process of becoming our own person by then.  I don’t know if you know this, but there is a school of thought that believes it’s dangerous to settle on a specific career path at a young age.

The psychologist Adam Grant calls it Identity Foreclosure. In other words, people prematurely settle on a path and close their minds to other options because they have this strong sense of commitment to that original plan. I guess I just didn’t do that completely.

So my answer to the question would be for people to emphasize that it’s important that parents give kids the opportunity to experience many different things and support them in whatever those burgeoning interests are. And, also, teachers at school and the guidance counselors can play a huge role in helping students identify their natural abilities and their instincts, and then match those instincts to their interests. Summer jobs and co-op positions also are great learning opportunities along that same track. Are you familiar with a program called OPgig?

Cory: No.

Daphne: So OPgig is a program to identify natural instincts in young people. Well, not just young people. It’s a career discovery program. It’s based on brain science. It can predict how well people of any age are likely to perform in a wide variety of careers, which is a gem for anyone, young or not too young, if they want to do some due diligence on their current career path or they want to know about other options that might be a better fit or better align with who they are.

Cory: Amazing! We’ll have to put a link in the show notes for anyone who would like to check that out. I think, you know, as you say, it doesn’t need to be, as a youth who are discovering, but also midlife career changes or even helping people understand, maybe where their passions can support them from a career perspective, that would be a great tool for that.

Daphne: For sure.

Cory: Yeah. So, Daphne, when you talk about that nature versus nurture, the stuff that we’re we’re born with, those those inherent skills and everything that that makes us as we’re born versus what we acquire along the way, how does how does the work that you do with families, how do you use that concept?

Daphne: Getting back to the whole point of that commencement speech, I think it’s important that we keep learning about ourselves to get to know a little bit more about those instincts. So when it comes to families supporting their kids, I think it’s important that they invest in a sort of a learning family mentality. Learning is one of the things that keeps families together, builds the connections, and it gives them an opportunity to create what a lot of people call socio-emotional wealth. In a way, learning together increases engagement, increases the connection, but it shows kids that parents have their best interest at heart, allowing them to follow their own paths. 

Cory: Yeah and so families that learn together, stay together. How did they get started? How do they know?

Daphne:  I said families in the whole family business world that we focus on, families that learn together, earn together, which is just another take on that. How do they do that? Basically the same as any of us starting to learn together. If family members know they’re going to join the family business, they’re already slated for leadership in that family business.

There’s a lot of learning that they’ll want to do independently, to know what constitutes a sustainable business and how they might contribute. But whether they choose to be involved or not in the running of the business, I think it’s important that the entire family commits to investing in building the rapport, the trust, the alignment, and that social emotional wealth that are so fundamental to maintaining a successful family enterprise.

I guess if I can introduce you to an approach that I use, that I believe is elementary to all of us, both in our personal and professional lives or whether we’re building a family enterprise or not. It’s about deciding what’s best for us going forward.

For example, for an individual who might decide which school they’re going to go to, or which city they’re going to move to, or which country even, which I had a lot of work to do on that, changing jobs, getting married, getting divorced, having kids, all of those sort of life decisions. I call it the Line of Confidence.

The model starts off on the left hand side with everyone in what we call the Inertia Circle. That’s where we don’t know what we don’t know. We don’t know what questions to ask or we are unsure about how the future might unfold. We might be afraid of making a wrong move, depending on our natural way of doing things. So that can cause some fear and uncertainty, which if we don’t address it, results in paralysis. We just don’t do anything. And given that we have a lot of other stuff on our plates every day, it’s very easy to procrastinate. We come to the decision that the only safe thing to do is put the decision off until another day.

Somewhere off on the right is our dream destination. I call this the Implementation Circle, where it’s our bigger future, whatever it is we aspire to, a place where we can reach when we make the right choices and make the right decisions. To reach that destitute destination, we also need to have the capability and the skills to get there.

I think the most important thing for families to note is that you can’t just go directly from inertia to implementation. There’s no such a shortcut. You can’t pull the trigger on moving forward if you don’t address the inertia, what’s holding you back. Our very human systems have a natural process that moves us from the Inertia Circle into what we call the Information Circle. It’s called learning. When we invest in learning, we are able to identify and discuss not only what the bigger future looks like, what we want it to look like, but also what’s holding us back and then what we need to do to move forward with confidence.

For example, families might learn about what’s most important to each other, how they each deal with conflict, what options are open to them, how they can better collaborate, and what works best for them as a group. The key takeaway from this learning is getting clarity around existing or potential roadblocks, all those things that are keeping us in inertia, and then getting the ideas on how we can remove those obstacles.

So the family gradually moves across what I call this Line of Confidence where they’re more empowered from their learning and they’re ready to move forward. They’re able to move into the next stage, which we call the Initiation Circle, where they build on the knowledge and the confidence that they now have, and then they can begin to put structures and execute on things that will get them to that bigger future eventually.

A couple of points I should mention here, Cory. We all learn in different ways and at different speeds. So some family members will take longer to cross the Line of Confidence. For example, you and I have very different learning and decision making styles, so you might well reach that line of confidence before I do, and that’s okay. Secondly, for the listeners today who are more visual learners, like, I’ve tried to describe this process, but I provided an illustration of the model in the show notes. So they can see that the left side of this model that I’m describing is labeled the learning phase. That’s all of finding out more about it, being in a position where we can talk about different options without committing to anything. We can hear what each other has to say and what we each think. Now, the right hand side of the model is, I call it, communication phase. So communication also means to command action by actually doing things. This is where you actually start putting the plan into action. So not only is it an opportunity to learn, but it’s an opportunity for families to get together, to make sound decisions, to make sure that there is an alignment before they actually start to do things.

Cory: You talked about going from the inertia circle into the information circle, and that’s understanding the roadblocks is kind of what I heard you say. Is there anything else that needs to be present to to move from that inertia circle into information?

Daphne: For sure. Families have to be open to adopting this learning process, any studies on family businesses will indicate that this is a very important part of getting to what we call good governance, where you do take the time to learn together and hear each other out. So that openness is very important. The willingness to have people participate. I know that sometimes, some, maybe a senior generation, isn’t as open to having input from the younger generation or the rising generation. That is absolutely critical. In the learning phase, there has to be some problem-solving techniques, hearing what people have to say, letting people have the freedom to say things, so not shutting people down because this is about learning. It’s not necessarily about being ready to make the decision yet. So, having that ability to allow each person to have their say and know that they’ve been heard is very key.

Cory: And, Daphne, you made the comment about each person will cross that line of confidence at a different time. What does that look like when we’ve seen the family, that collective, cross that line of confidence? Because I could see some impatience if somebody crosses it earlier than others, and maybe some resistance that could be caused by that. So how do you ensure that everybody is crossing that line in due course, but identifying that we are now in that initiation circle and everyone or or the majority, or how do we know that we’re there and we’re taking that next step?

Daphne: It’s like during a little strategy session, Cory. Whatever it is that the topic of conversation that brought us to this learning forum in the first place, maybe it’s about succession, maybe it’s about expanding the business and opening up another shop. Whatever that topic is, if that’s the identification of that bigger future, by actually taking them through as a group, about “we know what we want to achieve, what’s stopping us still from getting there?” If you still have 15 reasons why we can’t do it, we’re not there yet.

If it’s if a lot of those things are a bit clearer or even if it’s a smaller number, whatever the number happens to be, we make a list of those things, and then we have a discussion about what we still need to do to overcome that obstacle. And if we can get brainstorming on what the solutions might be, and we can get everybody participating in that, and then you can actually see that confidence arising. We had those 15 things that are the reasons why we’ll never be able to achieve this. But look, we can just do four things, five things, and we will be there. That confidence just lights up the room. It’s very obvious that they can do it. If it’s not there yet, then we have to go back and do some more work on how we overcome those obstacles.

Cory: I love that! So it’s not a clear, smooth, journey from one side to the other. Sometimes we might need to take a step back to be able to take two steps forward.

Daphne: Yes. By drilling down into what are those key obstacles that people can’t just get past, and maybe that’s a little bit of side work with some of them to have that conversation and then bring it back to group. Like, what about this? Could we change that? Could we experiment for a little bit and see if it works? And if it doesn’t, we’ll do it differently. Those things, or any solution that will help address the existing stubborn concerns, if you like, that just we can’t get around.

Cory: Right! Daphne, you made a comment of the willingness for everyone to participate. Now if we think about today or where we were and how we get everyone on board, what is it that needs to be present for each person for them to actually get there?

Daphne: For them to get in the room to begin with or for them just to feel that they have participated?

Cory: To get into the room. To actually say I’m on this journey. I’m defining the bigger future as a collective, and I’m ready to get on the bus with my family here and move forward.

Daphne: I think the biggest thing is knowing that they have an opportunity to put their ideas on the table, and sometimes that just doesn’t happen with families. You know, those decisions are made for them. I mean, I could go on to a bunch of stories about how the parents have made decisions, and then the kids hear about it afterwards. But for parents to feel confident enough in their kids that they can actually at least discuss those options. And they will have a little bit more confidence in knowing that we’re not making the decisions today. We’re just looking at the options, and we may have to go away and do more research and more homework. But if there’s a plan that’s going to be made about me, for me, I need it to be there. And then no matter which generation you’re in, that’s important.

I remember a funny story about a family that wanted to have this discussion, but dad wasn’t having any of it. So they said they were going to go ahead with the discussion, and they put an agenda out for everybody to see that they said the first topic was about dad’s future. Well, now dad wanted to be there to find out what this discussion was going to be. Does that help?

Cory: It does, absolutely. Now, Daphne, one of the things that I love is that passion that you have for teaching adults, that you can bring this in a way that not only helps us as auditory learners, but you can help the visual learners as well. And so, that line of confidence model is so fantastic. But you also have another model that I do want to bring to our audience. The Positive Outcome Model that you have shared and, again, linked into the show notes for those who want to see the visual, I want to go into that because I think that there’s so many components here of what those family members are bringing, and how you’ve beautifully demonstrated this. Can you help us understand how you use that model?

Daphne: And just before I forget, Cory, I’m so glad you made that point about the visual learning. I would say probably the majority of founders of businesses, business owners, are more visual in how they make their decisions and how they understand things. So it’s absolutely the perfect way. Funny story. Years ago, when we started the Success Care Program, we called all of these napkin tools. And a napkin tool is something that you can draw when you’re sitting in a coffee shop having a conversation. But it just explains the whole process. So the Positive Outcome is actually one of those napkin tools.

The purpose behind it is to illustrate what can cause misalignment in families and introduce a process that will help them get alignment or get on the same page. It was designed to help them identify what gets in the way of them moving forward together and then guide them through an approach to reconcile their differences, by building and defining what we call a common interest. So that’s another good reason for them all to come together in the room. A common interest is a multigenerational vision, if you like, that fosters the cohesion and the unity that you want to see in a family. It facilitates the alignment and actually manages that overlap between the family and business circles. There’s a lot of complexity that can occur by these overlapping circles from the three circle model and when and where you need some boundaries.

Families can circle back to that common interest whenever they face a new or a recurring pothole or a roadblock, if you want to call it that, and there will be. There’ll be lots of those. So the inspiration for this model was something called the Circle of Conflict by a group in Colorado.

 Again, you can refer to the illustration to follow along. I’ll try and explain it verbally, but, in the model itself, I draw a line down the circle, vertical line down the circle, and I label that line “today.” So this is where we’re at. This is where we’re at today. Now when I look at the left side of this model, the left side of the line are things that already exist. Things that have happened, that’s where we are today. So it happened in the past. I call it “yesterday.” So there’s three sections there that represent these things that already exist, and each one of them can represent very common potholes and roadblocks, things that can trigger friction, because a family member, has a different perspective than another. And we know that none of us can change what happened in the past, and we certainly can’t change each other. We can only change ourselves.

So there is a lot to be learned by getting clarity around the different perspectives that we have and the different opinions and understanding where someone else is coming from. So if I can, I’ll just go through a couple of those very briefly.

Cory: Absolutely. Yes please.

Daphne: Okay. So the first one is labeled Principles and Values. So whether we verbalize or not, everyone’s principles and values already exist. You’ve got yours. I’ve got mine. We may not always be conscious of what they are, but we certainly know right away if something happens or someone says something that goes against what we believe to be right. So our principles are those standards or rules that we have for ourselves that govern us as individuals. So the value that we put on those principles, in other words, how we define them and why they’re important to us, reflects our individual beliefs and ultimately drives our behaviors and decisions, how we do things.

Often in families, there’s some commonality, but not always, especially in multigenerational families. So you can find that different generations of families can have different values because you take three siblings in the same generation, and each sibling has a spouse from a different family of origin. So they have to blend their core principles, and it creates their own unique family standards, if you like. So it’s not surprising when you get various branches of the family together and they’re misaligned about what they think is most important.

One point I would like to make here though is avoid putting generations in boxes. Over the years, I’ve assessed the generational values of hundreds of family members through many, many group workshops and customized family consulting. Time and again, I find that about 20% of participating family members aligned with the values that are considered the norm for their generation. Now we hear so much about, you know, gen x did this, and the millennials did that, and, you know, now gen zed. They’re a whole different ballgame. But we don’t always align to those.

Case in point, in my own situation, I did the questionnaire about 20 years ago. Now not to give anything away, but I was born in the baby boomer era. But my beliefs align more with those of the builders or the traditionalist generation before me. But you know what? It made absolute sense to me when I compared my answers to the questions to my formative influences, how I grew up. So I was born in Northern Ireland and raised by a very strict father who was a traditionalist and a loyalist. He had great respect for authority and for his elders, around hard work and wisdom. Now, to this day, I emulate with a number of his beliefs, particularly one that I will repeat again and again, if a job’s worth doing, it’s worth doing right. I don’t know how many hundreds of times that was drilled into me.

So I do believe these formative influences play a huge role in determining our principles. So important to look at those and find what’s common to all the members of the family so that they can adopt a common set of principles and values for how they communicate, how they make decisions, how they manage conflict, how they run their business.

The second piece of the pie is called History and Relationships, and this refers to the different experiences people have in their lifetimes, whether they’re good or whether they’re bad. So these experiences, and importantly how we remember them, can lead to breakdowns in the family unit. It creates our biases of how things should be done. But they need to be reconciled if we’re going to avoid breakdowns.

Consider the story of the spat that two brothers in law had that eventually saw one of them having to exit the business. That spat kept going and precluded their wives from socializing and eventually resulted in the next generation, all their kids, having no connection whatsoever with their other cousins. That can be very detrimental. On the other hand, or similarly, you can have a very close relationship between a parent and a favourite child. And that can close the door to opportunities within the business for the other children. I find that they become more apparent when you run a family genogram where you see there’s an affiliation sometimes between dad who was the youngest child and his youngest child or vice versa, the mother who was the firstborn and their firstborn. It’s important to look at the history of relationships and see if it’s impacting our biases and how we make decisions.

The last piece of the pie refers to the differences in our individual cognitive abilities or skill sets or personalities and something we call Conative Instincts. All of these are very important to building that socio emotional wealth. If we have a couple minutes, I’d like to just explain conation because it’s the least known and the most misunderstood of the three parts of our mind, and the three parts of our brain.

Conation refers to our innate or instinctive way of getting things done, how we’re prewired to do things. So one very quick example for the listeners is how we default to riding with one hand exclusively or kick the football with one specific foot. We didn’t choose our default hand or foot. We are prewired that way. And, actually, it will drain our mental energy if we try to use the other hand or foot for longer than a few minutes at a time. Are you willing to try this little experiment with me?

Cory: Let’s do it.

Daphne: So I’d like you to print your first and last name on a piece of paper, and our listeners can try this later. So print your first and last name. That did that didn’t take you long. Your name’s too short. That it didn’t take you long, and it didn’t use much energy, right? I didn’t see that you had to focus on it a lot or concentrate very much. It was actually very automatic for you, very quick and very natural. Now try this. I want you to move the pen to the other hand and print your first and last name again. It took you a lot longer that time. And you had to, even though you’re smiling, you had to focus a lot more. It took much more effort, and more concentration, and more of your mental energy to do that.

So I have a question for you. How does both of those little taps compare? Is the first one better or the second one better? So, I do this a lot with all generations, and the comment I get most of the time is the second one looks like I’m back in kindergarten. So why would you spend that much more time, that much more energy to get an output that’s not as good? Doesn’t make sense, right? So that’s what our conative instincts will show us, what is the right way for us to do things to conserve our energy and use our natural instincts in how we do things.

So, Cory, I know that you and I have some different conative instincts. I have an inherent need to organize and follow a system, while you need more flexibility and variety in how you do things. You are more of a risk taker when it comes to trying something new, whereas I tend to push back because I’m thinking about what could go wrong. So if we were in business together and didn’t have that awareness and respect for the other person’s way of doing things, we’d definitely end up ticking each other off.

Cory: Absolutely.

Daphne: So same thing in families. It’s very easy to tick off a family member anyway. So why not look at whatever you can to create more understanding and more awareness, and how people do things? So just to to tell you where all that comes from, I’m a Kolbe certified consultant, because over the years, I’ve found that this Kolbe system, the conative instincts, are invaluable for enhancing interpersonal relationships in general, and especially within families and for building that socio-emotional wealth.

For example, I once worked with a family where mom was convinced that having brought her son into the business ended up having destroyed their personal relationship. And in actual fact, she was in tears, but tears of joy when she found out that the problem actually stemmed from their very different work styles, not their values. So the Kolbe Assessment actually pointed out a way for them to resolve their issues and reenergized their connection. And another side of it, it also helps prevent what I would call unrealistic expectations by ensuring we don’t put square pegs in round holes when it comes to what people do in their job when we’re assigning roles and responsibilities.

This was a case of a family that I worked with that were transitioning their farm produce operation to the daughter and son-in-law. So the son-in-law had major reservations about the whole transition plan. So when we did the Kolbe Assessment, we knew why. Dad was a real go getter with that ready, fire, and then aim approach to growing the business. The son-in-law was the opposite, a very cautious decision maker, much more risk averse, and very concerned about knowing ahead of time how this was all going to work. So by them understanding their different decision making styles, we found out that splitting the responsibilities of dad’s role when he exited between the daughter, who was a little more like dad, and the son-in-law was a better idea. That raised their confidence levels hugely, because it gave each one of them an opportunity, more freedom to be themselves and to do things their way.

So I guess the bottom line of that is if families don’t work on getting clarity in those three areas, they stay married in the past, without what I call a “what’s in it for me” focus W.I.I.F.M if you’ve heard of that. This prevents them from moving forward 96% of the time. So 96% of the time, a family will fail to achieve a positive outcome, which is the whole focus of this model, to get to a positive outcome. So how did they get around that? We get them to move to the right side of this model. So we’re calling it tomorrow, right? So we’ve got yesterday, today, and tomorrow. If families can do that, there’s a 70% likelihood of getting to a positive outcome. So maybe not 100%, but certainly a much higher success rate.

Cory: Yes.

Daphne: So at this side, we’ve got three components to help them create that refocus. So most importantly, it’s that defining that common interest. What do they want to achieve together? Why is that important? Do they commit to pursuing this common interest? That’s why we need that commitment. Pulling from the left side, we are looking for the common principles and values that will underpin this common interest. Secondly, we need to promote the sharing of facts and truths. The truth refers to our perception sometimes being our reality. We need something that are facts, and that can be then used to address the misconceptions and the biases that we see on the left hand side. So driving the understanding and the respect that is needed to repair those potholes and ensure better communication going forward. Now there’ll always be different opinions, that whole line of confidence is letting people have their different opinions. So we will need a structured communication process that will include things like guidelines and procedures of how we participate in the problem solving and the decision making, discussions.

And then lastly, we need to create some structures for working towards building that common interest. Now you will have, of course, typical family and business management conventions.

You know, this is just the right way to get together and speak in family terms on business and decisions from the business or enterprise circle itself. So this section typically will need some governance mechanisms, things like a family council or a board of directors, and protocols for how these structures will operate. So this having our decisions made, and then how will we do things together.

Now it all sounds very elemental, very fundamental, but it’s amazing how just looking at this and visualizing it, helps the process take precedence over the personalities around the table. So when discussions focus on the problems to be solved, the kind of conflict that we create is more constructive, more positive. So families are better able to look outwardly beyond themselves and de-emotionalize the relationship within the family enterprise. In other words, they’re better able to balance their economic goals of the business with their noneconomic goals that are important to being connected as a family.

Cory: Fantastic!

Daphne: And, actually, can I make one more point? Just for your listeners, this model isn’t just for getting alignment in the family circle. It’s every bit as valuable for the management team working together, owner groups talking about where they’re going to go, and the governing boards as well. Obviously, the details on the discussions will be different, but the whole process is the same.

Cory: Absolutely! Seems like a great model to build that alignment and trust amongst any group of people working together.

Daphne: I know it works because I’ve had situations where, a family member will say at a meeting, I’d really like to bring up some history right now, but I won’t. I’m going to focus on the other side, the right hand side. And actually, it was just amazing. I’m doing a workshop one time with probably about five or six families in the room together, so they’re all sitting at their own round tables in their discussion. And we had a lunch break, and I heard one family having a heated discussion, what was going to happen on the farm operation, about how they were doing things. One actually said, are we not getting stuck on the left side? We should be moving to the right side. So it’s amazing how it resonates for people.

Cory: That’s fantastic, that’s great! Now, Daphne, there’s so much more that I’m sure we could dive into, but in interest of time, as we near the end of our conversation, there’s a few questions that I ask each guest before we wrap up. Are you ready for the tough ones?

Daphne: The tough ones first? Okay.

Cory: What is one key strategy you believe is most essential for building a successful family enterprise?

Daphne: I would say it has to be, becoming that learning family for sure. If you don’t start there, you’ll not build that connection. You’ll not build that socio-emotional wealth. And what makes a family more unique from any other family or any other business is their ability to balance the non-economic goals with the economic goals. Whereas a non-family business is focused on the economics of it all, whereas I guess a competitive advantage, if you like, or unique point of difference for families is that focus on the non economic goals. We are doing things because it helps other people. We are doing things because it keeps our family connected. It creates jobs for the community or whatever. So that being the learning family is absolutely my number one choice.

Cory: Fantastic, I couldn’t agree more! And what is the most common challenge that you see family enterprises encountering when it comes to wealth transition and generational continuity?

Daphne: For sure, it’s that not communicating well together. They’re not having those differences or not being able to reconcile them. You hear it in the media. You hear it in stories. That’s the one pitfall that families can easily fall into. So that that challenge of communication, effective communication, I would say, is detrimental for sure. I’ve I’ve given people the positive outcome out. I would say start with that and see how it goes.

Cory: I think that everything that you explained on the left side of your wheel there is the strategies to overcome that one for sure.

Daphne: Well, certainly, those are the major challenges. The passive outcome model is basically a coat hanger to hang all of these individual challenges on. So the left hand side is one big challenge, and the right hand side’s the solution.

Cory: And in your experience, what are the top three key qualities that successful family enterprise leaders possess?

Daphne: I actually listed some of those in a little program I created a while ago called The 10 Ps of a Successful Wealth Transition. So they actually all, for me, start with the letter p. The first one that you hear a lot about these days is purpose. Leaders in every generation need to be clear on why this family enterprise continuity is important to them, and they need to see an alignment between who they are and the desire to create long term success for this business, so their purpose.

Are you familiar with Prammedita’s research on why people join the family business? I’ll give you a quick rundown, but you can certainly read it. And other people have sort of followed up with that research as well. If you want to have that purpose and that alignment, to put it bluntly, you have to want to be there. If people join the family business because they ought to, in other words, there’s an expectation that they have to join the family enterprise, they feel obligated to support their parents, they have to because they’ll miss out on the benefits or the inheritance that their siblings might receive.

It could be tangible or intangible, or they need to because they don’t have any other interest or passion or capability for success elsewhere in their perception, then they don’t commit truly to the purpose. But having said that, I’d like to point out that sometimes the next gens do join because they ought to or have to or need to, but with those regular family learning sessions, they later move into the want to, and they become strong candidates for leadership. So all is not lost. So purpose is very important.

The second one, I would choose passion, with a healthy dose of positivity. That incorporates the need for curiosity and creativity, which sort of can lead into the innovation that’s needed ongoing, and a strong commitment and determination to do what’s right. So successful leaders are those who can align others with their purpose and build a strong sense of stewardship among family and non-family members, even employees and customers. Essentially, they need to be what we call in FFI the psychological glue that binds the family together. So they are the ones that are driving that passion.

And then my 3rd p, I would say, are those principles. Now, top of mind for me would be things like honesty and fairness and strong work ethic. So the honesty and fairness would apply to both their business dealings, you know, being ethical, their decision making, get customer loyalty and a and a strong reputation, and also a positive culture for employee retention, and also the family governance side of things, where they’re open, participative, and transparent around decisions and policies. That’s how you keep people connected. You hear quite often the senior generation saying today about young people don’t have the right work ethic. Yet our predecessors said the same thing about us. It’s not you. It’s not you at all. Now in the context of leadership, I do consider work ethic to be something that incorporates the whole business acumen, their integrity, and from my point of view, the lifelong learning. In other words, building and demonstrating the skills and the capability to get things done.

We talked earlier, about the family adopting common principles and values in the positive outcome model. It’s very important that the leader of the family enterprise genuinely espouse each and every one of those common principles and values. They must set the example. So, that’s very much part of the principles being one of my top three.

Cory: Love that! I think, yes. You gotta walk the talk. You can’t just write it down and think that that means that we did what we did, and now we can move on.

Daphne: Exactly. It’s not a poster for the wall.

Cory: Love it! Before we conclude our discussion, I’d love to highlight where our listeners can engage in more of the conversations you’re having. Could you kindly provide us where our guests can find you, and more of the resources that we talked about today?

Daphne: For sure! They can go to my website, d3learningsolutions.com. There’s lots of ideas for different learning opportunities for families. Or email me directly, and I’d be happy to further explain any of the points or answer any questions anybody has. They can email me directly from the website or, by [email protected].

Cory: Great! And we’ll put links to your website and your email address into the show notes to make that easier for everybody as well. And I wanted to make sure that we covered everything today. Is there anything else that you’d like to share with our audience that maybe we didn’t get a chance to touch on?

Daphne: There’s so much, Cory, that we could be talking about.

Cory: Absolutely. I know.

Daphne: No end to it. I think I would want to highlight the discussion or a brief discussion we had about the Kolbe tools, not just for the individuals because we all will benefit. You have benefit from that. I’ve benefited immensely from that. But families for building that cohesiveness and that understanding and respect, and also for running the business itself, and how you pull a management team together, and how you make sure your board has cohesiveness. 

So, I’ve added in two documents that will explain what Kolbe is and how you might use it if you’re a family business member or if you’re an adviser to family business, how you can use that as a tool to move families forward, to the right hand side of the positive outcome model. I’m happy to be the back office person for that. I do that for a lot of other advisers or work with the family directly, if they don’t have someone that can help them. So just yeah. Certainly, if they can reach out to me, I will show them how it works.

Cory: Great, awesome! And as you mentioned, we’ll link those information pieces into the show notes so our audience can listen and understand a little bit more as they’re listening to what we’ve discussed here.

I wanted to thank you for taking the time to share your expertise and experiences with us today. Your insights have been incredibly valuable. I love the stories that you told and the models that you shared with us. I think from what you explained, it it would be very easy for me to draw those on a napkin and understand exactly what it is that maybe standing in in the way of us as as, you know, groups of us, be it family members in business, are are looking at that that common goal and bigger future. So thank you so much for your contribution.

Daphne: I actually want to thank you. Thank you for inviting me and giving me the opportunity to share some of these ideas, and, hopefully, the families and the advisers listening today will be able to put them into practice. So thanks again for all the great work you do.

Cory: Thank you, Daphne.

As we wrap up this episode, we invite you to reflect on Daphne’s insights about the value of understanding cognitive instincts, and the importance of balancing diverse decision-making styles. 

Whether you are part of a family enterprise or provide consulting to family businesses, her observations about avoiding generational stereotypes and her emphasis on creating safe spaces for open dialogue provide valuable perspectives for fostering meaningful family discussions.

Throughout our discussion, we explored Daphne’s Line of Confidence model, which guides families from inertia to implementation through structured learning and decision-making. We delved into her Positive Outcome Model, illuminating how families can address misalignments by understanding their principles, history, and individual capabilities. These perspectives provide valuable guidance for families and consultants alike, emphasizing the power of learning together, the importance of defining common interests, and creating structured approaches to family governance that honour both economic and non-economic goals.

For those seeking expert guidance on learning and development within family businesses, Daphne McGuffin offers valuable insights and facilitation through D3 Learning Solutions. Whether you’re looking to explore diverse learning opportunities for your family enterprise or need personalized guidance on your development journey, Daphne is ready to assist. Visit d3learningsolutions.com to discover a wealth of resources, or connect with Daphne directly at [email protected] to discuss how she can help strengthen your family’s learning and growth potential across generations.

Disclaimer: 

This program was prepared by Cory Gagnon who is a Senior Wealth Advisor with Beacon Family Office at Assante Financial Management Ltd. This not an official program how Assante Financial Management and the statements and opinions expressed during this podcast are not necessarily those how Assante Financial Management. This show is intended for general information only and may not apply to all listeners or investors; please obtain professional financial advice or contact us at [email protected] or visit BeaconFamilyOffice.com to discuss your particular circumstances before acting on the information presented.