Unlocking Family Business Legacies: A Conversation with David Blom

Cory: Welcome to Legacy Builders: Strategies for Building Successful Family Enterprises, brought to you by Beacon Family Office at Assante Financial Management Ltd. 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.

Joining me today is David Blom, Senior Advisor at Blackwood Family Enterprise Services, a true expert in the field of generational continuity.

David’s own history is rooted in a family glass construction company that drove him to acquire his Chartered Accountant designation and specialize in providing crucial tax services. With over three decades of experience in estate and succession planning, he’s witnessed firsthand the impact of inadequate succession planning on families and their businesses. This experience inspired him to attain his Family Enterprise Advisor designation and create his enterprise advisory practice with partner Patrick O’Connor.

Beyond his successful career, David’s legacy is rooted in his commitment to conservation and that shines brightly, with a 30-year volunteer career at Ducks Unlimited Canada, where he supported that organization from the boardroom in protecting wetlands and clean water, reflecting his dedication to leaving the land in a better state for future generations.

My goal is to be the most curious person in today’s conversation with David Blom where we unravel the intricacies of defining, safeguarding, and evolving these unique family legacies.

Together we will discuss what it means to be ‘stuck’ and what are the factors that make a family thrive. Also, David shares what he believes makes a leader in a family enterprise, as well as different scenarios on how leaders can align their values to position their family enterprise for success. 

Now, let’s dive in!

Cory: Well, welcome David, we’re excited to have you here today to share your wealth of knowledge and experiences.

David: Excited to be here. Can’t wait to get started.

Cory: Alright. Let’s dive in. Shall we? 

David, imagine you’re delivering a commencement speech to the graduating class of 2023.  And you have the opportunity to inspire them with your story and the journey that you’ve had along your career, how would you begin your speech to convey those incredible lessons and expertise that you’ve gained along your career?

David: That’s a great question. I think as a professional in the business of providing services to clients. What you want to do is leave a legacy, and you want to be remembered for having an impact on people’s lives, and in my case, family’s enterprising lives.

So my journey began as an accountant, and you know, grinding away and got into the tax world and the estate planning. And the impact that I saw in doing that work with families was powerful.

It changed not just the existing generation, but generations to follow.

Throughout that whole career, I found that going in with a solution sometimes didn’t work and what you really needed to do is to understand the family’s journey and where they want it to go. And once you unlock that, then you are able to provide them with the best service possible.

That took me years to understand. Maybe it’s because I’m slow. I don’t know. But once I found the key to unlocking that, it really opened up the world for me to be able to say, hold on a sec. I can make a difference to enterprising families in Canada, and that’s what I’ve set out to do.

Cory: Oh, that’s great. And, David, you’ve made the comment of impact and nicely defined your impact in the work that you’ve done.

How do you find that families that you work with, define that?

David: They define it. I think the clearest way to say is that they now have clarity in what they want to accomplish and achieve.

Most of not all the families that come to see me are stuck. And what I mean by stuck is that somebody’s come to them with either a financial plan or an estate plan or a tax plan or their children have come to them the rising generation has come to them and said, you know, what’s the next step, mom and dad?

And they go, I don’t know. And then they don’t know how to figure it out. They don’t know how to forward. And being able to unstick a family provides them with clarity on what they want to accomplish and what they want to be remembered for and what they want to be known for. So once you do that, then the flood gates open up. So all the other bits and pieces that need to be done to accomplish that are easy. Right?

Because now I know what I need to do with the state plan. I know I know what I need to do a tax plan. Now, I know what I need to do for governance and succession planning. It all comes together.

There’s bps along the road, but having that clarity is by far the one key to unlocking a family and having success.

Cory: And, David, would it be fair to say that the family being stuck, a lot of times, would be somebody coming in with a solution rather than understanding where that family’s going, whether it be a professional or maybe, you know, even that rising generation coming to say, I think I know where we’re headed.

David: Yeah. There’s a number of different, sort of kick off points, if you will. Sometimes it’s a professional going with a plan and the professional will come to me and say, like, I can’t get the family moving to any further.

We’re stuck. I know that this is a solution they need. They can’t see it. Can you help me get them unstuck so they can see that? Sometimes it’s the rising generation that come and say, well, mom and dad are going off into the sunset here, and I’ve got this large family enterprise. And I have no idea what they want to accomplish with it. How do I do that?

How do we figure that out? Or you come into a situation where you’ve got conflict in the family. And this these are the toughest ones where you’ve got someone coming to you and saying that my brother and I or my mother and father are having fights.

We can’t sit down. I haven’t talked to my brother in years. This isn’t working out. The family’s coming apart, and it’s all over the business. And when you start digging into that, you’d find that there’s some issues that need they need to deal with.

But once you start unlocking and helping them get through those issues, marvelous things start to happen.

Cory: Absolutely. And we’ve talked a lot about what it means to in previous episodes of what it means to have a family that’s stuck where there’s conflict.

I’m intrigued when you mentioned that the next generation is taken over but they’re lost. Can you dive a little bit deeper into that, David? And, you know, how that might feel for them or maybe a listener who’s feeling the same?

David: Sure, great example. One of the very first families I worked with the rising generation was driving with his father down to Palm Springs.

And they’re going down through Montana, and the sun says to dad, okay, what happens when you go? And dad says you’ll figure it out. Now this is one of the rising generations. He’s the only one in the He has several other siblings that are not involved in the business.

And now he’s going, well, what if I make a mistake? Like, what if I don’t follow through What if I do something that dad wants, but the others don’t know that dad wants that or mom wants that? And then I run into some trouble. I need to figure this out.

So, from that conversation, he came and saw me and said, what do we need to do here? Well, then if you start working through a process, which I can play a bit later on how to do that, you start unlocking all of these issues.

And now they’re a thriving family. All family members in the business and not in the business have a clear understanding of what the business assets are to do for the family and to their legacy.

They have an absolute crystal-clear view on what to do going forward and how to bring the next generation the 3rd and 4th generation into the business and have them involved.

So it’s and it’s unlocked all of this wonderful stuff. So now the son says, well, I don’t need to know what mom and dad want.

We have a very solid plan going forward, and it’s very easy to make decisions. And by the way, and one of the things I think that are most that’s most intriguing in all of this is in every situation that we come across where we’ve unlocked this, provided clarity, set out a direction, put a proper governance structure in place. The family enterprise has done extremely well financially.

They’ve done they’ve exceeded expectations and industry average returns because they have that clarity and the proper governance structure and a decision-making process in place. It’s quite magical to see that happen.

Cory: That sounds like it. Well, I want to dive deeper into to that. But I think it going back to when you said a thriving family, because I think that’s the core here is those in the business system, but also in the family system, can you explain a little bit more of that dynamic?

This family where you said there’s one sibling in the business, and then there’s some that aren’t, how does that dynamic fit in as far as the success of the enterprise as the whole.

David: Great question. When you have a family or a lot of families if the expectations of family members are unknown, then people make up their own stories. In this case, you know, we had other siblings that may or may not come into business. And mom and dad are saying, well, should we leave a place for them?

How do we know whether or not they want to come into the business? Does that impact the person that’s in the business working? And if we, in my experience, if you don’t resolve those issues while everybody’s still able talk about them. And then what happens is the expectations grow into situations where conflict arise.

In the situation that I outlined, we had started out with family meetings where we defined the values, their principles, developed a family constitution where mom and dad actually wrote down what I would call something akin to a letter of wishes, but it’s really a letter of wishes about what they want their legacy to look like. Once that was shared with the family, the family said, oh, wow.

Now I understand what mom and dad want to do. Then we went down and so Well, what roles do you want to play in the business?

What roles are you interested in playing in the business? And it became quite clear that all of them, except for the one that was in the business, wanted to do other things.

So that was fine. In the legacy, there was some ability to provide financial and other support for those individuals to seek their passions. And the person that was in the business now has the freedom to make the decisions still accountable to a process and a governance structure, but he is now able to make those decisions free of wondering about whether or not the other siblings are going to question that.

So now everybody’s on the same page, and you can make those decisions and thrive the business thrives. Now when the business thrives that allows the individual family members to thrive because now, they feel comfortable in pursuing interests that are not aligned with the business, but their own interests, but they’re being supported. And that’s all agreed to written down everybody now feels comfortable in their decisions, and they can thrive in their own individual pursuits. It’s quite magical to see it all work.

Cory: Absolutely. And really what you’ve defined there is a family that’s looking at their wealth beyond just the financial capital.

David: Oh, I would say absolutely. When you look at thriving family enterprises in a lot of cases, there’s enough money there that they’ll never spend at all. They’ve made a lot of money, and they’ve got great investments. And they’ll and the generations that are existing now would never spend it all.

So, really, what they’re looking for is how do I enhance those other assets that I have that make an impact on my family, the heirloom assets the social capital assets, the philanthropic assets, the real estate assets, the capital assets, how do I make that so our family thrives in all of those areas?

Because once you’ve hit a threshold of making money, don’t get me wrong. Making money’s a good thing. You need to continue to do that. But as soon as you start paying attention to those other assets, that family legacy start takes a life of its own on, and it becomes truly a legacy, not just a goal.

So that when you’re gone and other your generations are gone, that legacy lives on. You can think about some wonderful families in the US at the Rockefeller and the Vanderbilt.

And all of those folks and their legacy families that have worked really hard to make sure that not just the financial aspects of their lives have been thriving, but all aspects of their lives.

Cory: Absolutely. And going back to your statement of the individuals in that family enterprise, being able to thrive and having that freedom when there’s the alignment.

David: You think about, you know, somebody who wants to pursue something that may not be in line with the family, traditional family values.

In Alberta, we have a lot of families that grew up in the oil and gas business. Very entrepreneurial, very conservative, very laissez faire very focused on driving business.

If you got family members that are not focused on that, but are more focused on things like arts or perhaps other social pursuits, you can imagine that person in the family looking at the parents and saying, well, how do I how do I operate in this family if my if things I do are not aligned or they think are not aligned with their parents, the other family members.

But when you go through this process, what you’ll find is that most entrepreneurs are seeking excellence, and they don’t care what excellence that is.

If you just if you’re going to do something, be very good at it.

Do your best at it and put a we’re all into it. Whether that’s in the art entertainment and social aspects. Doesn’t matter. You’ll find that, yes, we we’ll support that as long as you want to drive forward and make an impact in your life.

And once that’s once people see that at its own law, it gives them the freedom to do what they want without guilt. And that powerful.

Cory: Absolutely. And you spoke of freedom on members of the family who aren’t in the business system, David.

And let’s go back to the financial assets and you made the comment about how the assets tend to thrive from a performance perspective when there’s alignment in the family. Did you realize that when you were in public practice, or was that after you’d left?

David: Yeah. And that would be after I left. 

And in public practice, you’re really focused on the tools that are required to accomplish the objectives. When you step back and look at the overall picture, you then have time to realize and have a look at and measure not only the impact of the financial assets, but the other assets as well.

But, you know, in all cases, when you get to clarity, and you put proper, what I call, communication and decision-making processes in a blaze. People call that governance. Then you start to see some very wonderful things happen to the assets of the business, and that’s key.

Cory: How is it that families or maybe yourself as a professional can really see that that change? Is it the profit of the business? Is it that the assets are actually working for them, rather than, you know, maybe some default decisions instead of maximizing how do you find that that’s really acknowledged?

David: Well, maybe I can explain it to you in an example. I have another client that we I got involved with, just before COVID. Mom and dad started a business 20 years ago, started off very, very small.

Then they’re growing the business. They have 3 sons to whom which want to come into the business.

They had no road map, no guide. This business when COVID had stopped, and the revenue stopped. The expenses didn’t, but the revenue up. I got involved with them probably 2 years prior to COVID, and we started working on figuring out what the family communication needs to look like how to make decisions, what the roles of the children would be in the business, and how to how to make decisions and deal with issues that come up.

COVID hit and the business stopped, but they didn’t. They said, okay. Hold on a second. We now have a whole bunch of things that we’ve sorted out in the family that we have to get done. Now we have time to do it. Let’s get that done. Coming out of COVID, and I met with them last night, coming out of COVID, they said to me last night, they said, David, it’s been unbelievable.

Our business has quadrupled and we’re able to bring in our children and pay them accordingly, fair market value and our business is thriving. They said if we had not gotten the roadmap figured out prior to COVID, we would have been focused on the issues that COVID presented us, and our business would have failed. So that’s just one idea or one example of the impact that this planning can happen.

And I was very proud of that. To be able to say that I was part of that journey, but they had said to me, if that hadn’t happened, they don’t think that they would have survived. So that’s just an example of the power that you can have by, making sure that you’ve got the proper things in place to be a be a thriving family and eyes.

Cory: And I I love how your example was at quadrupled by bringing the 3 kids into the business, you know, it’s remarkable to see that that the business has the capability to, pay those additional households and support the family in that way.

But for what those that next generation has brought to the business, I’m sure, it’s exponential. I’m sure that the growth is still ahead.

David: It is exponential. And, I love working with entrepreneurs and I love it because, you know, entrepreneurs are, I think, an absolute example of getting things done when nobody else say they can get done and they get it.

But if they don’t expand the resources around them. They plateau. Right? So, you get a business that does very well with mom and dad running it and then eventually it gets to a point where it just doesn’t it just can’t grow anymore because mom and dad’s capacity has been absolutely tapped out.

But as soon as you introduce other people that are trusted the next generation, then you can start off loading some of the tasks that you do and start focusing on the things that make an impact to your business.

And all of a sudden, you now have a compounding effect what you can do with that business, and you start to see another rise. It also allows the entrepreneur to step back and work on the business, not in the business, so that they now have a better eye.

When they first started, they had a dream and they had a vision on what they needed to do. Then they get busy doing and then if you pull them out and let them go and say, okay. Now what’s that new vision look like? They have the experience to know how it grows.

And that they can mentor and help the next generation, which creates just a magical exponential growth in the business.

Cory: Absolutely. And, David, if we go beyond the family business and into the rest of the enterprise, can you explain the comment you made of entrepreneurs expanding their resources?

Because I think that there’s also for families who maybe, don’t have the family business, anymore, or maybe there’s you know, multiple businesses and they’re not working in the family.

Are there ways that entrepreneurial spirit that you’ve seen it when there’s that alignment where the family has brought in those resources and it’s really thrived.

David: Yeah. I you know, there is an old adage in business.

You hire people that are smarter than you give them direction and get out of their way and I think if you can do that, you you’ll see some you’ll see some growth happening. When you get, you when we work, we work with what we call a very multi multidisciplinary adviser approach. So, I remember one of my clients one time when, you know, as a tax partner, and I’m bringing these tax ideas to the client, and the client says, well, I had, you know, I was out to a cocktail party, and I met this other tax adviser, and they said they have a better plan.

And I said, Fantastic. Let’s bring them in. They looked at me kind of funny. I said, well, wouldn’t that be threatening to you? I said, no, my job is to make sure you get the best advice possible. If there’s something out there that I hadn’t thought about, then let’s give that a whirl and see what happens. Well, that’s my approach, and that should be every advisor approach when they’re working with families.

Let’s go find the best advice, the smartest advice, bring it into the room, make sure the entrepreneur can understand what’s on the table, and then they can apply that to their vision. Because if you leverage those resources, you can you can ex you know, you can now move forward a lot faster than you could without them.

And, you know, I said to, you know, the businesses that I advise, I said, what you’re paying these advisors is not a cost. It’s an investment. So, you know, I won’t advise you to pay those costs unless we see a good return on the investment in almost every case that happens.

When you get great advisors in a room. It’s just amazing to see the one they’re all working together and how well that they can provide a family with a great road map and a toolkit to move forward.

Cory: That’s awesome. And absolutely that’s return on investment and it being an investment, not a cost of operation.

David: Yeah. Those who see it as a cost don’t really understand the process. Then your job is to teach them what the process looks like and how it can be beneficial to them.

Cory: Absolutely. And, David, would you bring that back to the goal, like, the really getting to the legacy and the impacts and how you bring that team in and who’s participating?

David: Yeah. The process that I’ve seen work the best when I get first introduced to a family is I walk through what they call a discovery process.

I’ll interview every single member of the family. Maybe some people in the business. And I ask questions around you’ve probably seen the Venn diagram when you have family, business, and ownership.

We ask questions around that. From there, I get responses that I can overlay on top of each other to see where there’s common ground and where there’s complete disagreement. When I bring that back to the family, a lot of issues arise. 

What it does allow the first thing we do is to from those discovery reports and going through that process is we get the family to align on values. And then once they align on values, then they can start to agree what their legacy needs to look like, what they want to be remembered for, what they want to be what they want to do in life. So once that happens, then you have a then you have a very clear understanding saying, okay.

Well, here’s where we are now with all the assets that you have capital, financial real estate. There’s where we are. Here’s where you need to get to to accomplish that legacy. What pieces are missing? Where are the gaps? Well, the gaps might be a tax plan. Okay. Well, let’s go find the tax advice.

If you don’t have one that’s find one for you. It might be, well, my investment philosophy is not is unclear. Well, let’s go find somebody that can align your values with an investment philosophy that that helps. Well, our philanthropic giving is not, okay. Well, let’s go get some help. And you’ve had Gena on the show before to help with some philanthropic giving. All of these things help. So as soon as you define that picture for them, is I somebody told me once Kelly Adam said Halifax.

He’s a great guy. He said, your job is to the family has a puzzle, and they’re trying to put the pieces of the puzzles together.

But if they don’t have a picture, it’s really difficult. Your job is to provide them with the picture. So once you provide them with the picture, then putting the pieces of the puzzle together becomes a lot easier.

Think about that. That’s exactly what happens in a family.

So as soon as we give them the picture, then they could go get the pieces of the puzzle and put in place, or they can find people to help them put the pieces of the puzzle in place. And, by the way, that picture is not static. It’s a moving picture because next year it changes and the year after it changes as people evolve and grow.

Our job as enterprise advisors is to make sure that we keep that picture fresh for them that were getting the people to put the pieces in the right place or getting them the help to put the pieces in the right place. So, in a nutshell, that’s become my elevator pitch, if you will. It used to be fifty floors of now down to 9.

Cory: That’s great. And That’s wisdom and years that that brings us down to something that we can actually explain to folks what we do.

David: Yeah. It is true that, you know, my partner, Patrick O’Connor in Blackwood, he and I combined, we were just reminiscing the other day, and we have over 70 years’ experience in advising families on various, aspects of financial planning and etcetera.

And, as we are later in our career, we have the ability to step back and look at it and assess all the experiences we’ve had and help that family work through some problems.

And it’s and it’s very important because younger in my career, I would have solved a problem and to try to solve it.

I mean, that’s what our training is. Right? See a problem fix Now I step-back. I look at the problem, and then I look at what’s causing the problem. I have this old saying that everybody says, it’s communication’s a problem. Communication’s In my view, communication is never a problem. It’s a symptom.

There are underlying reasons why people aren’t communicating. You have to unlock that before you can solve the communication problem. That’s our job. So, what is it that’s causing them not to talk, not to communicate, not to put things on the table, to find out where other people stand.

What is that? So as soon as you unlock that beast, and it could be very deep psychological issues dating back to childhood.

So, you need to bring in the expertise to help unlock all that. Once you do that, then then then it becomes an easy your task to make sure that that family identifies her legacy then starts to work on accomplishing it.

Cory: That’s great. And I want to go back to the moving picture, David, and going through that discovery and what that means for the family. Because, you know, in some circumstances, as you’ve said, the family hasn’t been communicating.

And, you know, possibly members of the family who haven’t felt like they can voice where they’re where they want to go and where do they are today?

How do you find that you navigate those waters?

David: Great question. So, again, I’ll talk in examples because that’s all I can draw upon.

But, you know, you one situation, we had a family. Their first constitution, family constitution said, we’re an entrepreneurial family. We support entrepreneurial pursuits in essence. It left no room for anything else. we said, okay. Well, you know, it’s not my constitution. Sure. So, let’s go through that and work with the family.

Over time, they realized that the family members not all of them aspire to that vision. And they aspire to other visions, but really what mom and dad was really trying to do was to say, you have to put you have to be excellent in what you do. And then so then they changed their constitution to be able to accommodate the areas that the other family members wanted to get involved in, but they weren’t entrepreneur pursuits, but they were still pursuits that progressed the family legacy.

Day 1, the picture was all about entrepreneurialism, day 2, it’s all about excellence. Day 3, I’m not sure what it’s going to look like, but I can guarantee it’s going to evolve because we now have the 3rd 4th generations coming up. And they have very different visions and attitudes than their grandfather and their great grandfather have. They’re going, well, Now what do we do?

Like, what do we do with these assets that we have to make sure that our family maintains its legacy and honors the tradition that it’s set out.

It is a moving picture all the time. I don’t know if I’ve got this right, but I think one of the families in the states that maybe are the Rockefellers. I may have this wrong, but started with an oil and gas pursuit, and then have moved to more of a philanthropic suit.

Cory: Absolutely.

David: You can see that their legacy and their moving pictures changed yeah. Over the generations.

Cory: Now the story of standard oil and where the rock feller started. And, you’re right. They they’ve become, pretty much a philanthropic family at this point and after many generations.

David: In our job is to help them realize where that picture is and what it looks like. In define it. And as it moves, there’s can be conflict. You know, one generation may say, well, that’s not right.

That’s then you work through and say, well, you know, why, you know, the rise of generation, why do you why do you want to pursue that?

Let’s help mom and dad and the grandparents understand your vision your perspective. And once it’s on the table and people understand each other, there’s no guessing on what the story is.

They can either accept it or not accept it. But at least now they understand and they can move forward. In some cases, we have situations where the conflict is so bad that there’s just no way that they’re going to come to but that’s also a good thing because now you understand that now while everybody’s at the table, you can take step say, okay.

Well, we need to liquidate and separate. Right? That’s the best thing for the family.

Cory: Absolutely.

David: So, they do that, but at least now when they have dinner, a Christmas time, they talk to each other. Right? It’s not about business, but all of that hangover of the business causing the conflict is gone, and now they can have a relationship.

Right? They can agree to disagree, if you will.

Cory: Absolutely. And going back to the liquidate, David, and as you said, you know, as they can now move forward from it, how have you experienced that in the past or have you? And taking that as success rather than a failure that we can now move on and still be a family.

David: Yeah. It’s interesting. The conflict in a family, that arises from business usually comes across not on what their business is going, but who’s getting what from the business? So, you’ll find in some families, the business is a lifestyle asset.

And the lifestyles that the individuals in the business want to have been quite different. The expectations of what they get from the business and not defined and that creates conflict, excuse me, and fighting sometimes the people that are causing the conflict and the fighting want that to continue.

And the reason for that’s kind of weird and it’s weird because that’s what ends up creating family harmony, because now they all agree to fight. Right? So, you know, it’s kind of weird relationship. So as soon as you start to take that away from them, one of the worries is, okay, well, when that goes, the business is gone, and we’ve separated and given all the assets owed, the cash showed, are we going to talk with each other anymore?

Right? Our job in in those situations is to say, yes, there is a path forward. You can liquidate have the assets go to the individuals because you can’t stay together and operate a business. The business will end up failing if you continue going, you’re going. So, let’s do that, but let’s also put in a process that there is always there’s always some common ground in a family.

It could be the weirdest thing, but there’s always a common ground. So, if you can land on that common ground and say, okay. Can we agree that this common ground is going to be our new pursuit forward? It could be anything. And it could be grandchildren. It could be, hockey pursuit. It could be anything. Anyway, so they all start rallying behind that.

Now that gives them something else to talk about and get together and gather. And that’s important because a lot, especially the older generations that they conflict and they say, well, if I solve that with the liquidation, now my kids won’t talk to each other. That’s devastating to the to the parents. Grandparents. So, you have to make sure you address that.

Cory: Right. And David, you mentioned the common enemy and that in some cases that thing to focus on is what keeps the family together.

Have you or let me ask that as in a way, when you are working with families and brought in, have you found that there’s that discord or distrust where it’s very difficult for you as the adviser to connect with all members of the family?

David: It is. Some of the divisions are so deep rooted. You know, in in Blackwood, we have Dr. Moyer Summers, who’s a psychologist, and she helps us out a lot in these situations.

She helps and she’s having a process to walk through with the family to start gaining some trust and ground on a grad bases. So, we let her do her work so that we can get to a situation where we can start to do some of the sort of the overall family work.

But sometimes there are issues that have developed for all kinds of different reasons for families, and you have to get through those in order for people to talk because they’re deep-rooted issues sometimes. It could be abuse. It could be, substance abuse.

It could be all kinds of things that need some professionals to help you with. As a tax account, I was never trained to do that stuff, but I’m trained enough to recognize it when it exists and then call for help when needed. And that’s important.

Cory: Absolutely. Let’s go to the comment of your dad’s guy.

How have you gone and worked around that?

David: Fantastic question. In another situation, I in fact became dad’s guy and I was working in a business and we were doing succession planning or developing a process to succeed the next generation.

And I found that my objectivity was not there because I was dad’s guy or seemed to be dad’s guy. Matter of fact, I probably was dad’s guy. In that situation, I went to the family and said, you know what?

I can’t help you in this anymore. We have to find some help, find somebody who is objective, and bring them in to help you. Now for a professional, like, the last thing you have want to do is say I failed, but I know that if I continued down this road, we weren’t going to be successful in generating a session plan that worked. 

We brought somebody else in. I worked with them, but they then elevate it and got us to a whole different level. And it’s very important that you recognize that because you can be a dance guy.

When we do new engagements, I am very particular in telling them the family’s engaging me, not mom, not dad, not the rising generation, the family, and that’s who my client is.

And I’m now very cautious of making sure that I don’t align myself with any particular family member because can ruin the whole engagement.

Cory: And did you find that your years of public practice, trained you in in a different way in the who is the client and how you engage?

David:  Yeah. I believe so. no disrespect to public practice. I think they’re fan task at what they do and they’re so specialized and so up to speed. You can’t do without them. You know, it’s excellent.

But what I’ve found is that in these engagements with families, you need to be patient. You need to wait sometimes I’ll start an engagement with somebody and talk to them, and it won’t be for 2 or 3 years before they actually formally engage me. Because they have to walk through a whole bunch of processes.

When you’re a public practice, there’s an old saying you’re only as good as your last file. Right?

And there’s always this pressure to make sure that you’re building your book, because your span of a professional is actually quite short.

But later on in life, when you don’t have those pressures and you can see the value of being patient, It’s far more impactful. I know we use that word a lot, but it truly is. And I think it’s important to have that patience to be able to get the family where they need to be.

Cory: That’s great. And, David, as we near the end of our conversation today, and before we wrap up, there’s a few things that I ask each guest. And the first one is really around, if you were to put one key strategy that you believe is the most essential for building successful family enterprises, what would that one thing be?

David: Okay. So, I’ve given this some thought. And I think the most important thing is the game clarity and consensus on what the family wants to be remembered or known for.

And I don’t really care how anybody does that. You can go through a family enterprise advisory process. You can rely on your experience. It doesn’t really matter. But if you can find a way to do that, then I think served your client the best way possible because now you have a chance of success.

Great. And absolutely that clarity, I think, is rooted through our conversation and really something that that families, a gift, really, I think, to give.

David: It is. And those families have the clarity, they just don’t realize it. And your job is just to make sure you can help them crystallize it. Remember, it’s not your planet. It’s theirs. Your job is just to help them find out what that is to see it.

Cory: Great. And what is the most common challenge that you see family enterprises encountering when it comes to a to wealth transition continuity or succession.

David: Yeah. I don’t think there’s any one, but I’ve written down a note that I think that are that I observed over time.

One is false expectations. So that’s where family members are expecting one thing and it’s not going to happen. And when it doesn’t happen, they’re become becomes very divisive, entitlement.

And I can tell you that this one is probably the one problem in Family Enterprises. You can imagine mom and dad working really hard, young in life, trying to build a business.

They get successful, they haven’t been around the kids as much as they want to do.

They shower them with gifts or whatever they want to maybe perhaps belay some of that guilt. It puts in the sense of entitlement.

And as those kids get older and the business now kicking off a lot of money or there’s a liquidation event. All of a sudden, there’s entitlement.

And a lot of times, they’ll get entrepreneurs that say to me, well, you know, it’s my money. I’ll decide what I do with it when I do with it. And then the kids are, well, you know, I’ve always been showered with this all my life.

Why is it stopping now? And, you get some conflict there. Again, that on and I’m clear about the targets and the legacy that you want to achieve. So, you’ve going to go through a process to help uncover all of that if there is those issues in place, you’ve going to bring them to the to a head, bring to the table, and discuss them.

And it’s not wrong. Trust me to if you got wealth to be able to share that with your family, be not, but it does become problematic when there’s an expectation that’s there that’s not given.

I can tell you, I’ll give you a little example of, where this works well in the I’ve dealt with a firming family, Scottish firming family, and in that family, the business, the farm is given from the oldest son to the oldest son to the oldest son.

I was doing a job when and this was happening.

David: This is a firm that was right on the edge of a growing city. Farmland’s worth of fortune.

And, no, it’s going from oldest son to oldest son.

I spoke to the other 7 siblings and said, well, you know, what are your thoughts about I said, no. That’s what we’ve been taught all our all our life. That’s what happens. That’s what we’re going to do. So, clarifying the expectation and making sure there’s no entitlement. In that situation, you may agree or disagree whether it was fair. That’s your opinion.

But to them, that’s what was expected and agreed on, and they still have family dinners, and they all talk, and they all enjoy themselves. Which is it being just quite amazing. When I think back on that, I go, wow. If you can clear that up, it makes a big difference in your family.

Cory: Absolutely. And families have such a different dynamic in some of those things where as you mentioned, you know, there’s one child that takes that and runs with it.

And, you know, as you said, us not having the judgment of whether it’s fair, we know it’s not equal, but the family believes it is fair.

David: Right. And they’re okay with it. So, but and when you think about their journey in life, so when they started off at very young age. They knew that the oldest was going to get the farm. So, they structured their lives so that, okay, I have to do something else because this isn’t an option for me.

So, they all did other things. Became very successful professionals or family. People they’ve got very successful lives, and they’re very happy but if you do that early in life, it allows everybody to choose their own path. right? The worst thing in the world is not knowing. It’s the it’s the it’s the unknown. If I don’t have certainty or If I don’t see what’s expected, that’s what causes the stress.

But once you see it and everybody okay. Well, that is what it is. Now I going to deal with it. It makes it a much easier journey.

Cory: I love that one, David. That’s great and goes back to the individuals thriving. And, you know, at a very extreme there that they’ve known their entire life. But it does sound like that they’re thriving because of it.

And in your experience, what are the top 3 qualities that successful family enterprise leaders possess?

David: if you think you know everything, you’re going to end up failing. So if you’re humble and appreciate those around you, The most successful entrepreneurs I’ve ever seen are the ones that talk to different people, take in all the information, and then make a judgment based on that.

Because then they can sort through what risks they’re willing and not willing to to accept. The next one is relationships. Every successful entrepreneur I know has built a series of relationships.

And as one person said to me a long time ago, Joel Hunter at a Halifax, He said every transaction in the world is based on a relationship.

That’s why when you go to Starbucks, they ask you your name because they’re building a relationship with you. That’s why you pay 4.50 for a coffee instead of $2. Think about that. Right?

Building relationships is incredibly important. And the most 6 another thing that I see most successful entrepreneurs have is they’re always three steps ahead of everybody else.

Like, in a conversation you have with them, they don’t come across as the smartest person in the room, I can tell you, there are always 3 or 4 steps ahead of you, and they’re already plotting about, hey, if this happens, this happens, then what? And I don’t know how they do it. I don’t process that. They do.

It’s just amazing to watch them work. If you combine those 3 elements together, you’ve got a powerful leader that’s able to mentor a next generation and teach them how to do that.

Cory: That’s great. Three steps ahead. That’s a great quality. Absolutely. And I’m sure all of our listeners, as am I, are, thinking about those people in our lives that do possess that.

And before we conclude our discussions today, David, I’d like to highlight where listeners can engage in more conversations that you’re having.

Could you pro provide us with where guests can find you?

David: Yeah. They can find me at, the Black Blackwood Family Enterprise Services. we have a website.

We’re on there. I, you know, you’ll probably see the notes for the, for the length, that’d be fine. And by the way, it’s in us tell you a little story about how Blackwood kind of came about my partner, Patrick O’Connor was working in doing this work for a long time, and I was doing it kind of with Grant Thornton, then with a client, and then operator opened up my own shop.

And then during COVID, we got I got together with him. And I said, Patrick, what we’re doing is needed in Canada. You know, we both have this passion to make sure that family enterprises have services so that they can thrive and have every success of being able to have a legacy.

I said, we need to take this across Canada. I said, let’s put our businesses together and let’s go across Canada. So that’s what we’re doing. Said we’re not going to get rich doing this because it’s a passion of ours, but we’re going to have a lot of fun, and we are having a lot of fun. So, if anybody out there wants to contact us, just to have a conversation about what we do or how we how this process could be good for them.

Please reach out in no obligation at all. I don’t care if you get us to do the work or if somebody else does work, just get the work done. Because for Canada, they have a thriving entrepreneurial market is the best thing ever for our economy and our society.

We want to make sure that that has every chance of success.

So please reach out and get yourself clarified.

Cory: That’s great. And absolutely, those small and mid-sized businesses that tend to be family owned, are the heart of our economy and need to be supported. 

David: Every time I talk to a family and I say, you know, what’s important to you and your business? Inevitably, the top one of the top raisins is I feed families that are working for me. I provide them with a living and a lifestyle. So, whatever we do, we have to make sure we preserve that. That’s so important to them. It’s critical.

Like, they walk the floor. They know the names of all of their people and their children and their families, and that to them is critically important to them. Know, when you look at that and expand that across Canada, that’s so powerful.

Cory: Yeah. And that is legacy right there, knowing those names and making sure that those families still have the means to put food on the table.

And I want to make sure that we’ve covered everything today. Is there anything else that you’d like to share with our audience that we didn’t get to touch on?

David: Well, there’s just there’s one that there’s a book I always give people when I first meet them called Willing Wisdom by Thomas Deanes, and it’s a very short book.

It’s a wonderful airplane ride read, but what it does is opens up this whole concept of sharing your perspective with your family members. And this deals this book deals with sharing what’s in your will. Right.

It’s a very simple book, but it starts that journey about having discussions with your family members to understand, help them understand, you understand where they are. I read this book and I started having family meetings with my family. I’d bring them together.

We have a conversation. We have this wonderful cottage property. And I said, okay. Well, we’re, you know, we’re going to give this to all four of you because it’s a wonderful cottage property.

You all grew up on it. You know, three of them said, why No. We don’t want this, like, to come up, but we’re no, you know, we don’t want to own it. It’s not in our, you know, not in our cards. And so, it changes your perspective, had I not had that meeting in conversation? I would have done something very different in my will.

These are the things that you need to have conversations about. As soon as you get that clarity, as you understand where everybody sits, then you can start making better decisions.

And that’s the key to success.

Cory: Great. We’ll also put a link to the book in our show notes to make sure that our listeners can find that one.

David: Perfect. I’m sure Thomas would love that.

Cory: Great. Well, thank you, David, for taking the time to share your expertise and experiences with us today.

Your insights have been truly, incredible for me personally. And I’m sure, all of our guests and listeners will, appreciate the words that you’ve given today.

David: Well, thank you very much, and I’ve been very honoured to be part of this.

And good luck to everybody and yourself. Thank you. Bye for now.

Outro:

Today, we ventured deep into the world of family enterprise alignment with David Blom, focusing on strategies for success. Throughout our conversation, David generously shared his wisdom and strategies for family enterprises to thrive when encountering challenges.

We explored issues like generational transition and balancing business with family dynamics. David emphasized the importance of clear agreements for confidence and individual growth. As many of our guest’s stress, David mentioned why effective communication and governance are crucial for a thriving enterprise. Ultimately, David confirmed that organizing and optimizing the family, business and ownership systems lead to improved return on assets.

If you’d like to learn more about David and his services, you can find him at Blackwood Family Enterprise Services. We have provided all his contact information in the show notes.

Thank you for joining me, Cory Gagnon, your host of the Legacy Builders podcast. It’s my personal mission to explore these vital topics related to family wealth with you.

If you enjoyed today’s episode, be sure to subscribe on your preferred podcast platform, whether it’s Spotify, Apple Podcasts, or others. Don’t forget to share this episode with your loved ones and colleagues who share your passion for preserving and growing family legacies.

To support the show, please leave a rating and review.

If you have questions about today’s episode or have topics you’d like us to explore in future episodes, don’t hesitate to reach out by emailing Beacon Family Office at Assante.com. That’s Beacon Family Office at Assante.com.

“Legacy Builders: Strategies for Building Successful Family Enterprises” is proudly brought to you by Beacon Family Office at Assante. If you’re navigating the complex waters of generational wealth transition, Beacon Family Office is your partner in safeguarding your legacy. To access more of our content, visit us at BeaconFamilyOffice.com, or to explore our services and book an initial call, find us online.

Thank you for tuning in, and until our next episode, remain resolute in building your legacy.

Disclaimer:
This program was prepared by Cory Gagnon, who is a Senior Wealth Advisor with Beacon Family Office at Assante Financial Management Limited. This is not an official program of Assante Financial Management, and the statements and opinions expressed during this podcast are not necessarily those of 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 prior to acting on the information presented.