A sample presentation that I gave at the 2010 Distinguished Advisor Conference

1. Seven Generation Thinking
“Building Family Business Dynasties”
Enzo Calamo,
B.Comm., BA, LL.B., CFP, RFP, CLU, CSA, TEP
Lugen Family Office Inc.
© 2010 All Rights Reserved
The Knowledge Bureau
© 2010 Knowledge Bureau, Inc.

2. Agenda
• An overview of “Seven Generation Thinking”
– Dealing with the Challenges facing Business
Families in implementing Seven Generation
Thinking
• The Ten Key Principles to Building a
Sustainable Family Dynasty
• The Importance of The Advisor’s Role in
Legacy Planning
© 2010 Knowledge Bureau, Inc.

3. Is Seven Generation Thinking a Fairytale?
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4. Dealing with the Challenges of Seven
Generation Thinking
Identify The
Elephant(s) in the
Room………
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5. Let’s go back Seven Generations
Jesse
James
(Sept. 5, 1847 – April 3, 1882)
Abraham Lincoln
(Feb. 12, 1809 – April 15, 1865) Sir John A. Macdonald
(11 January1815 – 6 June 1891)
© 2010 Knowledge Bureau, Inc.

6. The Global Reality:
Shirtsleeve to Shirtsleeve in Three Generations
Build Squander
Wealth Wealth
Maintain
Wealth
1st 2nd 3rd
Generation Generation Generation
© 2010 Knowledge Bureau, Inc.

7. Complexity of the Family Business Life Cycle
Environment
Business System Industry, Political, Personal System
Economic, Social,
Regeneration Technology Late Adulthood
Maturity
Mid-Life
Growth
Survival Childhood
Business
Family
Entrepreneur Child/Siblings
Sibling Partnership Marriage
Family with Children
Cousin Consortium
Empty Nesters
Ownership System Family System
© 2010 Knowledge Bureau, Inc.
John

8. Issues Within the FAMILY SYSTEM
CONTROL: COMPETENCE: CONFLICT: Rivalry
Senior Next generation and conflict
generation not prepared between family
cannot let go members
COMPLACENCY: CLOSED SYSTEMS: COMMUNICATION:
Disinterested In laws excluded Lack of effective
family members communication
© 2010 Knowledge Bureau, Inc.

9. How longevity has changed our World
Bob Butz
Grandson, 73 Kathy Jacoby
Great-granddaughter, 49
Sara Knauss, 118
Kitty Sullivan
Daughter, 95
Kristina Patton
Great-great granddaughter, 27
Bradley Patton
Great-great-great grandson, 3
+
Source: New York Times, 2001 © 2010 Knowledge Bureau, Inc.

10. The Mission of Seven Generation Thinking
Build
Build Wealth
Wealth
Build
Wealth
1st 2nd 3rd 4th
Generation Generation Generation Generation
© 2010 Knowledge Bureau, Inc.

11. How Is Legacy Preserved?
Monuments
Video Legacy
Mission Statement / ethical wills
Philanthropy
Estate/ownership transfer
Diaries, journals, blogs
Personal belongings: photos, memorabilia
Oral history
Parenting/mentoring
Time spent with others
Personal Impact: business, experiences, financial
© 2010 Knowledge Bureau, Inc.

12. Ten Key Principles for Sustaining a
Family Dynasty
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13. Principle 1: Stewardship
The principle of managing the assets of a
family business in such a way as to
preserve or increase their worth for future
generations.
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14. Principle 2:
Focus on what you focus on the
you value BEFORE value of what you own
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15. Principle 3: "One for all, all for one”
Pursuit of personal
life, health, liberty,
possessions, dreams,
and happiness
Empowering the rights
of others to life, health,
liberty, possessions,
dreams, and their pursuit
of happiness
© 2010 Knowledge Bureau, Inc.

16. Principle 4: Think about what hat you
are wearing before you speak
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17. Principle 5: You must establish a Governance
System for the Family Business
1. The family should treat the business as a
challenging opportunity, not a haven with
a guaranteed paycheck.
2. How will In-Laws be treated?
3. How will ownership be handled between
active and passive children?
4. How will Successors be chosen and
trained?
© 2010 Knowledge Bureau, Inc.

18. Principle 6: Family and Business Communication
is critical for building and maintaining trust
1. The assets of a family are its
individual members
2. Establish forums for
communication (i.e. family
meetings, family council,
Board of Directors, etc.)
3. Establish mission and vision
statements (Personal,
Business, and Family)
4. Preserve family stories for
future generations
© 2010 Knowledge Bureau, Inc.

19. Principle 7: Change is Constant – Both
Families and Businesses Evolve Over Time
Family of Affinity –
each family member
supports shared family
values and provides
"intimacy, love and
trust” to each other.
The sale of the Business
should always be an
option – Risk taken with
Passion and Wisdom can
build a sustainable
business. An “Entitlement
Mentality” or a “Have To
Attitude” generally leads to
business failure.
© 2010 Knowledge Bureau, Inc.

20. Principle 8: Business Succession Planning
Means the Business Must Operate Without You
Founder Successors
• Have regular discussions about • Show respect for Parent
career options for children accomplishments
• Monitor how children handle • Be pro-active on learning
work and family issues executive skills
• Give your children a chance to • Establish a schedule to discuss
handle big decisions with parents mission/vision,
• Announce a target date for your priorities, philosophies and
retirement decision-making criteria
• Manage sibling rivalry
© 2010 Knowledge Bureau, Inc.

21. Principle 9: Create strategic vehicles that
nourish and empower all Family Members
1. Family Bank – Using family
wealth to support new
business opportunities
2. Philanthropy – Create
consensus for Family
causes and develop a
formal decision making
process
3. Family Office –
Consolidate financial and
business knowledge for all
family members
© 2010 Knowledge Bureau, Inc.

22. Principle10: Understand the
Importance of the CEO
- Chief Executive Officer
- Chief Empathy Officer
- Chief Entertainment Officer
- Chief Educational Officer
- Chief Elder Officer
- Chief Exercise Officer AND
- Chief Employment Officer MANY
- Chief Ethics Officer MORE…
.
© 2010 Knowledge Bureau, Inc.

23. As a Wealth Coach you must choose how
you will empower a Family’s Wealth?
Vs.
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24. American Legacies Study
• Allianz and Dr. Ken
Dychtwald, President of
Age Wave
• Comprehensive study of
intergenerational wealth
transfer.
© Copyright 2010, Plan Your Legacy, LLC © 2010 Knowledge Bureau, Inc.

25. Ranking the Four Pillars
Values & Life Lessons
77%
Instructions & Wishes
65%
34% Personal Possessions
What you KNOW
10% Financial Assets
What you HAVE
© Copyright 2010, Plan Your Legacy, LLC © 2010 Knowledge Bureau, Inc.

26. TRADITIONAL PLANNING LEGACY PLANNING
Manages what you Manages what you
HAVE KNOW
PERSONAL
FINANCIAL MATTERS
MATTERS
• Values & traditions
• Investments
• Life lessons
• Businesses
• Timeless
• Insurances memories
• Taxes • Accomplishments
LEGAL PRACTICAL
MATTERS MATTERS
• Legal will • Location of key
documents
• Trusts • Household
• Powers of maintenance
attorney • Care of children &
• Asset protection pets
• Funeral
arrangements
© Copyright 2010, Plan Your Legacy, LLC © 2010 Knowledge Bureau, Inc.

27. Golden Nugget
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28. Fairytales Can Come True!
• Financial success and a strong
business cannot make a
strong family; but a strong
family can build a sustainable
business which brings financial
success.
© 2010 Knowledge Bureau, Inc.

29. THANK YOU!
For more information, go to
www.lugenfamilyoffice.com
© 2010 Knowledge Bureau, Inc.