About 70% of families don't make it to the next generation, mostly because of family quarrels.

[03:11]

"What What the biggest reasons that families don't make it to the next generation and roughly 70% don't make it to the next generation. The biggest reason is family quarrels."

[05:36]

"No, you're stewards, and it's your job to hand the family business over to the next generation in better shape than you inherited it. And so, yes, spend some of the money, but but your real job what you're there for you know, the families that last are taught this,"

[04:40]

"He said that the families that last, probably by the second generation, but almost certainly by the third generation, they've discovered that philanthropy is just an amazing family glue."

Full transcript

In 2009, I had the idea to buy billionaires.com. The billionaires.com mini-series is your chance to get hyper-valuable and unique takes from celebrity billionaires like Tony Robbins and many more. And this guy said, "This is great. I love it. I'll give you a two and a half million." This series gives you access to exclusive insights from in-person and audio interviews hosted by none other than the founder of the Family Office Club, Richard C.

Wilson. Get started now with an official introduction to the one billion-dollar plus expert insights mini-series and see what these nationally renowned billionaires have to say about winning and succeeding in the game of capitalism. This guy, like like of all the power players I've had in here, he's the smartest guy we've had here. No doubt. We are going to be talking about the three musts for a lasting family business.

And let's see what Richard has to say. Well, yes, Richard, I did say one in a thousand. And to repeat the question, what are the odds of your family business lasting a hundred years? Because you know, what should our focus be? Why are we making this money? Why are we putting on those long desperate hours?

Why are we giving it our all? Well, probably because you want your family to benefit. And you'd really like your family to last. What can you do to improve the odds? I mean, if the odds in general are one in a thousand, and I should quickly tell you where I get that figure. Uh, how many of you have heard of Dennis Jaffe?

Some of you. Okay, he's worth knowing about because uh he's a hero of mine. He has spent the last 40 or so years studying family businesses and what makes them last. And so here is it's Professor Dennis Jaffe. He has a lot of academic knowledge of what makes things work. And I have practical experience because as Richard mentioned, my family actually he didn't mention.

He mentioned that I come from the Sheraton family. The Henderson family, my father was a co-founder and president. The Henderson family began as a family business in 1840 and I see in the audience somebody who trumps me on that but uh and the producer has been in business for 182 years. So 182 and a 102. I because I'm a writer by trade I had a great interest in how did they do it?

And let's see some of the things where both my observations and what Dennis Jaffe has learned, they match. And I'm going to share with you the three musts and more important, I'm going to share with you some ideas of how to inculcate the musts. Let's start with no public quarrels. No public quarrels. What What the biggest reasons that families don't make it to the next generation and roughly 70% don't make it to the next generation.

The biggest reason is family quarrels. How do you avoid them? And why is it important to avoid them? Well actually every family every family that exists is going to have quarrels but by the time they're public, it's almost a bridge too far. I know a lot of family counselors who said they won't even accept uh as a client a family who if they have taken their quarrel public in the sense that it's in the newspapers or they've taken it to adversarial lawyers.

It's It's I mean, there may be families who can put it back together after that. Uh but I don't know of any. Both the Hendersons and the Perdue's teach family members just I mean, I think I almost learned this when I was still in a high chair. You can argue, you can fight, you can scream if you need to.

But, the way the Hendersons put it is uh we don't wash our family linen in public. And the way the Perdue's put it, we call it the covenant. And the covenant is again, you can fight as hard as you need to, but you don't take it public. Next. This is something I again, I get it from Dennis Jaffe, but it matches my own experience.

He said that the families that last, probably by the second generation, but almost certainly by the third generation, they've discovered that philanthropy is just an amazing family glue. Because by the time you're in the third generation, there are a lot of people who aren't working in the in the family business. On the other hand, you know, the married ins, the people who aren't part of the family business, they can all get the good feeling that you get from being involved in stewardship. And the third must is Do you know what?

I got that backwards. Stewardship. The families that last teach their kids from from childhood that the family business isn't about them Oh, I hope I'm I'm going to say something that may be unpopular with some of you, but here goes. The kids have to be taught that the money isn't that you can go spend it lavishly. No, you're stewards, and it's your job to hand the family business over to the next generation in better shape than you inherited it.

And so, yes, spend some of the money, but but your real job what you're there for you know, the families that last are taught this, what you're there for is to teach kids preserve it and make it grow for the next generation. So, Dennis Jaffe says that and and I agree with him that the families that last teach their kids from the youngest age that it's about stewardship. Philanthropy. Well, I already mentioned philanthropy and part of that family glue.

Let's jump ahead to how you I've I've given three principles. How do you inculcate this into the family? And I'm going to share with you first what the Hendersons do and then what the Perdue's do. Uh you're looking at John Cleves Sims Henderson from 1840. And he did something that I just recommend to absolutely everybody. It's worked brilliantly for the Hendersons.

It works for the Perdue's. He let He and his children got together and they endowed uh a family It was called the Henderson family dinner. It's grown into the Henderson family weekend. But in 1890, he and his children put together money to have a get-together. And I bet everybody has seen what what I've seen, which is a family you know, that while the patriarch's still alive, uh the family's close, it's great.

The patriarch dies and you know, for two or three years they get together for maybe Thanksgiving or other holidays. By the fifth year maybe they get together for a wedding, but the 10th year the family's gone poof. If you endow family vacations, uh this is a way of getting around it. This is a way of helping your family last.

Service to the family award. The Hendersons, we want we want the family members to really figure out what they can do for the family rather than just what they can get out of it. And so every year we have at our family reunion, we have a service to the family award. And people win it for such things as just to mention one, Roberta Henderson digitized 10,000 family documents.

They're and there's a great big ceremony. The house that I grew up in has as everybody else does a ballroom. Whoever's laughing, thank you. We have a great big ceremony in which we read who the past winners were and you know, applaud and just cherish the person who has just won it. So I recommend everybody to inculcate the culture a service to the family award.

Another one is we have a what it means to be us book. And I brought a copy of it here and I need my partner in crime uh somebody to to hand this around. Just start it and and hand it around for the next what it means to be us book. Just just pass it around and let people look at it and it may it may be circulating the rest of the day.

Uh philanthropic activities I I mentioned that before but this is just such a way to create family glue, especially in a family that's geographically separated. And here's one that the Hendersons do. Uh we have a blood drive and you get on the honor roll if you if you've donated blood. And you know, every new donation uh newsletters go out, people are praised.

You get a really good feeling and uh this is just a picture of one family member donating blood. Now on to how the hand the produce uh embed the culture. We have something that I'm really proud of. It's called the children's newsletters. And with the children's newsletters if you want your family members to absorb uh lessons from like the youngest age, I recommend a children's newsletter, but the children's newsletters that we have, every newsletter is about embedding one of the family values.

One of the Perdue family values is uh being frugal. And so, I tell the story of how great-grandmother Bunny Do used to when she baked her her famous biscuits, particularly at Thanksgiving, uh she would bake the biscuits, but then when she uh took them off the baking sheet, it had been covered with aluminum foil. And after after its use, she would wash the aluminum foil and and reuse it. Oh, or or save it for reuse.

And well, that that story's good, but it's not enough to really embed the culture. So, every newsletter is accompanied with a treasure chest. And the treasure chest has an activity in it that will illustrate what the newsletter was about, and I'll show you what this one includes. It includes cos- Actually, every treasure chest is going to include costumes cuz kids love costumes.

This is a chef's hat. Uh here's a uh a chef's apron. Here's Mommy Do- Here's biscuit mix. And here is uh aluminum foil. The kids get to bake their uh their biscuits and talk with their grown-up about how we're a fru- frugal family and we're an environmental family. We're into recycling.

You don't throw away aluminum. That's who we are. The Giving Club, children from uh about maybe 8 to 14 have a packet of uh of money from the foundation which they get to decide where it goes. And they get to research you know what category of thing they're interested in. Then they actually go call on on the different charities and this is from a very young age.

Uh but they actually have money that they can give out and then the family gets together and or the the children get together and they decide where the money goes and different they're about 12 in the giving club and they can each argue for where the money should go or it could just be divided up. Uh just really great ways of getting them from a young age and you know anybody who studies culture knows get them while they're young. Well, that's what we're doing. Uh family involvement in the company and this is kind of on the subject of of stewardship.

During the uh during the pandemic family members sewed I mean I guess it's close to a thousand masks. And this was in a period when it was hard to get personal protection and we we were just sewing. Uh Purdue employs 22,000 people so you need to get everybody but we got a lot of people and I think it was very meaningful that family members personally sewed masks. Uh sun play I'm so proud of this.

Family members got together and we voted it was something like a couple of hundred thousand dollars of our own money uh to do the following. We knew that you know Purdue being an essential industry the 22,000 people who uh are processing the food uh you know it's hard times for them. We wanted to show them recognition. So what we did and I wish it was my idea cuz it's so clever.

Uh with the money that we raised we bought tickets for a couple of meals for each each Purdue associate. And it was tickets at Subway and that had the huge advantage of Subway has Subway stores or restaurants in every place where we have a processing facility. So Subway was kind of desperate with no with with no traffic and they're a big buyer of ours so we love them dearly. So here we could have the associates uh buying food and they were accompanied by a big gushy letter from us saying how important they were and how we valued them.

This is a tornado that I mentioned the family the Kid Giving Club. The Kid Giving Giving Club uh when the this tornado hit the town that was in a Purdue processing facility uh with the at this meeting one one family member said, "You know, let's support the town that supports us. Let's give all our money uh to one place." And they did and I just love that because each one, you know, coming in had their own pet um Then we're also very involved in uh the lead program and given that I don't want to run out of time because I consider it a sacred duty not to go over my time and I've got 30 seconds left.

To summarize, no public trials, stewardship philanthropy. Uh that's what I recommend to everybody and I've got 19 seconds left. Um I'm just back from Ukraine. I spent 5 days there. And if you want to learn about what I learned as the guest of the head of police for Ukraine uh and why did I see some things like Chernobyl and human trafficking and I've been writing about it.

My time's up. I love you all. Thank you.