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Great white elephants: those things nobody wants to talk about

Alyssa Stencavage, L&A&E Editor

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Do you know how to be real? According to Franco Lombardo, as human beings, we don’t.
“How we treat our money is exactly how we treat those closest to us, including ourselves,” Lombardo said.
Lombardo is a renowned speaker, author and adviser to some of North America’s wealthiest families and their family offices, work he has been doing for 20 years now.
Lombardo said that an event will happen in our lives. From that, we tell ourselves a story and attach meaning to that event. We call the story our beliefs, telling this to ourselves often enough that it does indeed become our beliefs. The funny thing is, we never question these beliefs. We hold them as truth.
Just as we have beliefs about different types of things in life, we have them about money too. That is called a Money Motto, and we all have one that subconsciously runs us, and dictates the decisions we make about money. As the relationship beings that we are, Lombardo said we take these Money Mottos into these relationships. Whenever we argue with others, it’s usually centered around our beliefs and we never bother to question what we are really fighting for. People get hung up on their beliefs about money, which is what ultimately ends up impacting relationships.
These problems also expand into the family system and business. Research says that 78% of wealth transfer from generation to generation fails. Lombardo thinks that a lot of families know this, they just don’t deal with the issues that are sitting right in front of them. Lombardo said families invest so much focus, time and energy into the family business that they end up ignoring the fundamental issue at heart: issues within the family.
A colleague of Lombardo’s, Andrew Keyt, the president of the United States Chapter of the Family Business Network, said the problem is, in the industry, it’s designed to protect the business from the family – so by definition, the family is a liability. Lombardo agrees, because families are not dealing with their stories, or their great white elephants.
Everyone knows the concept of the “elephant in the room”. Similarly, there are three things that Lombardo said, if given too soon, are bound to ultimately ruin a family business. They are: money, ownership and power.
Research suggests that white elephants have long been regarded as sacred in Thailand. Legend says that if a Thai king became dissatisfied with a subject he would give him a white elephant, because such a gift would lead to financial ruin. It was both a blessing and a curse.
The question Lombardo asks is: How much do you invest in your family to deal with your story to make your family better? He says families typically spend significantly less time on the family system, which is really the “greatest and most valuable asset.”
To fix this, a family has to be restructured so that they’re not a liability to the business, and the only way to do this is to talk about issues head on. While this is what’s most needed for the family system, it is also what Lombardo has found to be the No. 1 challenge for the wealthiest families. They don’t know how to talk about things, their great white elephants. The lack of conversation causes failure.
When they’re not having conversations to try and solve their problems, families are seeking help from advisers who ultimately can only help them solve the issues, not actually solve them. But Lombardo thinks advisers are also at fault, because they think that by telling their clients the truth they will cause anger and resentment, and therefore a loss in revenue. But what families are really looking for is that honesty, passion and direct calling out of their mistakes.
Lombardo said the conversations that need to be taking place within families simply aren’t, and that’s where everything goes wrong.
“They buy the best help money can buy,” Lombardo said. However, what he has found when you deal with familial emotional issues, the governance often takes care of itself.
If you’ve ever seen or heard of Lombardo’s work, the phrase Why Rich Kids Hate Their Parents will sound familiar. Lombardo called the concept “entitlitis,” and it goes along with laziness. Not always intentionally, Lombardo said, parents will tell themselves that they are making life easier for their children by constantly bailing them out. By doing so, parents are inadvertently taking away drive, passion and desire to contribute, thus creating a spoiled brat. In the process, parents are also taking away children’s opportunity to experience pain, and no pain equals a tough time.
“Parents nowadays are over protectors,” Lombardo said.
For example, Lombardo said parents will say,“my kids aren’t responsible with money.” The question he asks is: where do you think they learned it?
As a result of all of this, Lombardo said parents will end up feeling guilty and try to make up lost time with money. But in Lombardo’s eyes, this isn’t the right move; what children want is time.
“It’s the wrong currency,” he said. “Children are wise. They’ll figure it out and play the guilt card, so there is accountability on both sides.”
Lombardo said the two biggest struggles facing wealthy families are they don’t know how to have those aforementioned conversations, and parents don’t know how to deal with entitlement. That’s where Lombardo comes in. He is the coach who prepares and helps parents to have those conversations.
“I coach them on how to do it – it’s like teaching them a new language,” Lombardo said. He later added that “as a society, we crave and long for authentic leaders because they stand out among others.”
For college students, the Money Motto still applies. Finances are still a central part of students’ daily lives. To be financially responsible and wise during your college years, and avoid all of these issues, Lombardo offers this advice: students can ask themselves what their beliefs are about money (Money Motto) and this will shed light on why they behave the way they do.
Students who attended the Family Business Forum on Sept. 19 found the presentation to be powerful.
“Franco gave great insight into finding the “Great White Elephant” in your family and dealing with it as soon as possible,” senior business major Josh Rodriguez said. “His humorous approach made the lecture relatable, because sometimes being truly authentic is hard. It showed me that family businesses need to be authentic right off the bat, or their story will unravel. The lecture also reaffirmed the notion that communication is the key. Putting time into the family is just as important as the business itself.”
With all of these issues, there have to be solutions. There are, and it all starts with looking within oneself, finding out what one’s story is and owning it.
Lombardo said somehow, people are all responsible for the relationships they don’t like. In order to change that, they have to: “Take a look in the mirror, dig deep and whatever you find, that’s the piece.”
So what Lombardo wants to know is, what are you going to commit to change tomorrow that you are avoiding today?
The Money Motto can be equated to just about anything else in life. Everyone has beliefs about something, and whether they realize it or not, they are at the core of what they argue about. In order to solve those differences, they must talk about them, and to do that there’s only one solution: in the words of Lombardo, get authentic, get real.
For more information, visit https://www.familyoffice.com/blog/how-have-great-white-elephant-conversations, http://www.themoneyproject.ca or http://contributingleader.podmatic.com.

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