Note: Voice-to-text transcriptions are about 90% accurate, and conversations-to-text do not always translate perfectly. I include it to provide you with the spirit of the conversation.
Episode Outline
· [00:00:12] Executive Coaching and Family Enterprises.
· [00:05:53] Family Wealth Consulting.
· [00:06:47] Wealth 3.0.
· [00:09:57] Wealth Management for Families.
· [00:13:44] Family Business Entropy.
· [00:17:05] Family Business Leadership Programs.
· [00:20:23] Family Coaching Boundaries.
· [00:23:45] Executive Wellness Coaching.
· [00:27:44] Pandemic Recovery.
· [00:30:13] Finding Balance Through the Arts.
Scott Allen 0:00
Okay, everybody, welcome to the Phronesis Podcast. Thank you for checking in wherever you are in the world. Today. We've got an interesting, fun conversation and I have Jeff Strese, and he is an organizational development consultant and executive coach focusing on multi-generational family enterprises, corporations, and mission-driven nonprofit organizations. He has more than 25 years of experience working across industries in the areas of leadership development, organizational effectiveness, and family dynamics. He holds certifications and family wealth, and family business advising. Jeff is passionate about helping family businesses and organizations create clarity, out of complexity, and inspiring leaders from all backgrounds to develop and master critical skills like coaching, communication, and emotional intelligence. He has developed innovative programs to guide next-generation leaders to reach their full potential in a fast-paced global economy. Jeff has served as chief talent and learning officer at Tolleson Wealth Management, a multifamily office serving client families across the country. Prior to his role at Tolleson, Jeff served as the Chief Human Resources Officer at Southern Methodist University. He has taught both undergraduate and graduate level courses as an adjunct faculty member in SMU's Cox School of Business and currently serves as academic director for an award-winning Leadership Development Program in SMU's executive education program. Early in his career, he held a private practice in marriage and family counseling as a licensed professional counselor, before transitioning into organizational development and executive coaching. He is currently a member of the Teach For America DFW advisory board and executive committee. Jeff is based in Dallas, Texas, he is married with two adult children. He enjoys music, traveling, and cooking. We've talked about the music we have a lot of commonalities when it comes to music, sir.
Jeff Strese 1:57
Yes, we do a lot of crossovers. I'm a 70s guy, though you're a little bit the 80s, so we blend that we blend the playlists, don't we?
Scott Allen 2:06
Yes! I was born in the 70s. But I think the first album I ever owned, was Michael Jackson's Thriller. And it was Valentine's Day if I remember correctly, and I opened it up. And he was lying there with a tiger. And I thought, wow, that is the coolest thing ever. And then I think I got Styx - Mr. Roboto, like a 45, and the Go Gos like a target. My mom would take me, and I'd get a 45. So, humble beginnings, but I found my way to 70s Classic Rock. Yes,
Jeff Strese 2:37
I'm glad you worked your way backwards to the good stuff!
Scott Allen 2:42
So Jeff, obviously, awesome bio, and a lot going on there. What else do individuals need to know about you before we jump into our conversation today?
Jeff Strese 2:52
I'm just at a point in my career where I really enjoy working not just with individual leaders in organizations but really at the industry level. I work a lot in the wealth management space with advisors, and financial leaders, financial professionals. I really enjoy that a lot. I really enjoy looking at where the trends are, and with the research and helping, leaders really kind of look around the corner on how to really help their employees stay engaged and effective.
Scott Allen 3:19
Something I'm excited about today for our conversation is that we're going to hone in on, you know your work with family businesses, because I think that's a unique context that I don't know is always given the attention that it deserves. But it's a fascinating context. I've worked with some family-owned businesses in my own practice. I know you've worked with a number of family-owned businesses and have several clients that are family-owned businesses. So, what I would love to do is just take the conversation ended in the direction of what are some themes that you notice in your work with family-owned businesses. What do people need to have on their radar? What are they need to be aware of it whether you're an owner of a family-owned business, or you're working with a family-owned business?
Jeff Strese 4:07
Well, I think it's interesting to start with a little bit about how I got into it. And that is really a confluence of my background, starting off as a marriage and family therapist and then early on moving into organizational development. And later in my career, I had an opportunity, I left the university I went into wealth management, and really played a role where I was working about half the time on the human capital aspect of the firm, HR training advisors, and the other half of the time I began to work alongside the advisor with the families and family-owned businesses. And so these were ultra-high net worth families who either own businesses operating businesses or they had to have a liquidity event sold a business and then they were managing some sort of estate and managing their resources. And I was able to work with the advisor to help with succession planning, with family dynamics, with family meetings - because when families really begin to accumulate a lot of wealth, and they want to responsibly pass it on to generations, they need some sort of a governance system, they need a practical way to prepare and educate future generation family members to be responsible stewards of that wealth. And so that's really where I'd had sort of a mid to late career, pivot, and certified myself; I was able to really dig deep into this acumen of family wealth. And I just think there are some really interesting things for probably all your listeners to hear because whether it's consumers, whether they work somehow or with alongside family, or family-owned businesses, it's going to affect all of us as consumers for sure.
Scott Allen 5:51
We'll talk about some of those themes. What are some things that stand out for you as you've worked with these organizations?
Jeff Strese 5:58
One of the things that I think has been evident as part of family wealth consulting for probably the last 25 or 30 years is this proverb called "shirtsleeves to shirtsleeves," which basically says the originator of the wealth, the one who created the wealth, male or female, begins a journey of building a business, doing something entrepreneurial, builds a wealth really works very hard to accumulate that. And by the second, specifically, the third generation, the proverb says that many times that wealth is lost. And it's lost for a variety of reasons, family dynamics, and entropy, and particularly by the third generation, there may be a tendency for entitlement or consumption. I think in recent years, in the last maybe seven or eight years, there's been an emergence of something called wealth 3.0. So 1.0 was the traditional view 2.0 was the multidisciplinary practices, and 3.0 is a more positive approach - using positive psychology, okay, using emotional intelligence to work with millennials and Gen Z family members and helping older generations. Understanding the value shifting and the view of wealth is changing with younger generations, and that requires a whole new skill set for leaders and family businesses to understand. It's based on an article from Grubman, Jaffe, and Keffeler out of trust in a statement management called Wealth 3.0. It's really a good read, you ought to put it in the program notes. Even if you're not working specifically in financial services or wealth management, it really highlights the role of the leader, the advisor, the trusted advisor, and the advisor, I use a little bit more ubiquitously. It can be an attorney, a CPA, or a financial advisor, it can be someone like me, who is a practitioner, who's more of a facilitator and a coach, working with leaders and family businesses. And I'm really excited about the trend, the research is showing that particularly younger generations are responding very positively to that kind of approach. And that's where a lot of educational programs are emerging around financial literacy, around understanding the impact of wealth, like philanthropy, and social impact investing. And so there's a lot to do, there's a lot of work to be done.
Scott Allen 8:16
So tell me a little bit more about this 3.0 And some of the differences between 2.0 and 1.0. I imagine 1.0 was just kind of "Hey, Jimmy, you're next."
Jeff Strese 8:26
Yeah, I mean, 1.0 really began, you know, decades ago when the first family trusts were developed. And they were done by attorneys. And it was all about protecting assets. And so, you know, trusts were designed, estates were planned, and so for a long time, going back to the 50s, and 60s, that was the approach with any family that had any kind of wealth. I probably would say, and, you know, maybe in the early 80s, the emergence of other disciplines that came into the family offices were the thing that began private trust companies began. So there was a diversification of how to not just protect the wealth but to equip family members for future inheritance. But it was still more of a risk mitigation mindset. It was still the question of, "hey, what keeps you up at night?" Let's design your financial strategy around that, so you don't worry. Yeah, in recent years, there's been a shift from not "what keeps you up at night" to "hey, let's talk about ways we can prepare your children. Let's talk about ways we can prepare your grandchildren." And it's more around - and this is significant - and you know, this as as a coach and a consultant, that a narrative is a very, very important thing and leadership, the narrative that you have and that you use, and so it's really a changing narrative using more of a strengths-based approach more of a positive psychology approach. And so I've really been involved in that in recent years and working with some of the authors and researchers and bringing that into my practice.
Scott Allen 9:59
It sounds like removing from kind of how do we protect our wealth? A lot of attorneys involved, a lot of financial planners involved. And that's important. That's critical. And, now, based on what we've learned over the last few decades, we are now focusing on education, we're focusing on development, we're focusing on helping these family businesses understand some of the life cycles that can occur and how to prepare for those, maybe even in some cases, how to disrupt because we don't want the third generation necessarily losing all of the money. That's not good!
Jeff Strese 10:37
No, and it's becoming, it's becoming more and more about legacy. Yeah. And so, you know, I think you make a good point there about it's not just attorneys, and CPAs, and financial advisors in there; it's now not just multidisciplinary, which is the web 2.0 perspective, it's the 3.0 perspective is the entire team is focused on well being - It's focused on legacy, it's focused on values. And those are qualitative terms. And so what I see happening in the industry is that the professionals that have had more of the technical, financial, legal background training are getting skilled up on the qualitative skills. That's where a lot of my work is with Family Office Exchange, some of the courses I teach at SMU and the executive education program are with physicians and engineers, and CPAs that are trying to gain these qualitative skills. So it's not an either/or; it's an "and."
Scott Allen 11:29
I love that phrasing. Well. And so it's interesting because I imagine that extreme wealth, and family-owned wealth. With it comes its own set of unique challenges. There's a shadow side to all of that, which is good. So what are some things that you see on that front that you find when you're doing some of this coaching, when you're doing some of this work, what are we preparing families to work through, or hopefully, potentially obviate or curtail?
Jeff Strese 12:02
I would say, probably in previous generations, primarily baby boomers and Gen X to some degree - there was a, I would say, a generational view I need to protect my children from the indulgence of wealth because I worked hard to create it; it's almost like a benevolent authority approach. So there would be quite often a potential to withhold information, to really wait a long period of time before there would be any sort of empowerment or delegation of ownership or leadership in a family business. And that created compression. And that created a real dynamic tension, particularly with younger Gen Xers and Millennials coming into the family business, a family system, that family enterprise. So that shadowside emerged as suspicion, fracture, or mistrust, or restlessness. And I would say that education and facilitated meetings, and coaching have been in part and anecdote to that because it's transparency is a great disinfectant, it begins to diminish suspicions or assumptions. And that's what I found a lot of times in family dynamics is that there's just a lot of assumptions on you. And I know Uncle Bill, and he's parked over there with the CFO title, and he really doesn't understand me or what my needs are. And so all these dynamics swirl around, and really complicate the organizational effectiveness and complicate the employee engagement. And so I think that's, that's one of the tricky parts of family-owned businesses is the sometimes the entropy that can occur,
Scott Allen 13:40
Say more about entropy.
Jeff Strese 13:42
What I mean by that in a family-owned business or family system is that families can become insular if they are not seeking best practices and allowing other voices into the family system. That's why a lot of family-owned businesses have the practices of is that if you're going to work in the business, you have to work outside of the family business first, maybe go to college, graduate, you work for five to seven years, then you come into the family business, and you earn your respect. That way, you don't come in and park in a corner office when you're 23, and hang a VP title on that young man or young woman, those are the kinds of things that can really blow up businesses. Not always, but many times that that can occur. I'm working with a client here in here in my area that I live in Dallas, and this is exactly - I would say this is a poster child, if you will, for what to do right - worked outside of the business for seven years, came into the family business, and with a very humble spirit started shadowing the vice president of operations and really has in a short amount of time has really earned the respect of all of the nonfamily, business leaders young which are really critical for succession.
Scott Allen 14:54
Yes. Well, again, there are so many dynamics like that, for instance, whether it's Uncle Bill being parked over as the CFO and really maybe not totally doing his job or her job, and people are afraid to confront them, or it's kind of worked around, or some of the dynamics were that you just mentioned, of how do you integrate a second or third generation child into the organization and integrate successfully, right? It's very, very important to do well. And if that individual isn't integrated successfully, or isn't, to your point, you use the key word there, I think he was "humble," you know, walks in with a sense of entitlement, or this is a done deal, that can probably be incredibly damaging to the culture
Jeff Strese 15:46
It can be, and it might not be as disruptive, short term, but long term, it will be very disruptive because it'll cause the rest of the nonfamily member workforce to fall into this engagement or just hang on to you know it's a safe job or a sure thing, and you know, and so that's why I think there's such a need with family-owned businesses to really pay attention to effective onboarding of family members so that they can earn the trust and credibility of the rest of, of the office of the rest of the organization.
Scott Allen 16:20
What are a couple of other best practices like that, Jeff, that you come across? So again, so we got successful onboarding, we've got a system where there's education, there's development, there's planning, not just on the financial side, not just on the legal side, but there's planning from a developmental side for some of these individuals. Care and attention that's being given to onboarding and how we integrate some of these family members into the family-owned business, or their other common elements that you encounter?
Jeff Strese 16:53
I think one of the things I would recommend, Scott, is if you're listening to this, and you either have a client or you're involved somehow in a family business is to really lean into there's a whole cottage industry of Educational Leadership Programs for family members, and nonfamily members who work in the family business. One of them is the Family Office Exchange (FOX) based in Chicago, which I do some part-time consulting and teaching with. There are a number of programs that are specifically designed for family members who are sending in leadership responsibilities, maybe in a foundation, or a junior investment council or something like that. But they're preparing for leadership and ownership. And it's, it's really a combination of those kinds of family enterprise skills and knowledge, along with the leadership skills. So I really would recommend you can we maybe could put that in the show notes; I would really recommend looking into those kinds of programs that are designed specifically for families.
Scott Allen 17:58
And so we have a family office, Family Office Exchange. So we're tapping into some of those resources. And then I imagine some of your work; Jeff is just coaching the current leaders. Again, in a dynamic or in a system, in any organization, there's a hierarchy, there are levels of fear, and there are levels of authentic feedback that's coming to the authority figure. And that varies widely, depending on the authority figure. So I imagine some of your coaching and some of your work, these individuals built a business, and they didn't necessarily have an education and how to lead effectively. They built a business, and it was manufacturing or it was in some other domain. And so I imagine a good portion of your work also is taking some of those current leaders and helping them understand - okay, how do we create a culture? Not build a business now but create a culture where people use your phrase, you've used it a couple of times are engaged, are in are enthusiastic see a future, right?
Jeff Strese 19:08
Right, I think what we see in many organizations is a tendency when there's tension or disruption of conflict avoidance in a family system and the family dynamic it can be even more so. And I've seen many well-intentioned coaches, practitioners get involved in the family system and really get triangulated. And the family uses that person almost as a go-between because they really don't want to deal directly with tension, conflict, or disruption. Compression, if there's a lack of succession planning, my approach to coaching is pretty straightforward about coaching individuals and training them to deal with each other one-on-one. Otherwise, I could fall into enablement myself. And so I think you've really got to be careful when you're a coach, and you're working inside families because that's going to be the tendency.
Scott Allen 20:02
Well, let's go there for a moment. Because again, your background and marriage and family therapy, and we've talked about this in the past, how it can be such a benefit when engaging in this work of coaching because you have some tools that maybe other coaches don't have. You know, family systems theory gives a very beautiful lens to some of the dynamics that are happening in groups. And so even that little clue that you just provided of look I could get into, did you use the phrase triangulation? So I could get into a situation where there's triangulation, and even just having that language at your disposal, many coaches might not think of that. But it's critical because you're entering an existing system that has its own dynamics, its own norms.
Jeff Strese 20:52
That's right. And I think I think that's really a good line of questioning there; it's similar to if you're a coach and a corporation, you still have to set boundaries, you're still basically playing the role of a faithful translator - especially if you're working with teams, not harboring, being a safe harbor if you will. And there is the balance, of confidentiality if you're coaching multiple family members within a business - confidentiality and sort of truth-telling. And so you can even see the language I'm using now in this podcast is I'm, I create sort of a language and I set the tone from the beginning, there was a family I was working with up in the northwest, that really wanted me to move more and more into a more of a family psychologist role where they were trying to leverage me to mediate their conflict for them. And I really set my boundary and said, "Look, I'm not well, psychologist, you know, even though I have a therapy background, I have an intentional purpose here of being more of an educator and a coach. And here's the scope of my role." Now, if we need to get that, we'll help you find that resource. If there's, you know, toxicity or addictions, or the risk of whole branch fracturing off, you know, those kinds of things are truly at risk, then, yeah, I think you need to get the calvary in here. But I think that that's part of any coach's role is really to make sure that there is a really good boundary set along the way.
Scott Allen 22:20
Yeah. But there are just some unique nuances here, where, again, I know, we keep using the phrase "Uncle Bill," but you know, we're going to be with Uncle Bill at Thanksgiving. And there are some unique differences in this context, that if your boundaries aren't clear, I'm sure pretty readily you can get sucked into some dynamics that you don't want to be sucked into without those clear boundaries.
Jeff Strese 22:44
Yeah, you can. And, you know, that's, it's, you know, I'm not a robot, you know, I'm not, I'm not just sort of going through these motions with no emotion, I, you come to care about people when you work with them, and you care about the family, and especially when you work with them over time. And so it can sometimes be challenging to either set boundaries or to, you know, have the courage to sort of really speak up to a patriarch who can be intimidating, you know, sometimes, that's kind of the profile of a wealth creator, they've created the well, they worked hard for it, you know, they don't have a boss. So they're used to sort of being able to have things go their way. And so with generational wealth transfer, there's lots of opportunity for conflict, just because of just generational value differences. And so I think that's, it's interesting to be in the space where I'm coaching and trying to help families connect
Scott Allen 23:38
Any other ways that you operate? I mean, I heard clear boundaries, and I think that's wonderful. Anything else is a best practice for your work with clients that comes to mind for you?
Jeff Strese 23:49
You know, I think, Scott, I always start with fundamentals of well-being and wellness. And this isn't a wellness pep talk. It's that I've worked with lots of corporate executives who are brilliant, and they're aggressive in their field, and they're wildly unbalanced. And it's showing up in negative ways with their health, their relationships, or their home life. And I usually always start there; I start with understanding kind of the rhythm of their work, their energy, how they spend it, how they make decisions, and then I begin to leverage principles around emotional intelligence or self-awareness. And those are the kinds of best practices that I use most frequently in my coaching, and then I begin to move into a deeper diagnostic of understanding their world, their industry, their organization, and their role. And you know, I think that sequence is important because it establishes on the front end, just as a PGA golfer would have a swing coach, you know, they keep missing cuts because they're three putting greens and their pre-shot routines messed up in their headspace is not good. And so I try to earn the trust of that leader so that I can enter into their headspace with them a little bit. So it's not therapy, but it's also not just cognitive teaching. It's something in the middle where we're navigating emotions, we're navigating some of their headspaces, some of their thinking, some of their scripts, their psychological scripts, but we're always trying to focus towards effectiveness being effective, being productive, being influential, being able to be a trustworthy leader. And I think it begins with wellness and emotional intelligence.
Scott Allen 25:26
Well, I think you and I have talked in the past about one of my favorite quotes, "Who you are is how you lead," by Bob Hogan. And if you are not healthy, and then in a good place, and working on growing yourself, bettering yourself, developing yourself, it's hard to be there for others. And this balance between being an entrepreneur and building, and to your point, not having a boss and spending decades doing that work, and then transferring it to another generation. And now I go to the definition of leadership, one of them at least - "the process of influencing others towards a common vision" - you are now building the bench strength so that the legacy lives on versus being quote-unquote, the patriarch, or the person who's calling all of the shots, are you setting it up so that it's sustainable? And that's a whole nother piece of work. And when it comes to that piece of work, we're getting into education; we're getting into development, we're accessing some external resources like Fox, we are engaging some external resources like coaches so that we can do that work with intentionality, and then again, so that it's sustainable.
Jeff Strese 26:38
I agree. It's been interesting being in this space for the last eight or ten years, particularly at my age. And you know, I'm a, I'm a Gen Xer, or I'm an older Gen Xer - I'm kind of right on the border between that and Baby Boomer, and to see so many very, very successful business men and women who have struggled mightily with letting go, letting go of what they created, letting go of their baby and entrusting it to the next generation, it's almost easier for them to sell the business. And when a lot of them do a lot of doing, they have liquidity events, and they form a family office, and then they go on a journey that way. So, I enjoy the work very, very much because I really enjoy working within a family system, earning their trust, and helping the rising generations be successful in the future.
Scott Allen 27:26
I love it. Any resources that come to mind for you that people could tap into? I'm going to put the article Wealth 3.0 I'll put in the show notes, for sure. Is there anything else that comes to mind for you that would be beneficial for leaders to tap into that I can link to?
Jeff Strese 27:42
Yeah, there are a couple of things during the pandemic '21 particularly, and '22 McKinsey put out some really, really good articles on change management, which I really, really referenced a lot in my work with both family-owned and corporations. I think there's just a lot of good language and tools in there around pandemic recovery. And I still think we're going through pandemic recovery. I think that there, there are years ahead of us, where we're still gonna see the lingering effect of that much of that has to do with mental health, people kind of moving around the country searching for purpose and meaning and all of that disruption has created, certainly some work for you and I in consulting and coaching. So that's one thing. Another is a new book that came out late last year called The Edge. And it's written by a friend of mine here in Dallas, and one of his colleagues, Adam Tarnow and David Morrison, and they wrote a book called The Edge and it's really focused on helping the high potential in an organization understand how to accelerate their credibility and influence. And it's all based on values and leadership character. It's not like, you know, quick little fixes and things like that. But it's a way to really create a language and a narrative, to differentiate yourself. It's also effective for the more senior leader or the HR professional who's looking for high potential to promote and accelerate in their careers. It's a really good read. And then finally, I've also mentioned the Family Office Exchange for families on businesses or consultants that are working in family-owned businesses. It's just a wealth of resources for the coach.
Scott Allen 29:21
Okay, wonderful. Well, I always wind down these conversations by asking my guests what they've been reading or listening to, or streaming, what's caught their attention in recent times, and anything stands out for you?
Jeff Strese 29:37
You know, I go through cycles, Scott, where I have gotten my head down, and I'm really reading McKinsey, or I'm reading a leadership book, which I've just mentioned a couple of things, and then there are times where I cycle off of that, and I get my myself my brain a rest and when I travel, I'll either watch a film, or I'll do something that's completely unrelated to my profession. And the reason I do that is because it helps me with my creative side. And if you can - the listener can't see I'm sitting in a home office with a guitar on the wall and an oil painting and a canvas and an easel in the corner. And that's one of the ways that I really try to stay balanced myself; I try to stay connected to things that are important to me my background, my mother was an artist, my grandfather was a stage actor, you know, and so I've got a lot of that in my family history. And so I'm kind of in a cycle now where I'm really just kind of enjoying the arts. And that just helps me when I'm ready to kind of go back in, and sometimes it's cycles a week, and sometimes it's a month or so, I'm cycling. So I'll cycle off this and get back into the business side here soon.
Scott Allen 30:45
Well, I know that you're a fan of music. And so I'm gonna I've mentioned this a couple of times on the podcast recently, but one I would share with you as an opportunity is Rick Rubin has a new book called The Creative Act, which as a musician, I think you're gonna very, very much love. It is just a great read. And I also recently finished Jeff Tweedy from Wilco, his autobiography, Let's Go So We Can Get Home, which, again, is just another wonderful kind of view into his thought processes and how he thinks about music and his life and his experiences. And so, both are wonderful. But if you get a chance, listen, don't read, listen to Rick Rubin's book, the creative act.
Jeff Strese 31:36
I tend to like those kinds of biographies. Paul Simon has one called Miracle and Wonder, which is an interview.
Scott Allen 31:45
That's great. Well, sir, thank you for stopping in today very, very much. Appreciate it. We got a bunch of stuff for all of you in the show notes that you can access. And, again, a fun, interesting nook and cranny of this conversation around leadership and how we help prepare individuals to be successful when assuming these very challenging roles, whether it's in a family-owned business or a Fortune 500, Jeff is right there in the middle helping people do that work. So thank you, sir.
Jeff Strese 32:17
Thank you.
Scott Allen 32:18
Okay, be well
Transcribed by https://otter.ai