The Business of Family

Scott Peppet serves as the President of Chai Trust Company LLC, the private trust company that serves as the family office for Sam Zell and his family. Equity Group Investments, a division of Chai trust, provides investment management services on its behalf.

From 2000 to 2018, Scott was a professor of Law at the University of Chicago where he focused on Bargaining, Dispute Resolution, Translational Law, and the complexities of multigenerational family enterprises. Scott speaks regularly on Family Offices, Private Trust companies as well as Intergenerational Leadership while also maintaining an active website.

Scott is a G2 family member. He is Sam Zell's son-in-law, having married Sam's eldest daughter.

Standout Quotes:

• "Business works on short wavelengths and family works on very long wavelengths" - [Peter Evans, Scott]
• "What does it mean to try and help family members really develop and really take ownership, so they can figure out how to deploy what they have?" - [Scott]
• "There are many different kinds of wealth... you probably aren't put on the earth to grow the financial capital, there's lots of professionals who can help you do that" - [Scott]
• "Too often, the implicit message sent to family members is 'this system is really here to steward the money" - [Scott]
• “Families rarely fail for taking too much risk, they fail for taking too little risk” - [Scott]
• "My goal is to create a family-focused office, not a family office, and a trusted company, not a Trust company" - [Scott]
• "If you want to succeed you have to have a family that understands what you're doing" - [Scott]

Key Takeaways:

• Scott is the President of Chai Trust Company, LLC, the private trust company that serves as the family office for Sam Zell and his family. Equity Group Investments, a division of Chai trust, provides investment management services on its behalf. From 2000 to 2018, Scott was a professor of Law at the University of Chicago where he focused on Bargaining, Dispute Resolution, Translational Law, and the complexities of multigenerational family enterprises. He speaks on Family Offices, Private Trust companies as well as Intergenerational Leadership while also maintaining his active website. Scott is a G2 family member, as he is Sam Zell's son-in-law.
• Scott got married to Sam's older daughter 20 years ago while he was already teaching as a Law professor. Since then he got increasingly curious about family enterprises till he fully transitioned into working in the family enterprise. After a few months of knowing each other, they started dating but Scott had no idea about her family wealth till she opened up about it.
• About Sam Zell: Sam is a serial entrepreneur, who first built a business in Real Estate, following which he turned to distressed Corporate Investing in the 80s, and then in the 90s, he created some of the largest REITs in the US today. He has continued to work on REITs and corporate investing since then. He has done several businesses over the years. Sam is also known for his straight talk, always making his stand clear in any discussion. He is also very astute and broad in his thinking.
• As a Law professor, Scott worked on conflict intervention with corporations all over the world. When he started having kids, he got curious about how the family wealth could be managed productively for the family, especially for the kids. Sam encouraged him to work on it. Some authors that stood out in Scott's study were Jay Hughes and John Davis.
• Scott describes the family structure; at the time Scott joined the family, Sam was 59 years, his 3 children were in their 30s, and as of now, there are 9 grandchildren. There was a form of governance structure, a board with his 3 children which wasn't functional as Sam made most decisions. However, now there has been a need to rebuild the structure as the company has evolved and this has been a huge part of Scott's focus since he moved full-time into the family enterprise. He has had to put in a lot of work to fully understand how the family enterprise functions; to make things change in a family system that often moves very slowly, you have to know where you're going. It involves a combination of urgency and patience, while thinking long-term, steps need to be taken early and consistently. Most of the family members are not employees, some of them are on the board. There is one board with both independent and family directors.
• The business continues to be eclectic, investing across all kinds of sectors, especially with the benefit of permanent long-term capital. At the same time, complex actions and deci...

Peter Evans is an advisor, consultant, and speaker to legacy families, family offices, and multigenerational enterprises all around the world. Peter creates the opportunities where affluent families have the greatest chance of flourishing.

Peter is also part of a legacy family himself; he is a 5th generation member of a 7th generation American enterprise established in 1885. Peter married into this family and was astounded by the welcoming and inclusive nature of his wife's large family. The family enterprise is now a holding company with over 500 shareholders, all of whom are family members. Of particular interest are the Family Summits held annually, which are designed to re-engage family members, partake in family traditions and rituals, discuss philanthropy and reset for the year ahead.

Peter shares his experience of what it was like to join a well-established legacy family and how he has used this unique experience to pivot his career and help other legacy families flourish.

Standout Quotes:

• "We can't really plan significantly for longer than 5-10 years, you just learn that along the way, things change; the world changes" - [Peter]
• "I'm really interested in making sure that the family's values are aligned with their actions" - [Peter]
• "To have some sort of formal way of telling stories, I think, is critical" - [Peter]
• "The most important thing you'll do are these rituals" - [Peter]
• "If we have the privilege of having wealth and means, we have an obligation to give back" - [Peter]

Key Takeaways:

• Peter is the 5th generation member of a 7th generation American enterprise established in 1885. He is an adviser, consultant, and speaker to legacy families, family offices, and multigenerational enterprises globally. He became a part of the family when he married his wife and was included.
• The company began as a group of lumber companies started by two brothers who liquidated everything after 45 years to invest with their partner, Friedrich Weyerhäuser in 1901. Peter's family had continued to be involved with the business as it expanded, although there were no male heirs in the second generation, till the 3rd generation. The family later started a private trust company in 1964, at which point they became the 3rd largest retailer of building materials in the US.
• Today with diversification, they are now a holding company with over 500 shareholders, all of whom are family members. Peter's children are already involved with the family business actively and eagerly look forward to partaking in the annual family meetings.
• The Family Summit: This annual family meeting usually runs over 3-5 days, on the same weekend every year, with activities like the coming-of-age ritual and elders’ ritual, Olympic games, business meetings, philanthropy group meetings, and talks by guest speakers. The goal is to make it so interesting that people want to come back.
• Planning Never Stops; the family forms a long-range planning committee every 5 years to have a clean slate to think through everything. A pattern of liquidating a significant resource once every 20 years was also observed; this 'Generational Harvest' would provide liquidity to each shareholder, giving them the freedom to make their own investments.
• The family investments today are largely in Real Estate, like residence halls or low-income housing units, all intentionally inclined towards 'doing well by doing good' which is a value the family holds.
• Peter left his role as president of the family enterprise in 2003 and has since then helped other family enterprises manage their multigenerational interests. He believes families with vast amounts of capital can make decisions that affect millions of lives and works to ensure that these families act in accordance with their values. "I can hold a mirror up to you so that you can begin to see yourself, your family system, and your footprint in the world; the other thing I can do is open the window so that you can look out into the world and see how other families made choices during different transitions"
• Peter's most satisfying work is sitting with family members and watching the interactions; his work is focused on helping build bridges in communication and relationships. His role is a position between being a business consultant, priest, and therapist all of which require a deep level of trust and respect. At its core, his work is about relationships.
• Peter’s role as a 'Personne de confiance': This is a confidential advisor based on their trust, respect, and honesty. The way to get into that role is to come into the family that needs help, taking time to build trust and confidence. Very often Peter has to model a way of doing things like chairing a meeting, inclusion, and effective decision-making while keeping i...

Matina Agio is a personal inheritance consultant. Her work inspires a deeper perspective into inheritance - beyond the legal and financial. She provides niche counselling, facilitating her clients- often in midlife, to resolve inheritance-related dilemmas, manage their possessions and create a meaningful legacy.

Through her signature method - THE INHERITANCE MUSE METHODTM, she addresses both the tangible and intangible aspects of their inheritance, heritage & wealth. Matina’s clients include art collectors, historic home owners, affluent individuals and family office members around the world. Matina’s experience of living & working in England, France, Germany, Italy, US, Canada and Greece, allows her to address their varying backgrounds.

Standout Quotes:

• "For me, the main wealth of our inheritance lies in the intangible inheritance because it is that which is not vulnerable, and it is that which probably the most influential" - [Matina]
• "A bad experience may turn out to be a very wealthy experience, it depends on how we process that...sometimes we receive good gifts in bad packages" - [Matina]
• "Objects are storytellers, they contain memory" - [Matina]
• "We just give our kids things, but we should give them stories with our things" - [Matina]
• "The value of something to us is always what our experience of it is" - [Matina]
• "Our ownership is a symphony of things put together, and we as good conductors have to master that symphony... so we can have harmonious wealth" - [Matina]
• "It's not what happens to you but what you do with what happens to you" - [Matina]
• "There are people who own a lot of things and experience very little value and then there are people who have very little things and they experience a lot of value" - [Matina]
• "The legacy of someone and the effect that they have in your life can never be taken away... that's the most meaningful part of the wealth that you can give others" - [Matina]
• "Research shows that family wealth is almost never lost due to poor financial decisions, its almost always lost by a breakdown in relationships and communication with co-inheritors" - [Mike]
• "You cannot make decisions without understanding who you are because who you are will affect how that thing will play out in your life" - [Matina]

Key Takeaways:

• Matina describes an "Inheritance Muse" as someone who inspires others in relation to their inheritance. Inheritance can either be tangible or intangible. The intangible inheritance is more important because it is more influential and less vulnerable. It affects our beliefs, attitude towards life, abilities, and self-confidence.
• Since parents are not perfect, sometimes we get good gifts in bad packages, so to understand intangible inheritance, sometimes we have to open our minds and look at what is there and how we can manage it so it adds value to us.
• Describing how she started her work with inheritance, Matina shares her back story; although born in Athens, her family had to relocate to Canada following a political event that made the family unsafe. A key determining factor in her career was the heritage and culture her parents brought from Athens, which influenced her greatly.
• This spurred her on to study interior design and renovation of historic homes and eventually become a cultural entrepreneur. Following the death of her parents, she inherited the home in Athens and had to curate everything by herself and started to work on also curating the influence her parents had on her as part of the legacy for her children.
• Storytelling is the center of Matina's work; using the stories behind objects owned by clients to resolve issues. Parents need to tell stories about their things to their children because it is unlikely for a child to sell something that has a story to it.
• When navigating inheritance and trying to be a custodian of what has been left behind, employing the concept of "Gratitude" is highly efficacious, in that it helps to understand the value of these things. This gives a reason to own these things and helps us know what our relationship was like with those who left them behind.
• The Legacy Scale: This is a process to understand the personal value of any property to a person irrespective of the market value.
• 2 classes of Real Estate: Objective Real Estate is the first type and it includes properties that have value but no particular personal relationship. Assets such as family homes on the other hand make up the second type of Real Estate which is usually more complicated and may involve co-inheritance.
  
• There are 3 ways you can value something: First is the intrinsic val...

Dato’ Loy Teik Ngan, the eldest son of a well-known entrepreneur who built one of the largest business conglomerates in Malaysia, Teik Ngan took over the rein of his family company upon his father’s demise. Within a year, the sprawling business empire that took 35 years to build, collapsed under the weight of huge debts amidst the 1998 Asian financial crisis.

14 years passed before all personal liabilities of his family from the days of the financial crisis were eventually settled. In the process, he built a new family business, in education. The Taylor’s Education Group is today the largest private education group in Malaysia. Focused on premium education, Taylor’s K-12 schools & higher education institutions are widely recognised as the top education institutions in their respective categories. Taylor’s institutions operate in Malaysia, Singapore & Vietnam.

The struggles during the tough financial period of his life shaped Teik Ngan’s stewardship views for family business. Appreciating unity, his family has introduced concepts and activities that promote collaborative conversations & strengthen relationships. He is dedicated to the development & transition of his family’s next generation of 13.

Teik Ngan’s family are active members of the Family Business Network Asia & he is the current President of the Board.

Standout Quotes:

• "We had to learn how to live together; we had to form a Living Together Committee"
• "One thing that normally goes wrong when families end up in dispute is lack of proper communication"
• "The family unit is important and sometimes we are subservient to the larger family"
• "We try to always emphasize that the family comes before the business, the business allows us the blessing to be able to have the lifestyle that we have, but we have to work together as a family first"
• "Do you want to be Rich or do you want to be King?"
• "I would encourage my kids to understand the context in why they do what they do... What is it all for? Wealth is fleeting; wealth is something that we cannot take with us when we die"

Key Takeaways:

• Dato’ informed the bank he was indebted to, that they could either push him into bankruptcy or loan him more money to rebuild and pay back the company debts.
• A living together committee had to be formed to help the large family live in one compound.
• Knowing that lack of communication was a common cause of family disputes prompted the introduction of Forums to build positive communication.
• Dato’ shares that the most important thing that has been done as leader of the family business in recent times is Annual Vacations.
• The difference between "Family Business" and "Business family" is that in 'Family Business', the family comes before the business.
• Guided by the shared family values, one of which is "Achievement and Learning", Dato’ explains how the next generation is encouraged to follow their passion even when it may be outside the family business.
• The concept of a "Personal Portfolio" in creating an education plan for the family
• The difference between being rich and being a king is that a king has ultimate authority, loyal subjects and lots he has to look after but being rich is just going for performance, the best point is somewhere between both
• Dato’ explains the concept of the "Deathwalk", an exercise involving walking into our death, looking back at our current age, and giving ourselves the advice we would.

Episode Timeline:

• [00:49] Introducing Dato’ Loy and 'The Taylor's Education group'
• [01:59] Dato’ narrates the events surrounding his transition into his father's company, which was is debt before the overwhelming challenges brought about by the Asian financial crisis
• [07:02] Dato’ admits he was ill-prepared for the scale of complexity involved in the business, worsened by the lack of adequate resources to surmount the crisis at the time.
• [08:43] From a collapsed family business to a thriving one
• [13:45] Dato’ describes in detail the current size and scale of the family business
• [14:50] How did these experiences shape your views towards stewardship of the family business?
• [20:50] The living together committee
• [23:28] Dato’ explains the different strategies employed to keep the family harmony
• [29:25] Differentiating between "Family Business" and "Business family"
• [33:35] Are you actively planning and anticipating succession with the next generation?
• [35:16] The concept of a "Personal Portfolio" in creating an education plan for the family
• [40:53] In the...

Spencer is a Principal with The St. Louis Trust Company, a multi-family office for 50 families in the United States managing in excess of US $10 billion, where he heads the Family Business Advisory Practice. Spencer is also an Adjunct Lecturer in Family Business at the Olin Business School at Washington University in St. Louis.

Standout Quotes:

• “Multi-family businesses are acts of inadvertence in the initial years or the initial generation, they're usually a force of necessity, and then it becomes more opportunistic as the family gets bigger, and by the time you get to the 3rd generation it's more process-driven and ultimately becomes strategic” – Spencer Burke
• “At the end of the day, it's not about having a board and all that, it's about the quality of the people, the vision, the culture and purpose of the organization; that's what creates great companies of all kinds and family business is just a large subset of great companies in the world” – Spencer Burke
• "In the United States, you can own 100% of the votes and not own any of the economics of a company" – Spencer Burke
• "I don't think there's anything better to own than your own company and the ability to compound earnings" – Spencer Burke
• “When it is time to sell the business that's great, that's not a failure” – Spencer Burke
• “The key to happiness is, don't let other people be the measure of your success; If you're not happy doing what you're doing, go do something else” – Spencer Burke

Key Takeaways:

• Some families walk away from a wealth of knowledge because they don't know what they're getting; although they need the advice, they just have the wrong person giving it to them
• Multi-generational family businesses are acts of inadvertence in the initial years or the initial generation, but get more opportunistic as the family gets bigger, and by the third generation, ultimately becomes strategic and process-driven.
• “Hygiene" refers to some cost-free measures that can be set up in the beginning to increase your chances of getting beyond the 2nd and 3rd generation, however, if not taken care of, you have no chance of success
• The key characteristic shared by enduring companies whether family business or not is "Total Control by One Person”
• In most families where there are issues, how the socio-emotional wealth is getting shared is just as prominent as how the money is being shared.
• To succeed over long periods (100 years), successful families have extracted a great deal of wealth out of the business so they have the resources to protect the business when necessary.
• The 3 fundamental factors that may impede the success of a family business; the Family tree is the first because it tends to grow faster than most business
• One of the number 1 keys to family business success is "Set the policies for the future when there are no names attached to them".
• The matriarch of the family is usually the keeper of family harmony, the patriarch of the family is usually the keeper of running the great business, but the patriarch more often than not, does not have the power in that family.
• The three interest groups represented in a family business; the people in the business, the people that own the business, and the people that are just in the family neither as owners nor in the business.
• The key to happiness is ‘don't let other people be the measure of your success; If you're not happy doing what you're doing, go do something else’

Episode Timeline:

• [01:28] A concise overview of Spencer's professional background
• [07:55] Spencer's thesis on starting a multi-generational family business
• [10:50] Instead of a Family Business Course, Spencer calls his course Ownership Insights
• [11:36] Common characteristics shared by enduring companies whether family business or not
• [14:19] The concept of Spoils of Ownership
• [16:35] The 'tyranny of the internal rate of return' versus 'creation of real wealth'
• [20:41] The 3-circle diagram in family business education depicts Family, Business, and Ownership, with how they interact.
• [22:32] The 3 fundamental undertows that affect a family business
• [28:57] The continuum of behaviors; a Business Family and a Family business.
• [35:20] The tradeoff between running a great business and maintaining family harmony
• [38:00] How is family harmony maintained as businesses progress through multiple generations?
• [53:40] A letter from Spenc...