Mitzi Perdue

My Favorite Post for This Year! Carmen, the Beautiful Carmen

For a peek inside the fecund mind of legendary hedge fund manager Roy Niederhoffer, come take a look at his analysis of the opera Carmen. Guaranteed, you’ll never before have seen such an original take on the opera.

That’s because Niederhoffer views this opera through the unusual lens of  behavioral economics. If Carmen were an investment, she’s volatile, high risk, and capable of doing catastrophic damage to Don José’s portfolio.  And that’s just the beginning of the analysis.

I heard Niederhoffer speak at the Ritossa Family Office Investment Summit in Miami last month. I, along with maybe 150 other members of his audience, thought it was one of the most original, insightful, and fun talks we had ever heard.

I know the audience liked it because the standing ovation Niederhoffer received after sharing his thoughts went on for approximately forever. Or at least it seemed like forever.

I’ve posted my version of Niederhoffer’s analysis on LinkedIn. With one little click you can get there and read it. The Fabulous Carmen Analysis .

Please do! If you’ve ever seen the opera Carmen, you’re in for an enticing, thought-provoking, and delicious treat. Enjoy! And have fun with a new way of looking at absolutely everything!

Have a widely agreed-upon family policy that provides transparency. It will allow the young person to prepare for the role. A family policy will likely require some financial education as well as work experience, possibly in a non-family company.

In addition, mentors can provide guidance and feedback at critical junctures. These mentors can either come from the extended family or from unrelated industry professionals. It is important that the candidate feels comfortable with the mentor and that there is trust.

Importance of Communication and Agreement on Long-Term Vision

Communication and agreement on the way ownership rights should be exercised is paramount when deciding on the future direction of the family business. One way of encouraging a long-term perspective is asking family shareholders, “What do you want the decision-making structure to look like in 10 years? Or in 20 years?”

Have flexible structures that provide room for the next generation to participate meaningfully. If some family members who are owners disagree with the long-term vision, have an exit mechanism available for them.

Von Albertini says: “Keep in mind that even a ‘bullet-proof’ legal structure may not work if there isn’t broad-based buy-in. Disappointed family members can always choose to litigate, which is highly disruptive for both the operating business and the family”.

She then adds: “It is always better to have frank discussions upfront. Anything that is discussed and agreed upon at this time is much less likely to be litigated in the future.”

Emerging Field of Family Governance Experts – Institute for Family Governance Serves as Know How Hub

Successful Inter-Generational succession planning can be daunting. To help families implement strong governance that endures, von Albertini founded an organization. As she explains, “The Institute for Family Governance (IFG) achieves strong governance that endures through multi-disciplinary collaboration and know-how exchange among trusted advisors”.

IFG brings together well-known thought leaders from the fields of law, psychology and family business consulting. In the emerging field of family governance, IFG focuses on research-based best practices and practical solutions that have worked for other families in the past.

If you’d like to know more about this approach, come to the Institute for Family Governance conference in Manhattan on January 24, 2019. For more information, see: http://www.ifgworldwide.org.

Mitzi Perdue is a business owner, speaker. and author of the book, HOW TO MAKE YOUR FAMILY BUSINESS LAST. Contact her at Mitzi@MitziPerdue.com or call her at 410 860-4444.