Zoom Out a blog by Bonnie and Michael Hartley

Why this blog?

We want to make change an accessible and manageable topic; one that is not driven by fear or resistance. We want our readers to realize that planning for and leveraging expected and unexpected change is both a process and a skill.

The title Zoom Out is meant to describe the ability to disengage from the immediate and expedient, from the specific and tactical. By zooming out to a broader, more strategic vantage point, we are able to reset our focus, fine-tune our direction, and better prepare for and manage change.

The Right Team in the Right Place at the Right Time

Is there such a thing as the perfect client advisory team?  I would define the perfect team as the right people in the right place at the right time.  The perfect team to help a client family address fraud in a family enterprise by an owner with a cocaine addiction may not be the perfect team to help another client manage the interface and impact of a complex real estate transaction, an upcoming wedding and estate plan revisions.

If your client advisory team is multi-disciplinary, it’s possible that same group of trusted experts may form targeted ad hoc teams perfect for addressing a multitude of complex challenges quickly, discretely and effectively whenever they arise.

Multi-Disciplinary Team Graphic

Providing the perfect ad hoc team to handle client challenges whenever and wherever they arise depends on four core elements in the larger multi-disciplinary client advisory team:

  • Trust among advisors, within the client family, and between the client family and its advisors;
  • Open communication that is flexible and nuanced enough to address challenges one-on-one, within the team and with the client family so that everyone feels heard, understood and valued whatever the outcome in a given situation;
  • Competence that is deep, wide and specific to the evolving strategic management needs of the client and its advisory team.
  • Continuity management of the advisory team and the client leadership.

A model called the Diamond Team makes a lot of sense for family client advisory teams:  Diamond Teams by Angie Herbers.  Each of the multi-disciplinary team members has the need to manage its own growth and continuity.  The Diamond Team model suggests ways to hire for future growth and promotion from within.  This is especially important when working with enterprise family clients.  Growing young talent from within allows the advisors to build generational relationships with client families who are also preparing members of the next generation to prepare for leadership.

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Are you cyber secure?


Cyber Security

How do threats to cyber security impact enterprise families?  The challenges of living in a digitized world include both personal and business threats because significant financial, human and social capital resources are interwoven and consequently at higher risk than if the family had no business or the business had no family owners and managers.

Enterprise families have historically valued their privacy and guarded it vigilantly.  That is becoming more difficult in today’s digitized world where global networks of hackers and government agencies access individual and business records with increasing ease and frequency.  [See Harvard Business Review’s cautionary article “Beware Trading Privacy for Convenience”.]

Due to their linked business and family assets, using social media carelessly may also lead to heightened risks for kidnapping, assault or robbery when sharing photos or tweeting specifics about schedules and activities, by providing too much specific information about family members’ physical appearance, habits, travel and location.  Companies should review the risks of BYOD (bring your own device) as employees are increasingly using their own smart phones and tablets to access business information.  Developing policies around employees’ use of their own devices will both help develop awareness and provide additional safeguards to sensitive information.

Clever TV ads and movies like Identity Thief have heightened awareness about personal threats like thieves using credit cards for unauthorized purchases, the risk of bank and credit fraud and dangers social media create for tracking and exploiting the affluent.  See “Chilling ad shows how easy it is to steal your online identity” and “Parents Warned over Children’s Online Saftey”  for additional threats related to identity theft, sexting and cyberbullying, and blog postings “How to Lock Down Facebook Privacy” and“You Aren’t Using These 10 Simple Security Settings”  identify ways to implement protective tools like two-step verification on Facebook, Linked In, Twitter, Evernote and Google.

Expect some resistance to two-step verification.  It adds an additional step to logging in, for example, texting a code to your phone that you have to enter after you enter your password to open any of these programs.  Part of your analysis is to determine whether the short-term increase in complexity and time is worth the additional protection.

Research shows that for businesses, especially those in retail or in heavily regulated industries such as health care, financial services, pharmaceuticals, transportation, and communications, the cost of malicious attacks is on the rise and is far greater than systems glitches or negligence (“The Escalating Cost of Software Malice” ). See “How Criminals Use Botnets”  to learn more about how individuals may inadvertently expose their family business to risks when downloading apps or software onto individual devices like phones, tablets or laptops.  “How to Protect PC privacy and IP Address”  gives you suggestions about reducing those risks.

What can family business leaders do to assess threats to their business and family?  Proactive education is the first line of defense.  Researching articles to assess the applicability of suggestions in  “How to Protect PC privacy and IP Address”  and “15 Ways to Protects Your Business e-commerce Site From Hacking and Fraud”  will help you identify options that might help you protect your family business. See the following articles for examples of what others have done to protect business assets and reputation: MIT tool to understand your own metadata, “I hired someone to spy on me.  Here’s what they found.”  and “Why I Phished My Own Company” .

We use customized Fire Drills to identify challenges and develop action plans for responding to a variety of threats like kidnapping, identity theft, website hacking, business data breaches and commercial espionage. Fire Drill teams may include members of the Board of Directors, key management, shareholder and family leaders and an outside expert.  We look for next gen members who are already sophisticated users of social media, software, apps, phones and tablets. Each team member represents a constituency in the enterprise family system.  Team members gather information from and report back to their constituencies throughout the process of identifying challenges and threats to your family business’s cyber security and opportunities to improve it.

The net outcome of effective Fire Drills is action plan development and implementation combined with improved oversight of the system.  If, for example, you want to develop protocols for managing cyber attacks in your family business, consider the following “Ten Steps to Planning an Effective Cyber-Incident Response”  specifies ten principles to guide companies in creating — and implementing — incident-response plans:

  1. Assign an executive to take on responsibility for the plan and for integrating incident-response efforts across business units and geographies.
  2. Develop a taxonomy of risks, threats, and potential failure modes. Refresh them continually on the basis of changes in the threat environment.
  3. Develop easily accessible quick-response guides for likely scenarios.
  4. Establish processes for making major decisions, such as when to isolate compromised areas of the network.
  5. Maintain relationships with key external stakeholders, such as law enforcement.
  6. Maintain service-level agreements and relationships with external breach-remediation providers and experts.
  7. Ensure that documentation of response plans is available to the entire organization and is routinely refreshed.
  8. Ensure that all staff members understand their roles and responsibilities in the event of a cyber incident.
  9. Identify the individuals who are critical to incident response and ensure redundancy.
  10. Train, practice, and run simulated breaches to develop response “muscle memory.” The best-prepared organizations routinely conduct war games to stress-test their plans, increasing managers’ awareness and fine-tuning their response capabilities.

The links in this blog can also all be found in our Flipboard emagazine “CyberSecurity” available on iOS (iPad and iPhone) and Android tablets. Use these resources to design your own cyber security Fire Drill.

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The Good and Bad News about Trusts

The Good and Bad News about Trusts

The Golden Egg of Trusts


Recently I read with great interest a blog called “Confessions of a Trust Fund Baby” by Caroline Faber, posted May 20, 2013 on LearnVest (http://www.learnvest.com/2013/05/confessions-of-a-trust-fund-baby/). Ms. Faber’s steep learning curve and self-discovery process about who she is, what matters to her and her relationship with the wealth she inherited resonated with my multi-decade experience as an educator and trusted advisor working with trust creators, beneficiaries, trustees and the team of advisors who serve them.

This is not a new topic. Wealth held in trust carries with it both good news and bad news.

On the bad news side of the balance sheet:
• Many advisors see working on multi-disciplinary teams as too risky, fearing they will lose their position of trusted advisor with the client and thereby their control;
• Some trust beneficiaries are limited by the language and structure of the trust to being kept in “short pants,” dependent on corporate and family trustees who may have their own competing agendas about the trusts they manage;
• Often family trustees receive little practical education and guidance about their roles and responsibilities as trustees and are intimidated by the legal and financial documents they are asked to review and approve.

On the good news side of the balance sheet:
Beneficiaries are
• Becoming better educated about the challenges and opportunities their inherited wealth brings;
• Acquiring the skills and experience to assess risk and make effective decisions about their financial, human and social capital;
• Using their financial capital to fund their own entrepreneurial or philanthropic ventures;
• Learning how to communicate effectively with their trustees, attorneys and financial advisors.

Likewise, family members serving as trustees are
• Becoming better educated about how to manage the sometimes confusing roles of trustee and family member;
• Understanding more deeply their fiduciary responsibilities as trustees, including the need for a regularly updated investment portfolio policy and ongoing reviews of the trust funds’ return on investment;
• Realizing the need for clear boundaries and communication with beneficiaries;
• Accepting the role of mentor to the beneficiaries of the trusts they serve.

Trust creators are
• Recognizing the challenges and opportunities inherited wealth brings;
• Exploring options for how to best prepare beneficiaries and family trustees through a commitment to lifelong learning;
• Working with legal and financial advisors who understand the dynamics of managing human, financial and social capital in wealthy families;
• Creating estate plans that are not only tax efficient but also support the sustainable well being of the family and its relationships.

Legal and financial advisors are
• Increasingly aware that creating the estate plan is only the first step to serving their client families;
• More open to a team approach (including specialists in family dynamics) when working with client families;
• Willing and able to mentor family trustees and trust beneficiaries;
• Better educated about the impact of family dynamics on the estate planning and wealth continuity processes.

In Ms. Faber’s case, her intelligence and self-honesty can be credited with saving her from squandering not only her inheritance, but also her life. In her words, a trust fund can be “a dangerous vehicle for self-destruction” when it is simply handed to the beneficiary. While she had to learn the hard way that money is not the key to happiness,
more and more often, trust creators, family members who are trustees, and all of their advisors are not only aware of the destructive potential trusts have, but are purposefully acting to ensure beneficiaries are truly benefitting from the power of their inherited wealth.

And, there is more good news; an increasing number of resources are available to beneficiaries, family and corporate trustees, and the advisors who serve them, including:
Family Wealth Transition Planning by Bonnie B. Hartley, Ph.D. and Gwendolyn Griffith, Esq., Bloomberg Press 2009;
TrustWorthy: New Angles on Trusts From Beneficiaries and Trustees by Hartley Goldstone and Kathy Wiseman ( a collection of 25 personal — and positive — stories told by beneficiaries, trustees and their advisors. The book speaks to the human side of personal trusts.);
A Wealth of Possibilities by Ellen Miley Perry provides a variegated road map of commonsense approaches, anecdotes and profoundly meaningful solutions to many of the most vexing issues confronting wealthy families.
• “The Trustee as Mentor,” by James E. Hughes, Jr. Esq., available as a downloadable pdf on www.jamesehughes.com;
• The Purposeful Planning Institute (PPI) www.purposefulplanninginstitute.com
“Lost in the sterility of the typical legalese of wills and trusts is the love parents and grandparents feel for their children and grandchildren – the faith they have in their descendants’ potential to grow and develop, and the hope they hold for their future.” John A. Warnick, PPI Founder;
• Impact Estate Planning by Michael T. Hartley, CFP® CEO, DKE Inc and Bonnie Brown Hartley, Ph.D. http://flip.it/mrDD7
Curated information about the challenges and rewards of thoughtful estate, life, and legal planning available through the iPad app Flipboard.

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Using a Lean Start-Up Pivot Point

lean-startupIf you are the leader of a multi-generational family in business together or an advisor serving such families, one of your biggest challenges is preparing for and managing change while sustaining relationships, financial security and emotional well being. We have found the Zoom Out, a concept from The Lean Start-Up by Eric Ries, can help you meet this challenge.


(We like the concept so much, we’ve used it to name our blog.)

Ries shows entrepreneurs how to use a scientific model to answer one of the most pressing questions they face: “How can we build a sustainable organization around a new set of products or services?”

By slightly shifting focus, we can see enterprising families face an equally pressing question: “How can we sustain a multi-generational family in business together using planning tools to prepare for unexpected and inevitable change?”

The scientific model Ries presents helps clarify assumptions and creates a clear vision for what you want to accomplish. Key to making progress is the identification and monitoring of “actionable metrics”, ones that accurately reflect the key drivers of a business. (In contrast to “vanity metrics” that present only the “rosiest picture possible”.)1  To help entrepreneurs manage unexpected change, and address unsatisfactory progress, Ries introduces the concept of pivots: “structured course corrections designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.”2

This approach aligns very well with how multi-generational families in business together and their advisors can meet the challenges created by unexpected and inevitable change. When change occurs it triggers a pivot, a “course correction”. The effectiveness of a pivot is directly related to the validity of the “actionable metrics” a family has identified and monitors.

Now, here’s where the Zoom Out comes in. (We bet you were beginning to think we were never going to get to it!).  A Zoom Out links a specific trigger to larger issues and begins with identifying the trigger you are facing, e.g. a parent’s cancer diagnosis. You then “zoom out” to the bigger plans for managing multiple change triggers like retirement, selling the family enterprise, divorce, or the dynamics of aging parents, any of which may significantly change your family’s life and the sustainability of your family enterprise.

In our work, we have created a number of structured zoom outs we call Fire Drills and clarifying assumptions is the first step in any Fire Drill. Consider the following example:

Mary was in the final stages of cancer. Her three children came home to take care of her. Jennifer agreed to serve as the executor of her estate at Mary’s request. As part of the estate planning process, Mary asked for feedback from her adult children about how she was dividing her estate. Jennifer was the only sibling who wasn’t married and had no children. Mary told all three that she had decided to divide her estate evenly among her children. The two who were married and had children would get the same amount as Jennifer.

The youngest of the three, her brother Tom, objected to their mother’s plan. He said the estate should be divided evenly among the children, spouses and grandchildren. Jennifer offered to resign as executor and to recommend to the attorney and their mother that Tom serve as executor instead. Tom declined.

A week before their mother’s death, Jennifer and Tom had a huge fight. Tom said their mother’s estate plan just proved Mary had always loved Jennifer more than her other children. During the year it took to settle the estate, Jennifer and Tom’s relationship was tense and distant. When he received the final report and distribution, Tom wrote to Jennifer to tell her he had not realized how complex and demanding the process of settling an estate was. Their relationship gradually got easier.

If they had done a Fire Drill and zoomed out a little, they might have avoided the stress, heartache and pain they experienced by clarifying these assumptions:


  1. In estate planning, fair does not always mean equal. Mary loved all of her children, her children’s spouses and her grandchildren. She had been generous over the years to each of them. She wanted “fair” to be equitable, and considered her three children her primary beneficiaries. She listened to Tom’s objections but wasn’t swayed by them.
  2. In family dynamics, money does not equal love. Tom was caught in a difficult spot. He didn’t agree with his mother’s assumptions or decision. He also thought it disrespectful to argue with her when she was dying. They had spent much of his adolescence fighting. He wanted her death to be peaceful.
  3. In families, talking about money is often taboo. Mary asked for input from each of her children separately, but wasn’t comfortable having a family meeting to work through the differences in perspective about her estate plan. The family had never had any kind of training in conflict resolution and tended to avoid hot topics like this.

In your family, you may be aware of contentious family dynamics made more challenging by un-clarified assumptions regarding aging parents, health issues and estate plans. Consider doing a Fire Drill starting with the following core questions. This will allow you to use the zoom out and pivot point concepts to clarify and agree on the broader impact of family dynamics issues.


To get support for this Fire Drill, go to www.cambiopress.com to see two books:  The Dynamics of Aging Families and Health Care Issues of Aging Families.  There are two versions of each, one for the aging parents, and one for the adult children and are available as a downloadable PDF files.

1,2 Ries, Eric (2011). The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. Crown Publishing. p. 103. ISBN 978-0-307-88791-7.

What’s Next for the Zoom Out Blog?

Trustee/beneficiary education

Often when a family member is asked to serve as a trustee or is named the beneficiary of a trust, assumptions are made including:

  • They know what their roles and responsibilities are as trustees and/or beneficiaries.
  • These roles and responsibilities will not put any stress on family relations.
  • Reducing estate tax liability through trusts is a piece of cake.

And then, reality strikes.

Much of our work includes educating families about how to make sure the trusts set up as part of estate planning really work, both for the beneficiary and the trustee. Read our next blog to learn how trustees and beneficiaries can clarify and maintain roles and boundaries together while minimizing the impact of harmful assumptions.


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Stay current, save time with TDI eMagazines

Transition Dynamics Inc. is now publishing six eMagazines that provide easy access to new, stimulating information for helping families and their enterprises take advantage of change.

The eMags are published using Flipboard, a free app for iPads, iPhones and Android mobile devices.

Curated by Michael (Mike) T. Hartley, the eMags include:

Economics and Investing Technology Trends DKE Daily Knowledge Engine Family Enterprice Impact Philanthropy

“We are publishing new information, knowledge and wisdom to help our clients and their advisors recognize, understand, and take advantage of the opportunities created by change,” Mike says. “And, to help save their valuable time, we are sifting out as much irrelevant noise as possible.”

“Our mission is to be the source of filtered and aggregated information most trusted by our readers,” Mike says. “While our curating policy is still being refined, we are avoiding most news items, opinion pieces, gaming technology, and soft business news. We are also avoiding personality pieces except those in which the subjects clearly demonstrate admirable traits or failings to be avoided.”

Unlike traditional print magazines, eMags published on Flipboard are not written and edited by an editorial staff. Instead, a curator (or team of curators) combs through articles published on the web selecting those that fit the needs and interests of their audience.

“To stimulate and maintain reader interest, we are adding new articles five days a week and changing covers at least once a day,” Mike says. “And, it’s working; after only two weeks of publishing, we have over 3,000 subscribers between the six eMags.”

About Flipboard

is on a quest to transform how people discover, view and share content by combining the beauty and ease of print with the power of social media.


Get Flipboard

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Contingency Planning: Keeping the rug firmly under your family’s feet

Contingency Planning

A recent New York Times article about one woman’s reaction and eventual response to being completely unprepared for her young husband’s unexpected death, reminded me that while change is constant, some changes are completely life altering. When death or catastrophic illness suddenly occurs, change can have a devastating impact as it exposes an unprepared family’s financial, structural and emotional risks.

Chanel Reynolds’ struggle to put her family’s financial house back into order is an inspiring story (A Shocking Death). While I read about the website she created to share what she learned with others, I vividly recalled the huge shock my family experienced when my father died suddenly of a heart attack at age 46.

I was in my first year of college, far away from my family when my father’s death pulled the emotional and financial rug out from under me. I not only had to deal with the pain and sorrow of losing my father, I also had to take immediate responsibility for paying for my college education.

My father’s death not only changed my life, it helped define my career. Over time, I recognized I had a strong need and desire to prepare against having the rug pulled out from under me again. Like Ms. Reynolds, I quickly learned about the power and effectiveness of contingency planning. Most notably, the sudden shock of my father’s death led me to focus my business on creating tools and processes for helping entrepreneurial families manage change strategically and through contingency planning.

The members of entrepreneurial families (and their advisors) typically make at least one of the following assumptions about preparing for unexpected change, like sudden death or catastrophic illness:

  • It is nearly impossible since the change and the time of potential occurrence are unexpected and unknowable.
  • It causes too much emotional distress by forcing people to focus on unpleasant possibilities.
  • It takes away from the focus on what can be anticipated.

In my experience, all of these assumptions are false and can be addressed through regular contingency planning activities conducted by the business’s board of directors, the owner family and their advisors.

Preparing the business or the family in isolation isn’t enough. For families in business together, planning for either the sudden or inevitable death of its founder or current leader is complex and easy to put off. I have learned that adapting the concept of a fire drill to my clients’ specific needs helps them focus on this painful topic, one step at a time.

Just as fire drills help people develop the processes and skills essential for surviving a potentially deadly emergency, the Fire Drills we developed help entrepreneurial families address and prepare for pivotal trigger events. By exploring how participants react to these events, Fire Drills act as a conflict-mapping tool by exposing, clarifying and addressing the assumptions, fears, tension, family dynamics, and taboos that surface when significant change occurs.

Taking a cue from Ms. Reynolds’ generosity, we’ve created a free self-assessment to help you rate how well you are prepared to manage change. Click here to gain access to it.

You can also try Fire Drills on your own by visiting Cambio Press. There you’ll find tools like our Think Ahead CDs and a do-it-yourself Sudden Death Fire Drill for capturing essential information your loved ones, business managers and advisors will need to assess the impact of sudden death and support effective decision-making in its aftermath.

We generally operate on the assumption the world will continue the way it is right now. We think our loved ones will always be alive and we will have time in the future to deal with everything. We believe there is a more-or-less predictable sequence to life and if we just follow our noses and meet all the challenges, we will find the answers at the end of the road.

Do not make this assumption; life does not always follow any sort of predictable order. The longer we live without facing any obstacles, the harder we will fall when something unexpected pulls the rug from under our feet.