EP12 Emotional Governance for Lasting Family Business Success: Franco Lombardo, Veritage

Speakers

Speaker 1: Matt Knight

Speaker 2: Franco Lombardo

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Matt Knight  00:00

Today's episode dives into how an advisor transitioned from a financial advisor to a coach looking at emotional wellness and emotional governance. I took a lot away from this conversation. I hope that you will as well, where we're going to go into key themes around next generation leaders. How do you grow and develop your children and your next gen to not be, not be entitled, and to learn from some of the lessons that you have over over your career, over your life, and how you can really look at building the systems and processes within your organization, within your family, within your business, to look at creating a safer space from a psychological perspective, but also from a business perspective. 

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Welcome to Table Talk, where we explore the stories and successes behind business families and business family advisors. I'm your host, Matt Knight with the Alberta Business Family Institute, and today we're joined by Franco Lombardo, founder of Veritage. 

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For over 20 years, Franco has worked with families worldwide, helping them navigate their financial wealth, but also their emotional wealth,and really looking at what drives their success, or in some cases, unravel that success. And Franco, thank you for joining us today, 

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Franco Lombardo  01:25

Matt, thanks for having me just just a bit of a clarification. We don't look after financial wealth anymore. I used to be a financial advisor. We focus exclusively on the emotional side of wealth and its impact on succession and transition. 

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Matt Knight  01:39

Okay, so yeah, and we will dive into that a little bit, maybe before we get into kind of Veritage and the emotional governance and the emotional side of things. Let's start by learning a little bit more about your personal journey. So kind of what sparked your interest in getting involved with family businesses and families of wealth, and what maybe took you into that emotional side as well. 

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Franco Lombardo  02:02

Well, you know, it's really, it's a funny story, you know, it's kind of, you know, really fun to close the loop here, because I was invited to an event at ABFI many, many, many moons ago. I still don't know who invited me to the event, so I don't know who to thank but it was one of those events where there's some very prominent, very prominent Canadian and US families, some very prominent, you know, family advisors, you know, who still are in the space. You know, Drew Mendoza, Andrew Kyte, just to name a few. And little me, okay? And I was just fascinated by the conversations in the space. And there was a gentleman that I heard speak that really, really spoke from his heart. And I thought that was a really fascinating conversation that he shared. So I gave a copy of my first book, which was called Life After Wealth - When is Enough Enough, and never thought anything about it. And I get a call from one of his… years, probably, I would say eight, nine months later, saying, You know what, Mister so and so, would like to order a dozen books. I was like, Oh, my God, someone's ordering 12 books. So that was a huge order for me, right at the time. And long story short, you know that gentleman, his family became a client. 

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Matt Knight  03:12

Okay.

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Franco Lombardo  03:12

And I've been fascinated by family owned businesses and the families of wealth, because in my early years as a financial advisor, I would see families that had the financial peace taken care of that most families struggle with globally, and yet they didn't feel emotionally, emotionally safe with each other. And I thought to myself, I want to help those demographic and those groups of individuals. So that was the start of my journey. 

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Matt Knight  03:38

Okay, so at that time, you were a financial advisor, and then kind of someone invited you to this thing at ABFI. You decided to come check it out

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Franco Lombardo  03:46

Yeah 

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Matt Knight  03:46

And you just started getting more and more insight into the emotional side of families, of wealth.

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Franco Lombardo  03:52

Yeah, yeah. It's kinda fascinating. 

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Matt Knight  03:55

So that was kind of a bit of a turning point in your career. Then. So how did that kind of create the path and shape what is now Veritas. 

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Franco Lombardo  04:05

So, you know, at the time when I was managing money, I was managing money for very successful and wealthy families, and I started to see a trend within myself. And the trend was that the more money I was making, the more arrogant and self centered and an A hole I was becoming. And I thought that doesn't seem right. There's gotta be something wrong here. So I went and hired a coach who I still work with to this day, and I realized - he helped me realize that I was using money as a substitute for something that I've been missing inside of me, which is the need for which I didn't feel significant or valuable. 

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So as I started on my own journey, I thought maybe it can help families of wealth with these similar issues. At the end of the day, we're all human beings facing similar issues. You know, shame is shame, guilt is guilt, anger is anger, sadness is sadness and so forth. And wealth typically magnifies that.

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Matt Knight  04:55

Yeah, so really focusing on kind of not using wealth as kind of a cover but actually really trying to figure out who you are and what brings meaning and value to your life. 

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Franco Lombardo  05:05

Yeah, exactly.

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Matt Knight  05:08

And then that led you into starting a company that focused on that - how long until you got away from the financial advisory side of things? 

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Franco Lombardo  05:16

So I left the financial advisory world in 2008 actually, July of 2008 to be exact. So it was kind of a serendipitous moment when the markets went south, okay, and I created veritage. And, you know, we've been focusing on what we call emotional governance, coaching families to really better understand why they do what they do, to come to a place of respect, trust and inclusion for each other so they can make joint decision making. Because, you know, when there's a founder, they're the decision maker, right? So they got a board of advisors, but they end up making the decision. But once you go to a sibling partnership or cousin consortium, we've got multiple personalities involved. Those human beings are best positioned to work together if they trust, respect and include each other in decision making.

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Matt Knight  06:04

Okay, interesting. So emotional governance is kind of a bit of a unique term. You don't hear it from every advisor, so kind of a unique spin on the service space as well. Can you explain more, kind of like, what exactly does that term to me mean for you? And then maybe dive a little bit deeper into why it's critical for families who share either wealth or business interests. 

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Franco Lombardo  06:26

Okay, so let's go back a little bit. So I believe that every human being wants to feel emotionally safe within the relationships within themselves and with their wealth and their environments, the challenges most of us, but every one of us actually comes from this thing called family, where some along the line were made to feel emotionally unsafe, either intentionally, or, most cases, unintentionally. So we made the decision humans make, the decision that is not safe to be myself within this group. It's not safe to express themselves. It's not safe to express my thoughts and my feelings, because I'll get shut down, ridiculed, made fun of, so we operate in this paradigm of not feeling emotionally safe. 

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So I created a concept called Safe Space, which is, how does an individual find emotional safety within themselves, first and then finally, within relationships and the family dynamics. Now, emotional governance is basically a concept of we all know what's the right thing to do, but yet most of the times, we don't do it.

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Matt Knight  07:32

Okay.

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Franco Lombardo  07:33

See, emotional governance is managing our emotions, governing our emotions that's aligned with who we truly are, not based I'm not feeling emotionally safe. Does that make sense? 

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Matt Knight  07:45

Yeah, I know those make sense. Franco, so for, like, for me, in kind of some of the family business courses that I teach, we talk about governance as really being, you know, the systems and processes that creates order and structure. So I can see that working really well in that emotional regulation space, especially when you think about, how do you feel safe with families? How do you feel safe in your business? How do you feel safe when you know people might meet you and make assumptions based upon the business or the family that you come from? 

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Franco Lombardo  08:16

Yeah, you know. And the challenge that the industry faces and actually a bit of a downfall, in my opinion, and when I talk about the industry, I'm talking about families and advisors within the same group, is there's belief that traditional governance will manage the dynamics and emotions and behaviors, and it doesn't right, because the human being has to manage their own emotions. And if we're, if we're a sibling partnership, and for some reason, I don't feel emotionally safe with you, we can have a great governance document. But if that underlying emotional safety isn't there, that governance document is not as efficient as it could be. 

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Matt Knight  08:57

Yeah, it's pretty hard to create a policy around feelings or feeling safe.

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Franco Lombardo  09:02

So successful families have two sets of governance. They've got traditional governance, which is made up, you know, of shareholders agreements and trust documents and codes of conduct and family charters, family constitutions. And they've got this other thing, you've called Emotional governance,which manages the human beings within that system so they can all feel emotionally safe with each other. And then you overlay traditional governance. Now you're cooking with gas. 

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Matt Knight  09:31

Okay, interesting. So when you talk about that safe space, or kind of that emotional wealth side of things, how do you go about creating that, that safety for people?

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Franco Lombardo  09:41

Well, we don't create it. They create it for themselves, right? So, so fundamentally, we coach.  We help individuals understand why they do what they do, right? So we all have, every human being has pain and every human being has fear. Now, the challenges, most human beings don't want to feel the pain or face the fear, so they create these constructs to avoid the pain and fear. But eventually they're going to feel the pain and face the fear, right? So the work that we do is we help them understand, why do you do what you do? Why do you avoid? Why do you people please? Why do you want to rescue? Why are you the victim? Why are you the manipulator? Not judging you, just saying, you know, this is water. It's not Coca Cola or a glass of wine. It's water. I'm not judging it. It's just this. 

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So they get curious about why they behave the way they do. Then the question is, is what you're currently doing serving you in what you truly want. Now they can choose to change it. So it's a coaching process. We take individuals through, yeah, where eventually they get to understand their mechanisms, their perspectives, their paradigms, and they see it. Because if you don't see it, you just operating blindly, repeating patterns, doing the same thing over and over and over again.

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Matt Knight  09:47

Okay. Yeah, interesting. So explain, and I know this may be going back a little bit into your personal journey, and maybe I should have started with this, but this, a lot of the things that you're explaining doesn't really sound like they would be in the toolkit of your average financial advisor. How did you kind of go through and get the ability to coach or learn that ability, or, you know, start to understand these emotional or psychological things better. Did you, you know, did you take some courses like, what take us through your process? 

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Franco Lombardo  11:34

Well, what I did was I worked with a coach, you know, and my coach was, you know, compassionately direct, right? You know, I would come in and say, here's what I'm working with. And he would say, Okay, let's examine that, and let's see what the origin of that is, and what's the belief system that holds that in place, right? So, for example, for me, because I grew up in a household, I didn't feel emotionally, emotionally safe at all, right? I made the subconscious decision. Then he helped me realize that if I go make a lot of money, then I'll go fit in and feel emotionally safe. The problem was I was putting a band aid of the money on a gushing wound of not feeling valuable or worth or worthy or deserving. So I never fixed the wound right. So as I was able to go and understand and peel the layers back of why was Franco behaving the way Franco was behaving? Then I was able to say, now maybe the behavior of trying to make a lot of money, I'm trying to be flashy and trying to find significance isn't really what it's about. 

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Matt Knight  12:37

Yeah. 

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Franco Lombardo  12:38

So maybe stop that behavior. So as I tell my clients, if you want different, you got to do different. And to do different, you have to become different. We have to shift the thinking inside. We have to shift the wiring, 

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Matt Knight  12:53

Yep, yeah. And if I pick up on kind of two keywords that you use there to really look at how you shift that focus is, I think it's you know, you talked about both fitting in, and then you talked about belonging, and I think you started to use them as almost, you know, meaning the same thing. But I think the further you get into this journey, the more you realize that you know, by trying to fit in, that it's not actually going to create that sense of belonging, that that a lot of these people might be looking for. 

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Franco Lombardo  13:18

Yeah. So what happens if I try to fit in, I'm giving up part of myself. I'm giving up my own self belonging, and that creates the conflict, and it becomes addictive, right? So what's interesting is, what I've realized in my journey is what I was really seeking was a sense of personal peace and being okay with who I am, The Good, the Bad, the Ugly, the worse, all of it, And being absolutely okay with Yep, yeah, I realized that that money wasn't going to do that, the hot girl wasn't going to do it, the car was going to do it, the wine was going to do it. I had to be comfortable with me. I had to face my stuff and be okay with it, not try to hide. 

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Matt Knight  14:01

Yep, interesting. Um, so if a client came to you and kind of explained a similar thing of, that's kind of what they're feeling, what process would you take them through? Like, what would you coach them on? 

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Franco Lombardo  14:11

Well, I've created a coaching process, you know, based on my own journey and, you know, over, you know, 18 years of tweaking stuff, right? So we have a coaching process we take individuals through, right? So the first thing is, we help them really understand. So it's got three components to it. 

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For the individual coaching, we started with what we call the valley floor and I'm a big, big believer in metaphors, and because you can, you can visualize it, right? So the valley floor is, you know, there we are in the shadow of the mountains. You know, really, very little self awareness, very little self consciousness. We just keep doing the same stuff. Oh no, again, staying in the dark, right? And nothing changes. 

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And as they come up the journey to what I call base camp, they have an understanding of what their safe space is, and safe space simplistically and complexly at the same time is what we didn't get enough of as a child and still seek as an adult. Another way to put it is what we seek out there that we're missing in here. So for me, I was seeking connection out here because I didn't belong. I didn't fit in. So my personal safe space is connection. So when I'm connected with myself, I'm in a great space, this internal peace. 

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Matt Knight  15:23

Yep

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Franco Lombardo  15:24

Okay, the next evolution is base camp, the summit, where we help them understand. What are the anchors that are holding them back, right? So, what are the emotional traditions? What are the emotional addictions? What are the repeatable patterns that they keep doing over and over again, like, for example, people pleasing or avoiding rescuing, right? And then when they get to Summit, which is the highest version of themselves, then the question is, how do you maintain them? 

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Matt Knight  15:51

Okay, yep, 

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Franco Lombardo  15:52

Right. So we have a very simple tool, which is the most powerful tool in arsenal, called the awareness tool, which is really about observing ourselves whenever we get triggered. 

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Matt Knight  16:02

So, kind of, like, you know, really much building on that, that climbing or mountain metaphor, where you you start in that kind of within the valley floor, move up to the to the base camp, and then eventually go to that, you know, that version of yourself that you want to see within the base camp. 

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Franco Lombardo  16:16

Yes, the challenge in family businesses is, as individuals, they want to be part of the system called the family business, but they don't know who they are, so they're lost. They're trying to fit in, they're trying to please, trying to make people happy, you know, I don't, you know, yes, I'll take it over, but I don't really like the business. And then there's the golden handcuff pieces, all these things that pull in there, and they end up being a version of not who they really are. They end up being someone else.

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Matt Knight  16:44

Yep, 

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Franco Lombardo  16:44

And really unhappy, 

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Matt Knight  16:46

Yeah. And I think almost every family business person I meet, you know, for the for the beginning of their career, said, I don't, I want to do anything but being in this family business, and that's where, you know, I think maybe they start with the trying to fit in piece, and then after they go away, maybe do some more education, maybe try some other careers or jobs out. Often they end up coming back, but when they do, they feel that stronger sense of belonging that really makes them committed to being there and wanting to be there, which I think you know, from what I've seen, makes a huge difference. 

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So without kind of getting into any specific clients or anything like that, could you give us, kind of walk us through a couple examples of how you've implemented emotional governance to help a family kind of transform into a more collaborative environment, or build those safe spaces? 

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Franco Lombardo  17:32

So one of, one of so I'll give you a couple of examples. So one of the tools we use is called the money myth, which is our subconscious belief about money. Okay, so I was working with a family. So father started the business. Three children, two boys and a girl. You know, classic, male dominated business, right? They were in construction and development. And the daughter wasn't really involved. She didn't want to be involved. She said she's actually constantly pulling away, right? So when we helped her understand her belief about money, she shared a story of when the parents were building the business, there wasn't a lot of wealth. But she called that happy times, right? You know, we would travel in the caravan. It was, it was all happy times. And then as the friend started to accumulate, well, she would see the family's friends start to have blow ups. You know, families would break up. There'd be addiction problems, drug problems. So in her mind, she goes, money's responsible for that. That's money's fault. 

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Matt Knight  18:30

Okay

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Franco Lombardo  18:31

So therefore being associated with money is very dangerous. I want no part of it, right? So once we're able to help her understand that, she went, Oh, that's what's been keeping me away from being involved. So now she runs the family foundation that's very involved with her brothers as co-owners, right? But we had to remove that blockage.

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Matt Knight  18:51

Okay? So really getting into almost more that meaning piece of you know her and her brothers maybe saw more meeting meaning in the foundation than they did in the family business or?

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Franco Lombardo  19:01

No, no, no for her was, was removing the block of money means this...

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Matt Knight  19:05

okay 

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Franco Lombardo  19:05

Money's dangerous, so therefore I want nothing to do with it. 

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Matt Knight  19:10

Okay, So changing her relationship.

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Franco Lombardo  19:11

Her Relationship, her beliefs about money, right. Okay, right? Another example, helping a founder understand that, you know, very controlling, like a lot of them are right, and that's I'm not. I'm just they're controlling exactly what's great success. But at the same time realizing that wanted to have the children take over, but was constantly controlling, controlling, controlling. So he would set up the stage where you set up the kids to fail. So he'd come in and be the hero and rescue and solve the problem, because it was a need for control. Wants to help them understand that this is the pattern you're doing. He went, Oh, my God, I need to stop doing this. 

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Matt Knight  19:55

Yeah

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Franco Lombardo  19:58

The truth about helping people, really see what they do, but most importantly, the impact that that behavior has on the system that they're a part of.

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Matt Knight  20:08

yeah. So really looking at kind of their relationships and where they feel connected and where they feel that meaning.

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Franco Lombardo  20:14

 Yeah.

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Matt Knight  20:18

So you've been advising, you know, families for, I think, nearly 20 years now, probably longer, if you count your previous wealth experience as well. You know, what are some of the recurring challenges that you see? And I know we've touched on a couple of them that you know, basically family businesses or families of wealth are seeing, kind of regardless of cultural background or business focus or business sector. I guess might be a better term. 

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Franco Lombardo  20:41

Well, one of the challenges is, is the belief that traditional governance manages family dynamics, and it doesn't. It does not right. You know, like families that have these beautiful, crafted documents, that have spent a lot of time and money developing constitutions charters, and they've got their values and they're in the vision and the mission and purpose, but they haven't really dealt with the underlying issue, which is, how do we feel about each other? What drives that? How does that impact? So that's number one.  

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Number two, there is a massive lack of communication between one generation and the next. No, we're in the process of veritage, of completing a research piece, which is really unique, of its a really unique piece and that we focus exclusively on what does preparedness mean? You know? Because if you ask parents, this is the number one issue in families of wealth, is, if you ask the parent, can you, you know, what's the number one issue? They go, Well, how do I prepare the kids, regardless of age? And if you ask the parents, can you clearly articulate, put into practical terms what prepared means. They're like, not really sure, right? So there's a disconnect in what prepared means. 

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So some of the original findings we're finding is the the same generation believes preparedness is skills working in the business, the next generation says, I gotta be emotionally ready. You know, when we ask each group what the issues are, the founder says, well, it's entitlement and sibling rivalry. And the next gen says, well, founders don't communicate, right? And I saw this happen at a conference in Australia that I was at last year. You know, I was sitting waiting for my coffee. There was a senior generation, you know, older woman and a next gen young man in his 30s. She must have been in her late 60s, and we're talking about what gets in the way, and they started blaming each other. You know, they're lazy. I don't know what to do, they haven't been invited in. So the clear lack of communication is a major problem. Yeah, those are the two, the two biggest challenges I see across the globe, regardless of wealth, gender, business is it, that's it.

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Matt Knight  22:44

Yeah, I think, thinking back to some of the stats and figures on succession that we use in some of the classes that I teach, I think we have like 80% of next gen or or 80% of that senior generation have already kind of identified and know who that successor will be, but only about 60% of those have actually had the conversation with that next gen so that next gen could be sitting there trying to figure out that, meaning, trying to figure out that belonging, trying to figure out what's next. And their parents or uncles or aunts might have this plan for them already, but they know nothing about it. 

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Franco Lombardo  23:14

Yeah, and the thing is, is they want to communicate. They just don't know how

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Matt Knight  23:21

Yeah, trying to have that tough conversation in the right way. You know, trying to create that that safe space as well, is probably pretty tricky. Any advice on that topic, like, how would you suggest people do that have this conversation?

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Franco Lombardo  23:36

Well, find a third party that specializes and hire them, let them help you, because, you know, we're taught how to talk as human beings in school, we're not taught how to communicate, right? And if we're talking about something that's the multi charged - like a lot of money, business, family dynamics, family relationships, we're going to get cluttered. We're going to be - It'd be my perspective, talking to your perspective, my perspective and your issue, and also, we don't see each other. So families need a third party trained facilitator that specializes in this to help the human see each other, feel emotionally safe with each other, to be able to have the conversations, right? 

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One of the biggest mistakes that advisors make is to try to bring the family in for a family meeting way too soon, without understanding what the dynamics are, and all of a sudden, the elephant comes charging in out of the closet, and the family says, there we go, that process has failed again. Well, because, you know, there wasn't enough, in my opinion, again, there wasn't enough work done on understanding the individuals, the individuals understanding themselves, and most importantly, the impact that they have in the system and taking accountability for them. 

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Matt Knight  24:52

Yeah, really looking at kind of that overall process. And, you know, I often seem to some of these family meetings, the first time that they have them, they put way too much on the agenda that is way too serious, where those first times it's more let's just have agreement that we're here to have a family meeting and maybe get into some of the core operating principles and not try to solve these problems that have been, you know, within our family business for 10 years. 

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Franco Lombardo  25:15

Yeah, you know, maybe help. Let's help ourselves understand who we are. Why do we behave the way that, without judging just being curious, and I call it being, you know, playfully curious. Let's be playfully curious with each other. Let's get to know each other first. 

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Matt Knight  25:29

Yeah. So are there any kind of, like, favorite games or icebreakers you have when you bring those families together for the first time to get to know each other? 

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Franco Lombardo  25:37

We have, we know, we have a process. We take them through a call on Education Day, right? So, so we really, we interview all the participants in depth, and then we bring together and introduce some of our concepts so they get to experience them. 

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Matt Knight  25:48

Okay, 

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Franco Lombardo  25:49

Right? And what happens inevitably, you know, I've had, you know, 56 year old siblings said each other, you know, Matt, I never knew that about you. I never knew dad treated you that way. I never knew he felt that way. So what that does is we start to move from a place of judgment to compassion and understanding so they get we allow them to experience some of the concepts, right? And then we get into the one on one coaching. Should they choose to engage us?

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Matt Knight  26:13

When, you know, over time, families definitely change from generation to generation. So you mentioned that with the example of like that, that next gen getting to know the senior generation. What are some of the challenges that will kind of come out in future generations or that evolve over time, specifically when it comes to emotional governance, and how do you kind of work with adapting to those generational principles? 

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Franco Lombardo  26:37

I think one of the biggest challenges families of wealth have is, again, it's a parental issue, right? Is, you know, and I see this with a lot of the families that I work with. Is the founder, you know, spends their entire life building a business. They gotta feed the family to start out with, right? And the time goes into creating the wealth, and the time is taken away from the family. 

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Matt Knight  27:03

Yep, 

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Franco Lombardo  27:04

Right. So what happens is, these founders want to make up for lost time with a checkbook, right? And they're two very different currencies, 

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Matt Knight  27:13

Yep, 

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Franco Lombardo  27:14

Right. So what the founders will say, Well, you know, I suffered building the business, therefore I don't want my children to suffer as they grow up. So they make it a little easier for you know, they buy them houses, you know, they - some of them, you know, give them work in the family firm that maybe they're not qualified for. Maybe they get overpaid. I don't see all, but some of them do. And this starts to create a sense of entitlement, right? And one of our basic human needs is the need for contribution, and also another one is the need for significance. So if we take away an individual's drive, we're taking away their need for contribution, we're taking away for significance, right? So the challenge is, is, how do you manage the balance of, you know, supporting your child so that they're not enabled,

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Matt Knight  28:08

Yep, 

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Franco Lombardo  28:09

But at the same time, they suffer a little bit. But life isn't too easy at the same time, and that's a balancing act that that parents struggle with, you know. And I see it over and over and over again, and the cost is 30, 40, 50 year olds that are basically Trust Fund babies that have never had to really work, that I've had everything bought for them, and now they throw a tantrum when they don't get what they want, and they control the parents, and the parents don't know what to do, and they call the child entitled. And my question is, well, may I suggest that maybe you contributed to that? 

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Matt Knight  28:46

Yeah, and that's one of the common questions we get sometimes too, is like, how do we raise our children so that they're good humans and they're not, you know, entitled assholes or jerks or whatever that might be. What kind of advice would you give parents that you work with on how to do that?

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Franco Lombardo  29:01

Let them suffer and hold - let them be accountable. So I'll share a personal story of mine, and I've got my son's permission to share the story, so that's where I can share it. 

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So you know, as you can imagine, I travel a lot. A lot of my clients are, you know, all over the world. So I've got a lot of airline points. So one day before I was leaving for Australia, my son says to me, Hey, you know, Dad, can I get some - can you donate points to fly me and my girlfriend out to Vancouver? He was living in Ottawa at the time, going to Carlton. I said, Sure, no problem. So I donated the points. I said, you know, but she's going to pay for the taxes, because she's going to have some skin again. No problem. So I've been sitting and get a call from him saying, Hey, I think Air Canada changed our flights. I said, Really, let me take a look. I said, actually, you missed your flight. He goes, Oh. I said, How can I help you? He said, Well, you know, what can we get tickets for? For a second, Matt, I thought, sure, I'll come in and be the hero dad and donate more points and solve the problem. 

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Matt Knight  29:57

Yeah. 

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Franco Lombardo  29:57

And I went, No, can't do that. So this is a teaching moment. I said, I'll happily get you the tickets. I bought the tickets. And said, By the way, that'll be $1,800. Get silence. I go, how’re you gonna pay me back? He goes, I guess they come from saving us so great. Look for receiving the, you know, the wire transfer in a week. And I said, you know, you should talk to your girlfriend about how you guys decide to split it. And here's what I learned about my son. He says, let me, let me think about it. I'll call back. 10 minutes later, he calls back. So you know that was on me, my mistake. I'll pay the full $1,800. You think he's ever missed a flight again?

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Matt Knight  30:35

Hopefully not. 

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Franco Lombardo  30:37

No, no. So whenever our kids mess up, this is the advice for parents. Whenever your kids mess up, don't save them. Think about how you can make it a teaching moment, a coachable moment. Saving them is the easy thing to do. Time and thought to go, how could I make this a teaching moment?

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Matt Knight  30:59

Yeah, and as a parent, that's kind of, you know, most of the time your first reaction is to save them.

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Franco Lombardo  31:03

Yes, yes, yes. And just keep in mind, the price of saving goes up. The price of poker goes up. Eventually, one day you can't do it. Yep. So good start. 

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Matt Knight  31:17

So. And kind of asides from those teachable moments and kind of building that sense of responsibility, any other advice or tips that you would have?

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Franco Lombardo  31:25

Yeah, you know, get your kids into coaching as soon as possible. The greatest gifts you can give them is for them to understand themselves. Yep. You know, we coach as young as 14 year olds, right? But, you know, I remember my son uses my coach, the more we understand ourselves, the younger we start, the more in control we are of how we choose to react to situations, 

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Matt Knight  31:51

Yep. And the more you know about yourself too, the more you can kind of give to others, to support them and build them in this journey.

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Franco Lombardo  31:59

Correct. And the more you understand about yourself, the more you understand others. 

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Matt Knight  32:03

So kind of tying into that next gen piece a little bit. Another thing we hear from a lot of family businesses around, you know, is around, how do they kind of focus on that legacy, whether it's on, you know, name or business or charitable contributions or things like that, how do you help kind of frame legacy in terms that are that kind of go beyond the financial measures.

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Franco Lombardo  32:27

You know, I think the greatest legacy we can leave as a human being is responsible children and contributing children. 

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Matt Knight  32:35

Okay

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Franco Lombardo  32:36

Right. So I think again, you know when, when I talk to clients, when I do my speaking engagements, and even in my books, I talk about the wealth, you know, the most valuable asset class in the family's wealth, portfolios to human capital, to human beings, right? Yet, most families don't invest enough in that asset class.

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Matt Knight  32:55

Okay

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Franco Lombardo  32:56

Right? You know, it's like a friend of mine who's part of a very wealthy Singaporean family. They've got a family office. And he says, you know, if you've got a family office, you've got way too much money. And he says, what happens is family office spend, you know, invest all their time and money in how to accumulate more money, but don't spend the time on how to educate and prepare the humans, or how to handle the pressure of that money, right?

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 So legacy, in my opinion, is really about how do you manage the human capital in your system, particularly the next generation, because they've got the impact to positively impact the financial capital and the social capital, which is the family, and their potential to negatively impact, and statistically, it's the latter.

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Matt Knight  33:47

Yeah, and maybe it's, you know, that I know family offices, especially in Canada, are a little bit more emerging, but you know, from a research perspective, we see a lot of the role of family offices is in kind of that that coaching and that emotional side and kind of helping the family prepare the next generation when it comes to education and things like that. 

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Franco Lombardo  34:05

Yeah,

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Matt Knight  34:09

So let's maybe look more at a lot of the conversations that we've started with today and some of the things that you've mentioned. I can imagine they're hard for some families at first. Imagine you probably get some resistance to wanting to spend time on coaching and wanting families to invest in emotional things instead of financial things. How do you tackle this resistance that comes from family, Families? How do you kind of show them that, that it's that it's worthy of their time and of their investment?

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Franco Lombardo  34:36

We don't. They are the one who engages so they don't. You know what we do? People buy it. We don't sell right? People either see the value in it or they don't, you know, I'm very clear that we only serve folks that are really committed to family and to growing their human capital. So.

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Matt Knight  34:58

Yeah. So you've kind of, you started with that introductory conversation. You talked about one of the books you authored, or co authored. What are some of the other books that you've done? You know, tell us about some of those and maybe the reasons behind some of those books.

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Franco Lombardo  35:15

Yeah. So the first book was called Life After Wealth, When Is Enough, Enough? And I wrote that book because when I was in my financial wealth management practice, clients and companies saying, what's the number? And I realized it was the wrong question. The question is, what's the lifestyle? And then the number funds, funds that right? 

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And then I wrote a book called Money Model: The Path to Authentic Wealth, which is really around the emotional side of money, you know, which is our belief about money. We have beliefs about men, women, God, sex, power, and one around money. And I found it interesting that society will focus on the how and the what of money, and have not focused enough on the why. Why do we behave the way we do with money? And then along there I did some research, it was my first, first piece of research, and I had a question I want to answer, and the answer was, it there a connection or correlation between how one treats their money, or how one does money, and how one treats relationships and how they do relationships? And they're directly correlated. So how we do one, we do the other? Okay, we've got a white paper on that, so if folks want to learn about that, you can happily just have them email us. We'll send it to them, right?  

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So then the next book was Great White Elephant: Where Rich Kids Hate Their Parents. And I realized that the great white elephant was people weren't having the conversation they need to have. And then as the process evolved, I realized that the conversation was around entitlement. 

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So the fourth book became Entitled Bride or Contributing Leader, Which One Are You? And that was really about examining what is entitlement, and that we're all entitled at some point, and it's not just to to monies, to our beliefs, behaviours, and we hang on to those who feel entitled to being an avoider, a people pleaser. And then in there, I came up with a concept called the Four Horsemen of the Apocalypse, which are the four big issues that all families face. Which is fair versus equal, enable versus empower, take versus contribution, and finally, burden versus responsibility. And again, we've got a web here on what people interested in. 

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And then the last book was called Safe Space, Governance and Actions. They were around the concept of safe space and what governance and action is. And to be very honest with you, when I put that subtitle in, I didn't really know what it was. Didn't know what it meant, until later, when I started, yeah, governance and actions are governing our own emotions. And I'm working on a sixth book, which will be out probably in the fall, which is really around looking at what I call emotional traditions, and looking at epigenetics and how our emotions are tied into our DNA and answer our behavior and why it's so difficult to break patterns. 

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Matt Knight  37:21

Interesting. Okay, so you've done a really good job at kind of transitioning out of that, you know, traditional role of a financial advisor into building, you know, a pretty amazing career and business for yourself. What advice would you have for other advisors who are maybe trying to get into that family business space and come from that financial advisor space.

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Franco Lombardo  38:26

Be mindful to stay in your lane. Don't try to be something that you're not. 

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Matt Knight  38:32

Yep, 

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Franco Lombardo  38:34

You know, I see a lot of advisors try to be coaches, and behavioral experts, and don't do it. It's dangerous. You know, like, I'm pretty clear where my lines are. If there's clinical issues, psychological issues, I refer that out and make it really clear to clients that I'm not a therapist, I'm not a psychologist, not a counselor, I'm a coach. So be really clear what lane you're in. Don't protect something you're not 

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Matt Knight  39:08

Yeah, yeah. Anytime you get to step into that scope group is pretty dangerous as a consultant or an advisor, like, if you're into something that you don't understand, it's not, not a good place to be. 

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Franco Lombardo  39:16

You know, if you're not capable of handling a meltdown or something going sideways, you can do more harm than damage. 

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Matt Knight  39:26

Yeah, 

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Franco Lombardo  39:27

You can do a lot, lot more harm and damage than good. So be very, very careful.As an Advisor you got to do that. 

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Matt Knight  39:34

Yep, No, that makes sense. So kind of with all the experience that you've had over the years as well, what's been the most rewarding part for you as an individual.

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Franco Lombardo  39:44

Oh, my God, I like, you know, when I see like, like I was telling you about that, that woman around the belief about money and to see where she's at today with her brothers and her family, you know, to see families. You know really connect with each other. You know, I recently read an education day for family, and just to see the level of vulnerability that they have with each other, and start to see the glimpse of the connection and what they see. That's my jam. 

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Matt Knight  40:18

Nice so starting to see that transformation. 

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Franco Lombardo  40:21

Yeah, no, you know my, my so, so my personal purpose is to create a safer world, right? Because, as I mentioned earlier, I didn't feel emotionally safe growing up as a child. And the medium I choose to do this through family owned businesses. 

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Matt Knight  40:35

Okay, Nice.

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Franco Lombardo  40:36

So I get to live my purpose and witness it on a daily basis when I coach and work with families. 

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Matt Knight  40:42

 Yeah, it's gonna be pretty, pretty rewarding for you. 

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Franco Lombardo  40:44

Yeah, its pretty special.

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Matt Knight  40:47

So one of the questions I ask in almost all of our podcasts is for kind of a book or a seminar or speaker that's really changed the way you think about business or life. I'm gonna add the caveat that you can't say one of your own books. So kind of, what, what book has kind of made the most impact in your life. You know, which one do you find you recommend to people the most?

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Franco Lombardo  41:09

Well, there's a great book that I read which I think is the best leadership book I read in probably 20 years. It's called Legacy by James Kerr and he talks about the New Zealand adult blocks, which are the highest winning sports franchise in history. And the last 20, 25 years, they have a winning record of over 80% and there's a reason for that. And he talks about the 15 guiding principles that they live by.

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Matt Knight  41:35

Cool.

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Franco Lombardo  41:35

And when I first read that book, I had the privilege of meeting a former old black captain and, you know, big burly, God, I expect, really thick, but no, he was really smart with two degrees, and he lived those principles, right? So that book is really, really powerful. You know, one of the concepts is, leaves the jersey in a better place, which is really transferable to family businesses, you know, leave the business in a better place.

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Matt Knight  42:00

Yeah. 

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Franco Lombardo  42:01

So that, that is a really powerful read. Love that book.

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Matt Knight  42:04

I hadn't heard that. 

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Franco Lombardo  42:06

The other thing is, anything for Brene Brown, yeah. You know, as people say, vulnerability is the new power. 

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Matt Knight  42:14

So maybe, maybe it's vulnerability. But thinking ahead as an advisor, in the next, you know, 10 years in this space, what do you think is going to be some of the changes that family business advisors and family business coaches see?

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Franco Lombardo  42:28

I think it's going to be a fundamental need to really focus more on the human side, the dynamic side of things. We're already starting to see some research work being done around mental health and those sort of things. You know, Andrew Kyte recently wrote a book about mental health in the space, which I think is a great read. So there's going to be more of a shift towards the family dynamics, mental health side of things, which I'm glad to say, is about time. You know, that's why we've done the research we've done around preparedness, because not enough time or respect has been paid to that side of the equation, which I think is critical. It's the foundation.

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Matt Knight  43:12

Yeah, And not enough people are kind of having that conversation around that emotional impact that it can have. But we are seeing more and more people having that today, and it is definitely making an impact, and some making some workplaces a lot more positive. So I think it's the more we can get that transparency, the better cultures of family businesses and businesses and families. May be. 

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Franco Lombardo  43:32

You know, Matt, we all want to feel safe. We all want to be able to feel vulnerable with each other. It's just we don't know how to and we haven't had the the space for that to happen. So it's starting to happen, which is great,

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Matt Knight  43:46

Awesome. Well, Franco, definitely appreciate your time today. Really enjoyed hearing your insights about how kind of families can protect and build more than their financial wealth and actually looking at the emotional side of the business. So, like we just talked about, that really is one of those conversations that has to happen a lot more often in all families, and especially in business families. 

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Really also inspired by how your engagement with ABFI Way back in the day, even though we don't know who we can thank for that, and I probably don't have the paper files to be able to figure that out, but really happy to see how that transformed your life. So as a nonprofit within the University of Alberta, being able to see that meaning and that impact that we've made on people is pretty awesome. 

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And lastly, you know, for any listeners who want to connect with you or learn more about Veritage, how do they reach out? How do they find you? 

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Franco Lombardo  44:38

They can reach out to my team, you know, admin@veritage.ca, you know, they run my calendar, because if I try and do it, it's a disaster, right? So they run that - they can go to our website, veritas.ca, as well. So a whole bunch of resources on there. And so just, you know, anything here we can do to help and you know, and thank you for what ABFI has done for me, and keep in mind the impact that has had on families across the globe, all because of you guys. So for that, I want to thank you. 

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Matt Knight  45:08

Thank you again for joining us. This has been another episode of table talk with ABFI. Really hope you enjoyed the discussion today with Franco Lombardo, with Veritage. You know, if you've enjoyed this podcast, please subscribe, please share, please talk about it with other people, if they - if you feel they need to hear these messages. And until next time, I'm Matt Knight, I want to wish you all the best of success within your family business and within your career as a family business advisor.

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