He is neither a banker nor a psychologist. He’s not a consultant, and certainly not a life coach. is what is known as a “facilitator.” His mission? To support family businesses who are faced with issues of succession and governance. Depoorter launched and developed the family business activity, which is based on a multidisciplinary approach, at Banque de Luxembourg.
In “Ce que j’ai appris de vous” (in English: What I learned from you), he gives eleven anonymised accounts of real-life examples and problems encountered by family businesses. He also offers some food for thought, “without lessons or magic recipes.”
Why write this book? And why in the form of stories?
Philippe Depoorter: I wanted to convey everything I’ve learnt from working with these families. First of all, I asked myself what I had to say. I didn’t want to give advice--that’s the job of consultants, not mine. Nor did I want to turn it into a collection of solutions, because the only solution is the one that people create for themselves.
My literary experience has taught me certain narrative techniques that allow messages to be conveyed in a more concrete and enjoyable way. I wrote eleven stories, drawing on the notes I’d accumulated over the years and getting back in touch with former customers. I came up with subjects and situations that come up frequently in these companies. I wanted this book to be like a mirror, something held up to provoke thought. At the end of each chapter, I offer a few short pieces of theory [editor’s note: see extracts below] to take you further.
You weren’t originally predestined for banking, so why this change of direction?
I trained in literature and psychology. I did journalism for five or six years, then taught French, before taking a detour into communications. Then a friend from school told me that Banque de Luxembourg was looking for someone to work in marketing and public relations. I thought, why not? It was really out of curiosity.
You ended up staying for 36 years. What did you do?
For a long time I took care of the bank’s image. In 2007, I discovered philanthropy in Switzerland. At the time, it didn’t really exist here in Luxembourg because we are a social state that takes care of things. We launched the Fondation de Luxembourg, which today houses 200 funds.
How did this interest in family businesses--which is at the heart of this book--come about?
A bit by chance. At the time, we were looking to sponsor a university in Belgium. We approached ICHEC Brussels [editor’s note: Institut Catholique des Hautes Études Commerciales], I discovered the subject, fell into the pot and never left.
As a result, I was able to take over the bank’s corporate business and relaunch it. It was wonderful, because what I’d learnt up to that point I was able to put into practice. I was very involved in the transfer of family businesses. The best service I could offer them was not to tell them what to do, but to help them find their own solutions. My role was to bring together all the stakeholders in the family, those passing on and those receiving, and get them talking to each other. The family is a system that interacts, and that’s what interests me: the human element and the stories behind it.
Family ethics are all those interstices and spaces in which neither laws nor rules tell you what to do.
What are the main problems faced by these families in business?
In Luxembourg, the law designates reserved portions for heirs. This is also the case in Belgium and France. The parents must give their child(ren) 50% of the estate. Without the child having asked for it, and without the parents being able to change it. This raises the question of how to pass on the estate, with founders who don’t know how to pass it on, and young people who receive something they may not want, or don’t know if it’s what they want. These are the problems of the wealthy, you may say, but it raises questions in these families.
How do you find the right balance between family and business?
We realise that the family business has become something of a myth. Yes, there are some fabulous stories and a lot of good things about it, but that’s not all. A family is complicated enough, so when you add a business and assets, it’s even more difficult.
A family business can be represented by three circles: family, company and shareholders. The three overlap, and you have to find the right balance. You never know what’s going to happen with the customer. Sometimes people laugh, sometimes they cry, sometimes they stop talking to each other. There are conflicts.
In the book, you talk about the notion of family ethics, what does that mean?
Family ethics are all those interstices and spaces in which neither laws nor rules tell you what to do. Ethics are important, because the business belongs to the family, and the members can’t just do as they please. I sometimes talk about abuse of family property, by analogy with abuse of company property. You can’t confuse the cash drawer with the wallet. I think that there are sometimes situations in which, consciously or unconsciously, the family is used for other purposes.
In the book, you also talk about the family charter as a way of formalising certain rules of family governance within the company. How is it drawn up?
The family charter, in itself, as a piece of paper, is something of zero interest. What’s important is the process used to arrive there. That’s where its value lies, because it reflects a consensus, not a compromise. It’s a structured exercise, and when the charter is drafted, it’s put away in the cupboard, to be used only when there’s a problem. It’s a process that’s constantly evolving.
In the book, we discover the story of a founder who struggles to pass on the family business, of a son who prefers to leave everything behind and go far away, and of a daughter who finds herself overwhelmed by what she sees as her duty. It’s clear that there is no single process for successfully managing a family business.
When I start working with clients, I tell them: “I’m not going to be able to tell you how to do it, but we’ll find out together.”
What’s important is that the business will be able to continue, and that it’s a good fit for the family. The best thing is to stay on track, always trying to maintain the right balance between the three circles mentioned above. That’s what I’ve always tried to bring to these families: a kind of ‘hygiene.’ My conviction is that a family business progresses or collapses according to the ability of its members to come together when things aren’t going well to find solutions.
Another subject that motivates you is the next generation. What are these young people up against?
They sometimes have real conflicts of loyalty. They put a lot of pressure on themselves when it comes to passing on the legacy. There are a lot of issues that we need to help them sort out. What’s important is what I call inner music: asking yourself, why am I here? What is my path? What can I contribute?
I have set up two programmes for family entrepreneurs: the summer academy for young people from families in business, aged 18 to 25, and the family business junior executive programme for young people aged 25 to 35.
The founders of a family business are intelligent, but they can jeopardise the company’s equilibrium if they have difficulty passing on the business.
What can make the transfer difficult?
It’s sometimes very complicated for a founder to pass on the business, because it represents his or her life’s work. When you think about passing on the business, you have to set a limit and accept that you won’t be coming in every day. In some cases, the founder passes on the position but not the power, and that’s terrible. The founders of a family business are intelligent, but they can jeopardise the balance of the business if there are difficulties in handing it over. To achieve this, you have to go through a psychological process and find another place where you can flourish.
The difficulty for the person taking over is often linked to a ‘conflict of loyalties’: how do you position yourself when faced with a founder, often the father, who is struggling to pass on the business?
Those who take over are no less visionary. You don’t free yourself from this feeling of debt until you can formulate a counter-debt. You have to make the company your own, but that doesn’t mean changing everything or mimicking it.
What external threats might these family businesses face?
The property market is the biggest threat to family businesses. Selling a plot of land to a developer can bring in a lot more money than producing glasses, shoes or other things... A lot of family businesses have already died like that, and there will be more to come. It’s enough to make you weep. We’re destroying a lot of values, knowhow and family histories because real estate is booming as we know it is. This goes against the spirit of these companies, because land is increasingly expensive to run a business. Companies sometimes have to relocate, the cheque they receive makes their heads spin, but in the end it’s not enough to invest afterwards.
And then, imagine a boss with assets worth €100m. Over the weekend, he sells his company. On Monday, he’ll still have €100m, but in the form of a cheque, and often he’ll ‘go ballistic.’ Money is a power of action which, until it is assigned to something, makes you dizzy. That’s why it’s so important to give meaning to our heritage.
“Restoring meaning where money has taken it away” is your credo. Why do you think this subject is so important?
I don’t know any great founders who got up with the aim of becoming rich. The people who have created their own fortunes have been guided first and foremost by passion, by the desire to lead their project. That’s what “inner music” is all about. The money came later, and they often don’t make the most of it. But they have a great responsibility: from the moment you build it up, you have a responsibility to pass it on. I’ve seen some very substantial assets pass from one generation to the next without anyone touching them. This will be the subject of my next book, which should be out by the end of the year.
You are retiring from Banque de Luxembourg. What are your plans for the future?
I’m taking advantage of the fact that I’m 60 and that the system allows me to stop now, because I think that after 36 years, you’ve given everything you’ve got to give. Stepping down also means handing over to young people, to Anne Goedert with whom I’ve already worked and who will succeed me. I will continue to pass on what I have learnt, but in other ways. I’d like to focus on the social side, using what I’ve learnt to tackle the problems of living together. Around major subjects such as age and ageing, intergenerational communication and the reintegration of excluded young people.
Finally, if you had to sum up in one sentence what you learnt from these families, what would you say?
Managing your life and your business in this relatively complex system, where the business, a family and money overlap, requires constant care and reflection. It’s not a linear life path, and it has to take into account the notions of self-fulfilment and responsibility.
This story was first published in French on . It has been translated and edited for Delano.