WEBVTT

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So, for last week, we learned three keys to courageous leadership.

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The first one was to actively invite feedback by using the one thing feedback, phrased as

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what one thing can I do, so that you're focusing on one thing.

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You're not focusing on everything, but one thing.

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Number two was to build mental strength through powerful questions, and then number three

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was to challenge your core assumptions.

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So the powers question attached to that is, if someone new was hired to do my job, what

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is the first thing that they would change?

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And that is such a helpful question.

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I found myself asking myself that this last week.

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If someone new was hired to do my job, what is the first thing that they would change?

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But today, we're going to focus on the two hat solutions.

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This is not to be confused with the six hats brainstorming.

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This is the two hat solution, how to be professional at work with complex relationships.

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So this comes about because most small companies have complicated relationships.

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You know, they have spouses that work together, they might have children that work together,

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or even best friends working together, all in the same business.

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And so this session, this technique is really focused on dealing with the complexity by

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creating simple ways to protect these relationships and make space for them to grow.

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And the power question that's going to be with today's teaching is, would I ask this

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of another person with the same hat?

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And that'll make sense a little bit more as we get into it a little bit more.

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For today, the pro tip is that this training will help you protect your relationships both

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professionally and personally.

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I myself have used this technique with my children and with my friends.

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And the next pro tip is, it's never too late to implement this solution.

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Once you hear it, you can immediately begin to implement it, and you can also revise it

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as you go.

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All right, is everyone ready to dive in?

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As we're going through the material, please add questions, comments to the chat.

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I'll keep an eye on that.

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And it looks like we're all ready to go.

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Dion, I'm going to hand it on over to you.

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Yeah, thank you.

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You know, one of the most complicated things I noticed, there was a time in my life when

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I did a lot of CEO consulting, and I would come in and help companies jump the curve

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to the next level.

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And as I went in there, there was almost always some sort of complicated relationship, like

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the CFO was the brother-in-law, or the son was, or the daughter was involved, or the

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spouse was involved.

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And these by themselves are not bad things.

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But for the most part, it seemed to me that there didn't seem to be a clear strategy on

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how to create space for them.

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So we end up with this perspective or the perception of nepotism.

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And you know, one of the arguments against nepotism is that it creates all these emotional

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ties between people who are related, which may negatively affect decision making, performance,

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you know, professional growth.

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And you know, even, you know, Inc. magazine did a survey, and nearly 48% of people believed

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that if you really wanted to succeed, you need to be the boss's child, the son or the

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daughter of the boss, that's how you got ahead.

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That was the secret.

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We're getting at, you know, only one quarter agreed that success comes from just pure hard

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work.

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And this is one of the core elements in a culture that we want to create in our business,

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we don't want to create a culture in which we have a situation where there is a perceived

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barrier or a perceived ceiling, I can't progress, you know, in my career, because I'm not related,

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I'm not part of the family.

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And so that the concept of that can get very complex, even in a situation where there are

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a lot of people from the same family, working, perhaps there's, you know, the husband, the

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wife and one of the children, or some related person.

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And this makes it very complex.

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So I want to talk about a solution of how we can go about it.

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There's really two, there's two approaches that I've seen, and I'm not sure that they

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necessarily get the best benefit.

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So the two solutions I've seen, number one is, you know, to avoid the appearance of nepotism,

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they just forbid any relatives from working together, right?

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So I've seen the, okay, we're not going to do any of this.

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You know, I'm thinking of a very, you know, large nonprofit organization here in our city.

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And you know, they're a big, they're a big group, several 1000 people, they will not

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allow any

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contractors, not even employees, they won't even allow contractors to work and do any work for

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for the company if they have a relation in the company. So if somebody's working there and says,

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oh, you know, my husband runs a contracting business, he could fix that. They won't do that.

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So they literally have this absolutely no connection policy. I've seen that. The other

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option is you just run everything and just deal with the muddle through the mess, so to speak.

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And most small businesses tend to handle that, what I call the one hat problem. So the one

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hat problem creates a lot of complexity. And I know we've told a story before, but it fits

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very well here is the story that Henry Plout tells about a man's walking through his business,

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walking through the factory, and he noticed his son berating one of the older managers, just

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really awful, trashing him and speaking to him in the most awful way.

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And so he walks up to his son and he says, meet me in my office. So they get to the office.

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The father sits down and he said, you know, in this relationship, I wear two hats. On the one hand,

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you know, I'm your dad. And on the other hand, I'm the CEO of this company. So let me put on my CEO

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hat and tell you, you're fired. I will not have this in my culture. I've talked to you

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about this many times. We've sent you on courses to improve your ability to work with people.

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And I won't have that in my culture. As a CEO, I will not stand for that. So you're fired. Just a

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second. Let me put my dad hat on. Son, I heard you lost your job. Are you okay? So in this

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simple story, there is a wonderful space created for each hat. The compassionate dad who's standing

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with the son who just lost his job, as though, you know, he was not related or in any way worked

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with him. And the other one is that he worked as the CEO and acted as though they were not related.

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So I want to break that down, why this is such a powerful story, because it lays out and we're

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going to develop out how this could work in your business. How many of you can maybe throw in the

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chat, how many of you are working with a spouse, you know, parents, son, daughter, some family

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member, or even a best friend? Anybody? You got that going on, right? Now, I think this can work.

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But I want to talk about how do we protect these relationships? And how do we make them? Because,

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you know, I watch my parents. Growing up, I grew up in an entrepreneurial home, and my parents

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worked together. And man, over the dinner table, they just talked about business all the time. Hey,

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did you send the invoice to customer so and so? And all that was always going on. And it seemed like

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our home was an extension of the business sometimes. And, you know, it's very tough,

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especially if you're working at home, and you're working together, and you're homeschooling.

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That's like a whole set of hats going on right there, right? Anybody know what I'm talking about?

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So in that process, we came up with a methodology. And the methodology is called the two hat solution,

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much like our story. Let me take a second and just talk through, you know, when we have the one hat,

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I'm me, you're you, it creates a lot of complexity, there's a lot of blurring of the lines

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relationally, where do the boundaries end? Can I tell you what to do? If you're my spouse,

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you know, I had a woman executive say to me, look, I'm the CEO, my husband works for me,

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you know, I feel odd telling him what to do, you know, and all the husband saying, you know,

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I don't talk to my wife that way. Or I don't want to like give her instructions. And she's my wife.

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And so, you know, do we lower our expectations? Because we related? Do we change the criteria

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that we allow for this person because of the special relationship? How do you know what

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message does that send to the rest of the team? Oh, well, they related. So that's just what it is.

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And I think most people kind of resign themselves to what, you know, it is what it is. But there's

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a far better way to do this. And to get past this kind of awkward conflict of interest,

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unsure of, you know, what I really want to do and help, I can't develop the other person,

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because they related, it's complex. So, you know, we've had several situations over the years.

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And so I thought I'd just give you five scenarios of how this might work. And then as I bring out

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Nori, I wanna talk and I wanna share with you

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three key ideas on how to implement this two hat,

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much like the father and the son example

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in the story we told earlier.

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So the first one is this,

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let's take a married couple.

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So in one of the companies that we ran,

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we had a married couple and for their identity,

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I'll just call them Sally and John.

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And Sally and John worked together.

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Now, Sally was a director of the company

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and John was one of the managers.

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So he wasn't at her level.

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So, you know, but they didn't work in the same department.

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And, but, you know, they had an affection,

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they were sweet marriage.

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So at work, you know, it was a little bit of PDA,

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you know, public display of affection

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and little, you know, not, it wasn't weird,

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but so I asked, I sat down with them and I said,

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hey, this can't be like this.

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And they said, what do you mean?

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I said, you have to have separate hats.

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At work, you have to be Sally,

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you have to be the director.

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John, you have to be a manager in your department

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and these two cannot be connected.

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And so you have to act at work like you're not married.

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And when you're at home,

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you act like you don't work at the same place.

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So when you get home, you put on your spouse hat

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and then you can say, let me tell you about my dumb boss.

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And yeah, even if you're referring to the other person.

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So the issue is that what this does

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is it protects the relationship because now we get home

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and if we did not work at the same place,

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we would share with them, how did your day go?

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You know, that situation you were dealing with,

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how's that working out?

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Because what otherwise happens is Sally and John get home

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and they have our whole discussion

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and then they get back to work

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and now we're all out of the loop

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because we don't know what Sally and John discussed at home.

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This makes for a very complex situation.

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But when they're at work,

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so John says to me, yeah, you know, but you know,

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I'd like to just give her a little hug.

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And I said, so John, here's the rule.

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Would you do this for any other director in the company?

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Would you walk around giving little hugs and kisses

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to all the other directors?

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I certainly hope not.

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You know, and he was like, oh no, I wouldn't do that.

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Then you cannot do that here.

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You're mixing two hats.

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You're making one hat out of the two.

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So by having two separate hats,

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we also found that when people are, you know,

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connected to, for instance, you go to a club

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or maybe you belong to the same church

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and you hire somebody, a friend from your church

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or from your, you know, your club.

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And suddenly you've got this weird relationship.

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You know, you knew each other one way with one hat.

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You were, you know, members of the club

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or members of the church.

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And now you work together.

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Now there's this weird awkwardness thing trying to,

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you're trying to figure it out.

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Well, the reason is you have to have

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a distinct hat for that.

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At work, it's as though you don't go to the same club

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or the same church.

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At church, it's as though you don't work

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at the same company.

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This idea we call a firewall.

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We put up professional boundary, a firewall

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that keeps the two hats separate.

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You know, I was thinking of Teresa Cook

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and I know she won't mind me sharing the story,

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but, you know, with Teresa, there was a point in time

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that Teresa actually ended up with three hats,

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you know, because her and Graham worked together,

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you know, brilliant perspective.

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So on the one hand, she was a wife to Graham.

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On the other hand, that was one hat.

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The other hat she wore was as an owner of the company,

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co-owner of the company.

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And a third hat she wore was as a manager in the company.

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So what was really odd about that relationship at the time

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is I'd just come in as the president of the company.

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So it depended in my relationship with Teresa,

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depended on which hat we were wearing.

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So if she was wearing her owner hat,

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I would say things to Teresa

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I would never say to another employee,

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hey, I need you to know this is the cash flow

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or this is the situation,

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or, you know, this is a new thing we've signed in the,

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you know, with whatever.

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I would tell her owner things with her owner hat on.

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And we'd literally say, okay, hey, Teresa,

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I need you to put your owner hat on now.

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She put her owner hat on and then we talk owner stuff.

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Then I take it off and then I say,

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I need you to put your manager hat on

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because at that time, you know,

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she was still does reports to Jenny, reported to me.

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So at that point now, you know,

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first I was reporting to her as an owner.

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Now she's reporting to me as the president

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and it kept it very clean

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00:14:54.320 --> 00:14:56.360
because when I was speaking to her about her manager hat,

231
00:14:56.360 --> 00:14:59.920
I was talking to her about developing her skills,

232
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her ability, helping develop her as a manager.

233
00:15:03.840 --> 00:15:06.600
And then of course, when her and Graham were talking,

234
00:15:06.600 --> 00:15:08.400
they had to figure out which hat they were using.

235
00:15:08.400 --> 00:15:10.840
Are we doing our own hat and talking about this?

236
00:15:10.840 --> 00:15:13.120
Is this my wife hat or is this?

237
00:15:13.120 --> 00:15:14.960
And by simply creating those things,

238
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what I noticed when people do this

239
00:15:19.000 --> 00:15:22.800
is it suddenly creates a whole lot more space

240
00:15:22.800 --> 00:15:26.760
for these different roles to develop.

241
00:15:26.760 --> 00:15:31.760
So now you have your spouse hat and that's protected.

242
00:15:31.920 --> 00:15:33.760
So when you're at home,

243
00:15:33.760 --> 00:15:35.600
you act like you don't work together

244
00:15:35.600 --> 00:15:38.160
and it makes space for your marriage,

245
00:15:38.160 --> 00:15:40.440
makes space for your home life.

246
00:15:40.440 --> 00:15:42.880
Otherwise, that's all you ever talk about.

247
00:15:42.880 --> 00:15:46.120
Otherwise it's business 24 seven, right?

248
00:15:46.120 --> 00:15:49.440
So, and there are things you wanna talk about,

249
00:15:49.440 --> 00:15:50.640
your experience at work,

250
00:15:50.640 --> 00:15:53.680
you wanna share with your spouse, not your coworker, right?

251
00:15:53.680 --> 00:15:54.520
You wouldn't go,

252
00:15:54.520 --> 00:15:56.240
the things you wouldn't share with your coworker,

253
00:15:56.720 --> 00:15:59.400
but that you'd wanna share with your spouse.

254
00:15:59.400 --> 00:16:03.760
So this idea, I've worked with my children before,

255
00:16:03.760 --> 00:16:04.840
I've worked, you know,

256
00:16:04.840 --> 00:16:07.520
and each time I've had to be very clear,

257
00:16:07.520 --> 00:16:11.120
this is my dad hat, this is my president hat

258
00:16:11.120 --> 00:16:13.240
or whatever hat I'm wearing,

259
00:16:13.240 --> 00:16:16.080
so that it's very clear what the roles will be.

260
00:16:16.080 --> 00:16:18.000
Now to make this work,

261
00:16:18.000 --> 00:16:21.320
let's talk about three key ideas.

262
00:16:21.320 --> 00:16:24.200
Idea number one, we call the firewall.

263
00:16:24.200 --> 00:16:28.760
The firewall is making sure there's a clear break

264
00:16:28.760 --> 00:16:31.680
between the one hat and the other.

265
00:16:31.680 --> 00:16:32.520
So in other words,

266
00:16:32.520 --> 00:16:36.120
we're putting up this professional boundary

267
00:16:36.120 --> 00:16:40.880
that allows each relationship to develop more fully

268
00:16:40.880 --> 00:16:44.920
as though the other hat doesn't exist.

269
00:16:44.920 --> 00:16:46.720
This is really important,

270
00:16:46.720 --> 00:16:49.080
which leads us to the second principle,

271
00:16:49.080 --> 00:16:51.200
which we call the exclusion principle.

272
00:16:51.200 --> 00:16:53.320
The exclusion principle is this,

273
00:16:53.320 --> 00:16:55.240
when wearing one hat,

274
00:16:55.240 --> 00:16:57.880
I pretend the other hat doesn't exist at all.

275
00:16:57.880 --> 00:17:01.680
That's part of making the firewall practical.

276
00:17:01.680 --> 00:17:06.560
So when I'm at work, I'm a boss,

277
00:17:06.560 --> 00:17:08.319
and this person that I'm working with

278
00:17:08.319 --> 00:17:11.599
is not my son or my daughter,

279
00:17:12.480 --> 00:17:16.040
but when we're at home, in a home context,

280
00:17:16.040 --> 00:17:18.560
then we don't work together.

281
00:17:18.560 --> 00:17:21.640
So this really helps, you know,

282
00:17:21.640 --> 00:17:23.480
and I'll talk about some best practices

283
00:17:23.480 --> 00:17:25.359
to make this even more practical,

284
00:17:25.359 --> 00:17:29.320
but by pretending the other element doesn't work,

285
00:17:29.320 --> 00:17:33.200
by firewalling and keeping them separate,

286
00:17:33.200 --> 00:17:34.360
what we're doing

287
00:17:34.360 --> 00:17:37.200
is we're not only protecting the relationship,

288
00:17:37.200 --> 00:17:38.960
we're creating an environment

289
00:17:38.960 --> 00:17:43.960
in which both roles can much more fully develop.

290
00:17:44.720 --> 00:17:49.680
Now we can have a fuller relationship as husband and wife,

291
00:17:49.680 --> 00:17:50.680
because we're acting as though

292
00:17:50.680 --> 00:17:53.040
we don't work in the same place.

293
00:17:53.040 --> 00:17:56.360
And, I mean, it can be quite funny,

294
00:17:56.360 --> 00:17:57.360
as you can well imagine,

295
00:17:57.360 --> 00:17:59.960
there are many great stories we could bring in,

296
00:18:00.880 --> 00:18:02.760
like the wife who reports to her husband and says,

297
00:18:02.760 --> 00:18:05.760
look, can I just put on my spouse hat?

298
00:18:05.760 --> 00:18:10.520
I work for a horrible boss, referring to her husband.

299
00:18:10.520 --> 00:18:12.320
You know, so it can be funny,

300
00:18:12.320 --> 00:18:15.000
but I think what it does is it makes it,

301
00:18:15.000 --> 00:18:18.200
with that hat on, how would I respond

302
00:18:18.200 --> 00:18:20.480
if that person did not work with me?

303
00:18:21.280 --> 00:18:24.400
The third idea is called the leveling principle.

304
00:18:24.400 --> 00:18:27.080
So we had the firewall, the exclusion principle,

305
00:18:27.080 --> 00:18:29.280
and now the leveling principle.

306
00:18:29.280 --> 00:18:32.560
Now what the leveling principle is meant to do

307
00:18:32.560 --> 00:18:36.280
is it's meant to level the behavior

308
00:18:36.280 --> 00:18:39.080
and treatment of the other hat.

309
00:18:39.080 --> 00:18:41.040
And this is how it works.

310
00:18:41.040 --> 00:18:43.800
If I have my best friend working for me

311
00:18:43.800 --> 00:18:47.680
and something happens and I let it slip or let it slide,

312
00:18:47.680 --> 00:18:49.280
because, you know, it's my best friend

313
00:18:49.280 --> 00:18:51.400
and, you know, I know he's got a good heart

314
00:18:51.400 --> 00:18:54.720
and I kind of cover it for him and whatever.

315
00:18:54.720 --> 00:18:57.880
And, you know, several years ago, a decade or two ago,

316
00:18:57.880 --> 00:19:00.520
I actually had this very situation happen

317
00:19:00.520 --> 00:19:03.360
and I let things slip because it was my friend.

318
00:19:03.360 --> 00:19:05.600
And, you know, we've known each other forever.

319
00:19:06.680 --> 00:19:08.960
And so here was the problem with that is,

320
00:19:08.960 --> 00:19:13.960
would I let another person who holds this position do that?

321
00:19:14.800 --> 00:19:16.040
Yes or no?

322
00:19:16.040 --> 00:19:18.160
If the answer is no,

323
00:19:18.160 --> 00:19:21.560
then I need to use the leveling principle.

324
00:19:21.560 --> 00:19:23.120
So when I sit down with my friend,

325
00:19:23.120 --> 00:19:24.840
I'm not sitting down with my friend.

326
00:19:24.840 --> 00:19:29.280
I take off my friend hat and I put on my CEO hat

327
00:19:29.280 --> 00:19:33.520
or my boss hat and I say, this is me with my boss hat on.

328
00:19:33.520 --> 00:19:35.720
Your job, this position that you hold,

329
00:19:35.720 --> 00:19:40.040
this vice president role you hold has these requirements.

330
00:19:40.040 --> 00:19:41.400
You did not meet them.

331
00:19:42.600 --> 00:19:43.960
And I speak with them,

332
00:19:43.960 --> 00:19:46.840
not just as though we're not friends,

333
00:19:46.840 --> 00:19:51.440
I speak with them in a way that I would hold anyone else

334
00:19:51.440 --> 00:19:54.920
in that position to the same standard.

335
00:19:56.640 --> 00:19:59.040
And there is the leveling effect.

336
00:19:59.040 --> 00:20:00.160
We level up.

337
00:20:00.000 --> 00:20:13.000
with, hey, I would hold this, or the other positive way around if I would, I want to give this person a bonus, but now I don't want to give them a bonus because they might, you know, they're related to me or whatever.

338
00:20:13.000 --> 00:20:25.000
But would have I given that position this bonus and if the answer is yes, then give the bonus to that position that happens to be, you know, your child or your spouse or your best friend.

339
00:20:26.000 --> 00:20:43.000
So it goes both ways. Sometimes we're so worried about creating the wrong perception that people actually suffer and can't move up because they are the, they are related to you, or they move up artificially because they're related to you.

340
00:20:43.000 --> 00:20:53.000
And you know, if the team members who are not related are watching very carefully to see what kind of leader, you're going to be.

341
00:20:53.000 --> 00:21:06.000
It's interesting when they see you treat them the same way. And if they ask you, you can always say, I would have given this bonus to anybody who held this position, who did this amazing job.

342
00:21:06.000 --> 00:21:13.000
And I'm not going to withhold the bonus just because they're related or we're special friends or there's a special relationship.

343
00:21:13.000 --> 00:21:15.000
Any questions about that.

344
00:21:15.000 --> 00:21:25.000
The exclusion principle and leveling. So what this does is it levels up and I can ask myself that question.

345
00:21:25.000 --> 00:21:33.000
Would I do or say what I'm about to do or say if there was no special relationship at all?

346
00:21:33.000 --> 00:21:38.000
And if the answer is yes, then go ahead. If the answer is no, then don't.

347
00:21:38.000 --> 00:21:46.000
Let me share quickly five best practices that I have found really make this work.

348
00:21:46.000 --> 00:21:54.000
So the first one I've already shared with you, number one, would I ask another person this question if they're wearing the same hat?

349
00:21:54.000 --> 00:22:05.000
And if the answer is yes, I would go ahead with it. Number two, am I raising or lowering my expectations because this person has a special relationship with me?

350
00:22:05.000 --> 00:22:14.000
Maybe you're tough on your kids and so you have an overly high expectation of them, but you would have never held another person to that standard if they worked for you.

351
00:22:14.000 --> 00:22:20.000
Or you're letting things slip because they're related to you or because there's the special relationship.

352
00:22:20.000 --> 00:22:24.000
So standards, am I holding the standards? So that's that's the second question.

353
00:22:24.000 --> 00:22:34.000
The third. Is I think is a general rule, wherever possible, do not let family members report to one another if they're related by blood or marriage.

354
00:22:34.000 --> 00:22:45.000
I think that's just wisdom if it's possible. I think putting as you know, putting somebody between you and the person you're related to is a really good idea.

355
00:22:45.000 --> 00:22:57.000
So we've had situations where we've kind of changed the chart a little bit of who reports to who just so that a spouse wouldn't report to a spouse.

356
00:22:57.000 --> 00:23:12.000
I think that just helps make it easier for them if that's possible. And then number four, compensation, make compensation based on actual market value, not on special relationships.

357
00:23:12.000 --> 00:23:22.000
We don't say, well, you know, so let's say in Graham and Teresa's case, we wouldn't say, well, she's an owner. Let's just pay her extra.

358
00:23:22.000 --> 00:23:33.000
No, we ask this manager position she holds. What is that pay? That's what we pay her. If the company declares a profit, then she gets her portion as an owner.

359
00:23:34.000 --> 00:23:45.000
She gets paid one way as a manager, another way as an owner. Does that make sense? Keeping that simple and clean really helps protect the relationships.

360
00:23:45.000 --> 00:23:56.000
So the fifth best practice is related parties cannot be involved in promoting, setting salaries or doing reviews.

361
00:23:57.000 --> 00:24:05.000
It's much tougher. I mean, I'm not ever going to sit down and do a review on, you know, my spouse or my wife or one of my kids.

362
00:24:05.000 --> 00:24:13.000
It's that that relationship is too complex and sometimes it's not as easy to switch hats as you might think.

363
00:24:13.000 --> 00:24:23.000
So just be realistic that the hat switching has some boundaries to it. And so try not to stress the multiple hats thing.

364
00:24:23.000 --> 00:24:30.000
So we've created a simple worksheet. And what I've in the worksheet, what we've done is we've laid it out in such a way.

365
00:24:30.000 --> 00:24:42.000
I see it's already dropped there for you. If you look at the worksheet here, the exercise is, do you have a situation with a relative or close friend that is creating the one hat problem?

366
00:24:43.000 --> 00:24:50.000
And if so, you know, maybe you can list what their roles are. On the one hand, you know, I'm a you know, I'm the mother.

367
00:24:50.000 --> 00:25:00.000
On the other hand, I'm I'm also the CEO, as an example. So if you're the woman leading your organization and one of your children work for you,

368
00:25:00.000 --> 00:25:01.700
but the mother and CEO role.

369
00:25:01.700 --> 00:25:03.700
So giving those roles direct

370
00:25:03.700 --> 00:25:05.420
and describing what those roles are.

371
00:25:05.420 --> 00:25:08.680
And then how would you implement the two-head solution

372
00:25:08.680 --> 00:25:12.460
is breaking it up so that you can use the leveling principle

373
00:25:12.460 --> 00:25:17.460
and you can also break it up with this clear firewall idea.

374
00:25:17.820 --> 00:25:22.560
So taking the time and then taking a minute to explain that

375
00:25:22.560 --> 00:25:27.560
to the person involved usually produces a lot of space

376
00:25:27.840 --> 00:25:31.320
and a lot of relief because you get things out of the way

377
00:25:31.320 --> 00:25:34.860
that's grinding at your special relationship.

378
00:25:35.800 --> 00:25:38.120
What would be an awful outcome

379
00:25:38.120 --> 00:25:40.840
is if we didn't have the two-head solution

380
00:25:40.840 --> 00:25:43.000
or in some of you have three, fine.

381
00:25:43.000 --> 00:25:45.560
But if you didn't have the two-head solution

382
00:25:45.560 --> 00:25:49.160
and you put these special relationships at risk

383
00:25:49.160 --> 00:25:53.200
for the sake of the business, it's simply not worth it.

384
00:25:54.480 --> 00:25:56.120
It's not worth it.

385
00:25:56.120 --> 00:25:57.760
I cannot think of a single case

386
00:25:57.760 --> 00:26:01.360
where it's worth stretching a special relationship

387
00:26:02.560 --> 00:26:04.000
in that way.

388
00:26:04.000 --> 00:26:07.400
And over the years I've learned to do this.

389
00:26:07.400 --> 00:26:11.000
I started a business once with a very close friend

390
00:26:11.000 --> 00:26:12.600
and then as the business grew

391
00:26:12.600 --> 00:26:15.240
and it finally grew to 80 people

392
00:26:15.240 --> 00:26:19.240
and he just stayed at the low end of the scale

393
00:26:19.240 --> 00:26:22.400
even though he was a particularly large owner of the company

394
00:26:22.400 --> 00:26:23.400
cause he helped me start it.

395
00:26:23.400 --> 00:26:25.440
He owned shares in the business

396
00:26:25.440 --> 00:26:26.720
but he's in the org chart,

397
00:26:26.720 --> 00:26:28.480
he just got further and further away from me.

398
00:26:28.480 --> 00:26:30.960
In the beginning it was just the two of us, it was all fun.

399
00:26:30.960 --> 00:26:33.800
And then as I hired more and more people,

400
00:26:33.800 --> 00:26:34.640
there were at one stage,

401
00:26:34.640 --> 00:26:38.720
it was literally three levels between him and me.

402
00:26:38.720 --> 00:26:41.600
And at work, I was the CEO

403
00:26:41.600 --> 00:26:44.120
and he was the manager of what he did.

404
00:26:44.120 --> 00:26:47.080
And after hours we were best friends

405
00:26:47.080 --> 00:26:48.440
and we didn't work at the same place.

406
00:26:48.440 --> 00:26:52.520
And that opened up our friendship to be...

407
00:26:52.520 --> 00:26:53.640
And that's why he could tell me

408
00:26:53.640 --> 00:26:55.560
he has a lousy CEO as a boss.

409
00:26:57.720 --> 00:26:59.440
Okay, any questions around that?

410
00:26:59.440 --> 00:27:00.960
Any practicalities?

411
00:27:03.800 --> 00:27:05.080
So I addressed this issue

412
00:27:05.080 --> 00:27:07.760
because I've seen this so many times.

413
00:27:07.760 --> 00:27:09.760
So I'm gonna hand it back to you, Jenny

414
00:27:09.760 --> 00:27:12.120
and then let's take a moment and talk through it.

415
00:27:12.120 --> 00:27:14.080
If you have none of this complexity,

416
00:27:15.400 --> 00:27:16.880
you're in a good place

417
00:27:16.880 --> 00:27:21.200
but sometimes the complexity exists anyway.

418
00:27:21.240 --> 00:27:23.760
So let's find a very creative way to deal with it.

419
00:27:25.160 --> 00:27:27.120
Yes, thank you, Dion.

420
00:27:27.120 --> 00:27:30.440
We do have some folks that do work with family members.

421
00:27:30.440 --> 00:27:33.680
Nancy says she works with her dad or step-mom and her son.

422
00:27:34.840 --> 00:27:39.200
So you can imagine the complexity of that situation.

423
00:27:39.200 --> 00:27:40.880
Can you speak to for just a moment,

424
00:27:40.880 --> 00:27:42.800
like as you're going along,

425
00:27:42.800 --> 00:27:45.000
will there need to be times where you revisit

426
00:27:45.000 --> 00:27:48.840
and you find that you've slipped into the one hat again

427
00:27:48.840 --> 00:27:49.760
and you have to go

428
00:27:49.760 --> 00:27:52.200
and you have to exercise the two hats again?

429
00:27:53.200 --> 00:27:58.200
Absolutely, it's interesting that you put this in place

430
00:27:58.560 --> 00:27:59.920
but if you don't keep it up

431
00:27:59.920 --> 00:28:03.040
and that's why we literally say to the other person,

432
00:28:03.040 --> 00:28:04.920
let me put this hat on.

433
00:28:04.920 --> 00:28:07.920
They know where you're coming from.

434
00:28:07.920 --> 00:28:10.680
They know the position you're taking.

435
00:28:10.680 --> 00:28:15.320
Whereas on the other side, if you just drop that habit

436
00:28:15.320 --> 00:28:18.080
then it can slip back to the one hat mode.

437
00:28:18.080 --> 00:28:19.040
Yeah.

438
00:28:19.160 --> 00:28:20.000
Yeah.

439
00:28:21.160 --> 00:28:23.080
So I see there's several people,

440
00:28:23.080 --> 00:28:27.880
I see Bev, daughter-in-law, friend, member, awesome.

441
00:28:27.880 --> 00:28:29.920
You'll have a lot of fun having this discussion.

442
00:28:29.920 --> 00:28:32.520
And it's not just for you, it's for them too.

443
00:28:32.520 --> 00:28:35.120
It puts them in a more powerful position.

444
00:28:36.280 --> 00:28:39.000
It levels, it's why we call it the leveling principle.

445
00:28:39.000 --> 00:28:41.400
It levels it out, levels the playing field

446
00:28:41.400 --> 00:28:43.080
so that they get a fair shot.

447
00:28:45.000 --> 00:28:46.520
It's a good way of saying it.

448
00:28:46.520 --> 00:28:49.040
Yeah, yeah, it's a two-way street.

449
00:28:54.160 --> 00:28:57.400
Oh, Bev has a question.

450
00:29:00.520 --> 00:29:01.960
This is so timely.

451
00:29:03.240 --> 00:29:04.720
My daughter-in-law lives at,

452
00:29:04.720 --> 00:29:06.680
I'll give you kind of the full scenario

453
00:29:06.680 --> 00:29:09.160
because it hit me in the face yesterday.

454
00:29:09.160 --> 00:29:11.280
My daughter-in-law lives in a different state.

455
00:29:11.280 --> 00:29:13.120
I'm in California

456
00:29:13.120 --> 00:29:16.160
and she's been working for me as a contractor.

457
00:29:17.520 --> 00:29:20.800
Which is wonderful and it's been great.

458
00:29:20.800 --> 00:29:22.440
And I have a couple of other employees too,

459
00:29:22.440 --> 00:29:24.240
one friend and whatnot.

460
00:29:24.240 --> 00:29:27.680
I got a letter yesterday from the Franchise Tax Board

461
00:29:27.680 --> 00:29:30.760
informing me that I was gonna have to do

462
00:29:30.760 --> 00:29:33.320
backup withholding for her,

463
00:29:33.320 --> 00:29:36.800
having no idea that I think she has to file taxes

464
00:29:36.800 --> 00:29:38.240
in the state of California,

465
00:29:38.240 --> 00:29:41.080
even though she lives in Arizona.

466
00:29:41.080 --> 00:29:45.720
And here I am, and this is not a conversation

467
00:29:45.760 --> 00:29:48.360
I wanna have with my daughter-in-law yet,

468
00:29:48.360 --> 00:29:50.400
or my son for that matter,

469
00:29:50.400 --> 00:29:53.160
and talk about dual relationships

470
00:29:53.160 --> 00:29:56.080
because they're not gonna be happy to hear

471
00:29:56.080 --> 00:29:59.400
that she owes taxes to the state of California.

472
00:30:00.000 --> 00:30:02.240
So my husband and I talked about it, it's like, maybe I

473
00:30:02.240 --> 00:30:04.880
shouldn't hire, maybe I should just have her help me and we

474
00:30:04.880 --> 00:30:08.240
could gift her. Yeah, I mean, all kinds of things went on in

475
00:30:08.240 --> 00:30:11.920
my head. So this is so so helpful that I'm going to have

476
00:30:11.920 --> 00:30:16.640
to say to her, I'm coming to talk to you as you as the owner

477
00:30:16.640 --> 00:30:20.560
of the business. And now I'm going to be empathetic with you

478
00:30:20.560 --> 00:30:25.400
as your mother in law and your mom to say, I am so sorry, we're

479
00:30:25.400 --> 00:30:28.520
in this you're in this situation. There is no way I

480
00:30:28.520 --> 00:30:31.480
ever I don't want to pay taxes in California, let alone you

481
00:30:31.480 --> 00:30:36.680
have to pay taxes in California. So yeah, I'm, I

482
00:30:36.680 --> 00:30:39.920
haven't had the conversation yet. We're still praying about

483
00:30:39.920 --> 00:30:42.680
how to approach us. So thank you. Thank you. Thank you.

484
00:30:43.520 --> 00:30:47.600
You're most welcome. And so the short answer is, mom never has

485
00:30:47.600 --> 00:30:51.240
to have that conversation with her daughter in law. But the

486
00:30:51.240 --> 00:30:53.720
president of the company has an obligation to have that

487
00:30:53.720 --> 00:30:57.560
conversation with the contractor. Yes. So in that

488
00:30:57.560 --> 00:31:00.120
clear thing, so started off and say, you know, what I've been

489
00:31:00.120 --> 00:31:03.200
thinking about is that I actually wear two hats, explain

490
00:31:03.200 --> 00:31:06.960
the hats, and then put the one hat on, and then put the other

491
00:31:06.960 --> 00:31:11.920
hat on. So it had we known that had I realized that even at the

492
00:31:11.920 --> 00:31:14.000
beginning, we could have had that Congress that

493
00:31:14.000 --> 00:31:18.600
understanding law, you know, eight months ago. And she might

494
00:31:18.600 --> 00:31:21.840
have made a different decision. I don't know. So thank you.

495
00:31:21.840 --> 00:31:24.920
The contractor can that in that way, the contractor can resign

496
00:31:24.920 --> 00:31:28.840
or even be fired. And moms can still love her daughter in law.

497
00:31:28.960 --> 00:31:33.160
Yes. And that's what it does. It protects the relationship.