As an in-law coming into a family business, you’re stepping into one of the hardest working environments imaginable. A family member is held to a higher standard than regular employees, but an in-law has to work even harder than a family member.

“It really takes someone with vision and purpose because there will be a lot of extra challenges,” says Ricci M. Victorio, CSP, CPCC, managing partner at the Mosaic Family Business Center.

If you lay the right groundwork, establish clear expectations, and work with an adviser familiar with the challenges that will occur, she says it can be a productive and joyous experience.

Smart Business spoke with Victorio about how in-laws can successfully enter the family business and thrive.

What challenges do in-laws face when coming into the family business?

The hardest thing to overcome is perception. It doesn’t matter if you have an MBA from Cambridge or a Ph.D. from Harvard. When it comes to in-laws, the fact that you married into the business downgrades any credentials in the eyes of non-family managers or employees. People will tend to judge you harshly, so be patient and don’t take it personally.

How can an in-law successfully enter into the business?

The position, pay scale and responsibility must match the in-law’s experience and education. Thrusting an unqualified in-law upon people, no matter how great he or she is, makes it a much harder road. For example, an in-law was a sales manager making six-figures who was downsized. Now, he’s in trouble financially, and the family is worried. The family can bring the in-law into the business, which might be in another industry, but he shouldn’t start as the head of the sales division. He needs to learn the business and earn his way up the corporate ladder. If parents are still concerned about the financial gap, they can consider gifting additional monies from outside of the business — to help until he earns his way up.

It can be helpful to have the in-law candidate interview with the executive management team to gain support.

How can in-laws overcome the assumption that they have the boss’s ear?

You can’t expect the employees to be your friends, because they are going to assume that anything they reveal will get back to the boss. It can feel isolating and you have to be above reproach. Stay professional and never assume to be the heir apparent.

Also, if you have a problem, resolve things through the proper chain of command. If you’re not reporting to your father-in-law, don’t go to him when you have an issue.

Remember when you come home and complain to your spouse about work that you’re talking about a family member. Your spouse may get defensive, run to whomever you’re complaining about or start disliking that person. Try to share more than just the bad days.

What documentation is needed to protect the business, and the in-law?

Families with a high net worth business typically will require a prenuptial agreement that protects the stock from leaving the family in the case of divorce or death of the blood relative. However, there are incentives such as restricted or phantom stock for high-performing managers, which can provide financial incentives that feel like ownership for growing the company.

It’s also critical to create family member employment and stock qualification policies. These policies define the benchmarks and requirements for all family members, whether an in-law or not, as to how they can become stockowners or hold key executive positions, clarifying the pathway and making family employees more accountable.

Why is having a succession coach valuable?

Engaging a coach who specializes in succession transitions to help employed family members can smooth the predictable challenges along the way. Family employees, including in-laws, need a safe place to talk, and guidance to strategize through the maze of issues that will occur. The coach also can facilitate a family business council, which provides a venue for family members to talk about business related topics, questions and issues that would normally feel inappropriate to bring up in a productive environment.

Ricci M. Victorio, CSP, CPCC, is a managing partner at the Mosaic Family Business Center. Reach her at (415) 788-1952 or

Insights Wealth Management & Finance is brought to you by Mosaic Financial Partners Inc.

Published in Northern California

There’s a popular metaphor referred to as “the boiled frog.” Simply put, it says if you drop a frog in boiling water it will quickly try to escape. But if you place a frog in tepid water that’s slowly heated to a boil, the frog will “unresistingly allow itself to be boiled to death.”

With the 2013 tax changes, this metaphor may apply to taxpayers, married and filing jointly, with wages of taxable income of $223,000 to $450,000, says Geoffrey M. Zimmerman, CFP®, Senior Client Advisor at Mosaic Financial Partners, Inc. These households could see their federal marginal tax rate go from 28 to 45.5 percent.

“Executives in this income range may soon find that they are in hot water with the heat on as the marginal tax rates ramp up fairly quickly,” Zimmerman says.

Smart Business spoke with Zimmerman about key tax changes as well as possible planning and investment strategies.

Why are $223,000 to $450,000 income earners unaware of the danger?

The increases come from moving up tax brackets, new Medicare taxes of 0.9 percent on payroll and 3.8 percent on unearned income, and the phase-out of itemized deductions. People earning more than $450,000 have a good idea of what’s coming, but others aren’t as prepared for 1 to 2 percent increases that can add up. For example, if each spouse earns less than $200,000, their employers aren’t required to withhold additional taxes from their paychecks for the 0.9 percent increase in Medicare. But, if their combined income pushes them over the $250,000 threshold in household wages, they may be surprised by an unexpected tax bill.

Additionally, if you live in a state like California where state income taxes have gone up, combined federal and state income tax rates can exceed 50 percent, with capital gains rates reaching 33 percent or more.

What should these taxpayers be doing?

First and foremost, don’t let the tax tail wag the dog. Tax strategies that look great in a silo may actually be detrimental to the big picture. If your strategy puts you in a concentrated position or triggers undue risk, then a sudden bad market movement can be worse than paying the taxes.

This is an opportunity for people to update their financial plan and review how the tax changes affect their goals. Make sure your advisers are talking with one another and coordinating their work and advice.

How can some key planning strategies mitigate these increases?

Look for opportunities related to the timing of cash flows. If you have a big income year where up to 80 percent of your itemized deductions might be lost, defer some itemized deductions to the following year where the income might be lower. In a low income year, look at doing IRA to Roth conversions, realizing capital gains and/or accelerating income.

Take the initiative to engage in tax loss harvesting in taxable accounts, which means you sell a security, harvest the loss and then use that loss to offset a gain in either the current year or carry forward for use in future years. This can be attractive, particularly for investing styles that offer similar but not identical alternatives. One example might be to sell an S&P 500-index fund and reinvesting with a Russell 1000-index exchange traded fund to capture the loss while remaining invested.

Review the use of asset location strategies to improve tax efficiency. Strategically place securities that produce ordinary income or that generally don’t receive favorable tax treatment into a tax-deferred account, while putting tax-efficient investments that generate long-term capital gains or qualified dividends in taxable accounts.

Municipal bonds/bond funds in taxable accounts now may be more attractive, and you also can review opportunities to take advantage of ‘above the bar’ deductions, such as contributions to qualified plans like your pension, 401(k), etc. For senior executives, contribution to nonqualified deferred compensation arrangements may be more attractive, particularly if a transition, such as retirement, is on the horizon.

With the help of good advisers who understand these moving parts and how they fit together, executives can use these strategies and others to make better decisions to move toward the things that are really important to them.

Geoffrey M. Zimmerman, CFP®, is a senior client advisor at Mosaic Financial Partners, Inc. Reach him at (415) 788-1952 or

Insights Wealth Management & Finance is brought to you by Mosaic Financial Partners Inc.

Published in National

Has your succession planning come to a standstill and you don’t know why or how to fix it? Fear, confusion, uncertainty, an undefined action plan and/or dysfunction within the family or business can all be contributors.

“Not every business struggles with all five of these challenges, but I usually see a number of them in almost every situation when succession efforts have stalled,” says Ricci M. Victorio, CSP, CPCC, managing partner at Mosaic Family Business Center.

Smart Business spoke with Victorio about five reasons succession plans stall and ways to overcome them.

What causes succession planning to stall?

Succession is about transforming the entire organization, not just transitioning a business from one person to the next. Shareholders, family members and key managers need to buy-in to the transition plan or they may undermine your efforts.

Business owners dealing with multiple issues stalling a succession plan shouldn’t feel doomed. You are not alone and there are professionals who can help you get unstuck. A succession coach or adviser can help guide your company through the emotional issues of this transition and identify early warning signs to prevent a smoldering fire from becoming a five-alarm blaze.

What are the common hang-ups and how can they be overcome?

Fear appears in many forms. In a family business it can encompass the fear of failing your family’s expectations or uncertainty about sufficient leadership skills. Such fears can transform into overwhelming doubts. Parents may fear sharing financial information with their children because of worries over perceptions of inequality in their estate plan. When talking about money and careers, familial bickering and artificial harmony replace understanding and trust. A coach can provide guidance in discussing emotional topics without confrontation, how to stay open, asking questions and considering differing opinions without blowing up.

Confusion often comes from being afraid to communicate or commit to action. Without clear communication or an execution plan, key personnel and family will become anxious worrying what is going to happen, who is actually in charge and how it will affect their security, which creates the added stress of business productivity going flat. By creating a timetable, sharing it with family, employees, your vendors and clients, and working with them to make sure it is clearly understood, you can sidestep this challenge.

Uncertainty over the economy and the business’ success has hindered many plans. You may be worried about the business value or if your successor can manage a significant bank loan. For family members, consider using a stock redemption program rather than a straight buyout, lock in key managers with a vested retirement plan, make sure you have a successor development plan and hire the best talent possible for the transition.

An undefined action plan can lead to skipped steps or no follow-through. The succession plan should be integrated into your strategic plan with specific and documented expectations, a timeline, ways to measure success and regular checkups.

Dysfunction — infighting, jealousy, sibling rivalry, secrecy and entitlement will stall family business succession. When relationships are out of alignment, people need to be heard, acknowledged and feel like they are making a contribution in dealing with important issues. Afterward, it’s possible the succession plan may look different than parents originally intended, but you will most likely have everyone on board, moving together. Even in a non-family business, not addressing existing dysfunction could lead to a failed succession effort.

There is a plan for every situation, but there is no standard solution. When your plan stalls, don’t be embarrassed to get help. Succession requires a great team, which includes the transactional assistance from your attorney and CPA, advice from your financial planner and a succession coach who focuses on the transformational goal of achieving a successful business transition while preserving family harmony.

Ricci M. Victorio, CSP, CPCC, is managing partner at Mosaic Family Business Center. Reach her at (415) 788-1952 or

Website: More tips on how to have a successful succession transition.

Insights Wealth Management & Finance is brought to you by Mosaic Financial Partners Inc.



Published in National

A typical family business could have four generations working to manage and grow the business. “The Traditionalist” 82-year-old founder is cautious, shrewd, still comes to work every day and holds the controlling stock vote. This person has no immediate plans for retiring and feels relevant by providing “practical” advice. “The Boomer” 57-year-old son serving as president has spent his career in his father’s shadow and is responsible for day-to-day operations, but doesn’t have true authority. The “Generation X” 30- to 44-year-old grandchildren are uncertain who will be the third generation successor, but have high financial expectations. The children of the Baby Boomers and Generation X, “Gen Y” or “Millennials” are the keys to moving the business into the future and want to be engaged in meaningful activities, but are the most disconnected from the company’s creation and development.

Generational diversity can contribute to misunderstanding, miscommunication, conflict and loss of productivity. So, how can you get all four working together?

“It is important to bring the generations together to discuss important family business issues with someone who has spent time with each of the individuals involved,” says Ricci M. Victorio, CSP, CPCC, managing partner at the Mosaic Family Business Center.

Smart Business spoke with Victorio about building trust and resolving business issues among different generations.

How can family members address issues to ultimately strengthen the company?

A facilitator/coach often teaches family members how to talk about difficult subjects without blowing up or running away and also how to listen to each other. Feelings that have been bottling up for years can come pouring or shouting out.

The older generation could feel disrespected and uncomfortable, as they weren’t raised to talk about feelings. The younger generation sees nothing wrong with baring their moment-to-moment lives on social media. The retiring generation could feel those who grew up with an entitled lifestyle don’t appreciate the sacrifices and hard work it took to build the business, while the incoming members could resent their inability to fully contribute, or feel unacknowledged for their work.

An outside coach can break problems down into small topics, including unwrapping family and business issues, slowly working toward sensitive areas. It takes time to build trust and learn where everyone is coming from.

What should be in place for new generations entering the business?

Have an agreed upon plan to clarify how family members come into the business, whether as a shareholder or as an executive. As an example, the plan would define what that next generation needs to achieve, both in education and work experience, before they come in as a manager. This document needs to be continually updated as operations become more complicated.

Decide whether all family members deserve stock. Consider having a stock qualification policy where perhaps you have to work in the business in some capacity for a defined period of time.

Another consideration is preventing family members from failing into the business. If the next generation isn’t meeting certain standards, which are higher than those for other employees, there can be conflict. So, set up definitions of control for both entering and exiting family members. Define the point at which authority passes to the next generation, and ensure the retiring generation has personal financial security by redeeming their stock over a period of time.

Do non-family businesses have these issues?

Every organization encounters generational issues, whether in the public or private sector. However, without family ties people tend to be more outspoken and straightforward. Younger workers don’t do well in the non-collaborative environment of cubicles and want to work smarter to have more free time. Baby Boomers prefer to hold employees accountable not only for what they do, but the hours they put in.

As with family businesses, both groups need to decide how to communicate and what they expect of each other. And once the agreements are in place, play by those rules. ?

Ricci M. Victorio, CSP, CPCC, is managing partner at Mosaic Family Business Center. Reach her at  (415) 788-1952 or

Insights Wealth Management & Finance is brought to you by Mosaic Financial Partners Inc.


Published in National

There are a number of reasons why you might want to sell or transfer your business. Some serial entrepreneurs find they like to start businesses but don’t really like to run them. Others have been around for a long time and are just getting tired or too old to stay in their role.

Some owners may have maximized the value of their company. Perhaps your personal balance sheet needs more diversification because 95 percent of your value comes from the business, so you bring in partners or sell a portion to employees, giving yourself more options and downside protection.

Whatever the reason, Norman M. Boone, founder and president of Mosaic Financial Partners Inc., says there are a number of questions to answer if you’re a business owner moving through the transition process.

“It’s really important to focus on your personal needs, both financially and emotionally,” he says.

Smart Business spoke with Boone about asking the right questions prior to a sale and how to deal with the financial and emotional issues.

What are some key factors business owners need to understand about selling or transitioning from a business?

There are six key things that they have to be thinking about and understand:

• What’s the business worth?

• Do you have a plan of who is going to come in and operate the business successfully when you are gone?

• Have you been too busy running the company to consider personal issues like your own estate plan, will and insurance?

• What do you want in terms of lifestyle? Do you want to keep running this business until you drop dead, or do you want to sell it and go onto the next business? What are your criteria and where do those triggers happen? Do you want to be working full time or part time? Do you need control of the business or not?

• If your personal finances are completely reliant on the business, what’s your extra exposure of not having diversification? If something were to happen to the business, would you and your family be OK going forward?

• What are some tax issues you could face with a sale or transition?

Why is it so important to ‘know your number’?

One of the key issues when it comes to selling a business is that people don’t know how much money they need to be able to live their life comfortably and successfully for as long as they and their spouse might live, factoring things in like medical care and Social Security. For example, if somebody spends $100,000 a year, maybe they need $2.5 million in assets to support that. If your lifestyle is more expensive, then you need more dollars, and knowing what that number is, whether it’s $2.5 million, $5 million or $15 million, is pretty important before you start to negotiate a sale.

If you sold your business for $6 million and after taxes you’re left with $4 million, you’re going to be frustrated if that’s not enough to support your lifestyle for as long as you might live. You may not be able to continue living as comfortably as you were before.

Is there a disconnect between what people need to live on and what their company will actually sell for?

As a general rule, people overestimate what a company could sell for, particularly on an after-tax basis, and underestimate how much capital they need to support their current expenses. That combination means that often people are really frustrated. They might get right to the edge of the deal, and suddenly realize, ‘Oh gee, I can’t do it on this. I need 2 million extra dollars to sell the business.’ You see deals fall through reasonably frequently because of that.

Once you know your number, you can do things to make the company more valuable. Get your accounting in good order. Minimize expenses in order to raise profitability. Grow the business in terms of sales. Have a brand that is as well known as possible. In addition, the less dependent the business is on you as an individual, the more it’s worth to somebody else, because if you’re critical and are replaced, then it’s very possible that operation could fall apart. Therefore, build in systems, processes and procedures to bring along key employees so they can continue to manage the business without skipping a heartbeat.

Why is it important to focus on what comes before selling?

If you’ve been running a business for 25 years and you’re being asked to let go, it’s not easy. You get emotionally attached to it and, as important, your identity is tied up in being the owner of that business. If you sell the business, what is your identity? What are you getting up for in the morning? This issue comes up all of the time. It’s one of the reasons why people don’t have a succession plan and why they don’t sell when they need to.

Owners need to try to think about what other things they want their life to involve, and then prepare and practice doing that before the sale. It could be getting involved in nonprofit organizations or sitting on the board of a couple of your friends’ companies. Business owners should retire to something, rather than from something. In the ideal world, the person who is selling the business is inevitably sad, but ideally, they are excited about what it is that they are going to do once they have more free time.

Norman M. Boone is founder and president of Mosaic Financial Partners Inc., which is celebrating, this year, its 25th anniversary. Reach him at (415) 788-1952 or

Insights Wealth Management & Family Business Consulting is brought to you by Mosaic Financial Partners

Published in National

As companies continue to try to do more with less, the stress of doing the work of two or more people is taking a toll on employees. And that is making them less productive, less motivated and less likely to do their best work, says Ricci Victorio, CSP, managing partner at Mosaic Family Business Center.

“As companies deal with lower budgets and tighten their belts, they are putting ever-greater demands on their employees,” says Victorio. “As an employer, you need to help your employees fill their cups back up, because they are being significantly drained. Whenever you have people being pushed at absolute top levels performing on all 100 cylinders all of the time, they run out of gas. And when they run out of emotional gas, negative behaviors start springing up.”

Smart Business spoke with Victorio about how one-on-one coaching with employees can improve morale and help them work better together as a team.

What is the value of executive coaching?

It can improve morale and provide an internal vision for employees as they ask: What is my value? Why am I here? What am I doing? How can I do it better?

Improved morale increases productivity and, in some cases, employers see a change in the first week, with people taking responsibility for their communication with one another, approaching their differences of opinion with less of an edge, having conversations happening in a different way and struggling less.

Why should employers be concerned about stressed, overworked employees?

It can impact their performance and, as a result, the performance of the company. Like a rubber band, we all can handle stress. We get a shot of adrenaline, we go into performance mode, we adapt and we circumvent our fears to handle the bigger cause. But also like a rubber band, if you don’t relieve that stress and the tension continues to build, people will snap. And when they snap, you see increased anxiety.

Stress robs individuals of mental energy, their problem-solving capabilities are reduced, their fuses become shorter and they snap at trivial things. They lose sight of the big picture and feel like they’re drowning, to the point that they can’t even see the path that they’re on. They’re so busy removing stones from their path that they don’t feel like they’re moving forward. They lose sight of the vision and goals that were so painstakingly created by leadership.

When the stress gets too great, people are going to do something to reduce it, whether that is quitting, blowing up, firing someone, getting sick with a stress-related illness or taking it out on their families. And all of those results are damaging to the company.

At too many businesses, what used to be a happy group is now a group of people who are frustrated, bickering and not cooperating with one another. Employers need to look at whether they are treating their employees as if they were paper cups — just using them up, throwing them away and getting a new batch.

How can employers help their employees?

In the past, employers might have hired a coach for their executives, but companies are now moving toward coaching for their managers and employees. It can be beneficial to begin work with individuals for one-on-one coaching before expanding to team training. Coaching helps each individual get a hold of what they can be responsible for in their own experience and helps them gain another perspective and a better understanding of other people’s communication styles. If you can understand why someone is communicating in a certain way, you can start to react differently. Or if people aren’t responding to you, you can look inward to identify a better way to communicate.

If you can become aware of your natural tendencies and learn to govern them better, you can expect a different outcome. And that self-awareness and the awareness of the team around you can be a significant investment in team morale.

I believe that people are naturally resourceful and creative and whole, and they don’t need to be fixed. But a coach can help them look inward to find the magnificence of who they are and the mission of what they’re doing, to gain a sense that, ‘Yes, I’m engaged in a project with my team that I really believe in,’ and forgive a lot of the trivial things that have been weighing that person down.

It helps them to get a better sense of perspective, giving them strategies for how to navigate tricky personalities and a better understanding of who they are so they are more self aware in their interaction with others.

How can that benefit a company?

It’s amazing what people can do when they feel acknowledged, excited, motivated and energized about the mission and about what their role is in it. A coach can help give people a clearer perspective on what they can control and magnify who they are and the contribution they are making, leading to a renewed sense of vision and appreciation for those they work with.

When people really get permission to be who they are and express their truth in a non-confrontational way, they can really do amazing things. You and your employees already have the answers inside of you. A coach is just a way to access those answers that you may not know how to get to on your own.

Ricci M. Victorio, CSP, is managing partner at Mosaic Family Business Center. Reach her at (415) 788- 1952.

Published in Northern California

Oftentimes, when people find themselves with a “sudden money” event, they’re overwhelmed with the new demands and new decisions they need to make. Whether that money comes through an inheritance, insurance settlement, divorce, stock options or a lottery win, it is going to make a significant difference in your life. If you don’t give yourself some time to figure out how to deal with your new level of wealth, you are likely to make a number of mistakes you’ll regret later, says Norman Boone, founder and president of Mosaic Financial Partners Inc. in San Francisco.

“Suddenly having money that you’ve never had to deal with before can be very difficult,” says Boone. “While you may be tempted to jump in and buy that new Porsche or home in Tahoe you’ve always wanted, taking your time will ensure that the money is used in a way that is right for you.”

Smart Business spoke with Boone about the three steps to making sure unexpected funds are used in an intentional way.

Isn’t suddenly having a lot of money a good thing?

Most of the time, yes. But, it’s important to recognize that most of us have emotions surrounding money. In addition, the issues that can lead to a significant jump in our level of wealth — inheritance, divorce, loss of a spouse, retirement — are themselves emotional events. Put the emotions you have about money on top of the feelings arising from those events, and it can become overwhelming.

What should happen first after coming into sudden money?

The first step is one of adjustment and planning. You need to get used to the idea of having this new money and it’s critical that you do some planning. What do you want out of life? Who do you want your friends to be? Where do you want to live? What things do you want to be involved in? Do you want to continue to work, volunteer, or just play golf? There are a lot of choices about how you want to live your life and how you’re going to share the wealth. What would you end up feeling good about, or what would you feel guilty about? If you make spending decisions too soon, you’re almost certainly going to make mistakes and do things you’ll regret later, as well as limit the choices you’ll have later on.

We advise our clients to take a year to think about these things and prepare. Find an adviser who has helped clients through these issues before. Don’t be afraid to discuss what seem to be ‘stupid questions.’ This is a new experience and so there are going to be new complications in your life. Begin to set goals, see how those feel to you and figure out the things you want for yourself and your family.

The biggest mistake people with new wealth make is that they quickly spend it on things that seem appealing. They are easy targets for friends and family who want something from them. While buying some new things is natural, defer the really major decisions until you have a clearer view of how to deal with the wealth. Those who spend too quickly almost always wish they had done it differently.

Family, friends and oftentimes strangers don’t always have your best interests at heart.  Friends will expect you to pick up the dinner tab. Most people who have publicly received new wealth are inundated with investment ideas or requests for gifts or loans. We suggest that ‘no’ be the answer until you have a well developed policy to help you decide how to deal with those requests.

The first phase also involves finding the right advisers. You want people who answer your questions respectfully and in ways that you understand. They should be well qualified and have experience working with others who have enjoyed sudden wealth. They should be well regarded by other advisers and should be willing to commit to always making recommendations to you that are solely in your best interests.

What is the second phase?

Phase two is the action phase, in which you start to implement the plans you’ve developed in phase one with your attorney, accountant and financial adviser. This will typically involve making investment choices and developing a whole new estate plan. It may include setting up charitable strategies, perhaps deciding if and how you might share some of that money with family.

Having good plans will allow you to make good decisions. It’s important that those decisions reflect your wishes and not what anyone else wants from you, including your advisers, family members and friends (all of whom will want to offer you advice).

What else needs to be considered?

The third phase is the monitoring and adjustment phase. When you discover that early decisions were not optimal, it’s OK to change your strategy. When your money is at work, the right planning has been done and you’ve begun taking the right steps, you can also start to think about larger projects. Are you going to get involved in charities? Depending on how much money you have, charitable work can be a gratifying way to share your wealth. It’s also a way to get family involved in enjoying the benefits of the wealth and help them learn to deal with money that may eventually be theirs.

You should see your advisers regularly to ensure you stay on track. We recommend you meet with your advisers at least once a year, and more often if you have larger amounts, because questions come up and things change. Do not be afraid to ask questions or use the expertise of your advisers. This is your ‘wisdom team,’ and if you’re not taking full advantage of them, you don’t have the right advisers.

Sudden money is everyone’s dream, but the reality is more complicated. If you do it right, the new wealth can add significantly to the quality of your life. Instead of impulsively squandering your opportunity, take your time and be thoughtful with it so that you can fully enjoy it.

Norman M. Boone is founder and president of Mosaic Financial Partners Inc. Reach him at (415) 788-1951 or

Published in Northern California

Most business owners understand the idea of developing a business plan and know how to create objectives and goals. But many become challenged when asked about their vision for where they want to be in 5, 10 or 15 years, says Ricci M. Victorio, CSP, managing partner at Mosaic Family Business Center.

“Many business owners say they don’t know what they are doing in the next 30 days, much less in 15 years,” says Victorio. “But failing to have a strategic vision will be detrimental to potential growth and long-term success.”

Smart Business spoke with Victorio about how creating a deliberate strategic vision can help move your business into the future and help you achieve anything you can imagine.

Where does a business begin to create a strategic vision?

With the help of a facilitator, imagine the year is 2022; then look back to 2012 and ask yourself, ‘What have we achieved in last 10 years that we are really proud of?’ Instead of asking yourself where you want to be, hypothetically ask yourself, ‘Where have I been?’ Do this exercise with no boundaries and no fear of failure. If you could have achieved anything in these last 10 years, what would it be? For example, if someone has a goal of being retired, then he or she has to think about succession. Who will have taken your place? If you don’t know, you have a strategic issue.

As you think back from 2022, you step into strategic visioning. When you look at what your future needs are going to be, rather than just dealing with whatever happens, you can ask what you need to do now to be better positioned for where you want to be. This kind of behavior is called ‘being at cause.’

‘Being at effect’ is based in reactive behavior and causes anxiety. You will spend more money solving problems, paying the highest price to get it done quickly. Also, hasty decisions may not be the best ones for the long term. Having a strategic vision allows you to make deliberate changes on your own timetable because you are thinking ahead.

Having a strategic vision also allows for creative, innovative problem solving. You can take the time to determine whether an adjustment works. And because you are doing it incrementally, you are ahead of everyone else who will be scrambling to make changes at the last minute.

How does creating a strategic vision allow a business to work more methodically?

For example, if you want to be retired in 10 years, ask yourself what will be required in the next 10 years to bring your successor through the experiential and training process so he or she will be ready when needed. Or if your shareholders want to expand, determine what you have to do to be positioned to build your assets so you will have the available resources when you need them. Your vision for tomorrow should fuel your action today.

Buy-in from your team is essential. Boil it down to a concept. This will create a strong emotional connection that will encourage commitment from your entire organization. With a common vision, all decisions become based upon keeping everyone in alignment with where you are going. Be advised that a strategic plan should be reviewed every year or two, because change is inevitable.

How does the process work?

Initially, all ideas should be welcome without judgment. The only rule during brainstorming sessions is that nothing is impossible. When you give people permission to create without being required to know how they are going to get there, it’s very freeing. People often get stuck in the question of ‘how’ something will be accomplished. But in the visioning exercise, the focus should be on the ‘what we want to be’ and ‘where we want to go,’ and not about worrying or negotiating how we will get there.

After you’ve gone through the predictable ideas, begin considering what else you can do — let go and have fun. You’ll find that people start throwing out ideas that are ‘outside the box’ and potentially brilliant. This is where having a facilitator who is objective, understands the creative process and doesn’t have a vested interest in the decisions that are made is significantly important.

How do you communicate the strategic vision to your employees and get buy-in?

Start by transforming the strategic vision into a plan with action implementation steps. Communicate your overarching vision and provide a way for employees to participate in implementing the vision into actionable steps. Your vision cannot become a reality without their creative participation.

Next, enroll employees into committees to work on fulfilling the three or four major objectives in your plan. They will develop the tactical steps that will become part of your annual business planning. This vision gives you the motivator — the ‘why’ — for the ‘what,’ and then employees are tasked with figuring out ‘how’ to get there.

Buy-in requires that every employee has a stake in the outcome and participates in creating the programs that will get you to the next goal post. Conversely, if ownership believes that the success of the company is built on the genius of top management, change will be difficult. Recognizing that your organization is stronger and more innovative and successful when everyone is working together as a team, rather than when taking orders from the top, will propel you toward the achievement of your dream.

Ricci M. Victorio, CSP, is managing partner at Mosaic Family Business Center. Reach her at (415) 788-1952.

Published in Northern California

Many of us have investments scattered among multiple money managers. If they are not working together, a lack of coordination among those managers could be costing you a lot of money, says Norman M. Boone, founder and president of Mosaic Financial Partners Inc.

“If all of your accounts — trusts, 401(k)s, IRAs, individual accounts, joint accounts, etc. — are under one broker, that person will have a clear picture of everything that is going on across those accounts,” says Boone. “Most investors have no idea how much it may be costing them to have different parts of their portfolio under different managers. This is especially true for the taxable part of your portfolio.”

Smart Business spoke with Boone about why one hand needs to know what the other is doing and how to find  an investment adviser who can maximize the tax advantages across your accounts.

How can having accounts across different managers cost investors money?

Let’s say you have $500,000 to invest, and your broker puts your account with three different account managers who are buying individual securities. Typically, they do not communicate with one another about their trades and holdings. This can create a couple of problems. The first issue is that they may be investing in many of the same securities; instead of decreasing risk through diversification, you instead get more risk due to the overlap.

Another pitfall would be if your three managers all avoided a particular industry, for example, the oil industry. The empty places in your portfolio further defeat your desire to diversify. Most managers manage what they are familiar with, and if they are not familiar with oil, or international markets, or emerging markets, for example, that could leave holes in your portfolio.

Both of these problems are caused by the failure to have someone seeing the whole portfolio, to make sure all the bases are covered and that there is no overlap. The lead adviser would make sure there is exposure to large and small cap U.S. stocks, large and small cap international stocks, emerging markets, bonds, real estate, etc.

How could a lack of coordination among managers negatively impact an investor’s tax situation?

According to the ‘wash sale’ rule, if you sell a security at a loss, you can only make use of that loss for tax purposes if you do not buy that same security during the 30-day period before or after the sale. In other words, you lose the tax advantage available when you have a loss. For example, if you sell a stock at a loss and, within 30 days before or after that sale, you also buy that same security, the tax code forbids you from making use of any loss you may have incurred on the sale of that stock.

The rule becomes important in a portfolio that’s being managed by multiple managers. For example, say you have Manager A and Manager B, both of whom oversee a part of the portfolio. Manager A likes IBM and owns the stock in the portfolio. Manager B doesn’t own it yet, but he likes it. Manager A then sees a better opportunity, sells the stock, and assumes the loss on the sale. He thinks he’s helping the client and saving him some tax dollars on the loss. But Manager B, operating independently, buys IBM 20 days later, eliminating the tax saving opportunity created when the stock was sold at a loss.

If there’s no coordination between those managers, the result could be very costly.

How can an investor avoid this issue?

Find an organization that will manage your money in a more coordinated fashion. That firm should be managing all of your accounts, so it knows what is being bought and sold across the portfolio and can make sure someone isn’t buying something that was just sold previously by someone else. This coordination is important if you want to be able to take full advantage of tax laws, and if you want your portfolio to be properly diversified.

Losses can be carried forward forever, until they are used by the taxpayer. As the market returns to strength, having losses ‘banked’ can result in significant tax savings for your portfolio.

What questions should an investor ask when looking for a broker?

Beyond the basic questions addressing how money is managed, questions you might ask include: Do you do tax loss harvesting for my individual portfolio? With separately managed accounts, the manager doesn’t typically know who the clients are and just manages the money without considering the tax consequences for the individual client — and sometimes without even knowing who the client is.

Other questions to ask: How do you coordinate with other managers? How do you manage the wash sale rules to ensure maximum benefit? When managing money, do you take into account individual tax needs? How many clients do you have?

If brokers have 1,500 clients, they may invest in the best small cap stocks, but it’s impossible for them to individually manage the tax needs of each of their clients. You need to find an adviser who manages with that objective in mind, who is sensitive to the costs and considers the tax consequences that reflect your situation, not someone who is just managing money the way he or she wants to manage it.

Norman M. Boone is founder and president of Mosaic Financial Partners Inc. Reach him at (415) 788-1952 or

Published in Northern California

As a family business owner, you may dream of one day handing your company over to the next generation. But have you considered the role that your management team will play in the transition?

“There can be no successful transition if the success of the business is not maintained,” says Ricci M. Victorio, CSP, managing partner at Mosaic Family Business Center. “A key element is making sure that you have secured the talent that has made your business thrive. It’s not just the family that is vital to an organization’s success. You have to retain your key managers, the talented people who really make your business work.”

Smart Business spoke with Victorio about how to involve your management team in the transition of leadership.

What role should the management team play in a successful transition?

Your management team needs to be able to run your business if you are no longer there, for whatever reason, while the next generation is maturing and learning about the business. You have to consider the gap that exists between the current owners and the next generation.

The first step in the process of passing the business along is to lock in a vision of what you see for the business’s future, then communicate that to the executive managers so that everyone who makes that business successful can be enrolled in the vision. The managers then see that, yes, ownership is thinking about their future and that there is a place for them. This is a significant step toward retaining the key managers that are such an important asset to your business’s success. You don’t want them departing at your retirement, leaving the next generation starting from scratch.

What challenges does senior management face when a leader departs?

Many owners are hierarchical in the way they manage, in which case senior managers learn to respond to the owner telling them what to do. But then what happens when the owner is no longer there? Managers won’t feel comfortable turning to the 30-year-old son, who’s never been in charge of the business, to now make those decisions.

You have to create a learning curve and find ways to develop the management team so that the company won’t be crippled when the owner is to longer there to make those key decisions, and the next generation is not completely ready to take the reigns. With the proper planning, key managers will know their expanded roles and who should be making the decisions once the owner departs, letting everyone feel reassured that the company can keep going.

How can a coach help facilitate the process?

A coach can spend time with the management team while the owner is still there, and alongside the next generation that is being groomed, to teach them to work together as a leadership team. This process also gives everyone the opportunity to clarify the core values of the organization and get comfortable in the kinds of decisions they’ll need to make based on those values.

In many companies, managers have a close working relationship with the owner, but may not have that relationship with one another. A coach can help unbind them so tightly from the owner and get them to start working together as a collaborative team.

The coach also works with the owner and managers to develop a charter. Here, the owner can define the vision of the succession plan, the agenda for regular team meetings and the objectives of what everyone is going to hold each other accountable for during the process. Part of this process involves identifying areas that managers will be taking over, but where they may be struggling. Some examples include communication, problem-solving, mentoring, how to deal with controlling personalities, conflict resolution and how to better conduct employee review sessions to create a dialogue between the manager and direct reports.

By addressing these issues before management takes on new roles and responsibilities, a coach can make a difference in the quality of the business environment, morale and, ultimately, bottom line profitability.

What are the dangers of failing to plan for a transition?

A drop in productivity is inevitable if you haven’t planned for that transition. If the person at the helm isn’t prepared for his or her new role, employees will become confused about who is really in charge. When people aren’t sure about whom to talk to about the important decisions, soon, someone with a higher pay grade will take over to tell them what to do. But employees won’t necessarily trust that person.

In this kind of confusion and unclear leadership structure, it’s inevitable that conflict will ensue and key people will leave the company. To avoid that, you have to identify and prepare new leadership, and get everyone used to the transition before it happens.

By empowering your leadership team as a group, you’re not putting all of your hopes on one person, because that could create resentment throughout the rest of the group, as well as stress for that one person. Instead, you’re enlisting a collaborative team that can check on each other and hold each other accountable. That way, if one person gets sick or leaves the company, the business will not fall apart. And generally, you won’t have to worry as much about people leaving when you enroll them at this level of leadership.

Who doesn’t want to be acknowledged and empowered and really feel that they are making a difference at work? That is really what this process is about.

Ricci M. Victorio, CSP, is managing partner at Mosaic Family Business Center. Reach her at (415) 788-1952.

Published in Northern California
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