Groundbreaking Guide to Family Business Succession: Upcoming Talking Billions Guest David Werdiger's "Transition"
As the host of Talking Billions, I'm particularly excited to feature David Werdiger on the show. His exceptional book, "Transition: How to Prepare Your Family and Business for the Greatest Wealth Transfer in History," resonates deeply with the patterns I've observed while managing stock portfolios for families with multi-generational fortunes.
A Visionary Approach to an Age-Old Challenge
Werdiger doesn't merely add to the conversation about family business succession—he transforms it. As he writes in the preface, "The First Generation Entrepreneur starts with ultimate power, but at some point, there must be a generational shift, not just in wealth, but in power." This fundamental insight cuts to the heart of succession planning, addressing both the tangible and intangible aspects of generational transitions.
Drawing from personal experience, Werdiger candidly admits, "I wrote this book because I've been going through the same journey in my family. A few years ago, I realized that my family would go through this transition." This personal connection gives the book an authenticity rarely found in business literature.
Unparalleled Insights from Immigrant Entrepreneurship
The book's exploration of immigrant entrepreneurship stands as some of the most illuminating business writing published in recent years. Werdiger observes that immigrant entrepreneurs who created successful businesses often followed a specific pattern: "Rather than reinvest their profits in the business, they pulled them out and put them into hard assets, such as real estate." This preference for tangible assets, he explains, stems from displacement: "These were people who were displaced and were stateless at some time in their lives... Psychologically, in their new lives in a new country, they were drawn to the attraction of property as a store of wealth."
His analysis of how immigrant entrepreneurs approach business reputation is particularly insightful: "In business, the reputation they wanted was as somebody who people wanted to do business with. It was something intrinsically important to them; often their families in their birth countries had a particular standing within their communities and they, as the survivors of their family, had to take that with them and start it from scratch in a place where they were not known."
Revolutionary Reframing of Legacy
Where "Transition" truly shines is in its examination of the psychological dimensions of inherited business and wealth. Werdiger writes, "A legacy is made up of the values that you transmit from one generation to another and that continue to be transmitted across many generations." Yet he also acknowledges the burden this creates: "When people are born into a multi-generational family business, it is the continuation of somebody else's dream."
This tension creates a fundamental challenge for next-generation family members, as Werdiger notes: "There is an intrinsic need in everybody to be their own person and to not just be the son of somebody else successful." This insight helps explain why succession planning must address not just business structures but also identity formation.
A Blueprint for Multi-Generational Success
Werdiger offers practical frameworks throughout the book, including his three personal business values: "Lifestyle—The business needs to meet my lifestyle. I will not be a slave to the business... Liquidity—The business needs to be profitable... Leadership—The business needs to be seen as a leader in its industry." This simple but powerful framework helps next-generation leaders clarify their own relationship with the family enterprise.
The book also tackles the notorious "shirtsleeves to shirtsleeves in three generations" phenomenon. As Werdiger explains, "The Scottish express it well: 'The father buys, the son builds, the grandchild sells, and his son begs.'" Rather than accepting this pattern as inevitable, he identifies specific intervention points for families determined to break the cycle.
A Timeless Resource for a Historic Transfer
Werdiger emphasizes the unprecedented nature of our current moment: "This is the first time in the history of humankind that four generations have lived concurrently." This demographic shift creates unique challenges for family businesses navigating succession planning across multiple generations simultaneously.
For family business owners contemplating succession, his advice is both practical and profound: "You can't copy someone else's success (because the context will always be different), but you can learn from their mistakes what to avoid." This balanced approach—learning from others while recognizing the unique context of each family business—characterizes Werdiger's entire philosophy.
As an entrepreneur himself, Werdiger understands the distinction between "owning a job" and "owning a business." As he explains, "If you're a high-value professional, such as a doctor, you own a job if you're working for yourself... On the other hand, if you own a business, the business has a life of its own, and you've created something (which includes an income stream) that exists without you."
I look forward to exploring these themes and more when David joins me as a guest on Talking Billions. "Transition" stands as an essential contribution to business literature and a transformative resource for families navigating what Werdiger rightly calls "the greatest wealth transfer in history." His parting wisdom reminds us what's at stake: "How can the business evolve to meet a new generation of needs and also a new generation of dreams?" In answering this question, Werdiger has created a guide that will serve families for generations to come.
Disclosure:
Blue Infinitas Capital, LLC is a registered investment adviser. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.