Forging Trust One Family at a Time
By Diane Coutu
Diane Coutu, Director of Client Communications and a former senior editor at Harvard Business Review, talked to clients and colleagues about Henry Foley, Senior Partner and Co-founder of Banyan Family Business Advisors.
People wanted to hear what Henry Foley had to say. One of the Senior Partners at Banyan, Mr. Foley stepped forward and invited his colleague Andreas Schneider—a young advisor who was leaving the firm for business school—to join him at the front of the room.
“This is a bittersweet moment for us all,” Mr. Foley told his mentee at the firm’s goodbye party. “We are all pleased and excited that you are launching into this next phase of your life, and we celebrate your achievements. At the same time, we all feel a genuine sense of loss. We deeply value who you are, and what you have given to us.”
Then Mr. Foley reached into his jacket pocket and pulled out a pair of gold cufflinks that his grandfather had passed on to his father who had passed them on to him. He’d had the chain-linked pair of cufflinks divided and each of the four ovals backed with a gold post and bar. There were now two different, but identical pairs of cufflinks.
“I want to keep something that is very important to me, but to share it in a tangible way with you,” Mr. Foley said, passing one set of the cufflinks to Mr. Schneider. The symbolism was not lost on anybody. Mr. Schneider was moving on, but he would always be a part of the firm, a member of the family.
“I was pretty overwhelmed by his generosity,” said Mr. Schneider, now an MBA student at George Washington University. “The gift was so like Henry—thoughtful and caring. It’s what makes him one of the best mentors I’ve ever had. He’s always very open and appreciative—very curious about my point of view. And this is exactly the way he is with families. He gives them his all.”
Families around the globe—Mr. Foley has worked with clients in North America, Latin America, the EU, the Middle East, the Indian subcontinent and Southeast Asia—agree that if they need help, Mr. Foley will give them everything he’s got. Whenever a family member needs assistance, he visits them—sometimes on his own; often with teams—or, at the very least, he connects with the client immediately by phone.
“We’ve never had an advisor who understands us or cares about us as deeply as Henry does,” says Isaac Rosset, one of the three sibling owners of Grupo Rosset, a textile and apparel manufacturing business headquartered in São Paulo, Brazil, “and no one has been as capable as Henry for helping us change in a positive direction.”
What makes Mr. Foley effective at helping families change is his ability to quickly and deeply assess a client situation. “He can very rapidly connect the dots on a wide range of issues in a way that is not easy or obvious to client families,” says Rob Lachenauer, a Banyan partner, and the firm’s CEO. “Henry can work with client families, on family, ownership, and business strategy with equal comfort. He’s that rare advisor who combines the breadth of a generalist with very deep expertise.”
Clients interviewed for this article agreed that Mr. Foley has a particular talent for getting family members to come to workable agreements, even when there are significant differences of opinion.
“The way Henry drives consensus in families runs counter to conventional wisdom,” said a family business owner who’s observed him closely. “He has, in my experience, a unique ability to be bluntly honest in his determination to get at the right issues, and the right solutions.”
Recently, in an engagement in Asia, a highly successful entrepreneur was agonizing about whether his children would ever be as good as he is, thereby stalling the transition process. Mr. Foley pointed out that the founder was intimidating his kids. “I’ve been intimidating people ever since I was 18 years old,” the entrepreneur responded matter-of-factly. “It’s time to get over your need to be intimidating,” Mr. Foley shot back. “Neither the family nor the businesses can afford that style. It’s time to build, support, coach and mentor.”
“Henry has the guts to tell it as it is,” said the founder of a billion dollar company in Toronto, Canada. “He can say very hard-hitting things, but he gets away with it because we trust him deeply. If anyone else were to tell us the same things, it would be very traumatic.” Indeed, client families consistently reported that Mr. Foley’s obvious affection for them makes them “feel safe.” “That affection is important,” the founder continued, “because the change most families need to go through is very scary, and the last thing we need is an advisor who makes us feel threatened.”
Mr. Foley, an extrovert who began his career behind the scenes, as a photographer, would describe himself as anything but threatening. Born in Boston, Massachusetts, he attended Harvard University as a graduate student, where he studied psychology, administration, and planning, and was trained as a clinician. But he majored in Art History as an undergraduate at Harvard College. There he wrote his senior thesis on photographer Alfred Steiglitz and the lifelong images he took of his wife, the painter Georgia O’Keefe. Mr. Stieglitz photographed Ms. O’Keefe from the time he met in her twenties until his death; he left behind hundreds of images, some of the finest photographs of the 20th century. In his thesis, Mr. Foley argued that a real portrait can never be created in a single image; it takes a lifetime of images to capture a person accurately.
“That’s exactly the way Henry relates to families,” said a former colleague, a psychoanalyst. “He truly believes you can’t get to the essence of person in just a few encounters. Sometimes he will keep in touch with a family for ten years before there’s an exchange of even a single penny.”
The former colleague recounted how Mr. Foley told him one day to pack his bags—they were heading out for Houston from Boston. “I asked him how many days we’d be gone,” said the psychoanalyst, laughing. “For lunch,” came the reply. After lunch, however, the family member invited Mr. Foley and his colleague back to his ranch where, for seven hours, they discussed confidential family matters in greater depth. The question of business never came up.
“Henry’s got fire in the belly,” said the psychoanalyst, “he’s got the true passion and excitement you need to really help families.” Or, as Mr. Rosset, the Brazilian textile owner, put it: “Henry loves his clients.”
That feeling is mutual. Over the years, families have invited Mr. Foley to family reunions, baptisms, bar mitzvahs, weddings, even to a Halloween birthday party. But the families interviewed agreed that it isn’t this familiarity that sets Mr. Foley apart. One thing that distinguishes him, they said, is his respect for boundaries, knowing where to draw the line between the professional and the personal.
“When you work with families, it’s so easy to cross boundaries, but Henry has always known that there is a line,” said Brooke Barrett, the Co-CEO of The Denihan Hospitality Group headquartered in New York City. “We’re close to Henry, but there’s a boundary of professionalism that always has remained no matter what. That’s one of his great strengths.”
Mr. Foley traces his strengths back to his family. He explained that he grew up in an environment with parents who encouraged him to be self-aware, and direct. Additionally, he said his mother and sister were genuinely, and exceptionally, curious about other people. “They each had a rare ability to make people feel important and different from anyone else they’d ever met,” Mr. Foley said in an interview at his farm in Dartmouth, Massachusetts. “I learned much of what I know by just watching them.”
For clients, this curiosity and empathy translates into extraordinarily profound connections. “Henry’s a superb listener,” says Ms. Barrett. “He listens to you so intensely that you always feel heard.”
Mr. Foley also credits his parents and grandparents for his appreciation of the value of a hard day’s work: “My parents were very successful, but they worked unbelievably hard so that I could enjoy the privileges life had to offer.” His grandparents on his mother’s side were Irish immigrants to Boston in the 1870s, who told him about reading want ads in newspapers saying: “Irish need not apply.” “My parents were both very well educated, but knowing what my maternal grandparents went through has helped keep me grounded. My mother in particular always stressed the importance of remaining rooted,” Mr. Foley told me. Today, colleagues say he is as much at ease with the visionary entrepreneurs who often started the business from nothing as with their children and grandchildren who have typically grown up in much wealthier circumstances.
For whatever reason, Mr. Foley often finds himself championing the younger generations of business families. As he put it in the interview: “At some point, the older generation has the obligation to give up their need to be the best and only generation that could ever run the business. This is not to say that they should roll over and play dead. But the most serious risk for anyone in the senior generation is that they may create or contribute to the conditions that lead to the next generation not being able to fulfill their true potential.”
This insight into the needs of the next generation may have something to do with his sometimes contentious relationship with his own father whom he loved and respected deeply. A Harvard-trained lawyer who founded the renowned firm of Foley Hoag in Boston, the elder Mr. Foley could be tough, said his son, moving the air with his hands. Among other things, his father had high standards for good writing: “People at his firm went through years of agony until they got back a memo on which my father had written: ‘This is excellent.’ These were the memos that weren’t all marked up with red ink, and I know a couple of the partners who actually had theirs framed.” Mr. Foley interrupted himself, leaned back in his chair and laughed: “You know, I remember one day wanting to grab my father by the lapels and shake him hard, but even back then, young as I was, I knew that when it comes to families, life is always a work in progress.”
There was a moment of silence while Mr. Foley waited for something to settle in his mind. “I get what the younger generations in families sometimes go through,” he straightened up. “I had a powerful, brilliant father who was a founder of a great firm. It’s a challenge to fill those shoes. When I work with the younger generations in business families, that’s something I always try to remember.”
To be sure, the younger Mr. Foley can be tough in his own right. His visions for the long-term sustainability of the family and the business sometimes require the use of what he calls his velvet hammer.
Not long ago, Mr. Foley and a team of advisors were invited in to help a family with ownership and leadership succession issues in their family business. The children, now in their 40s and 50s, are all extremely respectful of their mother and had never raised the subject of succession, considering that to be impolite. Mr. Foley and the team talked to the family matriarch for many months about transitioning to the next generation. Finally, Mr. Foley addressed her point blank: “It’s good to be Queen, but unlike Queen Elizabeth, you have made a decision to step down, and now it is time to begin the discussion with the next generation about when and how that will happen.”
“There was dead silence as the client searched for something to say,” recalls an advisor who was working with Mr. Foley at the time. “But Henry was unapologetic, and the client knew he was right.” It’s an integral part of his philosophy that confronting families about censored issues gives families the license they need to have difficult conversations. Then they can hammer through for themselves the pluses and minuses of the various options, he said.
But even a velvet hammer is of little use if is doesn’t lead to results. As Mr. Rosset, the Brazilian textile owner expressed it: “What makes Henry unique is how he can work with his insights, his feelings, and the feelings of others. You can’t teach that; Henry was born with it. He brought peace between my brothers and me. This is very important. First peace, but then results.”
That lesson is not lost on Mr. Foley. “Henry has very ambitious goals for his clients,” says Mr. Lachenauer, Banyan’s CEO. He describes Mr. Foley as being “relentless” in his determination to help families become more unified and to grow the business: He deeply wants to help family businesses increase their profitability all the while wanting to help Banyan remain a world class family business advisory firm. “Henry’s a rainmaker, and he relishes that role,” said Mr. Lachenauer, emphasizing Mr. Foley’s reputation as a team player: “He develops relationships with families as much for his colleagues as he does for himself.”
Ms. Barrett and her brother Patrick Denihan, Co-CEOs of The Denihan Hospitality Group echoed Mr. Lachenauer’s assessment of Mr. Foley as a team player who pushes hard for improvements in the business. They brought him in to help with family strategy and family governance, as well as with business strategy and corporate governance. The brother-sister team credits Mr. Foley with having helped them establish an Advisory Board and for introducing the Group to outside candidates, many of whom now sit on the board. Mr. Foley also brought in other firm members to work with the third generation in the family, as well as on ownership issues.
“Without Henry’s help, it would have taken us longer to get where we are,” said Mr. Denihan. “It’s a little odd to say this given that there’s not much age difference between us, but Henry reminds me of my father: He always raises the right questions and he challenges me.”
Other clients struggled to express how Mr. Foley helps them to succeed both in family matters and in the business. Robert Ho, one of five sibling brothers in an international shipping company, wrote to Mr. Foley that it “is difficult to describe the type of work you [and your team] do but can only describe it as being ‘healers of family enterprises.’”
However you describe him— rainmaker, father, healer—Mr. Foley clearly establishes deep roots with the people he works with.
No one achieves this stature without a certain amount of humor and charm, and these qualities come together in Mr. Foley’s talent as a natural raconteur. He is blessed with a prodigious memory and can remember stories and anecdotes he heard years ago with a richness of detail that is remarkable (some say “scary”).
As Mr. Denihan, the Co-CEO of The Denihan Hospitality Group, put it: “Henry rarely takes notes—for one thing, he writes too slowly—and yet he remembers things 30 and 40 years later.” Nick Di Loreto, one of the younger Advisors at Banyan, nods in amazement. “I have a tiny scrawl, and I take four pages of notes. Henry takes down four words on a page, and he remembers entire conversations.”
Mr. Di Loreto said Mr. Foley’s memory allows him to talk freely with family members over dinner or at business meetings about subjects that came up decades before. “He focuses entirely on the client, making him or her feel like the most important person in the room. That’s great for forging relationships. It creates trust and confidence, which lets Henry get away with things like pounding on the table and telling family members to stop quarreling. Families respect him.”
The story of Mr. Foley pounding at the table is true, and has become legendary throughout the firm, a kind of parable for teaching young Advisors that they must sometimes go to unusual lengths to keep order in the family. As Mr. Foley is fond of telling the next generation Advisors at Banyan: You have to be prepared to be “ferociously” diplomatic, adding, always, that this ferociousness works only “if you care, and care deeply.”
Mr. Foley is a key contributor of intellectual capital at the firm. George Stalk, world-renowned strategist and fellow Banyan Senior Partner, credited his colleague with pushing the firm to do more work with families on business and ownership strategy, in addition to the family strategy work that is the bread and butter of most family business advisory firms.
“The Partners were talking about the various family needs that the advisory industry wasn’t meeting very well,” explained Mr. Stalk, “and we all were troubled by fact that traditional family business consulting firms focused almost entirely on family strategy and governance. We realized that there are ownership and business strategy and governance issues, too, as well as financial linkages that needed to be explored. It was Henry who identified the need for integrated treatment of family issues, financial issues, and strategy issues.”
Mr. Foley quickly saw the close connection between a client’s level of trust and advisors’ ability to help improve business performance. Family businesses are typically very private and frequently hesitant to disclose information about their financials; it takes enormous trust before the ownership group will share their numbers with outsiders. Many business families are afraid that they will lose their competitive advantage if someone figures out their trade secrets. An advisory firm usually has to partner with a client family for a long time before it is convinced that the firm can keep their business secrets confidential. “We believe this kind skepticism is healthy,” said Mr. Foley, “and we pride ourselves on our ability to build up the level of confidence that is necessary to work with families on the business side.”
Henry Foley is obviously successful, but at what cost? That’s the question raised by a family business founder who asked not to be named. “Henry works too hard and doesn’t have enough work-life balance,” he said.
“No, no!” pipes up Evan Foley, Mr. Foley’s youngest daughter, a pre-med student at Clark University. “The truth is that he achieves a lot of balance. But, then, one of the things he feels intensely about, and he has helped us to understand, is that working hard is not a flaw.” Her voice softened. “People have no idea what our family life is like,” she says, adding that when she’s with her father, she doesn’t get even “a fraction of a second” to ask him what he’s been up to: “He makes our time be all about me.”
Mr. Foley’s three daughters strongly defend their father. As his eldest daughter, Catherine Foley, an epidemiologist, put it: People should be careful about judging how balanced someone’s family life is. “My father spends time with all of us and treats us each as individuals,” she said. “He calls me every other night. We’re in constant touch.” Kyle Foley, Mr. Foley’s middle daughter and a medical technician in the U.S. Navy, says that she and her father talked a lot growing up: “It was my father who drove me across country to my college in Minnesota, and then back again to Boston. We talked during these trips, and what I learned most from him is how important it is to have a dialogue with another person.”
Mr. Foley is married to the former Jane Tuckerman, herself a photographer whose images hang in the Metropolitan Museum of Art. The couple share a passion for art, with a special interest in photography. In his home office at their farm in Dartmouth, there hangs a photograph taken by the noted LIFE photographer, Arnold Newman. The image is of Mr. Stieglitz and Ms. O’Keefe—a rare photograph of the married couple who almost never appear together in pictures because Mr. Stieglitz was always behind the camera. That one picture may be worth a thousand words when it comes to the Foleys. “They’re two enormously talented people who are very accomplished in their own right, and even more accomplished as a couple,” says a friend.
Mr. Schneider, the young advisor who left the firm for business school this-past fall, returned to spend the summer working at Banyan. He said that after his first year of graduate school he had remained connected to the firm. When I asked him whether he could imagine passing on the cufflinks that Mr. Foley had given him, Mr. Schneider didn’t hesitate for a moment. “These cufflinks aren’t going anywhere,” he said quickly, “they’re going to stay in the family.” That’s one tradition that will be passed down from generation to generation.