Realistic Family Governance Goals
I recently spent a day in New York City at the second annual conference of the Institute for Family Governance.
It wasn’t only interesting, but in some ways inspiring. But upon further reflection over the following days, I almost felt like it might’ve been a bit too inspiring.
I’ll get back to that part later.
The opening speaker was Dennis Jaffe, who didn’t disappoint, as usual. His presentation was titled “Do you need a different mindset to create a fortune than to hold onto one?”
I love that title because it’s a question that answers itself, with an “of course” as soon as you read it.
Jaffe went on to talk about what he terms “generative families”, which others call “legacy families” and still others dub “enterprising families”.
Generative families, according to Jaffe, see themselves as a “collective entity”, who’ve decided to develop into a “great family”.
Great “Family” vs. Great “Business”
This reminded me of a line that some people like to use with successful business people, to convince them to shift their focus.
“You’ve already created a great business;
now, why don’t you create a great family?”
It also fits nicely with the question that served as the title of his presentation.
Jaffe has studied dozens of such generative families who’ve been successful at transitioning their wealth over several generations.
Examples and Role Models
The rest of the day continued with examples of families who’ve figured out that family governance is the key to having a great family.
Simply put, without any governance, a family’s legacy has virtually no chance to survive over generations.
In the past few decades, people like Jaffe have done the work of learning what these families do, and have written about it so that other people can follow these role models.
So here’s why I think that in some ways the examples we heard about might actually be “too good”.
I’m willing to bet that none of those families made the decision to create a governance model on one day, and then had created and implemented it successfully within a year.
I bet most of them still had lots of work to do even after a decade. This work takes lots of time and effort, over many years.
Mitzi Perdue was our closing keynote speaker and she talked about family culture, which includes the answers to questions like “who we are” and “how we do things”.
She also correctly noted that these things don’t just happen by chance.
This stuff takes lots of work, and it takes lots of time.
And it takes a different mindset.
Family Alignment and Vision
I know that in order for a family to be receptive to putting any sort of governance into place, they need to be aligned, and have a similar vision of what’s possible.
Regular readers of mine also know this to be true (assuming they’re drinking the KoolAid).
But I feel like many of the attendees at this conference might have had the impression that some of the examples we heard about possibly seemed “too perfect”.
Advisors to families, and families themselves, who’ve never heard of family governance often need time to grasp everything that’s involved in this work.
Likewise, the entire family will rarely buy in all at once; there usually needs to be an “early adopter” or “family champion” who “gets it” first, and then leads the way.
Ironman Inspiration to Get Off the Couch
I love analogies, and I think of these great generative, legacy families that are the role models, as if they were champion Ironman Triathletes.
They’re awesome and inspirational, and that’s why they’re on TV.
Most people will never get to that level, and if they choose to stay on the couch because they know they’ll never be an Ironman, then that’s a missed opportunity.
Lots of families could benefit from getting off the couch and just going for a walk or a jog.
One Step, One Person, One Family at a Time
Family Governance starts with a mindset, and a group of people who are aligned.
It takes lots of time and effort to get there.
The good news is that it’s very incremental in nature.
Start small, get another person on board, and grow slowly.
Don’t compare yourselves to the best and get discouraged.
It can be done, and it is so worth it.