Getting your Trinity Audio player ready...

Two Key Elements Working Together

As someone who shares my thoughts weekly on a variety of subjects relating to intergenerational wealth transitions, I need to have an eclectic array of inspirations.

Since the Covid pandemic has largely receded into the rear view mirror, I’ve noticed how in person meetings can develop into deeper discussions that more easily trigger ideas for these posts.

Such was the case when I recently had breakfast with a colleague who happened to be in town on other business.

This man has experience as a lawyer and a family office executive, and he is enamored with the idea of a “family bank” as a strong foundation for successful family governance.

What’s Right for THIS Family?

As we discussed his thinking and how a family bank can be exactly the right structure around which some families can and should build their legacy, the conversation took some interesting turns.

At one point he was in the middle of a sentence about what a family bank can bring and in my mind I jumped ahead and filled in my own word, assuming he would say the one I was thinking.

As you might guess from the title of this piece, we had different words.

I assumed he would say “structure”, but instead he said “discipline”.

Hmmm, I thought…. And this is exactly how many of my blogs are born.

What Angle Am I Taking?

Let’s take a minute to consider the angle one would be coming from to choose between those words.

I was coming from a big picture view of creating some structure around how a family might consider setting things up, in order to bring some necessary formality to the decisions they will want to make regarding the funding of various ideas that are expected to come from certain family members.

My friend was instead focussing on the discipline that having such a structure naturally imposes on those who wish to partake in a request for funding their idea.

Neither is necessarily better than the other, and in fact, they are complementary, hence my decision to highlight these synergies in the title I chose for this post.

Somewhat Like Engagement and Alignment?

The contrasting of structure and discipline reminded me of another pair of words that I like to look at together, engagement and alignment.

See Family Engagement and Family Alignment – Chicken and Egg

Regular readers know that I like to pay close attention to the words I use, and I also appreciate conversing with people who also choose their specific vocabulary with care.

In a similar way that alignment and engagement can be seen as two sides of the same coin, I think that structure and discipline also work well together.

When my friend said “discipline” while I was expecting “structure”, it probably mostly had to do with the fact that I feel like imposing discipline on people seems more judgemental that I think is necessary, whereas structure feels more neutral.

Back to the Synergies

Stepping away from how “judgy” these words are, let’s get back to how they work well together.

Structure is about the way you put something together, and some formality is inherent in the process, because we’re not talking about a physical structure, but a theoretical one.

The discipline is more about what that structure naturally imposes on those who want to interact with the structure, which includes some elements of formality, preparation, and diligence.

I’m flashing back to something I learned a decade ago in my Family Enterprise Advisor training, “Formality is your friend”.

Perfect for Certain Kinds of Families

A family bank can provide both structure and discipline, and for some families, it’s a great foundation for the family’s governance needs.

Other families will be better served with a different foundation, depending on where they are in their evolution and what their major activities and priorities are.

Some families anchor their governance to a philanthropic mission, others will base theirs around an operating business, while others will use a family office as their base.

What they all have in common, hopefully, is some basic structure, which then imposes some discipline for the family to organize around.

It’s important to find the right balance that can serve the needs of the largest group of family members who need to come together to make decisions together in the interest of the entire family.

Some structure and discipline are always required.