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Planning your Family’s Declaration of Interdependence

This week we’re going to go over some old ground, and cover some things that are brand new to this space.

There’s an “A-Ha Moment” involved, as well as a new way to attack an old problem.  

One thing most regular readers will recognize is that we’re once again visiting the wonderful world of “family governance”.

Never Start with a Constitution

Let’s set up the family governance part off the top.  Back in 2018, in Behind the Flawed Family Constitution we talked about the fact that for some reason, having a “Family Constitution” had become a really cool thing that families thought they needed.

Or at least, there seemed to be renewed interest in such a deliverable, likely caused by some professionals who discovered the idea of possibly selling this idea to their family clients.

I’ve also since met with families who’ve come to believe that a family constitution could be an appropriate thing for their family, and I usually try to get them to back away from the idea, once I realize that they’re still very early in their family governance’s evolution.

 

Start Small, Let It Evolve

I’ve tried making this point in various ways over the years, with families as well as with other advisors who are a bit newer to the area of getting families they work with on a proper path to governance.

Then recently, form an unexpected place, I got the killer line I think I’ve been looking for to seal the deal.

I was watching a WBECS coaching webinar recently, where David Burkus was talking about working with teams in businesses and other organizations in work situations.

A big part of such teams’ success stems from getting to the point where they understand the value of teamwork. Then he said the magic words.

“I want them to make a Declaration of Interdependence”. 

It hit me right between the eyes.

Why Didn’t I Think of That?

You see, back in 2015, I wrote a blog titled Independently Wealthy VS INTERdependently Wealthy, in which I first shared this notion about families being interdependent.

And, as most of you hopefully already know, in 2019, I published my second book, which happens to bear the title Interdependent Wealth.

But I had never thought about using it in an expression like “Declaration of Interdependence”.  But of course that ends now.  

And a little bit of knowledge of U.S. history also leads to a way to use it in the context of families, especially when they think they might want a family constitution.

 

A Time Lag of Measured in Years

Even though I’ve lived my whole life in Canada, it’s all been spent within an hour’s drive of the U.S. border, and there’s been a constant American cultural barrage, first over the TV airwaves and more recently over the internet, that most Canadians have become quite used to.

So I know that the U.S. Declaration of Independence was signed on July 4, 1776.  

I also hear about the U.S. Constitution on a regular basis, especially since I’m kind of a politics junkie.

I admit I had to Google the date of the Constitution, because it’s less well known. It was signed in 1787 and then had to be ratified by the 13 states, which took another few years.

 

The Family Governance Version

So now, whenever anyone talks about a family adopting a constitution, I’ll ask when they signed their declaration of interdependence.

Now, I need to clarify how I look at this, but it’s certainly not far fetched.

You see, while the U.S. was declaring itself independent from Great Britain in 1776, whether they admitted it to themselves at the time or not, they were simultaneously declaring themselves interdependent with each other.

And that’s the most important part for any family to realize.

 

Families and Wealth – Intention and Commitment

When I work with a family it’s usually understood that they have twin goals of keeping both their wealth and their family together through the generations.

That work takes some intention and commitment, because, as I love to remind them, that stuff doesn’t just happen all by itself.

This is where all the governance stuff comes in, along with working on engagement, alignment, and clarity.

And while some families will end up with a Family Constitution, eventually, there are more important things to take care of first.

Understanding and accepting that all family members, from all generations, are truly interdependent, is the first key step.

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Sharing the Load as an Enterprising Family

Most family businesses actually start out with one major contributor who builds something large enough to eventually employ many people, including other family members.

As any parent with children who want to help out around the kitchen knows, even when they’re really too young to contribute, it can sometimes feel like a step back as you need to actually take a bit more time to include some of these helpers.

This week we’re looking at the idea of sharing the load with family members, as the family matures and there actually are others who should be able to contribute to the family’s success.

Bringing them in isn’t always as simple as we hoped at the outset.

“Many Hands Make Light Work”

In theory at least, sharing the work among many people makes things easier for everyone.  Many hands make light work, the saying goes.

But what if we’re talking about more than simple “work”.

I’m trying to get at some of the things that underlie the complex nature of enterprising families, who are working towards an intergenerational wealth transition.person holding another person

There’s a lot of work to do there, in many cases. And if it were just a lot of work, it might be simple to divvy up.

But what if it feels more like a load?

“It’s Not the Load that Breaks You Down …”

The idea for this post came from a recent webinar I attended, by the Family Enterprise eXchange (FEX).  The presenter happened to be a friend and colleague, Thomasina Williams, with whom I once presented at the Rendez-Vous of the Purposeful Planning Institute (PPI).

She was presenting on Stress, Health and Well-Being as a result of the pandemic, and one of her slides featured a quote that I loved.

It was from Lena Horne, and it read: “It’s not the load that breaks you down, it’s the way you carry it”.  

According to Google, it also seems to be attributed to C.S. Lewis and Lou Holtz. It seems like great quotes get recycled a lot.

When Does Work Become a Load?

When we think about work, we’re typically pondering things that go on in what I like to call the “business circle”. 

If you aren’t yet familiar with the Three Circle Model of family business, you may want to start here: Three Circles + Seven Sectors = One A-Ha Moment

The place where things can start to feel more like a load often come up in the “family circle” and even the “ownership circle”.

Part of the difficulty in the family circle comes from the fact that there are often some members of the family who do work in the business, while others do not.

The “information asymmetry” that this creates can become a big issue for the family to address.  When someone is a family member and perhaps even an owner but isn’t involved in the day-to-day dealings of the company, they can feel like they’re flying blind at times.

Sharing the Load

Keeping all family members current with what’s happening in the business becomes important when there’s an upcoming generational transition.  

And by “upcoming”, I mean within a decade or so. In fact, it’s really hard to start this process too early.

One way to make the load easier to carry is to share it among different people. Of course the onus of sharing the info should fall on the ones who work in the business, but that doesn’t mean that all the work is theirs alone.

All family members who are currently owners, or those who expect to be in the future, also share in this task.

Ideally, the information flow should have both a “push” and a “pull” component.

Lightening the Load

As we think about ways to lessen a load, apart from sharing it, there is also the possibility of making it lighter.

This may seem like a bit more of a stretch, but here’s one way to look at it that might be useful.

Last week in Live from the Forum – Success Transitions we were looking at regular family forums, I don’t think I spent enough time talking about the importance of having fun together as a family.

Everyone should be looking forward to such meetings, knowing that there will be plenty of opportunities to share some laughs along the way.

In my book, spending time with people you love, and having fun together, always makes things much lighter.

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Live from the Forum – Successful Transitions

The Real Secret to Success for Families

As a child growing up in Montreal, home of the famous Montreal Canadiens hockey team, I heard the word “forum” hundreds of times before I had any idea what that word really meant.

You see, the arena where the Canadiens played their home games for the first 3 decades of my life was called the Montreal Forum.  

As a child, when my Dad managed to get tickets to a game, it was always a treat to go there, because the team was always very good and the games were always sold out, so tickets were tough to come by.

 

What Other Forums Are There?

It was a bit of an eye-opener when I later learned that there was also a Forum in Los Angeles. I recall thinking that they had “stolen” our name.

Of course this blog isn’t about arenas, it’s about families and the challenges they face in trying to transition their business or their wealth to the next generation.

And so you might be wondering what a forum has to do with that.

I hope that you’re intrigued and that you’ll always remember this idea, in part because of the way I’ve presented it here.

 

More Than Just a Meeting

Before we go much farther, let’s look at a definition that came up when I Googled “forum definition”.

“a place, meeting, or medium where ideas and views on a particular issue can be exchanged”

Many people who work with business families profess that the single most important thing such families should do is to make sure that they have family meetings.

I agree that having family meetings is very important, and I want to go a step or two further.

What I’m suggesting is that more than just having meetings with family members, you should strive to have family forums.

Teams working on their devices

The Importance of Open Discussion

Looking at other definitions of “forum”, I came upon one that included the following:

a public meeting place for open discussion and a medium of open discussion or expression of ideas

When I talk to clients or potential clients about these meetings, or forums (fora?) I always stress the importance of making sure that all voices are heard.

The absolute worst way to have a family meeting is to have one person, typically a guy named Dad, telling the family what he expects.

Monologues of any kind are the best way to kill any family meeting.

 

Striving to be a Family of Affinity

The bottom line is that you want to make sure that any family meeting is something that all family members will look forward to attending.

The kinds of families who are successful at transitioning their wealth to the next generation are ones who enjoy being together.  Some refer to them as “tribal families”.

Jay Hughes sometimes uses the term Family of Affinity. Just for fun I Googled that term and found this:

People with or without blood ties or legal ties, feel they belong together and want to self define themselves as a family.

There’s a lot there and for many families this is a pretty high hurdle

 

Discussing Things That Matter

I want to share one other tidbit I found while looking at definitions, before closing with what may be the most important item.

Forum: a meeting in which people can talk about a problem or matter

There aren’t a lot of words there, but they say a lot.  

“Can talk about” makes me think about how important it is that everyone feel safe sharing their viewpoints, and things that matter means we need to discuss more than just the weather or last night’s game.

 

When Is the Next Forum?

Having teased something very important above and quickly running out of race track, here we go.

A Family Forum is NOT a “one and done” deal.

You need to continue to have them, over and over again. Maybe you do it once a year, maybe more often

But you need to make this a regular thing; it needs to become a habit.

Family members need to learn what kinds of things they can bring up at these meetings, and then as they learn about each other, they will need to revisit subjects again.

Always schedule the next forum before everyone leaves. And if you can get a few of them involved in planning the next one, that’s even better.

 

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Sandwich Generation Challenges in Legacy Families

Yet Another Label for Generations

This week we’re looking at the challenges faced by one particular generation in many families. 

While we’ve previously discussed topics related to the “rising generation” in a family (a.k.a. NextGen) and on the leading or senior generation (a.k.a. NowGen), we’re going for something a bit different this time.

Most people are familiar with the term “Sandwich Generation”, based on the everyday challenges people in this position face no matter which socio-economic strata they inhabit.

I want to examine some of the special aspects of being in such a situation in an enterprising (a.k.a. affluent) family.

 

The Meat in the Sandwich

The term “sandwich generation” comes from being caught in between two other generations, much like the meat in a sandwich.

With increasing life expectancy, combined with couples having children later, more and more people in their 40’s and 50’s find themselves in this unenviable position.

Their offspring still rely on them and they’re rightly concerned with that following generation properly launching into independent adulthood.

Meanwhile, their parents have reached a stage in their lives where they also require care and attention.

This segment of the lives of the sandwich folks also happens to overlap with the most important years in their careers, and thus their work responsibilities, only adding to the challenges.

 

Patience Has Its Limits

A few months back, in On Patience and Impatience in Family Transitions, I wrote the following:

“The two (or three) generations need to take their time and incrementally move decisions and actions from the NowGen to the NextGen.  

 

That might sound like a very simple thing to do, but in reality it’s quite difficult.

This came home to me recently when my social media team put a podcast interview I’d done a while ago back into circulation.

On a 2018 episode of The True Wealth Project Podcast, which I recently re-listened to, I was personally stumped by a question about my own personal legacy planning vis-à-vis my children.

 

One Generation at a Time

The host asking me about my own family brought home the realization that I myself was one of these sandwich dwellers, and I knew that I was not alone.

In fact, when I wrote “The two (or three) generations” in that previous post, it should have been clear already.

Perhaps when I had written that, where the context was a family who were actively working on clarifying their legacy so that it would be successfully passed down, I was assuming that the generation in the middle would see themselves as part of the process and therefore not an afterthought.

But as I reflect on this, I can’t help but think that people in this position really need complete clarity of what is coming to them before they can think about how they’re going to eventually leave it to their offspring.

 

When Will Things Be Clear?

As I write these words and process them at the same time, it’s dawning on me that I’ve been confounding two separate issues: timing and clarity.

Last week, when I wrote How to ACE your FamBiz Succession Planning the “C” in ACE stood for “Clarity”, so I was unintentionally foreshadowing this point a week in advance.

But things don’t necessarily have to have already happened for them to be clear.

Perhaps the fact that I married into a family with little clarity has affected my view on this topic.

Don’t Wait for the Triggering Event to Ask Questions

Some families just never talk about things that are in fact inevitable, such as the eventual death of one of the family elders. 

They don’t want to talk about such subjects because they don’t want to be disrespectful or seem like they are rooting for something to occur in the near term.

Meantime, any planning for the future gets put on the back burner, because of the lack of clarity mentioned above.

Somewhere in a legal document lie the answers to many of the questions that are on the minds of many family members.

But nobody wants to ask the questions.

 

Coach, Coach Thyself

Every family is different, and some members are more comfortable in rocking the boat and bringing up uncomfortable subjects.

The expression “physician, heal thyself” comes to mind now, for me.

I’m not a doctor, but I am a coach, and maybe I need to think of myself as a coaching client and see if there are any ideas I might want to be pursuing myself, as I search for some clarity. 

Or maybe not.

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How to ACE your FamBiz Succession Planning

Don’t you Mean Continuity Planning?

One of the most popular topics in the area of family business is always succession planning. I’ve known this for a while, yet I rarely use that term in my writing, especially not in the headline.

So in order to prove that I can “zag” as well as I can “zig”, I did it this week. Why the change?

I’ve just spent several weeks refreshing my website, and my “web guy”, who is really good at what he does, told me that I needed to write about succession planning, because that’s what a LOT of people are searching for.

 

Yeah, But….

When I explained that there’s a better term that people like me now use, “Continuity Planning”, he patiently nodded his head and reminded me that if people are searching for one thing and you continue to call it something else, many of those people will never find you.

Alas, I acquiesced.

It kind of feels like I went back to build a worse mouse trap, hoping that the world would now beat a path to my website.  I guess we’ll soon see if new folks find me.

 

So You Want to ACE It

 

So in the spirit of writing something newish, catchy, and useful about family business succession planning, I decided to share a mnemonic way of thinking about it. 

A few months ago, in Family Engagement and Family Alignment – Chicken and Egg I shared the idea that engagement and alignment were two sides of the same coin, and two of the most important aspects of getting a family’s planning and governance on track.

Since engagement starts with an “E” and alignment starts with an “A”, I knew I had the makings of something. A good mnemonic should be something that spells a short word, so vowels carry a premium.

I just needed the right consonant to hold everything together.

4 aces in a deck of cards

Clarity to the Rescue

After kicking around a number of other options, I finally settled on “clarity” to complete my catchy word, “ACE”.

I was tempted to use “communication”, which would have given me the same word, and communication is, of course, crucial to family business success over generations.

But bringing things right back to the “succession planning” angle I was going for, I thought that clarity was a better word.

So let’s look at how this ACE holds together.

 

Does the Order Matter?

What I’m hoping people take away from this post is that family business succession planning can be a success IF you concentrate on the three items in the ACE mnemonic: Alignment, Clarity, and Engagement.  That’s it.

Now, are they in the right order? 

No. Or Yes. I’ll settle for a hard Maybe.

Does it matter? Definitely not.

Succession planning is not an event, it’s a process. And because it is a complex process, it’s definitely NOT linear.

You don’t do “Step 1” and then “Step 2”, etc. 

 

It’s NOT an Estate Plan

Some people may want to argue this, and I think that most of those folks are probably confusing family business succession planning with a related process, that of estate planning.

Estate planning is a specific subset of succession planning, and it can certainly be much more of a “linear” operation.

When we talk about family business succession planning, there’s a LOT more at stake, and it MUST involve those who will be expected to play future roles.

 

Engaging and Aligning, with Clarity

Whereas an estate plan is mostly about who’ll be the legal owners of specific assets after their current owner passes away, a succession plan is more about who will do what.

It’s about how a group of people will interact and decide things together, for the common good of the whole family.

That means that these people need to be aligned in their thinking. They also need to have a common and clear understanding of everything that’s at stake.

This stuff definitely doesn’t just happen by itself, which is why you also need to have everyone engage in the process.

 

Incremental Iterations Work Best

You need to constantly go from engaging to aligning, and back again, while making sure to always strive for more clarity.

This happens over time, as the family members learn to work together and understand that they are interdependent.

Small gains add up over time, and incremental is a good word to keep in mind.

Keep at this over time, and you will ACE it.

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What Are You “Well” At?

Surprising Word Choice Proves Revealing

Regular readers know about my penchant for word play and finding lessons in unexpected places thanks to vocabulary, grammar, and translation issues.

If that kind of blog is up your alley, you should enjoy this one since there’s some of each of those on tap this week…

A few months back in Social Capital in the FamBiz World we looked at the human need for connection. 

Since then I’ve realized the importance that social interaction plays in my life, and I’ve also developed a new level of gratitude for the social capital that I enjoy.

 

Joining Yet Another Group

I’m a member of a number of groups, mostly with peers, that get together over Zoom from time to time for various forms of discussion and interaction.

Most of them actually pre-date this pandemic, so I feel like I had a head start on many people in learning to get the most out of this way of meeting.

I recently joined a new group, and one of the first meetings we had was the source of inspiration for this week’s post.

Unlike all my other groups, this one conducts its business in French, which is my second language, but being a lifelong Montrealer, I’m sufficiently fluent, and I speak it both professionally and socially on a daily basis.

 

Colleagues Learning from Colleagues

Our facilitator, Jessica, was setting up a discussion and at one point I thought I knew what she was about to say but then she went in a different direction and it threw me off a bit.

We were talking about choosing the kinds of things advisors might decide to specialize their practices in, and as she was listing ways to make such choices she began to mention “Dans quoi on est…” which translates literally to “In which one is…”

My mind jumped ahead and filled in “bon”, which is French for “good”.

Of course, we want to choose to do things that we are good at, right?

But then, instead of saying “bon”, she said “bien”, which means “well”.

 

There’s a Lesson (or Two) in There

Jessica was making the point that we should concentrate on doing things that we’re “well” at, or, as a better translator might say, things that make us feel well.

Could she be on to something, suggesting that things we can feel good about doing and that make us feel well and good is even more important than concentrating on things that we are good at, i.e that we execute well?

And although we were sharing ideas amongst advisors to family enterprises, what are the implications of such a “discovery” for the members of the families we work with?

Couple relaxing on bed

Doing Versus Being

This is all about the difference between “doing” and “being”, which are two really different yet related ways of looking at oneself. 

And, interestingly, the way they interrelate evolves over time. The more you practice doing something, the more it becomes part of who you are.

Of course this also brought back memories of a piece I wrote last year, Ikigai: a Four Circle Model of Human Capital. 

That was about finding the true sweet spot of things we do well, things we like to do, things the world needs, and things we can get paid to do.

 

Examples for Legacy Families

While reflecting on these questions is important for professionals who work with families, they can take on even more significance for members of those families.

And, they give rise to another aspect of belonging to such a family, as I noted earlier this year in Where Do You FIT in your Business Family?

I think it’s interesting that I noted at the beginning of this piece the importance of social interaction in my life, as I continue to figure out where I fit in this wonderful world of working with enterprising families.

 

Feeling Well and Doing Good

Being part of this evolving field and making whatever contributions I can makes me feel good and I think that I’m doing a decent job.

Members of legacy families can often minimize the importance of finding activities for which they get paid, by virtue of the fact that they may have other assets off which they can live.

When I work with families, part of what I’m hoping I can help them achieve is that each person can do some good for the family while also feeling good about their place within the group.

That’s often way more important than money.

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A House / Home Metaphor for Family Legacy

Probably NOT What You’re Thinking Though

This week we’re looking at a metaphor that came into my head a couple of months ago, and that’s been on the back burner of my mind ever since.

I’ve been trying out different versions of it, and kept on returning it for more simmering, because it didn’t seem ready yet.

I hope it’ll finally be tasty enough for consumption now, and also nourishing.

 

The Cottage by the Water

I purchased a few acres of land on a river about 10 years ago, with the goal of eventually constructing a summer home there.

As it turned out, there’s a “pre-fab home” manufacturing plant nearby, “Kane Homes”, and so I eventually decided to check them out, took a plant tour, and was instantly sold.

“When we’re ready, I want to order our house there”, I told my wife.

So a few years later, we dropped in for a visit, assuming that we could order our house from the factory.

Nope, that isn’t how it works, we were told.

 

Metaphor Preview…

Before I lose you in this story, I want to give you the equivalent of that visit to the house factory in my parable about a family who wants to make sure that they succeed in creating and preserving their family legacy.

My normal blog topics deal with families who are concerned with transitioning their wealth from one generation to the next.

One thing that I often lament is that many such families, when they decide that they need to take some action to achieve that goal, will contact an attorney and make an appointment to discuss their estate plan.

While the house factory quickly dispatched us to an appropriate avenue to order our home, most lawyers are only too happy to begin writing up the estate documents at the family’s request.

 

There’s a Lot More to a Home than the House

Back to the house purchase.  Kane Homes directed us to one of their dealers instead, “Sullivan Homes”.

OK, so just like you don’t go to GM to order your car, we had gone to the wrong place first.

The good folks at Sullivan Homes didn’t want to simply sell us a factory-made house, they were interested in helping us construct our dream home.

They were the ones who were going to take care of pouring the foundation, drilling the well, putting in the septic system, bringing in the electricity, and even making sure our long driveway was wide enough to bring in the house on two giant trailers.

 

The Work that Nobody Sees

When you arrive at our place now, the main thing that you see is still the house that was built in the factory, but without the foundation, septic system, water, and power, it certainly would not be as useful or comfortable!

In a similar way, yes, you surely will need a qualified attorney to properly write up the legal paperwork to make sure that what you want to happen is properly and legally captured.

And, if you are proactive, you will also engage with the right people to make sure that everything else works the way you want it to.

Kane sells a standard house to anyone who wants one, but thankfully they only do so while working through one of their dealers who makes sure that everything fits and works for the family who buys one.

 

Process Versus Content

My analogy is admittedly a bit of a clumsy one, especially as I now pivot to the process versus content part.

The factory-built house is the key piece of content which involved a lot of man-hours to complete, but the work that was done on site, was done by various specialists who did everything that was needed to make sure the house actually “worked” for us.

That work was much more about process, and it involves the flow of water and power into the house, as well as drainage out of the house.

 

An Estate Plan is Great, But Not Sufficient

If you’ve decided that you want to ensure that everything you’ve worked for all your life gets properly passed down to the next generation of your family, then you’ve got work to do.

If you think that a visit to an estate planning attorney will take care of it all, then you are mistaken.

Many of those other things are discussed in other blogs here, so please, help yourself!

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What Are We FOR as a Family

What Are We FOR as a Family

Let’s Point in the Right Direction

It can often be way too easy to concentrate on things we don’t want, and some personality types are really good at finding fault and complaining.

While strictly speaking the negative and positive are simply two different sides of the same coin, I find that accentuating the positive can make a huge difference. 

This is true with individuals, but especially with groups of people.

Families who are trying to find ways to continue to work together over the long haul, i.e. into the next generation (and beyond) would do well to heed this advice.

 

Reframing to the Positive Angle 

Of course it’s fine to talk about what we don’t want, for a time, because sometimes that’s actually much more clear.

Eventually, as you work with someone who is looking to grow, improve, or change in some way, you need to focus on what they do want, and what they need to do to get that.

And as I mentioned, with a group, this takes on an even more important role.

Negativity can be contagious, and if a group of people are supposed to be working towards a common goal, one nay-sayer can quickly enroll others and creating positive momentum will become more of a challenge.

 

Start with One Person

The good news here is that it really can all start with one person.  

A family’s values or vision begins by asking each person to share their own values and vision, and then working with the group to try to shape some consensus on common vision and values that they can all agree on and get behind.

When things bog down, either in such exercises or other scenarios involving a family working towards some common goal, the way through is typically achieved when someone feels strongly enough to verbalize some strong feelings.

The leadership that such a family must exhibit almost always channels some positive view of what they see FOR the family, as opposed to what they don’t want.

 

Look for Exponential Magic

That leader can be the spark that the family needs to make progress. But, one person can only get so far all alone.

As I detailed in The Exponential Magic of Family Collaboration, if that person can find another family member to see the light, they can really begin to make progress. 

And once they enroll a third, they can start to roll forward with some momentum.

Not that any of this necessarily moves quickly, but there is usually a certain natural progression involved.

 

Important Support Along the Way Too

Because this can be a frustrating and lonely time for that family leader, sometimes called the “Family Champion” (but typically only in retrospect), it can be important for that person to have some outside support.

As I wrote about a few months ago in Coaching for Current & Future Family Leaders, coaching is really made for situations like these.

Furthermore, coaching is also made for times like these, and by that I mean during a pandemic where so many things are up for discussion and the future is as uncertain as it’s been in a long time.

Coaching Only One Family Member Works Too

One of the things I’ve recently noticed, since doing my coaching certification last year, is that a coach can help a family make a lot of progress, without ever meeting them.

Okay, so as I re-read that sentence, I realized that it can actually be taken in a couple of different ways, so let me unpack it a bit.

What I set out to say was that by working with only one person from a family, a coach can increase the effectiveness of that family leader to effectuate change and make progress with the rest of the family system.

The second way one could take that previous sentence is to note that a coach can work with a client without ever meeting them in person. 

Indeed, I have several clients I’ve never been in the same room with.

 

What Am I FOR, What Are We FOR

Circling back to the topic of the week, the coach will concentrate on supporting the clients as they work towards getting their family aligned towards things that they can all be FOR.

That family leader will already usually have some ideas of what they are FOR, individually, and with their coach they can then work on ways of strengthening the family relationships so as to get the family ready to embark on the journey as well.

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Musings on Collaborating for a Win-Win-Win

No Single Advisor Can Do It All

Thinking back to when I had my calling to this work with families, one of the first realizations I had was just how complex such work can be.

A family enterprise has lots of moving parts, especially as the family approaches an upcoming transition from one generation to the next.

Between the amount of wealth involved and the complexity of the family’s situation, there are important considerations that ultimately require the support and advice of a number of outside specialists who serve the family.

Getting these expert professionals to work together makes so much sense, at least in theory, so that the family client can get the best results.

 

The Theory Versus the Real World

Of course just because something makes perfect sense in theory, that doesn’t mean that it will work simply in the real world.

Thankfully, those who designed the FEA Program where I had that calling already knew about this “real world” challenge, and had purposefully included a team project into the curriculum.

For example, my project team included an insurance specialist, a CPA, a private banker, and me, who at the time was someone still trying to find his place in this field. 

I played the role of facilitator, and still very much enjoy that role today.

In fact, as my team came to learn, that role of coordinator and facilitator often turns out to me way more important than the other professionals ever imagined.

 

Many Challenges and Obstacles Remain

Such facilitators have a key role to play in how the actual collaboration will play out with the family. 

To many of the tactical specialists, we are often an “afterthought” because they haven’t necessarily been used to dealing with an entire family.

So many professionals have been accustomed to serving families more in theory than in practice, because they typically deal with only the head of the family or perhaps a couple.

Opening up the service offering to the entire family, which means at least two generations, means that there are many new considerations.

This poses certain challenges that can often be seen as more trouble than they are worth.

Rest assured though, that from the perspective of the family members from the rising generation, this difference is well worth the efforts in the end.

One Direction Only?

While the idea of collaboration is gaining wider acceptance and more advisors grasp the importance of working together, there is still much work to be done.

In fact, there seems to be a sort of “divide” that exists between the folks like me who specialize in the “family circle” and those whose practice involves the “business circle” and the “ownership circle”.

See: Three Circles + Seven Sectors = One A-Ha Moment (I’m referencing another blog from 2013, two weeks in a row!)

Whenever I have a client who needs something taken care of in those other circles, I always happily help them find the right resources and advisors so that they can be well served. 

Everyone else I know who works the family circle does the same.

There seems to be a general reluctance for those who specialize in the other two circles to return the favour.  Or maybe it’s just me.

 

Varying Degrees of Complexity Exist

Of course we aren’t talking rocket science here, and relatively simple family situations can obviously be handled by many advisors without the need to reach out for another person.

However, those whose entire career has been built on expertise in a particular domain aren’t expected to be adept and comfortable beyond a basic level of complexity and family conflict.

This is precisely where bringing in someone who has trained for this work make sense.

 

“Plays Well with Others”

Some professionals hesitate to bring in another advisor for fear of “losing the client”.

I can say with certainty that nobody is looking to “steal” your client. 

As children, we all got comments from our teachers that noted how we “play well with others”, and we get that the client family’s needs are what matter most.

 

What Do I Mean by “Win-Win-Win”?

And in case it isn’t clear what I mean with my “Triple Win”, the first one is the client family and the second is the advisor with the wisdom and courage to bring in another resource to deal with the family circle.

The third and final win is for that family circle expert who helps tie it all together.

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Legacy Families Rely on a “Generative Alliance”

More Metaphors and Vocabulary Discussions

Just how should we refer to the type of families we work with as advisors who toil in the intergenerational wealth space? 

There’s no shortage of monikers, from “UHNW” and “Business-Owning” which I really don’t like, to “Enterprising” and “Intergenerational” that are a bit better.

My latest preference is to refer to them as “Legacy Families”, because they’ve arrived at the point where the combination of their longevity and their accumulated wealth make the family’s legacy rise to the forefront of their concerns.

 

Distinguishing Features

Of course many of the families we deal with haven’t yet achieved true “legacy status”, and that’s OK too, since the intention to get there is often a key driving force to do the work necessary to get there.

I mentioned longevity, and typically we’re looking at a few generations, meaning that the family and the wealth have remained together through at least one generational transition, and hopefully more.

Dennis Jaffe, noted researcher and advisor to such families and a leader in this field, has set his research cut-off at 100 years or more and often uses the term “generative families”.

I’ve known Dennis for a few years and he’s easily the person I’ve heard speak most often on subjects relating to the successful transition of wealth within families.

 

Borrowed from your Grandchildren

His latest book is called Borrowed from your Grandchildren, the title of which makes one quickly realize the recommended attitude that’s necessary in such families: to become proper stewards of their assets for the generations that will follow.

I interviewed Dennis for the Let’s Talk Family Enterprise podcast and have recommended his book to my own clients.

The idea for this blog comes from another podcast interview I heard where he mentioned the three major groups that are always present in his study of one hundred, 100-Year families.

Jaffe calls them the “generative alliance”, but I’ve dubbed them the “generative trinity” because they evoke the “holy trinity”, even though I typically keep my posts religion-free.

 

The Father, the Son, and…..

For the uninitiated, the holy trinity is “the Father, the Son, and the Holy Spirit”, and considering that Jaffe’s three groups include the “current leading generation of the family” (Father) and also the “rising generation of the family” (Son), the trinity idea feels pretty apt.

You may be wondering who gets to play the role of the Holy Spirit in this metaphor. I hope your curiosity has been piqued, since that’s where we’ll now turn our attention.

Non-Family Employees, Advisors, and Board Members

The third key group of people happens to include a host of non-family professionals, both inside and outside the family’s operating businesses.

We’re talking about key employees who are not family, independent Board members of family companies, family office executives, and of course all manner of outside professional advisors who work with the family over the long term.

Jaffe points out the importance of all of these non-family people in the successful intergenerational transition of the wealth owned by such families, because he continually saw this group of people playing key roles in the hundred successful families in his study.

 

Outside the Family System, and Bridging Both Groups

When a family business starts out, there’s often some insularity and thinking that outsiders can’t be trusted, cost too much, or that they don’t “get us” enough to be valuable resources.

Families who remain steadfast to that position and can’t get past it are often doomed to limit their success to the human capital of the family, to their own detriment.

While the benefits of outsiders are numerous and varied, one of the areas where their potential input is often overlooked is in acting as a bridge between the current “NowGen” of the family who are leading things today, and the rising “NextGen” family members who are expected to lead in the future.

 

Independence and Interdependence

Such outsiders to the family are not part of the “family system”, giving them an independent and less biased view of the family members, not clouded by family dynamics.

While that independence is important, these people also often have plenty of interdependence with the two groups, in that their own livelihoods can be intricately linked to the success of the family.

Non-family professionals play a key role in intergenerational success of legacy families that should not be overlooked, nor taken lightly, especially when they work together.

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