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Revisiting “Should vs. Could” When Advising Families

The Field Continues to Evolve

During the past decade or so, my views on how best to advise families around transitioning their wealth have evolved greatly. 

I’d like to think that they remain a bit ahead of the curve vis-à-vis the world of professionals who work with enterprising families, although the field as a whole seems to be doing its best to progress as well.

As the thinking around the type of advice and resources families require makes progress, I think it’s a good time to revisit another related question.

I touched on some of this recently in Not Everyone Wants to Be Hugged not too long ago, and some feedback I received has me returning to this week’s topic.

Woulda, Coulda, Shoulda – Revisited

We had already looked at part of this back in ’22 in Some Woulda Coulda Shouldas for Family Enterprises. 

As more and more professionals get exposed to examples of families who’ve had success in the types of more “family-centric” wealth transitions, I think it’s important to not get too far ahead of ourselves.

I’ve been coming across examples of families who’ve been strongly encouraged by their advisors to pursue ways of remaining tied together, even when the family really was not cut out for that much heavy lifting.

I suppose that in many ways it’s better that more professionals now recognize that there are better ways to go than the old fashioned practices where the rising generation family members are kept in the dark and dictated to, but expecting all families to want to all stay together isn’t necessarily optimal.

Wielding “You Should….” Lightly

After Not Everyone Wants to Be Hugged went out to subscribers, I got an email from a regular reader thanking me for bringing this up.

It came from someone whose name most readers would recognize, so it was even more meaningful to me.

One small excerpt stood out: 

“But turning shoulds into coulds is really healthier for the family.”

Just because you can do something, that doesn’t mean you should.

And just because one family was able to do something, that doesn’t mean that every family will be able to make it work.

“Results Not Typical”

If you watch TV commercials that promote some method of weight loss or some way to get rich quickly, you’ll be familiar with some of the “fine print” that is often included as a disclaimer.

Phrases like “Results NOT Typical” may appear on screen for a few moments, probably at the behest of their legal counsel.

I like to think that when we hear from families who’ve successfully transitioned their enterprises down through a few generations, we should also be cognizant of the fact that these results are far from typical.

As I wrote last year in Working with Exceptional Families – Redux, such families are exceptional in the true sense of the word, i.e. they are the exceptions to the rule.

 

Leave the Prescriptions to the Doctors

More recently in Turning Need into Demand – Lessons from Big Pharma we looked at the fact that large pharmaceutical companies had found ways to get consumers to ask their doctors for specific drugs as a way to increase demand.

While that feels a bit suspect in some ways, let’s consider what that looks like in the context of today’s post.

I started out lamenting the fact that some professionals are encouraging clients to do things that may or may not be suitable for their situation.

The best solution for any family is almost always one that the family is able to co-create, together.

Doctors can and should give prescriptions, but as an advisor to a family, we shouldn’t be prescribing anything.

Guidance, Options, Timing

We need to recognize that we’re talking about a process, not an event, and we need to make sure the family understands this as well.

That helps everyone keep in mind that there isn’t one pill to take or one structure to implement.

As professionals who have done similar work with other families, we should be well positioned to provide guidance to families, and outline some options that they may wish to consider.

Facilitating conversations around such options can become the most important part of this work, as we help the family members make informed decisions about how they feel things could work for their particular situation and desires.

We can’t be in a hurry to finish either, because while the decisions the family needs to make are very important, they shouldn’t be treated as urgent.

This work is best done slowly.

 

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Diving into a Family System Without Making a Splash

Observing First to Understand

Having inherited a penchant for metaphors and analogies from my Dad, it’s always fun for me to find a new twist on something I’ve already been using for a while.

In conversations, I often talk about the aquarium in my office as a self-contained system, noting the fact that as an outsider I can see things going on inside that the fish themselves are oblivious to.

I then typically mention that if ever I were I to enter the tank, that would change the system in many ways, most of them negative.

Well, on a recent vacation to the Caribbean, I actually did enter the tank, in a manner of speaking.

An Unplanned Reef Stop

We were on a day-long boat charter when our captain noted that the water was calm enough that day for us to anchor near a coral reef to do some snorkeling.

This turned out to be the highlight of our whole week, and it hit me the instant I put my head into the water.

I quite literally imagined myself in my aquarium, as many of the fish there reminded me of some of my African cichlids back home, by some coincidence.

Here I was inviting myself into their system, yet given he enormity of the ocean, I was a largely unnoticed drop in the proverbial bucket.

Compare and Contrast

As I now contemplate this metaphor, there are many directions we could take.

The ocean is huge and might be compared to society as a whole, and we can think about what we can learn from a sociological perspective that can then help us when we deal with a smaller system, like a home aquarium or an extended family group.

We can also consider boundaries in each system, which can branch out into questions around who gets invited in, how the system protects itself from threats, and who gets to make the important decisions.

I decide who gets added to my aquarium, but I’ve lost count of how many times fish I chose to add were not welcomed, or if the were it was as a snack as opposed to companionship.

When I begin working with a family, I try not to make a splash, but it’s hard for me to go unnoticed like I did in the ocean.

A Tip of the Hat to Stephen Covey

The most important task for me after getting invited into a family system is to observe to learn.

I’m typically there because the family wants to learn how to work together better, but it would be crazy for me to walk in and immediately start barking orders at them.

It’s been many years since I wrote SFTU vs. STFU, but you may have noticed some foreshadowing about this in my first sub-head above.

In Covey’s watershed bestseller The 7 Habits of Highly Effective People, 

he labels Habit #5 “Seek First to Understand, then to Be Understood”.

I’ve taken that to heart for my entire adult life, and it especially applies to my work with a family.

The View from the Balcony

In order to begin to understand how a family currently functions, we need to get close enough to the system to observe them in action.

At the same time, especially early on, we want to do this without the proverbial splash I noted above.

Back to metaphor-land, as I wrote in 2021 in Getting Vertical: From the Iceberg to the Balcony, 

“A balcony is just high enough to allow you to see things differently while remaining close enough to stay in touch with the emotional field in the family group.”

During my snorkeling experience, I felt like I was in the “Goldilocks Zone”, where I was close enough to watch but without being a disturbance.

There was only one fish who appeared concerned enough with my presence to attempt to scare me off.

Working with a family, it’s also important to keep the number of those who wish to scare me away low!

Treading Carefully All the Time

As noted recently in Serving Families: Detective Skills Required it is so important to always tread very carefully at all times.

Those who do this work must continually remind ourselves that our role is that of a facilitator.

We are there to help a family navigate their challenges, as they hope to transition their business or wealth to the next generation.

It’s not about making a splash. It’s their family system, not ours.

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Proactive and Intentional, Hold the Aggressiveness

Finding the Right Level Is Key

One of the aspects of my current career and life right now that I truly enjoy but had not anticipated is that I get to speak with a wide variety of people on a regular basis.

Some might think that I spend too much of my time simply interacting with just about anyone who contacts me, and every once in a while I’d have to agree with them.

A while ago in Chemistry Is a Two-Way Street, I mentioned that I kiss a lot of frogs while searching for a few princesses, but that’s only part of it.

Many of my blogs are inspired by my many interactions with colleagues in one form or another, and I always get something out of every peer interaction.

But this week’s post was motivated by a recent conversation I had with someone who sought me out for some career advice.

What to Do, and How to Be

The ability to find and contact people in your field of interest has never been greater than it is today.

I’d like to think that if I were at the beginning of my career today, I would avail myself to the opportunity to reach out to those doing the kind of work I aspire to do.

The truth is, though, that I’m not sure I would have both the confidence to try and the ability to withstand the possible rejection at a younger age.

So when people who are around the same age as my own children do reach out to me, I do answer their requests as opposed to ignoring them, and I do set up a call with them and share my thoughts with them.

While this speaks to my actions and what I do, I think it has much more to do with how I am. 

Let’s hold that thought for a moment, as we’ll get back to it later.

“So I Should Be More Aggressive”

As I was speaking with this young woman from across an ocean, I suggested some actions she might consider taking, in order to better position herself for success.

At one point she nodded and said, “So I should be more aggressive”.

As I wrote that quote just now, I considered ending it with a question mark, but chose not to. As I recall it, she was making a statement, not asking a question.

But that didn’t stop me from offering her my “answer”.

“No, not aggressive”, I replied.

“I think you should be proactive and intentional, there’s a difference”.

The Unconscious Limits of Aggressiveness

This young woman did not come across the least bit aggressive during our time together, and I believe that quality will stand her in good stead throughout her career.

Most people will agree that there are some gender differences that still persist, whereby women who are perceived as too aggressive are judged rather harshly.

However, being proactive is not something that suffers the same drawbacks. And neither does being intentional.

My view is that it is possible to be too aggressive, but much more difficult to be too proactive or too intentional.

What I Do Versus How I Am

Let’s get back to the doing versus being idea we touched on earlier.

While it certainly is true that the way you are influences what you do, I think it’s more the other way around.

That is, what you do, habitually, becomes the way you are.

And maybe the key word in that sentence is “habitually”.

I work with families, where two or more members of a family actually work together, which can lead to some friction.

The good news here is that habits can be changed, slowly but surely, over time.

This takes practice of course, and also, intention.

Intentionally Being Less Aggressive?

It’s beginning to feel like we’ve come full circle, as we’re right back at being intentional. If you think this was cleverly planned, you’re giving me too much credit.

As I’ve shared before, writing these weekly posts is a major way for me to process my thinking, and this post is a perfect example.

You can, in fact, intentionally work on being less aggressive, and it starts with being conscious of one’s actions and how they are being perceived by others.

Such consciousness and awareness isn’t always present, however. Some gentle, non-aggressive feedback can often be very valuable in such cases, assuming it’s welcome!

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Living your Legacy, Before You Leave It

It’s Not a Chicken and Egg Situation

Legacy is one of those words that evokes different feelings in people depending on a lot of personal factors.

For most of us, it isn’t something we think about a lot and when we hear or read the word, it will typically pass without much resonance.

For some, though, especially as we get older, legacy can become something that begins to take on more importance.

I’ve dealt with this subject here on occasion over the years, but this week, inspired by a quote I saw on LinkedIn recently, we’re going to take a fresh look at it, from a whole new angle.

For reference, I did touch on this earlier this year, in Leaving a Legacy They’ll Be Proud Of.

Back to David York’s Well

One of the people whose writings and speeches have been at the root of a number of blogs of mine over the years is friend and colleague David York.

Normally whenever I’ve had the pleasure of hearing him speak, a post based on what I heard has quickly followed suit.

So we shouldn’t be surprised that he has nudged me once again, although this episode comes as the result of a single sentence he recently posted on my favourite social platform.

It read, simply:

 

             “You Cannot Leave a Legacy Tomorrow

                       That You Aren’t Living Today”

 

If you need a moment to pause and let that sink in a bit, then you know how I felt when I saw this.

Of course I quickly went on to send it to myself so that I wouldn’t forget to share this here.

“Do as I Say, Not as I Do” Just Doesn’t Work!

This idea of having to live a legacy today in order to leave one tomorrow, immediately conjured up an expression that most people will be familiar with, that gets thrown around when discussing the wonderful subject of parenting.

Those who like to tell their kids what to do, while behaving in ways that are not aligned with those words, are probably familiar with the facetious expression, “Do as I say, not as I do”.

Another more general version is that you need to “walk the walk”, because you won’t succeed if all you do is “talk the talk”.

Actions speak so much louder than words, and as York points out, this also applies to one’s legacy.

Actions Speak Louder Than Money

When people become successful financially, they quickly learn that their wealth can create a number of shortcuts that are not available to those lower down the wealth pyramid.

This is wonderful in many areas of their lives and enjoying the benefits of their hard work is part of the reward.

However, when they begin to believe that such shortcuts are applicable universally, in every area of their lives, that’s when they sometimes learn an important lesson.

Money can fill in a lot of gaps in one’s life, but not all of them.

Back to parenting, I know that most people who play the parent role can identify with the idea that money is not an adequate substitute for time spent with your offspring.

And so it is with legacy. Money alone cannot buy it. And I believe that that’s what York was driving at with his message.

People + Assets = Legacy

This harkens back to a post I wrote way back in 2017, Is Your Continuity PAL in Danger, where we looked at the fact that without “people” willing to carry out your legacy, the assets that you accumulated would not be sufficient.

That blog was inspired by Tim Belber, and I think that York’s quote takes that a step further.

Those people who will be carrying your legacy forward after your time on earth is over necessarily need to have been inspired to do so by seeing your actions while you were alive.

If all you do is finance them to do something, without them having seen you model the behaviours, the likelihood of creating a sustainable legacy shrinks dramatically.

If You Haven’t Lived It, You Can’t Leave It

This message is not reserved for the wealthy, of course, as it applies regardless of one’s socio-economic status.

At lower levels, though, there are typically no illusions that a legacy will survive unless it is built upon actions.

I believe that York’s message was aimed straight at those we were discussing above, who somehow think that their financial wherewhithal can buy them something without putting in the sweat required.

Govern yourselves accordingly.

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Our People Are Our Strategy, Family Version

Another Look at Human Capital, Family Style

Over the years I’ve had the opportunity to serve on a number of boards and committees in various areas of my life.

Of course it typically feels good to give back in time and effort to causes one holds dear, but there’s much more to it than that.

The opportunity to be part of something and shape how it will move forward is also significant, and a great reason why many people choose to get involved in such service.

One undervalued part of such an experience, though, is the chance to continue to learn.

As someone who toils in the area of family governance, any situation where I’m part of how anything is being governed is a valuable (and valued!) learning opportunity.

An Organization Taking Its Next Steps

I’ve been part of an international organization for almost a decade now and have served on some committees for its annual conference for most of that time.

We’re currently going through some big changes as we prepare for a future where we’re evolving from the work of a founder, and now need to put in place a more sustainable structure, one that’s more about shared leadership.

Naturally there’s a whole “meta” thing going on here, as what we are doing mirrors the work many of us do when we work with family clients who are going from their first generation founder to a sibling leadership team.

I was happy and proud to have recently been asked to join the committee that is charged with initiating and overseeing our governance and recruitment processes.

People as a Strategy

During our initial meeting as a committee, the head of the group, who also has a seat on the Board of the organization, had us spend some time on figuring out how we all saw our mandate and how we wanted to be together.

As someone who’s been involved with families as they set forth on a new journey around how they want to govern themselves, I was in familiar territory here.

Thankfully, because the other members of this group had been well selected, we all felt that this was time very well spent.

But just as we all felt at home spending time on seemingly unproductive activities, we all know that in most business settings this could be viewed as a waste of everyone’s time together.

And then the leader of our group quoted someone (sorry, I forgot who it was, and Google unearthed several possible sources) who said “Our people are our strategy”.

All Our Heads Were Nodding

At this point all of our heads were nodding, as our small group understood that the strength of our whole organization was in its human capital, and it was important for us to maintain that moving forward.

When working together with family members, it isn’t always easy to get such solid agreement. 

So many other issues can arise when everyone is related, and the freedom to add or subtract people from the group is much more limited, or at least can be tricky.

I’m going to pivot in an unexpected direction now, as I just had an A-Ha moment as I wrote this.

The Right Seats on the Right Bus

Because it’s typically much harder to get rid of a family member than someone who isn’t related, perhaps a reassignment of seats is more realistic in many cases.

Much like the committee we were discussing earlier, which was hand selected, putting the right people in the right seats is key when you are working with a family enterprise.

And, thankfully, once you’ve achieved a certain size and maturity, there can be a number of different places where family members can be placed for positive effect.

As noted a few months back in Supporting Roles in the Family Enterprise, various family members can occupy a number of different roles in support of the family’s overall success.

Addition by Subtraction Is Also a Thing

There’s always a balance that’s in play when finding the best place for everyone.

You need to find people to play important roles, but at the same time you can sometimes need to find roles for people.

Don’t forget that sometimes you can make something better by adding someone, and at other times you can make something better by removing someone.

Hopefully your family isn’t a hotbed of addition by subtraction, but sometimes it’s a reality you must face.

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Turning Need into Demand – Lessons from Big Pharma

Testing My Message for Resonance

I recently returned from a quick swing through the Toronto area, along with some new business partners.

We met with a number of folks I’ve already known for a while, along with some new faces.

Having recently aligned my services for family enterprise clients with a group of like-minded professionals, we did a little “road show” to explain our methodology and offering to potential collaborators.

These visits allowed me to repeat a favourite message of mine on a number of occasions, to a varied audience, which helped me to gauge its resonance.

I’m happy to say that most people truly got it, and so I’ll address it here once again, along with a new twist.

Unfortunately, this new idea won’t be a panacea, but I hope it will stimulate some thought among readers, which is always a goal of mine here.

Getting Clients to Realize They Need Us

I’ve long understood that the type of resources and services that enterprising families could benefit from are not necessarily very obvious, even to those families who face the challenges that they do.

Working with family members or co-owning assets together presents some significant yet predictable challenges, but the families themselves typically think of themselves as unique.

Of course each family is unique, but that doesn’t mean that there aren’t any other families who have successfully faced and overcome similar challenges to theirs.

The way I’ve explained this is to say that while there is a huge need for what we do, that doesn’t nicely or neatly translate into a similar demand for these services.

That message, the one about the fact that there’s a large need, but not necessarily a huge demand, was the one I repeated at each meeting.

Most heads nodded in agreement, as I had expected.

Big Pharma Seems to Have It Covered

Anyone who watches TV, especially programming from the US, will be quite familiar with the multitude of pharmaceutical commercials with which viewers are constantly bombarded.

The drug companies spend millions coming up with products that solve for a condition from which many people suffer.

But in order to get those people to buy their product, the end customers need to learn about the existence of this magic solution, so that they can then go see their doctor and ask for it.

Of course it wasn’t always this way, but it seems to be quite prevalent now, so I think we can conclude that it must be working.

Rather than focusing on pushing their product through the medical community (which they surely also continue to do) they create awareness through their commercials to instead pull the demand through via the end users.

“Ask Your Advisors About Family Governance”

So whereas we’re all familiar with phrases like “Ask your doctor about Blekthrypligo”, somehow a similar “Ask your advisors about family governance” doesn’t sound like it holds as much promise.

This field is continuing to evolve, though, and has a lot of room to grow still.

There are many players from a variety of professions who serve and interact with families every day.

These people can see and detect issues that each family faces, even though they may not be in a position to work with the family to resolve these needs.

Our hope is that once other professionals are aware of our offering and ability to become additional, complementary resources to their family clients, the necessary introductions will be made.

Turning Supply into Demand, One Family at a Time

This requires these other professionals to have an abundance mentality, and not fear bringing in outside specialists with complementary skill sets.

I wouldn’t say that this attitude is prevalent or even widespread yet, but it does feel like we are moving in that direction.

In some fields, notably financial wealth management, it seems to be moving a bit faster.

Collaboration in this space continues to be a challenge, but progress is happening.

With time, and with more and more people concentrating on serving the families and not just their enterprises, we can make a bigger impact.

Not every family needs these kinds of resources all the time, but as a generational transition approaches, complexities increase and “structural” solutions are often insufficient for handling “relationship” issues.

Families don’t typically handle these challenges well on their own.

But reaching out for guidance and assistance doesn’t have to be a challenge.

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Not Everyone Wants to Be Hugged

It’s Not as Universal as You Might Think

The inspirations for these weekly missives have come from all sorts of places over the decade I’ve been sharing my perspectives here.

This is surely the first one that comes from writing a blog two years ago, mentioning it to a coaching client recently, and then sharing that experience with my coach afterwards.

So you get to see how the idea has evolved over the years as I’ve continued thinking about this subject.

Let’s start with that old post from 2021, called The Family HUG We’re All Looking For.

“Everyone Wants the Same Three Things”

That blog came on the heels of my teaching a course on Family Governance for the Family Firm Institute. (GEN 502 for the extra curious).

During the capstone webinar that year, one student claimed that all families want the same three things, i.e. Harmony, Unity, and Growth, which I then put into the obvious acronym, HUG.

At the time, I was pretty much in agreement with the fact that these were things that all enterprising families are truly interested in and concerned with.

Yes, they’re all laudable goals, as that post pointed out, but recently I’ve been questioning the universality of that triumvirate. 

Not So Fast! Coaching My Client

Recently during a Zoom call with a coaching client I’ve been working with for a few years now, he mentioned something from a recent blog I’d written.

I’ve gotta say it’s pretty cool to have a client mention something you wrote for a large audience but that spoke to him personally, even though his situation was not in my thoughts when I wrote it.

It was about the post On Evolution, Emergence, and Rebirth.

That blog ended with some thoughts on the fact that nothing lasts forever, and family branches going their separate ways shouldn’t automatically be seen as a failure.

This client has been working on engaging his rising generation in a number of ways, and was now second guessing himself.

Sharing the Experience with my Coach

A few days later as I debriefed this with my coach, I got to go over it again and had a bit of an A-Ha moment about this.

I walked her through the HUG acronym and came out of it with a new perspective.

Sure, every family wants the Harmony, we can pretty much agree on that.

But what about the Unity? Well, it certainly is nice when it occurs naturally, or even requires some encouragement, but is it really something for every family?

And what if pushing the unity too hard starts to weaken the harmony, then what?

Can We Even Agree on Growth?

As I went on, the HUG started to fall apart.

My client is in the fortunate position to have attained a level of wealth where the idea of growing it even more is not really a priority.

It’s hard for many in the 99% to understand this, but after a certain point, more wealth can be tougher to deal with than less.

Back to the HUG scenario though, if you are going for Unity, then you actually need the Growth, because otherwise the family will continue to get bigger and then the wealth better grow too!

Just talking through this made me come away with a fresh take on those in my field who make our living serving such families.

Has the Pendulum Swung Too Far?

A decade ago I was typically lamenting the fact most families were ignoring the “family circle” and only getting professional help on the structural side of their transition planning.

Now I’m beginning to wonder if we’ve gone too far in some cases, to the point where the families feel that they must be working on Unity or else they are wrong or bad.

I’m pretty sure we have not overshot in general, but the idea that there’s something that “all families” want or need must be questioned.

What Makes Sense for THIS Family, Now?

My conclusion for those of us who work with families preparing to transition their wealth to the next generation is to help them consider all the ways they can go about it.

As we get to understand their reality, we can then support them as they evaluate which path makes sense for their particular circumstances.

And, we also need to consider where they are in the arc of time in their transition. If we try to push them down a certain path too early, that can backfire too. Please be careful.

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Onboarding those Who “Marry In” to a Family’s Governance

Colleagues in Search of Articles

I recently received an email from a colleague asking me if I’d come across a seminal article on the challenges of including spouses in a family business.

I replied that I didn’t know of such an article (although I’m sure that some exist out there), and thanked him for the blog idea.

This is a subject that families ask about often, and yet I haven’t really written much about it over the years.

Let’s change that now, fully recognizing that a 750-word blog post will never qualify as “seminal”, and that’s OK too.

I hope the thoughts I share here are useful nonetheless.

It’s Less About “Yes or No”, More About “How and When”

Let’s settle a couple of matters right off the bat: There is no correct answer that applies to all families and businesses, so it’s rarely a question that has a yes or no answer, and more about how and when we should consider including them.

This may take a while to sink in for some, because an attitude of “it’s none of their business” may exist and be difficult to overcome. (Thanks to my wife for that perspective!)

When we think about the business itself, the basic starting point is that anyone who marries in to the family that owns the business, begins as an outsider.

As they marry in to the family, do they also marry in to the family’s business? 

That’s a loaded question, of course, and it does not have a “one-size-fits-all” answer, as noted.

If a Rule Applies to One, It Applies to All

To me there’s an obvious place to start, and that’s to say that if and when a family begins to create their own rules on how to answer this, whatever rule is made must apply equally to everyone.

So if I am going to insist that my wife be allowed to attend a certain meeting about family stuff as it relates to the business, then I cannot tell my sister that her husband isn’t invited.

Guidelines or rules need to be made in logical ways that are clear and simple to determine, so that even a child could be brought in to impartially determine if someone is eligible or not.

Not One-Time Decision; Inclusion vs. Exclusion

The next key point is to admit that whatever decision is made about involving in-laws absolutely needs to be subject to continued evaluation and review.

Rewind the clock or calendar, when none of the rising generation had spouses, and there’s your baseline, i.e. there are no outsiders involved because they don’t exist yet.

Fast forward a few decades, to where they do exist, and also have their own offspring who are involved, either as employees and/or owners, and now it’s hard to maintain that hard and fast rule that the married-in people have no place.

At some point, during the life stage of the family, the business, and whatever attempt is being made to establish family governance, it becomes important to consider how including these people makes more sense than excluding them.

Human Capital and an Abundance Mentality

Let’s now look at a couple of other ideas, one of which I talk about often, and a newish one.

The people in a family can (and should) be viewed in terms of their human capital, i.e. they each bring something to the family, and the family should rightfully be concerned with each person and how the family can support their ability to flourish as a human.

And if a family is fortunate enough to own and manage a successful enterprise, then finding ways to spread those benefits to all family members can hopefully also happen, for the benefit of the entire family, including those who marry in to the family (and presumably add more family members through procreation).

An abundance mentality is helpful here.

Back to Evolution and Emergence

The decisions around including people needs to constantly be revisited over the years, decades, and generations of the family’s life cycle.

And because it’s difficult to undo something that has been done, families should proceed slowly, because like adding salt to your soup or sugar to your coffee, once it’s in there, it’s hard to get it out.

Think back to last week’s post, On Evolution, Emergence, and Rebirth and how we need to let things emerge, and then consider if and how they deserve a place in what is evolving, as your family governance takes shape.

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Making your Transition Plans “Fit for Purpose”

Just What Are You Trying to Achieve?

The subjects I cover in this space typically have something to do with families who’ve accumulated a certain level of wealth, who eventually get to the stage where transitioning that wealth to the next generation has become a priority.

When I work with such families, it’s always simpler when they’re still early in their journey, because when they start fresh, I can guide them through some of the important considerations that I know will become pertinent down the road.

Oftentimes they’ll have already begun with some of the legal and structural preparations that other professionals have suggested in good faith, but that end up causing issues on the human and relationship side of the family’s reality.

All of this preamble is designed to set up a look at making sure that a family’s transition plans are actually “fit for purpose”.

Consumer Protection Origins in the UK

The term “fit for purpose” is one I’ve heard off and on in recent years and at some point I noted it as a possible blog topic.

As I dusted it off recently, I decided to do some quick research and found that its origins are based in the UK, and derive from consumer protection laws.

 

That is, if a product is deemed to not be “fit for purpose” the purchaser can return it for a refund.

The term later got renewed life in a political context when an opposition party stated that someone or something in the government was not “fit for purpose”, and when that story got legs, the term became part of the lexicon.

So why am I bringing this up in a family wealth transition blog? I’m glad you asked.

Asking Some Basic Questions Is Key

When we attempt to determine if anything is “fit for purpose”, the first question that begs is “what is the purpose?”

Getting back to the general topic of planning for a transition of wealth, such plans are typically supposed to tick a number of proverbial boxes, i.e. they have multiple purposes.

Having both the wealth AND the family relationships survive the next generational transition are usually among the goals families have.

But because relationships are nebulous and hard to define, this can play second fiddle to other purposes that are more easily quantified, like, oh, maybe, saving taxes?

Most clients’ heads will nod when presented with an iron clad plan that guarantees that they’ll owe less taxes, without getting into the details of the side effects of such plans that may impinge the family relations purpose noted above.

Doing Things “On Purpose”

If we think back to our childhood, our first exposure to the word “purpose” was likely in the context of a sibling interaction where someone got hurt and then blamed the other.

“He did it on purpose”, you may have exclaimed to the nearest parent.

“No, it was an accident”, the other would say, in their defence.

So here we have our first nugget, one “opposite” of doing things on purpose is getting something haphazard, i.e. by accident.

As long as we’re looking at expressions that contain words about purpose, regular readers already know my love for the Purposeful Planning Institute and the great community I belong to thanks to that group.

For All Intents and Purposes

The word “intent” gets combined with purpose in the expression “for all intents and purposes”.

Families I work with need to be very intentional about how they make sure that their relationships will remain strong.

“Things don’t just happen by themselves”, I often tell them. This takes work and families need to be very intentional.

Getting back to “fit for purpose”, my intention here is to make sure that families make the effort to consider how their plans to transition their wealth are going to impact their family relationships.

Very Fit for One Purpose, Unfit for Others

Too often, some of the decisions families are advised to make for one purpose, like saving taxes or making sure that access to the wealth is severely limited, end up creating undesirable side effects.

I try to make sure families think through their choices so as to avoid those shortcomings.

Openly sharing the purpose of what the family is trying to achieve is also a big part of how families succeed, because that transparency is part of the solution too.

Continually asking “what are we trying to accomplish” never hurts.

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Another View and a Fresh Perspective

There Are Different Ways to Take a New Look

LinkedIn is head and shoulders above all other social platforms for professionals, and I’ve found plenty of great content there over the years, not to mention the wonderful connections I’ve been able to make and nurture there.

This week’s post was prompted by something I saw there recently, and even though the majority of my network on LnkdN is connected to the world of family wealth transitions, this particular piece came from a local colleague whose professional life is very much elsewhere.

This friend had recently experienced a sudden and unexpected career disruption, after which he took some time away to think about how he wanted to come back fresh for a restart.

I was so pleased to see that he shared a quote from Leonardo DaVinci on the experience of stepping back and taking a fresh look at his life and career thanks to this experience, and I know that I can use it as fodder for some ways to look at my work with families.

Back to Some Translation Issues

Setting out to write about this topic this week, I hadn’t realized that I was going to once again run into an issue around translation, which is something we looked at last week.

See: On Coaching, Parenting, and Sub-Optimal Translations

But because the LinkedIn post in question was in French, I’m writing this in English, and I’m pretty sure the original quote from DaVinci was in Italian, I’ll need to take a bit of editorial licence here.

(Despite some attempts via Google, I wasn’t able to locate a direct English translation.)

Here’s my quick version of what he posted:

“Take a step back, and the problem looks smaller. And in one glance you’ll have a better view of the full picture, and a lack of harmony or proportion will be easier to see”   – Leonardo DaVinci.

Planning to Transition your Family Wealth

This is the point where I now switch from the inspiration for the post to the message for families whose main challenge is transitioning their wealth from the current generation to the next.

These families have many potential resources available to support and guide them on this journey, yet the hard work cannot be farmed out to outside professionals.

The idea of stepping back and looking at the problem differently is definitely something we can suggest as a worthwhile action.

Because I also understand the context of my colleague’s recent challenge, I also know that his “step back” was not just a simple one.

I know for a fact that he included both time and space in his reflection.

Time Away to Clear your Head

His efforts involved taking several weeks off and travelling across an ocean.  He was also able to spend a good deal of family time with those most important to him, and get his mind away from what had been his usual work grind.

Many family leaders employ similar methods, such as getting away and taking longer and longer vacations (and weekends) over their final years of working in their business, to allow those on their way up more opportunities to take on leadership roles.

That works well in many cases and isn’t anything new, but I’m talking about more than that here.

Clearing your head completely and beginning to think about “working ON the business” as opposed to “working IN the business” is a bigger step.

Being able to see the picture more fully, including where there’s a “lack of harmony” can take a bit longer and require more effort.

Add an Outsider to the System

In many ways what I’m getting at is that this requires a fresh perspective, which can really only occur after some kind of a break, either in time or space.

Getting away from being in the middle of something is needed to be able to look at things from the outside.

Having someone along who is also an outsider to the system can also be useful, because they will automatically have a different viewpoint, as well as way less “baggage”.

When you’re constantly surrounded by the same people who all look at things the same way, you can get caught in the tough space of “group think”.

Getting away in both time and space, and bringing in a coach who is there for you on your journey, are great ways to make a fresh start.

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