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Learning and Collective Intelligence – From SG-FECC ‘25

My Annual Favourite Events Tour Begins Anew

Every year there are a series of events in the family enterprise space that I make every effort to attend, as a way of keeping up with the field and picking up topics to share about here in this weekly blog.

Regular readers will recognize that SG-FECC, the Schlesinger Global Family Enterprise Case Competition, is always the first one on my calendar each year, as it takes place during the second week of January.

I’ve been fortunate to be able to serve as a judge there almost every year for the past decade, and I typically share something about it here each time.

This year is no different, but I’m taking a bit of a different angle on what I’m sharing this time, as I had a bit of an A-Ha moment.

I always leave that event inspired for the future, and this year is no exception.

The Judges’ Preparation Sessions

The competition between teams from a couple of dozen Universities begins on Wednesday, and the best teams make it to the final round on Saturday.

There is a different family business case for each day, and while the teams are busy preparing to present their solution to the case, the judges all get together to prepare for what we expect to see during the students’ presentations.

While I’ve been involved in these sessions over the years, typically over two days of judging each year, this year resulted in a bit of an A-Ha moment for me.

The hour and a half or so we spend together with our judging panel, along with the panels assembled for the other divisions, is really an exercise in collective intelligence development.

Collective Wisdom + Intention & Effort = Collective Intelligence

I think most people are familiar with the term “collective wisdom”, and all of the assembled judges each arrive with their own life history related to family business in some way.

Among us are other consultants like myself, but also academics who study and work with family enterprises, as well as people who are part of business families.

So we begin each day’s discussion with a great deal of wisdom in the room, but then there’s an intentional effort to take all of that wisdom and turn in into collective intelligence through sharing.

A thoughtful discussion takes place, lead by experienced professors who are used to leading such discussions, where we talk about the case, as well as what we expect the students to present.

This is done first with the entire group of 25-30 people, all sharing our thoughts, perspectives, questions, and ideas.

After that we spend time with our individual judging panels, getting to know one another and planning some questions we expect we’ll want to ask during the Q & A section.

Now Let’s Share Again

Then to make sure we’ve gleaned as much as we can from the group, we go around the room and share some more.

Each lead judge shares some of the items that their panel unearthed, so that we can all learn from each other again.

My big take-away is that when you have a bunch of people in a room, all of whom are bringing their own experience and wisdom, it takes some effort and intention to really maximize what everyone can walk away with.

Time and a facilitated discussion are needed to make sure that we get the most out of each other.

As someone who works with groups of family members, there are some reminders and lessons there.

And It’s Never Sufficient!

Inevitably, though, at least one of the student teams will present something nobody expected or foresaw, despite the efforts made to get out ahead of them.

And herein lies another lesson for those who work with families.

We can prepare all we want, even discuss in advance with colleagues who have been working with families for decades, and we never know what might arise.

We always need to be ready for the unexpected, and be prepared to deal with whatever happens to show up that day.

And the Winners Are….

After Saturday’s finals, the winners of the Undergraduate League are from the University of Alabama, and the Graduate League champions are from Babes-Bolyai University (Romania).

Kudos as always to the awesome team of UVM volunteers who make it all happen without a hitch.

I look forward to returning again in 2026.

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Agreement Before Understanding Equals Potential Chaos

Only in the Dictionary, Nowhere Else

This week we’re returning to some territory that’s been covered here before, but is so important that I want to underscore it again, with some new insights.

Almost a decade ago I first shared some thoughts on this subject in Understanding AND Agreement, noting that it’s important for both to be present, even though in many family enterprise situations you can have one but not the other.

In the intervening years, as I’ve been involved in and exposed to many more real world family scenarios, I’ve become more convinced that the only place agreement should come before understanding is in the dictionary.

Otherwise, the potential for chaos is high.

A Simple Example, Thanks to My Dad

My late father gets a shout out here every once in a while, and it’s usually positive, but not always.

See: No Dad, Coaching Is NOT “Helping Losers”.

Some of his teachings are indelible though, and this one is the perfect simple example about the importance of understanding before agreement.

“Work out all of the details first, and THEN agree to the price, otherwise you’ll end up in an argument”, he repeated many times.

Let me break this down, as it relates to a specific scenario where two parties are trying to agree to buy and sell something to one another.

Let’s take a house as our example. If we agree that I will pay you $500,000, but we haven’t yet defined all the terms and conditions, we’ll only end up with arguments later.

Exaggerating to make my point, imagine if, I thought it was clear that all the furniture was included, and that you’d move out in 10 days, and that I’d pay you $10,000 per year for the next 50 years.

Based on those terms, I’m sure you’d insist on revisiting the agreed price, or more likely kibosh the whole deal.

The Family Project Case Example

Regular readers may recall that I serve as a team project advisor for some participants in the Family Enterprise Advisor program of FEC.

See When Sudden Health Issues Threaten Transitions for another recent post about this.

A team I worked with recently came to the same conclusions about the importance of understanding before agreement quite readily.

Here’s an excerpt from a note I wrote to myself when I recognized their inspiration for this post:

“We need to make sure everyone understands what is owned, how it’s owned, who manages what, who is expected to own and manage after, etc., before they can agree to the new scenario”

One of the biggest thrills I get in that project advisor role is seeing teams “get it”, i.e., seeing them grasp the real world part of what they’ve been learning about working with families, “in theory” during their course work together.

There’s nothing like dealing with real people trying to work through their challenges to help you “feel” your way to such breakthrough learning.

It Still Happens Far Too Frequently

A key takeaway reported after following that program is how important it is to work together as an interdisciplinary team of advisors, because no one person can serve all of a family’s needs.

In fact, much of the work of a project team just involves all of the team members coming to a common understanding of the family’s current reality.

When you try to provide solutions before you understand where the family is, never mind where they’re trying to go together, you’re often just adding to the confusion and complexity.

There really is no substitute for actually speaking with all the family members to figure out if they all understand things the same way, because in reality, that’s almost never the case.

Slowing the Family Down Is Hard

When I’m engaged by a family to work with them, it’s not unusual for them to want to make some quick progress.

One of the hardest aspects of this work is making the family slow down so that all family members can come to the same understanding of where they are, so that we can then co-create the future together.

Family leaders from the “NowGen” usually have a good idea of what they want, and assume that the “NextGens” should just agree to Mom and Dad’s plans.

That internal family desire for quick agreement runs counter to what I’m espousing here, so getting them to slow down so everyone understands, first, is a common obstacle, but well worth trying to work through.

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Lower the Heat but Increase the Light in Families

A Couple of Multipurpose Metaphors

Whenever I consider blog topics to write about here, the ease with which I see opportunities to slide in a metaphor or two is right up there.

Working with families who are trying to get out ahead of the challenges of transitioning their wealth or business to the next generation, there are always plenty of subjects I can write about.

After over a decade of sharing my thoughts here each week, I’m sometimes surprised to discover that some truly fresh ideas continue to come forth.

This week we’re going to look at a couple of thoughts that flashed through my mind recently, and try to take away some memorable lessons.

Good Old Mainstays: Sun and Fire

Metaphors come in all shapes and sizes, but I guess that sun and fire are among the more useful starting points.

Both provide heat and light, and trying to make sure you get the amounts of each right can be tricky.

Not enough light can be a problem, but so can too much, and the same goes for heat.

And trying to control the sun or fire each come with their own challenges.

But wait, isn’t this supposed to be about families? 

Indeed, so let’s go there now that my setup is complete.

How to Get More of One, without Too Much of the Other

The ways in which I describe the work I do continue to evolve, and lately I typically mention the importance of families having the important conversations they know that they need to be having.

Many of these discussions continue to be delayed and avoided because they can be fraught with anxiety, lest something not go well.

It is very common for most family members to be in the dark about both the planning that their parents have done, and are also still considering.

Turning up the light, so as to show more family members what’s in the works for the future makes lots of sense here.

The trick is to increase the light, without turning up the heat.

The biggest factor that inhibits these conversations is the fear that someone will feel like they’re getting burned.

 

Smokey the Bear to the Rescue

Now that I’ve set up my whole premise, we’re getting to the hard part of writing this missive.

The underlying reason for my sharing here is to inform and entertain, and also present myself as a potential resource to families doing this work.

Thankfully Smokey the Bear just popped into my head as I searched for a way to extend the metaphor towards a solution.

Fire is important but also has the power to be quite destructive, and the world has seen more than its share of wildfires recently.

When I work with a family, a major goal of mine is everyone’s psychological safety, making everyone feel safe around a small campfire, while making sure that the potential for things to get out of control is minimized or eliminated.

Adding Light Slowly, without Heat

It’s relatively easy to see how too much heat can be dangerous, but the same can apply when families attempt to “rip off the Band-Aid” and share everything in one shot.

I wrote about this back in 2017, in The Dimmer Switch Vs. On/Off.

I get the reasoning behind this, but it remains a very common way that families think about sharing financial information with their rising generation.

So often they have been concealing everything for so long, that once they decide this can’t be sustained, they feel like they need to go “all in” and share everything in one meeting.

Here the metaphor is people in a pitch dark room, and then switching on powerful floodlights all at once.

This can be very disorienting, and can inflict serious damage, leaving scars as deep as those from too much heat.

Holding the Safe Space for All

I noted earlier that families often postpone important discussions because they aren’t sure they know how to have them well.

The good news is that when families bring in a skilled facilitator to help them get started, they can learn how to be with each other in ways that honor everyone’s safety and desire to share their input.

A space that’s safely held for all participants is key to the family being able to co-create their future together.

Finding the balance of enough light without too much heat is the key.

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From “Me to We”, and from “Mine to Ours”

And the Subtleties That Make Them Different

There often comes a time in the evolution of a family when the leaders recognize that a shift needs to happen regarding the wealth they’ve accumulated.

Some make this shift more easily than others and some never get there.

My first book, which came out a decade ago, addressed some of the challenges involved.

I think the title is self evident in this context: SHIFT your Family Business – Stop Working In Your Family Business, Start Working On Your Business Family.

At some point, the founder/wealth creator needs to figure out how to go from Me, to We. 

Not Always an Easy Shift to Actually Make

Many a family business founder has faced difficulties here, notably because they’re so strong-willed and driven and had success due to their individual leadership qualities.

They are great, people tell them they’re great, and they want to keep going and building more wealth. They’ve caught lightning in a bottle and are having fun.

Eventually, though, many get to the stage where the concept of sharing the wealth with their family starts to click.

They’ve likely been saying for decades that “they’re doing all this for their kids” anyway.

 

Saying Something Is Easy – Doing It Is Hard

So that idea of letting go of the “me” attitude towards a “we” attitude kind of makes sense.

And in the end, it isn’t that hard to at least “say” that you’re moving forward on the basis of “we”.

Between the saying and the doing, though, there’s usually a lot of work to be done.

Expanding the circle outwards beyond oneself is an idea that most people can get their mind around, in theory. But putting it into practice can get tricky in a hurry.

The minute you begin to take concrete steps and writing checks, a multitude of questions come up.

We’re Moving Into “Mine to Ours” Territory

The simplest way to summarize the point I’m trying to make here is that “Me to We” is more theoretical and therefore easy to conceptualize, while the “Mine to Ours” is where we get into the action stage, and complexity rears its ugly head.

Let’s take a brief detour into the land of philanthropic giving. 

There’s an expression used by those who work in that world that I’ll paraphrase here, because I think it rhymes with the challenges faced by families figuring out how to share their wealth.

It goes something like this: “It’s easy to give away money. It’s difficult to give it away well”.

When it comes to figuring out how to share one’s wealth with family members, truly stepping into the “from Mine to Ours” in practice, it is really hard to do this well.

Back to Equality Versus Fairness Again

Back in 2017 I tried to address some of this in We Treat Them All Equally – That’s Good, Right?

In simple and straightforward situations, equal is fine; but very few of the situations I come across in the families I work with are simple and straightforward!

We’re venturing towards one of the biggest overall topics I deal with, even though I don’t love the way it’s typically labelled.

I’m talking about family governance, of course, as regular readers may have guessed.

I just put “family governance” into the search feature on my website and, unsurprisingly, hit the motherlode. Here’s one good place to start: Three Pillars of Family Governance from a Pro.

That post quotes Barbara Hauser noting that transparency, accountability and participation are all required.

How Are We Going to ___________ Together?

If you want to dive into that motherlode of posts, please be my guest. I can save you some time and give you a quick summary of what family governance boils down to.

The subheading above has a blank in it, into which you can plug the following three phrases:

  • Make decisions
  • Communicate
  • Solve problems

That’s the gist of family governance, but as usual, even though it’s simple to say, it is hard to actually do.

Making “Mine to Ours” Actually Work

Going from my wealth to our wealth takes time and practice, and typically evolves over years and decades, not days and weeks.

There’s no substitute to having regular family meetings to discuss matters in a productive way.

Families need to learn how to make decisions, communicate, and solve problems together.

They need to learn how to operationalize transparency, accountability and participation.

Few families can do this all by themselves, so finding someone to facilitate the process is a great idea and a good place to start.

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The Not So Glamorous Life of Family Enterprise Advising

It’s Not What People Imagine

When I meet someone and the topic of the work that I do comes up, the conversations can go one of two ways.

Typically, people don’t really get it and the subject quickly gets changed, and that’s usually fine with me.

Other times, when folks are curious, it soon becomes apparent that the kinds of families who engage my services are often those who are part of the “one percent”.

That’s when things can get interesting, but not likely for reasons you might expect.

Another Peer Call Inspired Post

Regular readers know that I’m involved with a number of peer groups that meet on some sort of regular basis.

Many of my weekly missives here are inspired by something that occurs during such calls, and this is yet another of those.

This happened to be the monthly group that I started almost five years ago, where friends and peers gather to discuss cases we’re dealing with.

As we were waiting for everyone to log onto the Zoom, a couple of us were commiserating on the banalities and lowlights of some aspects of the work that we do with families.

That’s when one noted, “Working with ultra high net worth families is not as glamorous as people think!”.

Dispelling this myth can lead to looks of disbelief from new acquaintances.

Flying On Private Jets Is Rare

While I have been to some nice places to facilitate meetings for families, I’ve yet to travel on any family’s private jet.

In fact, I know of only two colleagues who have shared that that’s an experience they’ve enjoyed, and I know lots of people who work this space.

While it’s very interesting to deal with successful people and their families, we are there for a reason, and that is to work for them, and with them.

We are not there to be friends with them and hang out with them, although that does happen to some extent, of course.

In fact, as I’ve shared with many colleagues over the years, when our relationship starts to slip into this territory, it becomes harder to do our work well.

A certain amount of professional distance is required.

Objectivity, Transparency, Equality

I wasn’t planning on going in this direction here, but that last sentence sparked me, so I’ll continue down this train of thought.

While we are usually brought into a family by one person, in order to serve the whole family as our client, we need to demonstrate constant objectivity, and not ever appear to favour one person above others.

This is not as simple as it might sound, especially for professionals who’ve been trained to serve the master who’s paying them.

We need to serve every family member as equally as possible, and do so in a very transparent way, very overtly, so all can see that this is what we are doing.

Anything we do that gives off even a hint of preference towards certain family members just makes our work harder, if not impossible.

Back to the Lack of Glamour

Thanks for abiding my digression, but it’s another aspect of this work that few appreciate unless they’ve been there.

Another reason that there’s little glamour is that doing this work with families is not easy, because the easy families aren’t the ones who usually reach out for our support.

Families who have achieved a certain level of financial wealth do not automatically have everything in place to run smoothly and perfectly, despite their desire to make it appear that way.

The wealth almost always brings with it a great deal of complexity in all their family relationships.

This complexity leads to a need to have important conversations about how that wealth is going to be deployed and shared, now and in the future.

These are not conversations that are always easy to have among family members, hence their need to bring in specialized independent outsiders.

Never a Dull Moment

I hope that highlighting the lack of glamour doesn’t come across as a complaint, because it took me decades to even find this space.

I’ve finally found my calling, and now do something that fulfills me.

It might not be flashy or sexy, but it is nonetheless important for the families I get to serve, and that’s plenty for me.

 

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Finding the Right PACE for Your Family Meetings

How Do We Know We’re Getting It Right?

This week we’re returning to a subject that comes up in one form or another on a somewhat regular basis here, and that’s the good old “family meeting”.

When you work with families who are in business together, or who own assets together, there are typically a number of regular meetings that occur on business related matters, or areas where owners come together to have important discussions.

Holding family meetings, which are largely “by and for family members” is often overlooked, or seen as unnecessary or superfluous.

In reality, they’re sometimes avoided because they can be a bit awkward and uncomfortable, usually for those who should be the ones calling them(!)

Let’s see what we can learn by looking at this again this week, from the perspective of “PACE”.

My PACE Has Nothing to DO with Speed!

I’ll forgive you if, when you saw the word pace, you thought that I was talking about something related to speed.

In reality, while speed is an important consideration for how such family meetings actually happen, that’s not where we’re going now.

If you’re interested in posts related to that angle, please check out: Choosing your FamBiz Tour Guide, or A Family Marathon without a Map.

The new idea I want to share this week is an acronym that I’ve come up with (accidentally, as usual) to think about evaluating every family meeting, just before adjournment.

And the letters in my acronym (or maybe it’s a mnemonic?) are P.A.C.E.

Making Progress, Not Achieving Perfection

Let’s start at the beginning, which is obviously the P, which for me is Progress.

In fact, my main idea is that at the end of a family meeting, I like to ask about whether the people in the meeting feel like we made progress together.

So in fact, my acronym is like a formula, that might look like this:

                              P  =  A + C + E

So it’s a way to check on the meeting participants’ views on progress being made, or not, according to three criteria, the A, the C, and the E.

As the one who’s typically facilitating and leading such meetings, I’m always hoping to see lots of heads nodding as I go over them.

If instead I’m getting confused looks, there’s a lot of information in that too, most of it pointing us “back to the drawing board”.

Back to Alignment and Engagement, Again

Regular long-time readers won’t be surprised to see that Alignment and Engagement are part of my progress check, as I’ve written about this pair one several occasions. 

See, notably: Family Engagement and Family Alignment – Chicken and Egg

I like looking at them together because I see them as kind of like two sides of the same coin, although that isn’t quite it.

My main message here is that if you are looking to improve alignment, one way to do that is to check your engagement level.

And if you are looking to improve engagement, you might need to look at your alignment.

In any event, I always try to make sure I’m thinking about making progress on both of them in every family meeting.

“Are we more aligned after the meeting than before? Was everyone engaged?”

I Can See Clearly Now

Having alignment and engagement as part of my criteria is helpful for making a memorable word like PACE, because vowels are helpful. But of course another consonant was needed, and thankfully this was an easy one.

One of the biggest reasons that families need to come together to meet and discuss is because there’s usually lots of complexity to their lives, and that makes lots of things unclear to many family members.

This means that there’s a premium on clarity.

See: I Can See Clearly Now, from 2016

The end of any family meeting is a great time to check in on this question too.

“Are things more clear now than they were at the beginning of the meeting?”

Hopefully you get mostly “Yes’s” to that one, but if you don’t you will certainly have a better idea of what you need to focus on during the next meeting.

The Next Meeting

So before you end a family meeting, please consider doing this PACE check.

And, of course, like my dentist and chiropractor do so well, make sure that we have the next date on everyone’s calendar, so that we all know when we are getting back together again, to continue to make progress on our alignment, clarity, and engagement.

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The “Plan A” FamBiz Transition Mirage

Many Families Want This, Few Will Achieve It

For those of you who read my weekly musings regularly, you probably think that I spend a lot of my time writing about the challenges that families face as they prepare for intergenerational transitions.

You certainly aren’t wrong, as I spend more of my time on this than most others. However, I spend a lot more of my time talking about these subjects all the time.

And sometimes, like this week, the things I hear myself saying over and over, in various contexts, eventually spark the idea in me that I’m overdue to share some of these “talking points” in writing.

Which brings us to the idea of “Plan A”, which I’ve talked about often, as well as the “mirage” part, which I just conceived as a “hook” for this blog post.

So Many Families Have the Same “Plan A”

Now I don’t have any statistics on this, but I have spoken with dozens and even hundreds of families over the years to some degree of depth or another, and I can confidently say that roughly 2/3 to 3/4 of families arrive at a similar point when considering what they’d like to happen, after the parents transition out of the business.

It’s some version of the following: “We want all our kids to own the business equally and run it together”.

“OK, great”, I reply, “Let’s call that Plan ‘A’. One of the first things I like to do, is to get a good idea of whether or not I think your Plan ‘A’ has a reasonable probability of success”.

Most heads nod along with that, but at this point their view of that probability of success is usually much different from mine.

Not as Simple as It May Seem

Coming to this conclusion as a great way to go is pretty easy to understand, because it seems so neat and tidy, and every parent would be thrilled to achieve such a wonderful, harmonious result.

There’s a variation, which may be even more common, where the hope is equal ownership and lead roles for some subset of their offspring, notably those who’ve been working for the business.

There are plusses and minuses to each, of course, but my main point here is that decisions around who’s going to run the business and who is going to own the business are complex enough on their own, and when you blend them together, you aren’t making things simpler.

I don’t disagree that such results would be lovely, if they can be pulled off. But I defy anyone to find me more than a couple of examples where this “Plan A” has been successfully executed and sustained over time.

I dealt with some of this back in 2017 in We Treat Them All Equally – That’s Good, Right?

Different Interests, Abilities, Motivations, Etc.

Let’s start by looking at the idea of having a sibling team run things together, and the challenges this can pose.

Each sibling has different interests and motivations for working in the family business in the first place, but of course this isn’t always a deal-breaker.

Where things get tricky is that the siblings typically have very different abilities to perform well in their roles.

When you try to put together a good leadership team, one of the keys to success is for all of the people on the team to accept and respect their positions relative to one another.

When Sis is the President and Junior is in charge of the shipping department, then it’s clear to me who should be making the big decisions, but when they’re all part of the family, that often gets blurry.

Ownership Is Another Complicating Factor

Setting things up for a sibling group to run the business is already difficult enough when none of them are owners.

When you add in the ownership question, things get even more complicated.

See The Challenges of Working with a Flat FOOT Enterprise which I wrote for the FFI Practitioner in 2022.

That feeling that as an owner, I get to have an equal say in everything is quite pervasive in a lot of families.

A willingness and ability to recognize hierarchy among a sibling group is not a given, and can take a lot of work.

Should We Be Looking for Plan B or C?

The good news for people like me is that these challenges are good for business, as families can use my guidance.

Starting to sketch out Plan B or Plan C often helps.

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On Wellness, Performance and Relationships in Families

Three Key Areas to Keep Tabs On

At the behest of my coach, a while back I finally read a book that she recommended to me, called Positive Intelligence, by Shirzad Chamine.

It came out over a decade ago, and I see from my Amazon account that I actually ordered it in 2023, so I realize sometimes things just take time.

As a coach myself, when my coach makes a suggestion for me to check out, I’m typically receptive.

After finishing the book, I signed up for a 7-week coaching program that uses the Positive Intelligence methodology.

I may circle back to that here some day, but right off the bat in week 1, I noted with interest that they kept coming back to making progress in three important areas: Well-being, Performance, and Relationships.

Hmmmm, I thought to myself, how is it that these three seem so “all encompassing” and yet I’ve never heard anyone put it this way before?

Using It as a Checklist

So now my challenge became how to write a blog about this in a way where I could actually tie in some “lived experience” with it.

I decided on Wednesday that this would be my subject, but I didn’t know how I’d approach it.

Then, this morning (Thursday), I took part in one of my peer group meetings, the one that I actually pay for, and the one where I probably make the most personal progress.

 

During this 3-hour session, I shared a case that I worked on with a family during the first half, and got some valuable feedback that I will use going forward.

During the second half, another colleague presented a case she was working on where she had experienced some recent frustrations and challenges, and we all provided insights that she found useful too.

And after we all said goodbye until next time, I started to think about this post and it hit me between the eyes.

That Was Great, Because….

As I reveled in the afterglow of a wonderful time spent with like-minded peers, I tried to integrate why I felt so enriched by the encounter.

So, let’s take them one by one….

Well-Being: I really felt good, physically, mentally, emotionally, spiritually, after that call.

Performance: The ideas and perspectives I received (and shared) will all most certainly result in better professional performance by me and the others, as a result of the valuable time we spent together.

Relationships: A few of these peers are folks I’ve known for a while, but others are relatively new to me, and vice versa. The depth of the exchanges has enhanced each and every one of these relationships as well.

So now I had a way to think about why I felt it went so well.

Family Business: Is Performance All There Is?

When I work with families who are in business together, or who own assets together, many discussions focus on subjects related to performance.

Of course it is important to make sure that everything that needs to get done is done well, by qualified people. 

And so we need to make sure that all of the people whose job it is to get things done are well equipped with the tools and training to do so.

 

That’s where a lot of people like to leave it though, simply looking at how the people perform in their functions.

But what about their well-being and their relationships?

Is enough attention being paid to those aspects of the lives of the people in the family? Typically, no.

Human Capital and Social Capital

Besides financial capital, there are other types of capital that enterprising families also have, and my belief is that more attention needs to be paid to those.

While lists and definitions vary depending on the source, I like to think of “human capital” as the people in the family, and I think that the term “well-being” is as good as any to help us think about how we want to maximize it.

And as far as the relationships that family members have, with each other and also others outside the family, those fit under my heading of “social capital”.

So I’m happy to now have another entry point to talk about these other kinds of capital, that otherwise might be neglected.

Framing them as well-being and relationships gives me a new way to broach the subject.

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What to Do VS How to Do It

The First Part Is Comparatively Easy

It feels like it’s been a while since I’ve given a shout out to my late father in this space, so in some ways this may be overdue.

He was an immigrant entrepreneur who lived the Canadian dream, arriving here with next to nothing as a teenager, and he went on to build a very successful family enterprise.

While working for him in various capacities during my younger years, I got to hear some important words of wisdom that will never leave me.

In addition to one of my favourites, about the fact that simple and easy are NOT the same thing, there’s the one hinted at above in the title to this post.

Experts Telling You What to Do

In the field in which I now spend all of my time, working with enterprising families and accompanying them through the challenges of their intergenerational transitions, I always meet families who’ve received great advice from expert advisors.

One of the issues the families can quickly run into is that while the “what to do” part of the advice sounded great, it fell short when it came time for the “how to do it” part.

Back to Dad, I can hear him saying for the umpteenth time, “First we need to figure out what to do, then we’ll worry about how to do it”.

He was good about finding the resources to help with the first part, but he was even better at figuring out the steps required to succeed at the second part.

He would listen to all sorts of ideas and advice, but would make up his own mind, always considering how to put the solution into place.

Examples from Family Wealth Transitions

Almost every time I get introduced to a family, there’s already been a good deal of work done with other professionals, to get some of the structure in place for their eventual wealth transition.

There are typically wills in place for the parents, there may have been some estate freezes in place to crystalize the value of a business for one generation so the growth can be more easily held by the next one, sizeable insurance policies may be in place, and some level of trust structure may already exist.

These families will have been well advised on these tools by well-meaning professionals, all of whom have served a number of other families with similar products.

These all fall under the heading of “what to do”.

The assumption that few have questioned along the way is, how is this all going to work with the members of my family?

“Well, just have a family meeting to tell them all” may be the extent of the advice they receive for that part. If only it were that simple.

The Tail Wagging the Dog

In such cases, which remain the norm, many decisions have already been made, before any conversations are even attempted with their offspring.

These plans are being made for a group of people, but those people, for whom all of this is ostensibly being done, have never been consulted.

The silent expectation that “we know best” is a given, along with the one about “they should just be happy with whatever we give them”.

I look at this as the tail wagging the dog, or a “bass ackwards” way to go about things.

And I recognize that I’m in the minority with this view. 

And I’m good with that.

Complexity and Co-Creation

In most families, the way to go about things that I outlined above is sufficient. But I’m not talking about “most families”.

When there is sufficient wealth that complex tools and structures are required, then it behooves the families to engage in much more thoughtful efforts to get it right.

The idea is to make the wealth last AND the family last, and that takes work.

A few months ago in The Family Conversations You Know You Need to Have we looked at some of this. Note the plural “conversations”, because this is not a “one and done” discussion.

The “How to do it” part can also benefit from some outside, unbiased guidance and support.

Families left to themselves can seldom achieve the level of discussion and conversations between generations that is necessary to get everyone into co-creation mode.

Thankfully, there are more people doing this work now to help them.

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Clarify the Facts, Weed Out the Interpretations

Make Sure You’re Clear with These Distinctions

This week we’re going to explore some territory that can become rife with confusion, in the hopes of leaving readers with a better understanding of what often sets the stage for things going of the rails.

We’re staying in the land of families who are planning on transitioning their business and wealth to the next generation, which we already know can be pretty complex.

When I work with such families, it takes a certain amount of time and a number of meetings (both one-on-ones and in groups) before I feel like I have a good handle on all of the facts.

One of the toughest parts of this work is to be sure that I am actually learning objective facts about the history and current context, because so many people slip into sharing their interpretations of the facts, without even realizing the distinction.

The Family Diagram (or Genogram) Example

Those who do this kind of work, accompanying families on this journey, often start off gathering facts and immediately begin drawing a family diagram (or genogram).

This remains the best way to capture many important details about the extended family tree, including birth order of siblings, and facts like dates of birth, marriage, divorce, and death.

The old sports expression “You can’t tell the players without a scorecard” often comes to mind when I do this.

When colleagues of mine talk about this tool, someone eventually asks, “Do you share the genogram with the family?”

My answer is always, “It depends”, which sometimes leaves people underwhelmed.

But this is the perfect example of distinguishing a genogram that includes only facts, from one on which interpretations and subjective assessments have been added.

I’m fine sharing a 100% facts-only genogram with family members, if only to make sure that I have the facts correct.

Don’t Be Like Elaine from Seinfeld!

I typically follow up my explanation with a story about the potential danger of having my interpretations seen by the wrong audience.

I then ask if they recall the episode of the TV show Seinfeld, where Elaine goes to the doctor. 

At one point the doctor leaves the room, but Elaine’s file remains on his desk, and while he’s away, she cannot resist the temptation to open the file and see what’s inside.

There she finds that he has noted that she is a “difficult patient”, and things go south from there.

And it’s the perfect explanation for why I prefer to keep such notes in my head, and never write them down anywhere.

Interpretations Among and Between Family Members

A big part of the work I do revolves around helping family members have conversations around difficult subjects.

They know that they should be having these discussions but can’t seem to hold them and have them go well when left to their own devices, which is why having a facilitator can be a huge help.

One of the simplest ways that I can be helpful is to make sure that they know the difference between assertions that they make that are facts, versus those that they make that are their own subjective interpretations of facts.

An example might be useful. “Sam doesn’t care about his job, he never gets in on time” is not the same as “Sam got in half an hour late today, and it also happened twice last week”.

I think you can tell the difference.

But when personal accusations start flying, things can devolve quickly. Ergo the importance of having a neutral third party involved to keep things calm.

Let’s Agree on the Facts First

It’s amazing how simply making sure that the parties all first agree on the facts can be helpful.

A respected colleague recently shared that this is because the part of the brain that deals with facts is separate from the part that gets all tangled up in emotions, so deliberately insisting that people take the time to use their thinking brain can be very helpful.

When someone is charged with keeping the parties focused on the reality of the facts, more productive and less emotional conversations can proceed.

Family members just tend to act more civilized towards one another when there is a non-family person at the table.

If that person also understands their role and knows how to play it, that’s even better.

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