The Evolution Over a Decade

It was ten years ago, during the time I was completing the Family Enterprise Advisor program in 2013, that I first had my true calling to work in this fascinating field.

When I entered the program, I assumed that the key work to be done was all in the “business circle”, where family businesses have been traditionally well served by the existing fields of professionals who work with all sorts of businesses (family or otherwise).

As I learned about the Three Circle Model (and wrote about then in Three Circles + Seven Sectors = One A-Ha Moment) I quickly recognized not only that the “family circle” existed, but also the fact that it is typically as underserved as it is important.

I also realized that my natural abilities are best suited to serve the family relationship area, despite all my education until then having been geared towards business circle challenges.

Sharing My New Calling Back Then

As I tried to comprehend my newfound calling and what it would mean to finding the type of clients who actually have a need for be served in these areas, I found myself trying to explain the challenges that families face, which while related to the business circle, are actually quite distinct from them.

I recall someone mentioning that there was a lot of demand for such guidance for families, because of the prevalence of family enterprises in the economy.

I initially agreed with those who noted the demand for what I was speaking about, before eventually realizing that the word “demand” was poorly chosen to describe the reality of the situation.

I think what my friend was trying to point out was a huge need for help in these areas, which existed then and still does today.

The problem for people like me is that while the need is huge, the demand is actually quite low.

Turning Need into Demand

One of my overarching challenges for this past decade has been trying to find ways to turn that need that families have to find resources and guidance to overcome the challenges they face into demand for such services.

How does one turn a need into a demand?

I recall a story about IBM way back when, who came up with a computer so powerful that they expected would have little demand, because it was difficult to conceive of what anyone could use that much computing power for in those days.

I daresay that every person in the western world now probably has several devices they use daily that are more powerful than the machine they were talking about decades ago.

The Education Aspects

One aspect that certainly comes into play is education, and it can be looked at in a few different ways.

Of course one part is to make families aware of what they could be (and should be) working on to increase the odds of success in their favour, as they try to find the best path to transition their businesses and wealth to the next generation of their family.

Sharing examples of families who have been “early adopters” of some of these avant-garde methods, and thereby educating these families around what has worked elsewhere is a big part of that.

Instead of having professionals use scare tactics by pointing out well known failures, and thereby providing “solutions” that solve for some simple aspect of those failures, we’ve seen more modeling of what successful families have done.

The other major education angle lies in having professional experts trained to serve such families, based on those positive models of families who have done this well.

Growing the Supply

The supply of experts who serve families needing support in the family circle continues to grow, seemingly at a faster pace than ever, and that’s a good thing.

The need is still greater than the demand, but at least the supply is ramping up as more and more demand is being expressed.

As I wrote last year in From Multi-Disciplinary Field to Interdisciplinary Ecosystem in many ways I’m jealous of those now entering the space because of the progress we’ve all been making over the past decade.

Everything continues to evolve of course, and there is no finish line either.

Most families will need support and resources at some point on their journey, and the opportunity to accompany them on this complex ride can be very rewarding for many.

A Simple Adjustment Makes a Big Difference

There’s an expression that I’ve found myself using more and more recently when speaking with people, but I don’t think I’ve used it in writing that often.

When I talk about the principles behind much of the work that I do with families, as I try to guide them to prepare for the transition of their business or their wealth to the next generation, I often marvel that things are actually quite simple.

“None of this is rocket science!”, I typically state as some point.

Regular readers may recall that I also like to remind everyone that “simple” is not the same as “easy”.

So this week I want to share a concept that is far from rocket science, that is relatively easy to explain, and that while not necessarily easy to do at first, does get easier with practice.

I’ve been trying it myself since I learned it and can attest to its usefulness.

A Book Recommendation from a Podcast

For the past few years I’ve been serving as one of the hosts of the Let’s Talk Family Enterprise podcast, which continues to be a labour of love for me.

(My Dad used to say “There are only two reasons to do something: Love or Money”. Mystery resolved for the curious.)

One of the standard requests we have for each guest at the end of every episode is for a book recommendation, and I’ve been nicely surprised by most of the responses.

I’ve ordered many of them based on the suggestions of my guests, and enjoyed the vast majority.

And so it was with episode 45 when I spoke with Kristin Keffeler about her book, The Myth of the Silver Spoon, and the book she recommended, Good Inside, by Dr. Becky Kennedy.

I ordered that audiobook from Audible, and listened to it during a car trip.

While I only have one take-away as I reflect back on it, it’s a major one, and it’s the subject of this post, which I’m finally getting to!

People Generally Are Good Inside

The premise of the book is that, generally speaking, people ARE good inside. It can be easy to forget that from time to time, especially when we’re dealing with our own family members.

What the author then suggests is to adopt the MGI method, in order to minimize our over-reactions to situations, especially when we still don’t have all the information around something that has occurred.

And when you think about it, when we first learn about anything, we almost never have all of the information, we typically only have our own, quickly arrived at, perspective.

Kennedy suggests learning to always defer to the Most Generous Interpretation of what you learned.

That’s the MGI, and it sits at the other end of the continuum most of us default to, which is to ascribe the worst imaginable view of what has happened, usually basing this on some assumptions, many of which turn out to be wrong!

Examples in our Own Families

There are many everyday occurrences this applies to, so there are plenty of opportunities to learn to put this into practice.

Years ago I began a daily meditation practice, which continues today, and it has made a similar difference to my stress levels.

Say I come into the kitchen and I see someone left some dishes in the sink. I could simply get angry inside and assume some forgetfulness or laziness on the part of whoever left them there.

Or, I could apply the most generous interpretation to what I see, and say to myself that the culprit got distracted or was in a huge hurry.

If I send a text to a family member and then notice hours later that I am still waiting for a reply, I could assume that they are purposely ignoring me and waiting to reply in order to make me angry.

Or, I could use the MGI method, and tell myself that they must be very busy, and maybe my text arrived at a very inopportune time for them.

Making a Habit of This Practice

It’s a simple mind trick that can become a habit, and that’s the secret to making it work for you.

Any single time you do it is almost irrelevant, like meditating once, or going for a jog once a year.

But as you do this more and more, it can help in keeping you calm.

Key Success Factors for Working on Family Transitions

When I stated sharing my thoughts in this blog over a decade ago, I decided to write a weekly post and figured I’d see how long I could keep that up.

Well, I’m still going, and often people ask how I come up with fresh material 52 times a year. One answer is that I recognize that nothing is truly original and subjects come up in different forms and contexts, which allows me to repeat certain themes.

This week I’m combining the ideas of discernment and resourcefulness, both of which I wrote about in 2018, in separate posts.

Let’s jump right in.

Patrick Lencioni Fan Club?

I’m a fan of the writings of Patrick Lencioni, and if you’ve never heard of him, you’re missing out on something. He’s not everyone’s cup of tea, but I love the way he brings clarity and simplicity to his work.

His latest book, the Six Types of Working Genius, is where the concept of Discernment jumped off the page at me again.

I highly recommend the book but will cut to the chase here and focus on the fact that Discernment is one of the types of genius, and it also happens to be in my personal top 2 (along with Engagement).

Discernment is the ability to see the big picture of what’s going on and then to divine what needs to be done as a next step.

See Questions of Discernment in Family Business for my initial thoughts on this in 2018.

Where Are We in This Transition Journey?

When a family is working on transitioning their wealth from one generation to the next, it is truly a journey, and not an event.

There’s also a whole heck of a lot of complexity going on, and a number of interested parties, all of whom see things in their own personal way.

This is why it is sometimes useful to engage an unbiased outsider to guide the family on this journey.

If that person is also skilled in the area of Discernment, I hope that you can understand why this would be a plus.

Bringing the Right Resources to Bear

Now let’s look at the resourcefulness question, and see how it ties into serving families.

The first thing one needs to recognize is that any one person quickly hits a limit in what they can provide, by themselves, to a large, diverse and complex family.

Knowing what other services and resources are out there that can be woven into how we serve families is often the key to our continuing to be able to add value as the family evolves and moves forward.

Let’s look at a handful that I’ve used or incorporated into my client work over the years.

See also: The 3 R’s: Finding a Responsive, Reliable, Resource

Outside Platforms and Services for Families

  • I’m working with some families using the MTM 360 platform that has been instrumental in getting them started holding regular family meetings.
  • I recently used the Family Enterprise Assessment Tool (FEAT), which was very helpful in clarifying what my client family needed to work on next.
  • I’m just starting down the road with a family where we’re looking at using the Assess Next Gen tool as a way to plan the next steps in the eventual exit of the G1 parents from the business.
  • I’m also a big fan of the Values Edge Toolkit and have used it a few times to help families discern, understand, and follow through on the values that they all have in common.
  • Last but not least, I’ve been looking at bringing another client family into working with the Tamarind Learning wealth education platform.

All of these are potentially useful for families at one time or another, and it also helps that I know the people who’ve worked hard to develop these resources, so that I have confidence when introducing them.

Weaving It All into the Family’s Timeline

Back to discernment, a big part of doing this work well is involving the family leaders and working together to figure out the answer to this key question: 

                         What does this family need now?

Many of these tools have only been created in the past decade, and others have had major revamps and improvements recently.

This ecosystem continues to evolve, enabling professionals to serve complex families in more productive and useful ways than ever.

Naturally, if you’re curious about any of these and want to talk about how they might be a fit for your family or one that you serve, please hit me up and let’s talk.

Useful Analogies for Working with Complex UHNW Families

During recent discussions with colleagues, many of whom who also work with complex families, I came up with an analogy that resonated with some of them.

So of course I now want to share it here as well, if only because writing about it forces me to think through the best ways to talk about the subject.

I’ve always been a huge fan of metaphors and analogies of all kinds, even though they’re never perfect.

I’ve written about sports analogies here a number of times, including The Rules of Baseball and Family Business, Where’s the Puck – Family Wealth Hockey Analogies, and Communication in Curling and in the Family.

Formula 1 Racing Is Up Next

This week we’re venturing a bit up-market, into the lofty world of Formula 1 auto racing, because that’s the analogy I recently concocted.

It so happens that the wealthy are often referred to as “The 1 %”, but that’s a total fluke here, and I didn’t even realize the coincidence of the number 1 until I set about coming up with a headline for this post.

For those who don’t follow auto racing, Formula 1 likes to view itself as the crème de la crème of the sport, with a worldwide audience and races on several continents.

Many of the automakers own parts of the teams and use them as kind of an R & D Laboratory to test the limits of technology.

The technical automotive improvements they develop at this top level of racing cars eventually make their way downstream to the cars sold to consumers.

Over the years Mercedes, Ferrari, BMW, Nissan, Renault, Ford, Honda and Porsche have been doing this. Likewise, in the US, Toyota, Ford and Chevrolet have done similar things on the NASCAR circuit.

Family Governance Models to Follow

I recently attended the annual NYC conference of the Institute for Family Governance where some of this really hit home.

Attendees heard from members of several families about how their governance systems were put into place and how they have evolved over the generations.

We heard from families that are into their 5th, 6th, and even 7th generations, including a few that now have several hundred family owners.

None of them got to where they are today easily, and they were all supported by outside professionals over the decades.

These are rare families at the very top of the complexity pyramid, and often also from the highest echelons of wealth.

This is the “Formula 1” equivalent I’m trying to point out.

What About the Other 99%?

As someone who is involved in several professional communities who serve families, I’ve heard many people lament the fact that we typically speak about the work that gets done and discussed always seems to involve the wealthiest families. See Meta Views on Sharing with Peers and Families.

They recognize that the need for this work on family dynamics and developing the rising generation exists at all levels of wealth and even in the smallest of family businesses. I can’t argue against that.

What I always try to stress is that this ecosystem is still in its infancy, and for now, most of the ideas we are learning to integrate into these complex wealthy families are still emerging, and that the good news is what we learn here can, should, and will eventually trickle down to simpler and smaller families.

The Pit Crew Metaphor

Happily, there’s a related metaphor that I can share that will help drive my point home, and that’s the idea of the interdisciplinary pit crew that every race team has to prepare the car for each race, and also handle the periodic pit stops during the main event.

The aforementioned professionals who serve families come from a variety of fields that each have their own view of what family clients need, and when they work together, all seeing the same big picture, they can be even more effective all while being more efficient.

If you’ve ever watched any auto racing on TV, you’ve surely been impressed by what you see when a car comes in for a pit stop and a bunch of guys all jump in and change all the tires, top up the gas tank, make whatever other adjustments, and then get the car back on the racetrack in a few seconds.

Imagine professionals who work well together to serve families operating with such seamless interaction, and you can begin to see what’s possible in our ecosystem.

That’s the model we should be following.

Learning by Sharing, and Sharing our Learnings

Ever since I had my calling to work with families facing the challenges of transitioning their business to the next generation, I’ve found a wonderful kinship with others who work at guiding families towards this same goal.

The ecosystem surrounding such families continues to evolve and mature, as professionals from various fields of origin continue to find themselves in situations where collaborating together is an essential ingredient for getting the best results for the families who engage us.

Various peer groups have sprung up over the years, and as someone who’s been working mostly solo, I find it hard to resist joining them, so that I can continue to learn and share what I’ve been learning.

Having just returned from the annual in-person gathering of one such group, this topic is fresh and top-of-mind for me, and I want to share some of the perspectives I came home with.

A Wicked Case of “Groucho Marx Syndrome”

I was invited to join this particular group just before the pandemic, and even though most of its members have a certain professional status that I lack, I feel like my contributions are welcomed.

When I set aside my “why would I want to be part of a group that would have me as a member?” I can actually appreciate all that we bring to each other as a group of like-minded peers.

During a quick discussion with a small group a one point, someone mentioned the “container” that we provide for each other to pour our shared experiences into.

Another added that we understand ourselves better in relation to the group as we do this.

As individuals who often find themselves as the only non-family person in a room during the toughest parts of our job, this work can be lonely at times, and sharing with others who’ve experienced the same thing is cathartic and allows for personal and professional growth.

A More Recent Example

My involvement with a different organisation has me in the middle of launching another peer group, this one involving members who serve families from a variety of different professions of origin.

It will be interesting to see how this one evolves, and what we will each get out of the experience.

It’s always best to approach such situations with an open mind and an attitude of abundance, as opposed to arriving with a closed mind and a scarcity view of the world.

Thankfully those folks typically self-select out of such opportunities.

What About the META Part?

One of the most fascinating aspects of the work that goes into the organisation, launch, and maintenance of such groups (and make no mistake, it does take work) is how everything we learn in these efforts is applicable to so much of what we do with the families we serve.

The things we do to successfully engage with and learn from peers is almost perfectly transferable to the work that families require assistance with.

As peers who share with each other, we learn about ways that families can and should share.

As we co-create ways that we are going to govern our groups, we learn about ways that we can guide families as they develop their family governance policies.

As we share leadership in our groups, we learn about how to make co-leadership and co-creation work well in the families we serve.

As we facilitate our sessions with each other, we learn what makes some methods work better than others, and we practice new ways of being with each other, which helps us when we do so with families.

The Constant Challenges of Engagement and Alignment

All such peer groups face similar challenges, from their launch, through their evolution and into their maintenance stages. Eventually, things typically stagnate at some point, and a fresh look and new focus with some changes in leadership is often required.

Again, there are strong parallels to the work we do with families.

As I wrote back in 2020 in Family Engagement and Family Alignment – Chicken and Egg families need to constantly work on keeping all family members engaged, and working on their “alignment” is frequently required.

Likewise, when there are challenges keeping them aligned, working on their engagement is helpful.

From now on whenever anyone asks me why I choose to get involved in so many of these peer groups, I’ll just refer them to this post.


Following Up On the Escalator Post

It’s been a few years since I’ve written a two-part blog post, and when I used to occasionally do that, it was planned as such in advance, when I recognized ahead of time that I was treating a longer topic.

This one wasn’t planned at all, and so this follow-up to last week’s The Crowded Escalator Problem in Family Planning is a bit of a surprise, even to me!

After completing that piece, it stayed with me, and I realized that I left a lot unsaid in that post.

I hope you’ll agree that it was worth revisiting this other view, the one at the beginning of the escalator ride, in contrast to the end.

With the escalator providing a metaphor for the ride through life for family members, I hope you’re ready to grab onto the handrail now.

Mixing Bookends with Escalators?

OK, so let’s get the mixed metaphor out of the way; I love to dabble in metaphors and so occasionally I end up putting a couple together, Frankenstein-style, that seem a bit incongruous, and that’s the case here.

I hope you’ll excuse that bit of inelegance, because I’m not sure there’s a better way to think of the view I’m talking about here.

Last week, we dealt with the difficulty that some senior family members have in recognizing that the time had come for them to disembark from the escalator they’d been riding for decades, as it pertained to their leadership role in the family enterprise.

The key is to distinguish that role, the one they play leading a business, from their other roles, the one of family member, and whatever role they continue to play in ownership.

The Training Period Takes Time – It’s a Process

Those in the rising generation need time to learn how to assume the roles they’ll be expected to play in the future, so from their perspective, they usually can’t wait to get started.

Too often, though, they have to wait, sometimes way longer than needed, to get into positions where they can practice and learn.

And here comes the A-Ha that I had, after finishing up last week’s piece.

It’s a lot like when your children are young, and they want to help out, say, in the kitchen.

When you’re in a hurry, it will always be faster for you to decline the offer of help and do everything yourself.

Showing them, helping them, fixing their mistakes, cleaning up their messes, Aaaaaarrrrggghhhh, it’s all so time-consuming.

And, if you never slow down and do that, they’ll never learn.

You actually did it, back then, and so later in life, you need to remember to do it again.  

Hence the bookends.

Back to the “We” Versus “Me” Angle 

Last week I ended off noting the difference between taking the “Me” view of things rather than the “We” angle.

It is very much that here again, but it’s also a lot more.

It’s about the arc of time, and learning to look at it from a much longer viewpoint. In the life cycle of a family, the longer the viewpoint you take, the simpler everything becomes.

If you look at today, or next week, or this quarter, doing the Me thing, in the short term, will always win.

But when you think about where things will be (and NEED to be) in five or ten years, the We almost always takes over.

Switching Over to the Diaper Story

I’ll wrap up by switching to a completely different issue, but that still deals with people at the extreme stages of life.

I want to talk about diapers. More specifically, the two people involved in the changing of the diaper.

Let’s call them the “diaperer”, i.e. the one doing the changing of the diaper, along with all the duties that brings with it, and the “diaperee”, i.e. the one for whom that diaper has been doing the heavy lifting.

Early on in the lives of the rising generation family members, the kids are the diaperees, and their parents are the diaperers.

At the other end of the escalator, a role reversal naturally occurs.

Hopefully, the former diaperees will be able to pay someone else to become their parents’ diaperers, but I think you get my drift.

In many family roles, we end up taking turns.

Like with bookends, you end up facing the other way at the other end.

It Gets Dangerous When People Won’t Disembark

When going about one’s business in society, there are some unwritten rules that people follow that ensure the smooth and safe flow of people.

Some of these are based on laws that are written and enforced, but many are simply based on custom.

Driving a car is largely based on laws, with a few customs sprinkled in, and these are usually formally taught to those who wish to be licensed to drive.

How we walk through airports, shopping malls, and other public spaces is usually way less formal, and is something we learn from our parents, who are concerned for our safety and try to teach us how to function in society.

One such basic practice is to always get off an escalator when you get to the top (or bottom), and not to step backwards just to stay on.

Stretching the Metaphor for All It’s Worth

I may have used more words than necessary to set up my metaphor, but I’m glad that I was able to incorporate the part about how such customs of behaviour in society are typically taught to us from a young age by other family members.

In my work with intergenerational families, it’s always interesting to note how the proverbial apples don’t fall very far from the tree.

Yet there are some things that the leading generation sometimes does that don’t serve the family well, which are then learned by their successors, much to the dismay of the generation that then has to follow them.

Failing to disembark from the escalator, and not getting out of the way of those who are behind you, is a problem that we see far too often.

It’s not safe for anyone, and the repercussions are far-reaching.

Examples Abound – Let’s Look as Some

A couple of months back, in Starting Family Discussions Late – 5 Considerations I shared a real-life story about a large family in the town where I was visiting relatives.

The matriarch had recently passed away, which brought with it a hope that some of the uncertainty facing the rising generations might soon be clarified.

What I didn’t get very deep into then, and what I hope to address here, is the follow-on effects that such lack of clarity can have on the subsequent generations of these families.

When those in their 80’s and 90’s still haven’t ended their ride on the proverbial escalator, those behind them in their 60’s aren’t able to begin to make their own plans, which then stifles the ability of their offspring to figure out where they fit into things.

You now end up with people in the prime of their lives and careers, in their 30’s and 40’s, who are unable to make key decisions around whether or not they have a future in the family enterprise.

A Recent Extreme Tale

I recently made a presentation about legacy planning to an industry group in the center of the universe (Canadian readers all know I’m referring to Toronto).

During the Q & A, an attendee shared their story, which I will now relate here, while disguising some facts for privacy.

The G1 founder is in his late 90’s and still very much in charge of all major decisions, including many day-to-day ones.

Unfortunately, the G2 heir apparent passed away recently, reinforcing the founder’s perceived need to stick around even longer.

The G3 person who attended my session, who’s trying to run the company with a sibling (and both see things very differently, by the way) now has to deal with a meddling founder grandfather, a mother who suddenly holds a large ownership share despite never having been involved in the business, and a sibling equal.

When this person’s offspring, who are hitting their prime working years, ask their parent to try to paint a picture of their future in this family enterprise, how can they do anything but shrug their shoulders and say, “we’ll see…”?

Moving from a “Me Focus” to a “We Focus”

I’m often too indirect in my writing referring to the importance of “having important discussions”.

I now want to highlight that talk is insufficient, and that action has to occur.

A key action that needs to happen is for senior family leaders to get off the damn escalator.

They need to move from focusing on ME to doing what’s best for WE.

Hopefully some will recognize themselves and act.

Probably Not as Big a Deal as Artificial Intelligence

A couple of months back, my wife took an extended work trip that had me alone in the house with just our two cats to take care of. 

I decided that it was an opportune time to clear out our freezer, which had begun to accumulate a variety of odds and ends that were too good to throw away, yet wouldn’t keep forever.

I keep an email folder of blog ideas that bears some similarities to such a home appliance, and lately I’ve decided to look behind some of the recent additions to see if there isn’t something I put in there a while ago that just might be right to serve up now.

Such is the case with this week’s post, which is all about Appreciative Inquiry, which I’ve seen labelled as “A.i.”, not to be confused with the now ubiquitous “A.I.” (Artificial Intelligence, for the uninitiated)

In my work with enterprising families, appreciative inquiry will likely be the more important A.I., at least in the short term, although this prediction risks looking foolish and out of date some day.

So What Is Appreciative Inquiry?

Rather than trying to reinvent the wheel, I’ve decided to share an introductory sentence from this piece I saved last summer, by Regina Koetters.

“Appreciative inquiry (Ai) focuses on what’s working well, why it’s working well, and how to replicate and build upon it

Developed by Dr. David Cooperrider and Dr. Ron Fry at Case Western University three decades ago, this approach has been validated by extensive research as an effective means of developing people, spurring innovation, and scaling companies.”

I hope that you can see why I like the idea of using Appreciative Inquiry with business families, where too often there can be a tendency to focus on the negative.

Positive Psychology Strikes Again

This is not brand new territory for me, as I’ve touched on some angles that come from the world of positive psychology before, notably in What Colour Is Your Cape?

Keeping one’s focus on what’s going well can be so important in setting the right tone with everyone we interact with.

It’s as much a “default mindset” as anything else, in my view, and can truly be a difference maker in so many settings.

And, it doesn’t come naturally to most people.

Maybe that’s why it’s so refreshing when you experience it.

Generative Questions and Positive Framing

Family businesses do a lot of things right in order to be successful, so sometimes when we are invited into them to be helpful, it can be a natural reaction to try to fix what’s not working.

But as my UK colleague Ken McCracken likes to say, they have some natural advantages that they’re already using, so it’s usually better to look at what they’re doing right.

(Listen to the podcast I did with Ken as my guest.)

The biggest thing to remember is to ask what are called “generative questions” and do so with “positive framing”.

These generative questions come from a place of real curiosity and a desire to learn when listening to the answers.

The constant search for more positive ways to look at things works better when the questions are asked in this way, as opposed to questions that contain judgement.

There are literally books written about this topic and also courses you can take to get better at this.

Hopefully this blog post will encourage more people to consider this methodology in the family enterprise space.

Not to Be Confused with Other Kinds of A.I. 

Off the top, I tried to make a humorous point about the other kind of “A.I.” that we keep hearing about in popular culture these days.

I also realize that there are even more things that go by the initials “A.I.”, including one I wrote about recently in No Beef with this Family Resemblance.

I imagine that in some family farming businesses there might be a reliance on the Artificial Insemination practices that I got to learn about thanks to my Dad’s post-retirement adventures in cattle breeding.

But for most family enterprises, and for the advisors that work with them, I think that Appreciative Inquiry is an idea whose time has come, and that more people should be looking into.

The questions we ask and the way we ask them are the basis for the good conversations we have, that create and sustain our most important relationships.

Please Stop Calling it a “TRANSFER”

Many families know that they should be planning for the eventual transition of their wealth or business to the next generation, but they avoid the issue for as long as they can.

This is unfortunate, and causes all sorts of problems the longer they delay things. The longer you wait the less good options you have available to you.

They put these important discussions off because they’re usually looking at this the wrong way, in my estimation.

Too often, they’re thinking about a “transfer”.

They really need to learn to consider this as a transition, or, better yet, a series of transitions.

A Process Versus an Event

I’ve tackled some of this here before, like back in 2018, in Don’t Transfer Family Wealth, Transition It.

One idea I shared then was that transfer is a word that’s often associated with a one-time event that takes place, whereby something is in one place at point A, and then “whoosh”, there’s a transfer, and now it’s at point B.

Transfers are typically pretty instantaneous.

The way a family looks at its enterprises and wealth, though, and how it should best move from one generation to the next, should be much more gradual, and needs to be planned that way.

But what about the “unpacking” that I teased, and the “series of transitions” I already mentioned? I’m glad you asked.

When you get right down to it, there are actually at least four parts to this complex question.

A Simplified Example

Because this gets messy as you add more people, I’ll use the simplest possible example, where only one parent owns and manages everything at the start of the example, and eventually only one of their offspring will own and manage it all.

You can imagine that if we have both parents and a sibling group, like many real-world examples, it gets hairier quickly, but I’m trying to demonstrate that even the simplest cases are more involved than they first appear to be.

My goal is to break this down into bite-sized steps, because the elders who put these discussions off just may be more willing to engage with the ideas in this piecemeal way.

Level 1 – Management of the Assets

One key element that needs to move from one generation to the next is the management of the business or the assets. We’re talking about the day-to-day oversight of whatever the business does in terms of operations or how it’s wealth is invested.

Non-family employees or outside professionals are also very likely involved in some aspects of this management and those people take their instructions and cues from someone who’s part of the family. At some point the rising generation person will need to learn how to handle this part of things.

This is sometimes the first thing that gets transitioned, as the younger person learns on the job, starts to get involved in things, and eventually becomes the person in charge of managing the day-to-day activities.

Level 2 – Leadership Roles

One level up from the management we find leadership, which has us moving away from the simpler day-to-day of management, but now looks at some of the higher level choices that need to be made.

Hiring and firing of employees and choices of advisors are a couple of elements that come into play here.

The junior family member eventually needs to be able to take over these roles as well, but not necessarily at the same time as they assume the management roles above.

Level 3 – Power and Authority

Even after the senior person has transitioned out of their management and leadership roles, they may still continue to exercise power and authority over many of the decisions. That sometimes only comes years after ceding the first two.

Level 4 – Ownership

Finally, there’s the legal ownership that needs to transition. This can take place all at once, or gradually, which is what I typically recommend, whenever possible. Portions of ownership can be transitioned as some of the other transitions are progressing.


Planning It This Way, AND Executing It Too

These four layers can and should be separated into these components when planning for transitions, and also when executing them.

An overlapping of responsibilities between both generations is a good thing, because these elements are rarely mastered in a day.

Hopefully this breakdown will help some families get moving.

The earlier you begin, the more good choices you have.

More Here Than Meets the Eye

Working with enterprising families brings up many challenges, which I write about here weekly.

I talk about getting the family engaged and aligned, and the importance of being intentional about everything, because things don’t just happen by themselves.

When I write about professionals who serve such families, I often highlight the need for us to collaborate, and how that’s typically never as easy as we’d hope.

But one of the ideas that I’ve given scant attention to is the idea of considering the whole family as your client.

Many of the advisors who work with such families do so mainly via the business the family owns, and they naturally consider the company as their client.

Others, who work with the owners of the company, look at those folks as their client.

There’s a growing movement afoot to consider the family as the client, and while it makes lots of sense on some levels, it’s also fraught with challenges.

“Who Is My Client” – A Really Good Question

My first exposure to this question came a decade ago when I embarked on my journey to this work and enrolled in the Family Enterprise Advisor (FEA) program.

As a “newbie” to this work back then, I didn’t appreciate the distinction, unlike many of my colleagues in the class, who’d already been exposed to the distinctions outlined above, although perhaps never having considered that the family should be their focus.

So for me, this wasn’t really an issue I thought I needed to concern myself with. Of course once I began working with families other than my own, things began to sink in quickly.

You might think that those who treat the business as their client would be used to this, since the business is typically also comprised of a number of people, as is a family. But it’s not that simple.

Even when you think you understand the idea that the whole family should be your client (which is a big leap for many), at some point you’re confronted with the realization that the family doesn’t always speak with one voice!


Plenty of Groundwork Needs to Be Done

In fact, getting a family to the point where they understand that they need to learn to speak with one voice on some matters takes lots of work in itself.

In cases where there are a number of non-family members in key roles in a family business, having different family members giving direction, especially to non-family employees, causes problems.

See Nose In, Fingers Out for Family Business

The idea that each family member sees things their own way, and often expects that their way is the way the family should go, also affects the way all outside professionals working with the family interact with them as a group.

Having been trained in the FEA program, I quickly understood that the entire family needed to be my client, and I adopted that mindset from the get go.

But therein lies the challenge, i.e. what are the limits of this important mindset?

Values and Vision Work, or Mediation

Much of the fun work that people like me enjoy getting into with families involves spending time with family members trying to ascertain their common family values and getting them to identify a common vision and mission for the future.

Some of the less fun version of working with family members who have disparate views involves things like mediation and conflict resolution.

If you adopt the mindset of “the family is my client” this gets easier, because it can serve as your “north star” and give you some important grounding, which is why the FEA program teaches us that.

We must always remind ourselves that the family is a system, with many interdependent moving parts and relationships.

We are invited to work with the system, but need to be careful not to become part of that system.


The Family As a System

This isn’t as easy as is sounds, as those within the system constantly try to pull us in to their view of how things should be.

By always keeping what’s best for the entire family in mind, it becomes more straightforward, but certainly far from easy.

Most families will agree in principle to this way of working without resistance up front. It doesn’t always last, though, as some family members realize they aren’t getting the special treatment they’d like.

Yet another challenge to overcome.