Family-Business-Ownership Has Its Limits

The ecosystem of professionals who work with enterprising families is naturally quite diverse, as this work has become more interdisciplinary than ever before.

This week we’re going to look at some of the models these experts use to think about and explain the complexity involved in doing this work well.

My exposure to this began with the venerable Three Circle Model from Tagiuri and Davis, which I first wrote about here in Three Circles + Seven Sectors = One A-Ha Moment.

If you check the date on that post, you’ll see that it’s now over a decade old, so it stands to reason that some of my views on this have evolved in the intervening years.

From the Family Office World

Let’s start with something I’ve seen a couple of times now from some thought leaders from the family office space.

I’ve heard about the “MLF ratio”, as in the percentage of the time spent by those who work for the family office that’s spent in each of three key areas.

It seems many family offices have a ratio of about 70 / 20 / 10.

What does that mean?

That 70% of people’s time is spent on the Money, another 20% on Legal matters, and then a final 10% is spent on the Family.

Those I’ve heard talk about this are typically in favour of finding ways to increase the Family number, to at least double or triple where it typically falls.

From the Trustee World

I recently saw a similar triumvirate that I think stemmed from the world of trustees for wealthy families.

This one looks at Assets, Documents, and Relationships.


The assets are what the family owns, the documents are the legal papers that explain who owns what (and who’s allowed to do what), and oh, yeah, let’s not forget that there are a group of family members that are being served here!

And isn’t it always the problems in the relationships of those family members where most of the problems arise?

Again, I think that those who speak about this trio are those who are in favour of finding ways to increase some of the thinking about the relationship questions on the front end of decisions, as opposed to having to then clean up a mess that resulted in poorly thought out “documents”.

From Other Family Wealth Experts

I also recall hearing someone recently noting that heirs don’t only inherit wealth, they also inherit structures.

So if we wanted to turn this into a three-point model, it might be “heirs, wealth, structures”.

Once again, we look at the wealth/assets/money/business (what) as one leg of the stool, the family/relationships/heirs (who) as another, and then the legal/ownership/documents/structures (how) as the third.

Doing Away with the Circles?

At this point, we can even do away with the circles, for the sake of simplicity.

What the Three Circle Model does so nicely is to highlight the overlaps for some of the people, because in the family business world from which it emerged, the issues caused by family-employees and family-owners versus family members who are neither (or both) are often front and center.

But as a family’s wealth increases and the portion from an operating business decreases, these other ways of looking at things often make more sense.

Who and What Aren’t Enough

The one thing that doesn’t change is that more often than not, the balance of time and effort is way off from what it should be.

Regular readers won’t be surprised to hear that I think that too much focus is put on the money, the business, the wealth, the assets, while too little focus is put on the family, the relationships, the heirs, and all things related to the human capital.

Likewise, those in charge of the documents, the structures, the legal arrangements, the ownership (beneficial and otherwise) are given far more attention than they deserve.

In its simplest terms, it boils down to Who gets What.

It is very important that all of this be spelled out properly, especially when so much is at stake.

However, there are a couple of other questions that shouldn’t be forgotten along the way.

Let’s start with some WHY questions:

  • Why are we doing it this way?
  • Why don’t we involve our heirs?

And let’s add a big HOW question:

  • How is all this actually going to work, with our family?

You WILL Leave a Legacy, Like It or Not

This week I want to tackle a topic that many people talk about, but don’t always mean the same thing when they use the word.

Legacy is a big word, despite it only being six letters long.

I’ve been paying attention to people who write and speak about it for about a decade now, and while I don’t consider myself to be the authority on the subject, I definitely have some strong feelings about some parts of it that I want to share.

I also want to give a bunch of tips of the hat to some of the people from whom I’ve gleaned some of the wisdom I’ll now attempt to spout.

This Is NOT Optional 

My first hat tip is to David York, whose words have inspired several of my weekly posts over the years. See, for example, Striving for the All and Nothing Inheritance.

York talks about the fact that leaving a legacy is not optional, i.e. you will leave one, whether you like it or not.

Will it be large or small? Will it be positive or negative? Will it last centuries or fade within months?  These are perhaps the questions you should concern yourself with, but some sort of legacy will survive each of us.

Once we understand and accept this fact, hopefully it’ll help focus some of our actions in ways that ensure that the legacy we eventually leave will look something like what we’re hoping for.

Wealth Is NOT a Legacy

My next hat tip is to David Werdiger, for reminding me via his most recent newsletter, of a quote from the man who deserves thousands of hat tips from all of us, James E. Hughes Jr., aka Jay Hughes.

Werdiger quotes Hughes as saying:

            “Founders Create Wealth, but Heirs Create Legacies”

We’ll get more into dissecting the second part of that in a minute, but for now let’s concentrate on the founders and the wealth.

Too many founders believe that the wealth they created will be their legacy, and hence the more wealth, the greater the legacy.

They then continue focusing on making their proverbial pie as big as possible, on the mistaken assumption that quantity and size are what are worth striving for, in order to ensure a long-lasting legacy.

That’s a short-sighted view.

There’s no such thing as a fortune that’s “too big” to screw up. In fact, there are plenty of examples of “positive correlation” on those scores.

Don’t Forget the People Part

My final hat tip is to Tim Belber, who inspired this post way back in 2017, called Is Your Continuity PAL in Danger? 

Belber’s argument is framed as an equation: P + A = L.

People, plus assets, equals legacy.

What he means is that while anyone’s legacy will involve the assets they accumulated in their life, there won’t really be a legacy, unless there are people who care enough about it to carry it on into the future.

I sometimes talk about the fact that when we’re babies, someone changes our diapers, but at the other end of life, sometimes diapers are again needed, and now instead of changing the diapers of our children, it’s likely our offspring who will be in charge of changing ours.

If you want them changed with love (and in a timely manner), best make sure the relationships with your offspring, who may be calling the shots, are properly maintained and nurtured.

Preparing the Heirs for the Assets

All of this falls nicely in the category of preparing your heirs to receive the assets they’ll eventually inherit.

So much effort is typically put into the other end of that equation, i.e. preparing the assets for the heirs.

What wise people and families are finally realizing is that the time and effort spent on preparing heirs is never wasted.

Back to the Title of this Post

As I thought about the title for this piece, I stumbled into the idea of pride and whether or not your heirs will be proud of the legacy they inherit.

I don’t think it’s an exaggeration to think that this is the key element required in  the legacy one leaves.

If more people lived their lives with this type of “top of mind” motto, “I will act in ways that enhance my legacy. knowing that my children will be proud to keep my legacy alive”, that would probably be a good thing.

Fun with Similar Words, Part Umpteen

My wife and I were recently back in “full house” mode for a few days, as both our recent college graduate offspring decided to grace us with their presence at the same time.

I always enjoy the mental stimulation of this family time, as our similar-yet-different senses of humour get reacquainted and combine for many laughs.

One evening they indulged me as I shared highlights of a recent episode of America’s Got Talent that I’d seen, whereupon I realized that the word “finale” has a number of possible meanings.

Add in the fact that I often intentionally mispronounce that word as “finally” (for humorous effect) and you now have the genesis of this post.

Let’s see if I can turn this all into something useful for those in the family wealth transition ecosystem.

At Least Three Types of Finales

As I zipped through the recording of the episode, I stopped on a few acts I thought were worth sharing, including one that featured a really nice visual finale that we enjoyed.

So there’s the first type of finale, the end of a particular act, the last few seconds of a performance that lasted a couple of minutes.

We then watched parts of a couple of other acts from the 2-hour episode, before finally watching the last performance, which was the finale of that episode.

Imagine all the attempts at using every possible “double entendre”, feigning ignorance of what someone meant, sarcasm, and every other kind of dig we could employ to try to confuse, frustrate, or otherwise get a laugh from our family trio.

Of course we even brought up the idea that in a few weeks we could watch the “finals” of the competition, which would then be another kind of finale.

So we already had a finale of a performance, of an episode, and of a season. 

The Journeys, Not Just the Destinations

As I attempt to turn this family time into a blog post, the various time frames, and the fact that they each had an endpoint, were where my mind went.

It made me think about each finale as an endpoint, or destination.

As I wrote in There Is No Destination, I like to focus more on the journey instead.

In fact, after every finale, there’s always something else about to begin.

Bringing this to the overarching subject of this blog, the idea of family continuity, and transitioning an enterprise to the next generation of one’s family, let’s think about this as it pertains to the views of the “NowGen” and the “NextGen” of a family.

Back to the Long Game and the Arcs of Life

As noted last week in Stepwise Planning for Family Enterprise Transition Work, you can only plan so far ahead in this work, because each step depends on how the previous one turned out.

It’s almost like there’s a never-ending series of finales, each followed by another round of what’s next.

The trick is to periodically take the time to reflect on how these steps fit together when looked at from the very long term, “arc of life”, viewpoint.

Family wealth transitions are intergenerational by definition, so it certainly behooves us to look at them from that lens.

Many people have difficulty “going there”, mostly because it forces them to think about how things will look in a world “post me”, i.e. after my final finale. (You know, “if I die” as opposed to “when I die”).

But you can only get so far if you don’t consider that view.

Don’t Set Yourself Up for “Finally!”

Let’s wrap with a look at a couple of versions of “finally” that you’ll want to avoid.

First, please don’t look at “estate planning” and “succession planning” as events, that involve putting ideas and decisions to paper as an item on a to-do list.

Too many people do this work, along with outside experts, and once they sign the documents, they exhale and say “finally”, that’s done.

It’s a process, not an event, and you’re never done.

Second, please make sure not to set things up in a way that creates the conditions for your heirs to quietly and subconsciously root for your demise.

Too many people put themselves in a position where the lives of their offspring will be much better after their passing, as opposed to during their lives.

You really don’t want your death to create a “finally!!!” reaction from them. 

You Can Only Plan So Far Ahead

This week we’re looking at the reality faced by those of us who work with groups of family members as part of our role in guiding families through the challenges they face when transitioning their family assets to the next generation.

For those who simply advise a family leader (or couple) it’s typically much simpler. You give them your best ideas and advice, a few tips on sharing information within their family group, wish them luck, and you’re done. 

Of course, what happens next, when they in turn speak with their family members, is that they’re met with questions, resistance, quizzical looks, rolling of eyes, and all manner of uncertainty. Things often grind to a halt or spin out of control from there.

Some families are wise and lucky enough to find and enlist the help of skilled outsiders who know what questions to expect and can help guide the family forward, at least by one more next step.

That “one step at a time” aspect is what I want to share more about now.


More Peer Group Benefits 

Let’s put some context around how this topic became top of mind for me recently.

As noted in Meta Views on Sharing with Peers and Families I participate in a few regular meetings with peers, where we share ideas and stories about how we work with families.

A recent call had someone sharing a live case that they’re involved with, and the dozen or so others on the screen provided them with all sorts of ideas that they might pursue with the family we’d discussed.

And Some Sports Analogies Too

My mind kept churning after the call, and I couldn’t help thinking that even though this advisor now had a handful of great ideas that they might pursue with the family at their next meeting, it would be next to impossible for them to lay out a long term plan for how to implement these great ideas.

While every advisor and family leader may have some idea around the best approach to take as a family recognizes the need to begin to have regular meetings and to create some semblance of governance, it’s difficult to lay out Step A, Step B, and Step C, in order.

Trying to carve it in stone from the get go is NOT recommended.

You can only realistically plan Step A, and you need to keep B, C, D, etc. on the back burner (or in your back pocket), until they can all, as a family, see what works, what gets traction, and what the family is ready for.

As a fan of sports analogies (see Formula 1 Racing and Working with 1% Families) the next morning I tuned into a soccer match….

Tic-Tac-Toe Just as They Planned

The FA Cup game began with a pass all the way back to the goalkeeper, who fired the ball downfield in what seemed like a set play.

Surely this couldn’t turn directly into a scoring opportunity as they’d drawn it up in the locker room. There are too many moving parts on the field. Or so I thought.

A mere 16 seconds later, the ball was in the back of the net, and I wondered if maybe I was wrong. The play involved about 4 or 5 players, and the 4 or 5 steps all worked out in order, seemingly exactly as planned.

Playing the Very Long Game

As I tried to process what I just saw, it finally came to me. The score in the game was 1-nil, but there were still 89 minutes to go (at a minimum).

They managed to put a few exact steps together and successfully attained one step along the way to victory, but the rest of the game was played with more of the typical “fits and starts” that sports fans are accustomed to seeing.

Similarly, when working with a family on an intergenerational transition, you’re playing an even longer long game, measured in years and decades, not seconds and minutes.

As advisors or coaches who work with families, sometimes we can draw up a nice sequence of moves that work out, but it’s much more important to know how to guide the family through the ups and downs of the whole season.

Having family members learn how to play nicely together as a team is always key, so time spent on that is never wasted.

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.

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.


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.

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.

Frequency of Interventions Varies Over Time

The time lapse between a blog idea and my eventually writing about it is usually a matter of weeks, typically somewhere between 2 and 6.

This week, I’m writing about an idea that’s been sitting in my “blog ideas” email folder for almost two years.

It just finally feels like it’s time to share my thoughts on this.

In my work, what I do with the “Smith” family is never a good predictor of what working with the “Jones” family will be like.

Likewise, the circumstances, timing, approach, and cadence of the work with the Brown family will be very different from what occurs with the Johnsons.


Some Patterns Are Common Though

The fact that the families and their situations are never the same doesn’t mean that there aren’t some patterns that develop.

In the same way that I work with very different families, my chiropractor works with all sorts of patients, and no two are the same for her either.

There’s an informative poster on the wall of one of her treatment rooms that does a nice job of explaining three different stages of care that chiropractors generally deliver.

The poster is in French, and I was worried about how I’d translate some of the specifics, but thankfully my friend Mr. Google helped me out and found a site with the same information in English.

Ever since I first had the idea to write about this, I’ve understood that there’s something useful here for those of us who work with families on the challenges of transitioning their business and wealth to the next generation.

How Serious Is It Now? How Often Do I Need to See You?

Over the years that I’ve been seeing Dr. B., the cadence of my visits has varied greatly, depending on what has ailed me.

Initially, it was sciatica, which probably fell under the heading of “Initial Intensive Care”, which is often the first stage and the one that made me make an appointment.

In my work, this might be analogous to some family conflict that has reared its head, and is too hard to ignore anymore.

Families who reach out for an external resource at such times usually need some version of lots of “intensive care”, if only to make them realize that they need to work through the issue, and likely won’t be successful on their own.

The chiro version of this looks at “pain & symptom management”, whereas my equivalent is something along the lines of clarifying interests and trying to find common ground, while providing a safe space and calm presence.

Rehabilitative and Corrective Care

The second stage of chiropractic care is labeled “rehabilitative/corrective care”.

Visits during such treatments are usually spaced out further, but still quite regular. At this point, we’re not going in twice in the same week, but we may have a number of visits, once a week or every two weeks for a certain period of time.

Working with families, this stage is probably the sweet spot, where you start to make progress with a family group.

You’re also possibly not dealing with a real “pain point”, and more likely building in some of the elements of family mission and vision, and laying the groundwork for family governance.

The chiropractic work here looks at “improved function”, which may be something as simple as having better and more productive regular meetings with family members, where the family’s relationship to the business is discussed.

The Holy Grail of Maintenance Mode

I’m happiest when I leave the chiropractor’s office with my next appointment set for a month later.

That means I’ve arrived at the maintenance stage, and I’m usually feeling as good physically as I have in a while.

The chiro world calls this “wellness/elective care”, which is mostly preventative and consists of minor adjustments before little things get worse.

In my work, this can be where a family “graduates” from requiring regular services from me, and an occasional check in is all that’s really required.

The Limits of this Analogy

There is of course no perfect analogy, but I think about this from time to time, especially early on with a new family.

It takes a certain amount of time just to figure out what the family truly needs, because often they don’t have a very good handle on this themselves yet either.

Hopefully I’ll have just the right touch for them.