, , ,

Finding the Solution in the Mirror

It’s Often Right in Front of Your Nose

Although I personally try to shy away from using a simple “see problem, find solution” mindset, I recognize that many people do default to that way of thinking.

There’s no shortage of folks who prefer this shortcut way of looking at situations and trying to find a way through a challenge.

Dealing with complex family situations as I often do, a bigger picture, longer term, systems view of what they’re facing, typically yields better results for me when guiding a family.

There’s plenty of nuance in my work, and I also try hard to not present myself as the bearer of simple solutions to problems.

Inspired by a Tweet, Uh, I Mean, an “X”?

While I love using LinkedIn for professional interactions, I’m still a fan of what used to be called Twitter, although I spend less time there than I once did.

This week’s blog was inspired by a post I saw recently on X, from Dr. Nicole LePera (@Theholisticpsyc) a psychologist with over a million followers there.

Her post read simply:

                    If I am the problem, I am also the solution.

As you might imagine, I was intrigued and needed to process this more, but on the surface it held promise as inspiration for an eventual blog post here.

It’s so simple, and there are many ways to ponder it.

I immediately emailed it to myself and saved it in my “blog ideas” folder.

Complex Situations Have Multifaceted Problems

Back to the complex family situations I often learn of, and sometimes get invited in to assist with, there are always many people interested in finding a solution.

Not that many, though, immediately jump at the opportunity to look at the part that they themselves play in the perceived problem.

If (and when!) they do, they can eventually see how at least a part of the resolution is right there in front of them, when they look in the mirror.

While it isn’t usually easy to get anyone to the place where they even feel like taking that glance in the mirror, it is almost always a necessary step that needs to be taken.

As you might imagine, it’s also typically not something that only needs to happen for one member of a family, because any complex situation naturally requires some “adjustment” by several people.

Spreading the Responsibility Around

Challenging family situations affect many members of the family, and are also affected by many family members too.

Getting each family member to understand and accept this fact can take some time, but that “buy in”, to get everyone focused on doing their part in getting to a better place is crucial.

This work requires a “systems view” to be able to see what’s going on, and it also requires the guidance for each person in the system to make the necessary adjustments to get to a better place.

Getting a family to understand that there’s a shared responsibility at play can calm the whole system down as well, and that’s a huge piece of making progress.

The More and the Less of It

Families can benefit from making small, gradual adjustments, which can happen once some family leaders step up and show the way, by modeling such behaviours.

I’m talking about learning to practice more forgiveness and less blaming.

Nobody likes to have fingers pointed at them, even when they may internally acknowledge some of the fault for where things are.

Knowing that others are in a forgiving mood can become contagious, for the benefit of all.

Instilling an attitude of more gratitude and less lamenting one’s fate is also quite beneficial.

Benefits of the Mirror

Helping family members think about their own role in things, and getting them to think in terms of “I-statements”, as opposed to “you are to blame”, goes a long way.

Getting a family to a better way of being together requires an attitude of more self-efficacy, that gets everyone out of finger-pointing mode.

There’s typically a kind of culture to the ways families act, that can set in an add to the “stuckness” that sometimes exists.

Getting a family “unstuck” doesn’t usually happen quickly, and rarely in one step.

Taking the time to work with each person individually, to get them to understand and accept that everyone holds part of both the problem as well as the solution, is always worth the trouble.

/by
, , ,

Looking Family Enterprise Advising in the Mouth

Serving the Needs of “Enterprising Families” Varies Greatly

There are some subjects related to working with enterprising families that many of us don’t really ever think about, but that are always kind of there in the background somewhere.

This week we’re going to look at one of those, thanks to a new book that I just finished reading and that I highly recommend, which made me realize one of these issues actually does exist.

It got me thinking too, and when I do that, I typically try to find an analogy or a metaphor to help explain it more clearly, and so I’ll be trying out this new thinking here as well.

I bet you’re wondering what book I’m talking about.

Wealth 3.0 – The Future of Family Wealth Advising

I’ve known that this book was due out soon and was pleasantly surprised to see that it’s now available.

The authors, Jim Grubman, Dennis Jaffe, and Kristin Keffeler are all veterans of the field who I’ve known for years, and I’ve interviewed each of them of the Let’s Talk Family Enterprise podcast in the past couple of years. (Episodes 11, 29, 45)

They are mentors and colleagues and have each already authored other books on areas of this subject matter individually.

I think you can imagine why someone like me, who writes regularly about family wealth transitions, would’ve been eagerly awaiting its publication.

Business, Enterprise, Wealth

I could never do the book justice with a full review in this blog space, but I do want to share my thoughts on the new distinction that it clarified for me.

It’s a book about advising families about their wealth.

It highlights the fact that the field of family wealth advising is not very well defined and urges those who participate in this field professionally to do more to organize and advance it for the good of the families we serve.

(Image credit: https://www.vitatanden.se/)

 

It also contrasts the needs of wealthy families with those who inhabit the world of family business.

The family business advising world is, in many ways, ahead of the family wealth advisory space, and is also distinct from it.

That was the “A-Ha” moment for me.

Some Families Make the Journey

My own professional journey in this ecosystem started with me working for my Dad in the family business he started before I was born.

I then found my calling to this work while enrolled in the Family Enterprise Advisor program.

And I now sometimes work with families who have significant wealth, without ever having had an operating business to speak of.

Even the term “family enterprise” feels a bit clunky, because it was essentially concocted to try to cover the fact that families often sell the operating business that made them wealthy, and then still have many of the same issues to deal with, despite no longer being concerned with the operation of a business.

The Family Firm Institute, started in 1986, has been playing a leading role in advancing and professionalizing the field of family business advising.

Wealthy Families Come in Many Forms Now

The Ultra High Net Worth Institute, for its part, has yet to see its fifth birthday, and they seem to be working hard to play catch up.

All three of Wealth 3.0’s authors are part of the UHNWI faculty.

While many of the world’s wealthy families have had a successful business as their main wealth driver, there are now more non-business-owning wealthy families than ever.

Entertainment celebrities, world class sports figures, tech billionaires, and even well-compensated executives can easily end up in the Ultra High Net Worth category.

When these successful people end up with more money than they could ever spend, and they have families, they then face many issues that they hadn’t even realized before.

Do You Need a Dentist or an Orthodontist?

So as I contemplated all of this, I began to think about family business advisors as dentists.

They help business families with lots of little things, many of them mundane, and work with them to help keep their mouths healthy.

Maybe family wealth advising is more like orthodontics.

They still concern themselves with your mouth, but they look at things very differently, and help with more specialized services.

Orthodontics surely evolved from the field of dentistry and then took its own course of professionalization.

Every orthodontist needs to study dentistry first, and then move on to that specialty afterwards.

Perhaps family wealth advising is now beginning to follow a similar path?

/by
, , ,

Supporting Roles in the Family Enterprise

Not Everyone Can Be the CEO

In the world of family enterprises and their ubiquitous challenges in transitioning from one generation to the next, there are a number of misconceptions that continue to plague those trying to help families get things right.

A pervasive one that’s a pet peeve of mine, is the focus on finding that one singular person who can take over the top job, let’s call them the CEO.

When you think about a business founder, the person who’s the “G1” (first generation) head of the family business, you typically imagine certain traits and characteristics that they likely exhibit and even exude.

I suppose it’s natural to assume that once they’re no longer around, the ideal replacement for them would be a clone, or the person who is most like them.

And that’s the first part of the misconception.

Not Everyone WANTS to Be the CEO!

Fans of TV dramas like Succession may believe that the members of the next generation of every family business behave like the fictional Roy siblings.

Now I’m not saying that their portrayal of the battle to succeed their father is completely unrealistic, or that the efforts they each made to try to outmaneuver one another never occur, but they are surely the exception, not the rule.

Additionally, as a Family business goes through each successive generational transition (G1 to G2; G2 to G3, etc.) those qualities of the original founding CEO become less and less important.

Already by G2, the leadership that works best is often very different from that of the founder.

And not everyone even wants to be the CEO.

Sticking with the Hollywood Theme

Having mentioned a TV drama, I guess I can stick with the Hollywood theme a bit longer, and invoke another misconception, or actually probably more like a “misquote” or “misnomer” that gets used far too often.

Whether it’s the Emmy awards for TV or the Oscars for movies, awards shows always honour two different categories of actors.

There’s one category for the “lead” actors and another for “supporting” actors.

But that’s not actually what they’re called, even though that’s the way most people say it.

It’s actually best actor in a “leading role” and “supporting role”.

OK, not a big deal, right? Or is it?

Maybe not in Hollywood, but what about in a family enterprise?

Playing Second Fiddle to your Sibling?

Let’s get back to the sibling drama situation we touched on earlier. These kind of superiority contest plays do happen, especially when they happen in an environment where there’s a “winner-take-all” mentality.

When things are seen as a contest to find the best person, and all others are less good, that “winners or losers” dynamic isn’t helpful at all.

While you can’t always make it disappear, there are ways to try to frame it as more about the roles than about the individuals.

Many Roles in Large and Complex Families

There’s something that I recognized after entering this field a decade ago that I hadn’t appreciated until I began working with several large and complex families.

It isn’t something that most people would consider, and even those in such families often need to have it pointed out to them before they eventually say, “Yeah, that’s true”.

I’m talking about the fact that there are usually several major roles that need to be played as a family enterprise moves from G2 to G3 and onwards.

Not Just the Roles in the Business

Besides the roles in leadership in the operating business, there are other key roles that someone from the family can, should, and hopefully will take on.

Governance roles are so important, and exist in various places and forms during the evolution of a family business becoming a family enterprise.

Family office roles, ownership council leadership, being the family champion and taking on leadership of a family council, leading a family foundation, being part of the board of directors, leading the education committee and being the Chief Family Learning Officer all come to mind.

These roles don’t start with a job posting and typically evolve as a family matures from one generation to the next.

They also come with various advantages and disadvantages, suit different kinds of people during different life stages, and are sometimes compensated and other times not.

Helping families recognize this is the first step to finding the right spot for each person who wants to participate.

/by
, , , ,

New Labels for Three Circles with Similar Results

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?
/by
, , ,

Leaving a Legacy They’ll Be Proud Of

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.

/by
, , , ,

Enjoying Many Finales While Avoiding “Finally!”

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. 

/by
, , , ,

Stepwise Planning for Family Enterprise Transition Work

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.

/by
, , ,

Need Versus Demand in the Family Enterprise Space

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.

/by
, , ,

Formula 1 Racing and Working with 1% Families

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.

/by
, , , ,

Meta Views on Sharing with Peers and Families

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.

 

/by