On Homeostasis, Iteration, and Change in Family Systems
Why Slow and Steady Is Often Best
The title of this post uses some words that are a little longer or less familiar than the kind of vocabulary regular readers are used to seeing from me.
I pride myself on writing and speaking in terms that are easy enough for most people to follow, and I typically resist the urge to try to sound like I’m smarter than everyone else.
But occasionally, there’s a word that must be used to make a point and so I will use it.
As usual I’ll spend plenty of time explaining the words, what they mean, and why I think they’re important to the subject at hand.
Section 01
Homeo-what? Homeostasis
The longer word I was talking about is obviously “homeostasis”, and it was going to be the central thesis to this post until I realized that I had another blog planned around iteration.
As I looked at my Blog Ideas folder and thought about my notes more deeply, I recognized the potential synergies, and here we are.
Let’s check with my friend Mr. Google to see what we can learn about homeostasis. Here’s what came back:
Homeostasis is your body’s automatic process of maintaining a stable, balanced internal environment, even when external conditions change.
It seems to me that part of what’s involved beneath the surface is an inherent resistance to change, and a desire to maintain whatever equilibrium is in place.
It also brings up inertia, one of Newton’s Laws that states that a body at rest tends to stay at rest, if I remember my high school physics correctly.
Section 02
Homeostasis in a Family System
Anyone who has tried to make changes happen anywhere will recognize the challenges therein.
If the system where you’re trying to effectuate changes also happens to be a family, you’re probably dealing with a trickier problem.
When the family in which you’re making these efforts also happens to own a business or enterprise, you’ve got an even heavier lift ahead of you.
Your best bet is to try for small changes, and even then, it takes time for the family members to adapt and recalibrate with each other as any change is implemented.
Change is a bit simpler when it’s done in small increments, i.e. incrementally.
And one of your best bets to make change happen is to recognize the concept of iteration, and the idea of making change iterative.
Section 03
A Blog Idea Around Iteration
When the idea of writing a post on iteration popped into my head, I Googled the word and one of the results included the following:
What does iterative mean in project management?
That’s when I realized how powerful this idea could be, if I could use the “project” idea to explain it to families I work with.
Last fall in Ideas on Dealing with the Family Crap, I wrote about getting families into the habit of Convening Regularly And Productively (C.R.A.P.)
Coming back together as a “project update” meeting, where we assess the latest iteration of where we are makes sense to me.
Section 04
Iterative Versus Incremental
The Google result on iteration in project management brought me down a rabbit hole that tried to distinguish between iterative and incremental, but I’m not sure that adds value here.
Both are part of continuous improvement but the distinction on iterative is that it involves incorporating feedback into the process.
When a family reconvenes, it’s so important to hear how each person has been evolving in their own thinking and adaptation to whatever the family has been working on improving and evolving.
This feedback allows the facilitator to gauge progress and adapt the pace of changes or modify the direction as needed.
Things naturally evolve incrementally, and reconvening to incorporate feedback keeps everyone on track together.
Section 05
Changing the Way a Family Is Together
Homeostasis tells us that change is naturally resisted, so we need to accept that and find a way through.
Iteration reminds us that we need to incorporate feedback along the way to produce a slightly improved result, and then do that again (and again, and…).
The family system concept is all about how the family members relate to one another, i.e. who the family is when they are together.
A family can continue to evolve, and looking at it as a journey or a project can help clarify why they are actually making these efforts together for the good of everyone.
At A Glance
The Slow-and-Steady Loop
Tap each idea to reveal the principle.
+Idea IExpect Homeostasis
“An inherent resistance to change, and a desire to maintain whatever equilibrium is in place.”
+Idea IIGo Incremental
“Change is a bit simpler when it’s done in small increments, i.e. incrementally.”
+Idea IIIMake It Iterative
“The distinction on iterative is that it involves incorporating feedback into the process.”
+Idea IVReconvene Regularly
“A ‘project update’ meeting, where we assess the latest iteration of where we are.”
Back in 2017, in My Beliefs on Family Legacy Advice, I shared the text of an assignment I prepared as part of my Bowen Family Systems Theory training in the Post-Graduate Program at the Bowen Center.
I just completed a year in their new Differentiation at Work (DAW) program, and participants were once again offered the opportunity to share our beliefs.
I thought I’d share it here once again.
I can see the evolution of my thinking, I hope you can too.
Here Goes:
Section 01
One Self Can Shift the System
I believe that ONE person in a system can have an enormous effect on the whole system.
I also believe that to have the most positive effect on that system, that one person must limit their efforts to making changes in themselves.
To become such a leader in a system, they must resist the temptation to over function for the others in the system and of course overcome a similar temptation to try to “fix” others.
Resisting temptation can take lots of work, but it can be done, with continued effort, attention and intention.
Section 02
Using the I-Position
When one takes a systems lens to a group and keeps their focus on the relationships between the people rather than on the people themselves, one can quickly conclude that the only relationships over which they have any control are the ones between themselves and each other person.
Such a view can help keep one out of triangles with others, which is ultimately for the benefit of all.
When a leader models such behaviour, with any luck it can become “contagious” and others will follow.
Using the I-Position is the simplest way for me to keep this intention top of mind.
Reminding myself, and others, of what I will do, and what I will not do, helps me to define myself to everyone, me included.
Section 03
Banishing the Word “Help”
Another temptation that I have learned to avoid is the offer to help others until asked.
About a decade ago in a coaching call with my Bowen coach, I expressed frustration with my wife’s resistance to accept my help in dealings with a situation in her family of origin.
My coach, Amie, asked me to consider withdrawing my offers to help her, and instead to remind her that if she ever wanted me to assist her, that I was ready, willing and able to be a resource to her.
I mentioned this to my wife later that day, with low expectations, and I was pleasantly surprised by her response.
I have since tried to almost banish the word “help” from my vocabulary to positive effect.
Section 04
Holding Position Under Resistance
For a leader to succeed in a system, it is paramount to remain vigilant to these old habits and temptations to intervene with others in ways that may be unwelcome.
When others know that you are there, know what you will do and what you won’t do, that clarity can permeate the entire system.
When adopting such strategies within a system for the first time, there can be a need to repeatedly remind others in the system of one’s I-Position.
It can take a while for others to adapt to a new stance. This is where maintaining one’s resolve to hold that position, even when there is resistance, can be a challenge.
Changes in how we relate to others in a system that we have been part of for a long time can create anxiety in others. Maintaining one’s position in the face of such anxiety is one of the most challenging parts of differentiation of self.
What will I do, what will I not do. Sounds simple.
Simple does not mean easy.
But focusing on oneself also simplifies our outlook, because we no longer need to worry about everyone else!
Section 05
The Non-Anxious Presence
I have been working on some version of this for over a decade, and it has become so important for me in my work with families.
I frequently remind myself that being a non-anxious presence within a system has allowed me to be successful in anxious situations, and this has helped me keep my focus on myself and my own behaviour.
This has helped me to respond to situations rather than simply reacting and making things worse.
De-escalation is so much more useful than escalation when working with a family system.
Being an outsider to such a system makes it much easier for me to model this behaviour than for the family members I am serving.
Lastly, I believe that I am the most important instrument or tool in my toolbox.
I must keep myself sharp and ready, so that I can properly model a calm and non-reactive way of being in every situation, in service of the client families I am privileged to serve.
At A Glance
The Four Pillars of Differentiation
Tap each pillar to reveal the principle.
+
Pillar I
One Self Can Shift the System
“ONE person in a system can have an enormous effect on the whole system.”
+
Pillar II
Hold the I-Position
“Reminding myself, and others, of what I will do, and what I will not do, helps me to define myself to everyone, me included.”
+
Pillar III
Withhold Unsolicited Help
“I have since tried to almost banish the word ‘help’ from my vocabulary to positive effect.”
+
Pillar IV
Be a Non-Anxious Presence
“Being a non-anxious presence within a system has allowed me to be successful in anxious situations.”
On Institutional Knowledge in a Family’s Continuity Journey
A couple of weeks ago, I had a few instances where the idea of “institutional knowledge” came to the fore, so I decided that this could be something around which to build a blog post.
As usual, I sent myself an email and stuck it in my Blog Ideas folder and there it sat, simmering.
Lo and behold, even more recently, another example landed in my lap, giving me a “three-legged stool” to work with.
We’ll see what my friend Mr. Google has to add, and then look at how the concept ties into the challenges that families face when working on intergenerational wealth transitions, as usual.
Section 01
So What Is “Institutional Knowledge”?
Here’s some of what my friend’s AI summary came back with:
“The collective, often unwritten information, experience and expertise accumulated by employees over time within an organization”
“How things are done, cultural norms, non-documented processes, tribal knowledge, an organization’s memory”.
There are plenty of good reasons to believe that it’s important to make sure our organization treats such experience as worthy of respecting and preserving.
And, of course, there are occasions where leaning too far into the idea has its own drawbacks.
Section 02
A Peer Group Example with Volunteers
There are plenty of posts on my website in which I sing the praises of peer groups, and every such group is different.
Most are run on a volunteer basis, and so institutional knowledge is not constrained to “employees” only.
As a relatively new member of a group that’s been running for over 3 decades, I’m seeing this at play now.
I was recently added to a committee, joining a couple of longtime members. A few short months later, I became the only member of that committee.
I insisted that we needed someone with more seniority than me and twisted the right arm just enough, and we also added a newer member.
Section 03
A Workplace Example with Employees
A couple of close family members both happen to work for the same arm of a university department.
One has been there almost since the department’s inception, the other for less than two years.
As I listen to them talk about the structural changes currently taking place, it strikes me that having institutional knowledge provides one with more flexibility in how closely one needs to follow new rules.
When you’ve been around longer, you can get away with more because they really need you.
When you’re newer, you’re easier to replace.
Section 04
A Non-Profit Version with an Employee
While writing about my own family members needs to be done carefully, so does my next example.
I was involved in a local charity for many years, and they experienced a good amount of turnover during that time.
One employee was there for so long that their seniority was probably triple the next closest person’s.
While I served on that organization’s board of directors, I constantly referred to that person as the one with the most institutional knowledge, and everyone bought into that.
One of the downsides of having so much of that knowledge in a single person is the risk to the organization when that person is no longer there.
A person may suddenly no longer be available due to an accident or health reason, a fight with their superior, or even having been caught with their hand in the proverbial cookie jar.
Section 05
What About Multi-Generational Families?
In a family, the parents naturally have more institutional knowledge than their offspring.
In my first example above, the committee lost so much of it when I became the senior person with not enough of it to play the role properly.
Giving too much power to someone too junior has risks you want to mitigate.
The second example reminds us that the rules apply to everyone in theory, but not always in practice. Families need to be aware of this and find ways to minimize this happening.
The most positive lesson from the third example is that it’s important to have younger and more junior people begin to get involved in matters earlier, so you don’t end up with the sudden exit of someone with lots of institutional knowledge creating a problem.
Knowledge should be shared with more people, and there needs to be both a “push” and a “pull” element to make this work sometimes.
And it’s never too early to begin.
Coming off a weekend spent with peers, I’m still basking in the warmth of positivity we all gave one another during our precious time together.
Existing relationships were deepened, some relatively new ones rose to a new level, and a couple of brand new ones are off to a great start.
Of course these thoughts always get my juices flowing on considering how such ideas also affect the work we do with the families who entrust us with helping them “hold their space” safely.
So that’s where we’re headed this week, looking at gratitude and feedback, and how they play into deep connections among people.
Let’s get going.
Grateful for the Professional and Personal Connection
Last year after that same peer group’s annual weekend, I wrote about how I sometimes felt like I was cheating on these friends because I also interact with peers in several other groups.
See On Peer Groups and Feelings of Infidelity
But this year when we went around the table for our check out comments on Sunday, I realized that this group is a bit different, and it actually felt like the connections were deeper.
Some combination of the size of the group, the culture we’ve developed and nurtured, the quality and depth of the conversations and just how we all seem to feel so safe to be vulnerable together, all add up to its specialness.
We have many things in common on a professional level because of the ways we all work with families, and we have personal connections.
Gratitude for Sharing in Client Conversations
During one of our sessions that recent weekend, we worked on the idea of giving feedback in a more constructive way, called “feed forward”.
My friend Mr. Google’s AI overview just informed me that this concept originated from coaching and leadership guru Marshall Goldsmith, and it’s summed up nicely as:
“a proactive, future-oriented communication approach focused on providing suggestions for improvement, rather than analyzing past mistakes”
It’s actually just a small tweak in approach, which can yield huge differences in results.
I’ve noticed myself giving feedback in one-on-one conversations with clients where I want to use this more.
I already make sure that the members of my client families know that I truly appreciate when they’re completely open and real with me.
Feedback + Gratitude = Deeper Connection
When you work with an entire family group, there’s often some sort of family hierarchy in place, which may stem from seniority in generations, positions inside the business, or even birth order.
In order to properly serve the entire family system, facilitators like me need to make sure that while we recognize that such hierarchies may exist, we are not beholden to them.
We need to make sure that even the folks who feel like they’re lower down the pyramid are important to us, and thereby to the rest of the family.
It can take a while to establish a deep enough connection with each family member for them to truly believe that while we are there to serve the whole family, that includes every last one of them.
I believe that my giving them grateful feedback, increases the odds that they buy into me as their advocate.
The Better I Understand, the Better I Can Serve
Trying to reconcile each person’s desires, viewpoints, fears, and wishes is complex enough when you don’t actually understand what those are.
When I sense that an individual has been vulnerable with me by sharing something that they likely haven’t shared with others in the family, I thank them and remind them that I can best serve them and their family when I get each person’s true input.
When your professional work can sometimes be summed up as “family relationship specialist”, it’s important to develop and maintain deep connections with every family member.
If I want to help a family get along well enough so they can come together productively to make important decisions about their common future, they all need to trust me enough to allow me to play that role.
Building and Maintaining Trust Is a Forever Challenge
So whether we’re dealing with peers who also do this kind of work or with the family member clients themselves, the way we are is often at least as important as what we do or what we say.
Following last week’s post Funeral Musings on Family Member Evolvement, this week we’re returning to the subject of character traits that often get handed down through one’s DNA.
As someone who frequently works with several members of the same family, usually from more than one generation, this idea is never really far away.
Of course it’s easy to read way too much into this idea, and make assumptions about how a member of a rising generation “should” be just like their parents, and we need to be careful of that.
This past week, while speaking with a colleague, I shared a self-reflection regarding my own parents and how I turned out, and the conversation that followed has led us back to this idea here.
Partially Inspired by Prince?
The recent ten-year anniversary of the passing of Prince may be why some of his lyrics jumped into mind as I talked about how “just like my father” I was (or was not).
As I spoke about how different we were, and how I’m 1000% sure he would not do well in the roles I’m called to play when working with a family, the song When Doves Cry came to mind.
“Maybe I’m just like my father, too bold” is an oft-repeated lyric.
My relatively recent realisation that I inherited more useful traits from my mother for my current career is a fact I now often share.
“Maybe you’re just like my mother, she’s never satisfied” was about the woman in the couple in the song, but I ended up thinking of how my Mom’s personality rubbed off on me in positive ways.
Facilitation Is Not Telling People What to Do
When I imagine my Dad taking my place in a meeting with a family, I see things unfolding much differently than with me facilitating.
He was a smart and successful businessman, and he was always very sure of himself.
I jokingly say that if he were leading a meeting instead of me, it would go much faster!
“You, shut up”.
“You, you said you were going to do X, but you haven’t done it yet.”
“You, do this.”
“You, do that.”
“Listen to me, I am right”.
It would be much more of a one-directional monologue than a dialogue.
What Traits Are Needed in Successive Generations?
Enough about me and the role of a facilitator, the families I work with are typically led by someone who has been successful, and they eventually become concerned with the leadership of the family after they’ll are no longer be “in charge”.
There can be a tendency to look for the person in the next generation who is most like this leader, on the assumption that what got you here is going to be what it takes to get you there.
That can work, but it isn’t the only way, and is often not recommended.
When you work with family enterprises, you quickly realize that there’s an extra couple of layers of complexity to deal with.
First of all, the family considerations invariably end up mattering at least as much as the business realities.
Secondly, the ownership of the assets and how around how that’s expected to transition from one generation to the next makes things extra complex.
Leading the Business Vs Leading the Family
The qualities of a person who will be competent to lead the business are not always found in the offspring of the current leader(s).
And sometimes great qualities are there, but they aren’t the same qualities as the current leadership, so they aren’t properly recognized by those who need to figure this out.
And let’s not forget about leading the family, isn’t that also important, especially if the family is planning to continue being the owners of the business or assets?
What Was Needed Then, What Will Be Needed Later
One of the easiest examples of different leadership needs for a business can usually be found between the founder in the first generation, commonly labelled “G1”, and the second generation, “G2”.
The skills and risk taking of an entrepreneur that are required to get a company off the ground are not something everyone has, and I’m not sure they can be taught, except under certain conditions.
But taking a successful company and maintaining it and keeping it on the rails, while juggling ownership by various family members requires skills as well, and they aren’t necessarily the same ones!
So Much Common DNA, So Little Consistency
As someone who spends much of my time thinking about how families function together, I’m always eager to enter any real world “laboratory” to observe members of the same family as they assemble for whatever reason.
So imagine how lucky I felt over the past couple of months when I “got to” attend not one, but two, “celebrations of life”, the events formerly known as funerals.
Over the past decade or two, it seems we’ve finally found a way to put the “fun” back in funerals.
Thanks to the conscious choices to delay these events for several weeks after death, some of the grieving is allowed to happen in smaller private groups in advance.
By the time the greater extended family and friends group gathers, a much lighter atmosphere allows for more of the celebration we now usually experience.
Catching Up with Relatives After Many Years
Considering how rich with information post-life celebrations can be, it’s almost surprising to me how seldom I’ve written on them.
In fact, I think I need to go back 10 years to Family Business Flashback to find the last time I wrote specifically about a family funeral.
A couple of months ago I attended a celebration of the life of someone who was more of a distant relation, but was still someone with whom I had had many interactions.
Pam was quite gregarious in life and it was great to hear her daughter Laura eulogize her and make everyone laugh.
What stayed with me was when Laura shared something that had occurred between Pam and a grandson, and then she contrasted how his other grandmother would have reacted very differently.
I’ve begun to share this with some people, and ask them to compare their two grandmothers and note whether they were similar or different.
I know that mine were polar opposites, and so are the grandmas of my offspring.
It kind of feels like “opposites attract” but one layer above and even more magnified.
Another Pillar of Our Past Now Gone
The more recent event was my aunt Liz, my late father’s older sister.
She’d been instrumental in our family’s immigration to Canada story, and without her bold first move, my parents would surely never have met, and so whose blog would you be reading now?
One of her granddaughters shared so many stories that brought laughs to the assembled family and friends.
I congratulated her for the speech afterwards, and we laughed at how Liz would probably not have appreciated everything she shared, but that it was great that she did so anyways.
It made me flash back to when I eulogized my father, and it enabled me the opportunity to share some sides of him that many people were likely unfamiliar with.
I feel like I “humanized” him for some who were only used to his tough exterior, which felt safer to do with only his ashes in the room, and not his judging glare.
More Random Life and Death Musings
The opportunities to be with extended families as they gather like this are an interesting vantage point to view how resilient some family members are.
When many people from a family branch have survived various tragedies over the past few decades, it can be reassuring to see how they continue on courageously nevertheless.
Perhaps there are lessons there on how strong a family can become when they learn to rely on each other, even if they have more practice at it than they wish they had.
Understanding a family’s history can take a while when you’re hired in to work with them, and you can never get to the level of depth that you can in your own family.
Family History Lessons Travel Differently by Branch
Another interesting fact that emerges is that lessons about the family’s past aren’t typically shared to the same degree in every family branch.
Some stories from Aunt Liz’s eulogies about their family’s pre-immigration past were “brand new” to some of my cousins, whose parents rarely share about those olden times.
Every branch evolves in its own way, and siblings are all their own people despite overwhelming similarities in their DNA.
But although we all evolve into different beings, our shared history and roots can remain a huge strength to be tapped into.
In the end, everyone’s life deserves to be celebrated by family and friends.
Where to Follow your Family Members Online
As someone who typically works with several members of the same family, discussions on how they communicate together and how I can best interact with them are quite common.
I still prefer email but accept the fact that texting works better with younger family members.
Some have group chats while others use WhatsApp groups to stay in touch.
There are so many ways to stay in touch, which is good, but the lack of a standard way can become a challenge.
And then there are the social media options.
Staying On Top of What’s Going on in Their Lives
Members of each generation often have their preferred social media platforms that they use to stay in touch with their friends and keep up with what’s going on in the world.
There are the derisive comments about Facebook being where you connect with Grandma and the fact the GenZ spends way too much time on TikTok, and everything in between.
And whatever the lay of the land is today, it may be very different in 12-24 months, if not sooner.
In theory all of this competition is great and keeps forcing the tech companies to stay ahead of the game and offer the best possible user experience.
But it also makes it hard to know where a family should go to try to stay on top of what’s going on in everyone’s lives.
My Continued Penchant for LinkedIn
Regular readers will not be surprised to see that by far my favourite platform remains LinkedIn, for a variety of reasons.
As a professional advisor who uses the network to build my brand and my connections in the industry in which I operate, I spend lots of time on LinkedIn every week.
I have a lot of LinkedIn connections that I feel like I know even if I’ve never met them in real life.
Because I also create plenty of content, it also serves as a distribution channel for me, and I wouldn’t be surprised if you’re reading this after having clicked on a link from one of my posts there.
And now that I have a couple of “former children” who are now adults with jobs, it also happens to be a place where our family can interact.
In fact, it was the fact that I had interactions with both of them, as well as my niece and my wife, over a short period of time that inspired this post.
On Ages and Stages of Life
I guess what struck me was that I was no longer at the stage of family life where I had to think about how to stalk them on Instagram, or how frustrating it was watching them SnapChat their friends.
We are now in an “adult-to-adult” phase of our relationship, which is nice to acknowledge.
Similarly, on a recent peer call with colleagues who have toddlers, I related to them that I had actually borrowed my daughter’s car to get to work that morning, after hearing them relay stories of things they had done that day for their kids that made me flash back a couple of decades.
My offspring are in their mid-20’s and I recognize the importance of treating them like the adults that they are, although it isn’t always easy.
Some of my clients have even more trouble with this idea, including even some who have decades more parenting experience than I do.
Everyone Should Act Their Age
Communication within families is really important and I usually suggest that more is better than less, within reason.
Ideally it should flow in all directions, up and down and sideways between family members, and hopefully in an adult-to-adult fashion, once they are in fact, all adults.
The sooner you get to the adult part, the better, as too many parents have difficulty thinking of their offspring as grown-ups and therefore continue treating them like children long after such treatment is appropriate.
Some of these parents need to be reminded that someday, it’s quite likely that these adults they’ve raised will be in positions of authority over them and their life choices.
We can’t know what social media platforms they’ll all be using then or what technology they’ll be using to stay in touch with one another.
But if everyone acts their age and treats each other with respect, it should all be fine.
Just Going Along for the Ride Isn’t the Same
Few people I know appreciate a good metaphor more than me.
It’s partly because of the way my brain works, and because I feel like I inherited my ease with them from my Dad, and also because I compulsively share my thinking here weekly.
After over a dozen years of this I sometimes wonder how such a simple way of explaining something has eluded me thus far.
I guess it’s good to know that this work will never end.
That’s fine with me, I’m all about the journey, because as I wrote back in 2018, There Is No Destination.
The Things You Find On LinkedIn
I feel like I sing the virtues of LinkedIn more than most, because in reality, besides getting together with people in real life or even virtually, LinkedIn is the best place to get a feel for everything going on in one’s professional space.
I’ve already got another piece planned wherein I’ll take a deeper dive into this, but for now, just know that the impetus for this week’s post comes from something I recently saw there.
It was posted by a friend and colleague, Michael Palumbos and it featured the venerable Jim Grubman in a video clip.
I just Googled “venerable” to be sure it was the right adjective because I know that Jim is one of my regular readers; and I’m leaving it in.
In the video, he relates a true story about a conversation between a rising generation family member and a matriarch, which contained this great metaphor I’ve been teasing.
We’ve Made This Trip Plenty of Times
The matriarch had trouble understanding why her G2 and G3 family members thought they needed to start having meetings about their wealth.
She believed that since they grew up with the wealth and managed to transition it to G2, it should come naturally.
A wise daughter countered that “if you’re riding in a car as a passenger, you may see the countryside going by, but if you’re not the driver, you’re not making the decisions.”
She continued, according to Grubman, “I was a passive observer, you were in the driver’s seat. Now I’m in the driver’s seat but nobody ever taught me how to drive the car”.
I remember traveling to places by car when my parents drove me somewhere, and later when I needed to drive there myself I often realized that I hadn’t been paying enough attention.
Taking the Car and Driver Analogy Further
The road and terrain that the matriarch dealt with as the wealth creating generation were very different from what her offspring now faced as they were now dealing with a transition from G2 to G3.
While such transitions can seem like they should be easier, in most cases there’s a lot more wealth and more people involved, making things more complex.
The car that grandma drove was also much less sophisticated decades ago, and while better technology in cars is supposed to make our lives easier, don’t get me started on borrowing my wife’s truck and having trouble even switching radio stations.
I’d be remiss if I didn’t add the part about how it is unwise for wealthy parents to hand the keys to a new Ferrari to their child on their 16th birthday if they haven’t even started driver’s eduction yet.
Everybody into the Pool
Another favourite analogy of mine is about learning to swim.
I usually bring this one out when I am talking to someone about learning Bowen Family Systems Theory.
You can’t really understand it if all you do is read about it, you actually have to “do” it.
That’s where I mention that after you’ve read a few books about swimming, I’ll take you to the middle of a big lake by boat and then throw you overboard.
If you haven’t learned to swim by swimming, good luck.
Working with families on getting comfortable with their wealth takes time and practice.
Family Learning Takes Center Stage
One of the key parts of the story Grubman referred to is that the G2 who wanted to begin doing family work together centers on the fact that she recognized the importance of the whole family learning together.
Wealth transitions go better when people are prepared, and preparation involves some education but also the shared learning experience that families go through together.
Hopefully we can all learn from that.
Allocating Budgets Is Never Simple
When I sit down each week to compose something worthwhile for families facing challenges around their wealth transitions, my inspirations come from all sorts of directions.
This week, we’re taking our cue from the world stage, starting with how various governments face choices regarding where to deploy their resources, and then we’ll see if we can find some parallels to the realities faced by multi-generational families.
I know lots of people who’ve begun to minimize their consumption of news for the sake of their sanity, but the subjects I’ll touch on also happen to be evergreen and therefore ubiquitous, so don’t worry about following along.
Government and Governance, Ugh!
A dozen years ago when my first book, Shift your Family Business came out, I was happy that I chose the title “Governance, Ugh!” for chapter 9.
I wanted to underscore the fact that for most people, that word does not resonate well.
At the time I didn’t necessarily connect it with the more common word, “government”, which also has more negative connotations than positive ones.
When I ask my friend Mr. Google about the root word for government, its A.I. summary returns, in part, “… the act of directing, controlling, or steering a community”.
I like the fact that “directing” and “steering” are there, but also that sandwiched in between is the harsher “controlling”
Controlling the Flow of Funds
In the end there are final decisions that need to be made, and ultimately the buck needs to stop somewhere.
The world’s major governments are often caught in interesting dilemmas when they always seem to have plenty of money to spend on certain priorities like waging war, but never seem to have anything left to spend on feeding their hungriest people.
On a smaller scale more locally, whenever there’s talk about some new venue for a sports team, the argument “but what about our crumbling hospitals” is never far behind.
Decisions always involve choices, and it’s usually difficult to satisfy everybody.
So what does this look like in families?
When the Family Owns an Operating Company
As I was planning to write this piece, my initial idea was to focus on “family wealth” as opposed to “family business”, but then I happened to check my email one day and decided to touch on both.
I continue to read lots of content from all over the place in this ecosystem, and I don’t mind giving the occasional shout out to those who consistently put out good stuff.
So when I got the newsletter from Mercer Capital with the headline Capital Structure as a Reflection of Family Priorities I knew I wanted to include a link.
That piece looks at risk tolerance and control, long term vision and evolving stakeholder needs, as well as family dynamics and liquidity needs.
Somehow when decisions revolve around an operating business, decision making can be expected to be more, well, “business-like”.
Of course such expectations can quickly be dashed.
Family Wealth – “Post Liquidity Event”
Since more of my work now involves what I call “family circle” issues than business circle ones, we’ll now move over to how decisions around money and what it can be used for are made when the family’s wealth is mostly liquid.
See Huge Liquidity Events – Great News, Right?
Most wealthy grandparents will support some of their hard earned dollars going towards their grandchildren’s education, yet they may frown on Bobby III arriving at their house in a Lamborghini that was bought with those funds.
So maybe Bobby III should wait until the wealth creator has passed away before splurging.
The question of what is an appropriate use of a family’s wealth is ever-present, and there is not one right answer that suits every family.
Families need to work this out amongst themselves.
The older generation members naturally have more say, but eventually the family needs to hear everyone’s ideas around how these decisions will go.
Who Gets to Decide? – The Answer Evolves
Writing this conjured up memories of a long ago post (almost 9 years!) titled Who Gets to Decide Who Gets to Decide.
The generation in control will often tend to hang on to that authority as long as possible.
I typically encourage them to open things up slowly once their rising generation are adults, but I’m not always able to convince them as easily as I’d like.
Having them “practice” living with and managing wealth makes sense, even if they do sometimes end up spending some on things we’d prefer they didn’t.
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