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Holding the Power of the Process

I’ve just returned from a quick trip to the center of the universe, which every fellow Canadian will recognize means Toronto.

During the 48 hours I spent there, I had occasion to catch up with some folks I’ve known for years, as well as meet some people with whom I’d only recently exchanged a couple of emails.

The return to the world of face-to-face conversations is refreshing, and five meetings over two days allowed me to speak with people about the work I do and how I approach it a number of times.

These conversations had me rehashing a story I’ve shared many times when speaking with people, but have yet to write about here.

That changes today.


Facilitation Is NOT About the Content

Let me share that story now to set up my point.

Years ago I was in the board room with a family for the first time, and about an hour into things the matriarch stood up and began using very colourful language to berate her nephews and sons.

As she began to put on her coat and gather her things as she stormed out, I suddenly felt that all the eyes were on me.

The specific words that this woman had used with me weeks earlier, about wanting me to “referee” their family meeting, were coming more into focus right then.

That was when I needed to summon all of my strength to just sit there and watch, silently.

It has become my real life, lived experience of “don’t just do something, sit there”.


Hat Tip for the Inspiration

That type of occasion, where not doing something is what’s best, is very rare when presiding over a meeting.

The idea to write a blog about this came from a LinkedIn post by a colleague a couple of months ago.

Dr. Stacey Feiner shared a story about a meeting she was in where things suddenly got heated and everyone stared at her.

She had the perfect one-liner that got everyone back to reality and eased the tension, allowing for productive work to continue.

Going back to my story above, that meeting also continued, minus one person, for many hours of useful discussion, and in which my referee’s whistle remained in my pocket.


Reading the Room and Holding the Space

Not everyone is suited for this type of role, because there’s a weird power dynamic that you need to deal with.

In some ways, it seems like the person presiding over the meeting has a lot of power, because they’re guiding all of the process.

However, assuming that they are there because a process person is needed, then they actually don’t have any power at all, and are really there to allow all the other people to be as powerful as they can be.

This entails lots of observation, reading the room, especially the emotional field, and really holding the space for productive discussions to take place.


Intergenerational Discussions Fraught with Emotions

Let’s also not forget that I’m talking about meetings that involve family members, often from more than one generation.

We’re talking about the crossroads of family and business, with a lot at stake, and some power dynamics that can make things tricky in a hurry.

There are always plenty of important subjects to discuss in any business, even more so in a family enterprise.

But having those discussions go well and be productive is not always easy.

While I didn’t necessarily like the idea of being seen as the “referee” of the meeting, sometimes that’s what’s necessary.

I did referee hockey for a few seasons decades ago, and also umpired baseball games for a number of years too.

Little did I know then that these activities would give me some much needed experience that I could call upon in my 50’s.


Learning How to Be Together

When family members also work together, they sometimes fall into communication patterns that don’t work very well, especially for members of the rising generation, who may have difficulty being seen as responsible and mature enough for their roles.

In cases like these, they almost have to learn a new and more appropriate way to “be together”, in a way that works for everyone.

And never forget the saying that you know a game was well refereed when it’s over and nobody even remembers the ref’s name!

Business, Family, and Ownership Each Have Their Own “Clock”

I’ve been a huge fan of the Three Circle Model since I first saw it almost a decade ago, and wrote about it almost instantly. See Three Circles + Seven Sectors = One A-Ha Moment.

It remains the simplest way to quickly get at so many of the issues that enterprising families face, in a way that just about everyone involved can quickly grasp.

That model from Tagiuri and Davis has been around for over 40 years now, and many people have commented on it, tried to modify it, added circles, changed the sizes of the circles, turned the circles into spheres, etc.

Rarely, however, have I seen much comment around the time elements that affect each of the three areas.

That will change today.


An Old-Fashioned Analog Clock Analogy

Many of the posts I write here are inspired in one way or another by group discussions that I’ve been part of over Zoom, and this is yet another of those.

This one involved a number of local family business folks who have begun kicking around an idea to host an event next year to celebrate the community in some way.

The call included people from a local university, some practitioners who work with enterprising families (like me), and a few who run some pretty cool family enterprises, who I was happy to meet.

The discussion went all over the place and was all positive, and although I didn’t attend in order to find a blog topic….

When the academic on the call mentioned the Three Circle Model, my ears perked up, because I wasn’t expecting it to come up in this context.

And then he added the part about a clock, and the second hand, the minute hand, and the hour hand.

Bingo!


Flashback and Confusion, But No Time to Argue

He shared that someone had pointed out to him that you could look at an old-fashioned clock and think of each of the circles as being represented by one of the sweeping hands.

I’m pretty sure I stopped listening at that point because my imagination had taken over

I’m not even sure which hand he had assigned to which circle, but that’s probably moot here. I’ve got my own thoughts on that and I’m not sure they agreed with his, but in this context there was no time to argue either.

It also caused a flashback to a post I wrote about ownership and how that’s the circle that changes the least often, so for me it would have to be the one that gets the “hour hand”.  See Clunky Ownership Syndrome in Family Business


What About the Seconds and Minutes?

So what about the second hand and the minute hand, to be assigned to the family and the business?

Well, more often than not, I’d be inclined to say that the business turns at a faster rate, especially when there’s an operating company with lots of employees working there, possibly for many hours every day, possibly even around the clock.

I’d say that the family circle would be best ascribed to the minute hand, because things change there more frequently than in the ownership, but there aren’t necessarily any noticeable changes happening on a frequent basis.

If you have a family genogram with everyone’s age on it, you could update it once a year and never be too far off.


Attention, Focus, and Intention

You may be wondering what any of this has to do with anything, and if you are still left wanting, (and still reading this!) I’ll share my thoughts on the relevance of this.

Quite often, family members who also work in the business can become overly focused on the business, at the expense of the attention they pay to their family.

They follow that second hand around because it’s moving quickly, and in the time that the business went around the circle five times, the minute hand barely moved, so it’s easy to ignore.

Now extend this analogy to the ownership, and you can barely even notice that anything there needs to even be thought about.

But eventually….


Don’t Get Caught Watching the Clock

It can be very seductive to pay attention to the fast-moving business circle and forget that the minutes and hours also continue to move along at their own, slower pace.

The other circles, most notably the family circle, also require attention, focus, and intention.

Don’t get seduced by the second hand.

A Country Song Sparks a Blog – Again!

Whenever I get an idea for a blog post that allows me to link back to things I’ve written about here in the past, it gives me an extra incentive to try to pull all the pieces together somehow.

Of course, a decade of writing weekly gives me lots to look back on, and sometimes posts I thought were recent turn out to be much older than I recalled.

So a few weeks ago, when I heard a country song on the radio that sparked this week’s missive, I was amazed to discover that it’s been over 6 years since I’ve been inspired that way.

Back in 2016, it was Humble and Kind, which I had heard while driving to a family business function in Atlantic Canada. When that song came on again during my drive back, that sealed it, since so many of the FamBiz folks I’d met were both humble and kind.


Inspirational Simplicity

I wouldn’t necessarily call myself a big fan of country music, but I have to admit that most of the lyrics are quite simple, and I find that inspirational for a number of reasons.

As someone who regularly tackles subjects that are quite complex, I am constantly trying to write about my ideas in ways that are easy to understand.

When you can already sing along to a song the very first time you hear it, you know that the writer has done something well.

When I wrote Blame it on Cinderella back in 2013, the lyrics of that country song had painted such a vivid picture in my head that I needed to write about the feelings it evoked.


Another Long Drive, Lots of Switching Radio Stations

So here I was in July 2022, killing time between a conference in Denver and running a family meeting in Denver, with a handful of days in between.

I decided to rent a car and managed to cross another 4 states of my list to visit (48 now, only missing North Dakota and Alaska).

Over those few days, I tuned into lots of different radio stations, and I was not surprised that many of them played country music.

I lost count of how many times I heard Dierks Bentley ask the rhetorical “What Was I Thinking?”, from that 2003 tune.

I’m pretty sure that I’m one of the few listeners who immediately thought about Bowen Family Systems Theory every time I heard it.


Being Driven by One’s Feelings

The song is about a fellow who ends up in some interesting situations, that make him ask himself the question, “What was I thinking?” each time.

The understanding is that he was clearly NOT thinking, because a thinking person presumably would never have allowed himself to get into all those situations.

In fact, in the line just before that question, he says “I know what I was feeling”.

Murray Bowen came up with his Family Systems Theory (BFST) starting in the late 1950’s and continued to work on it until his death in 1990.

When I began working with business families about a decade ago, I kept hearing about BFST and how it was a great tool to try to master if you are planning to work with families.

One of the most basic concepts in BFST is “Differentiation of Self”, where the idea is to become better at following your thinking rather than your feelings.


Family Situations Evoke Strong Feelings

When looking for family leadership among members of any generation, you will often discover varying levels of differentiation, where some members are guided by thinking and others are more driven by feelings.

Dr. Bowen would encourage any family to put more faith in those who use their thinking brain more.

He also supports the idea of consciously trying to work on oneself to try to act less based on our feelings, and more on our thinking.

He talks a lot about the subject of anxiety, and the ability to function well even in anxious situations, where it’s clear that being able to remain calm and keep a clear head are hallmarks of the emotional maturity required to be successful.

Families with lots of drama can be extra tricky. 

Great family leadership is essential.


Interdependent Wealth

If you’re interested in BFST and how I use it when working with families, please pick up a copy of Interdependent Wealth on Amazon.

You Can’t Start Too Early – Or Can You

It’s Never Too Early nor Too Late – But….

This week we’re going to take a look at a common question that people in my line of work get, and dig a bit deeper into my standard answer, to try to test its limits.

It so happens that a couple of the client families with whom I’m presently working are showing signs of concern with the pace of our work together, which has brought this to the front burner for me.

I want to write something here that I can share with them, and at the same time make some broader points about how my engagements with a family can play out.

But first a flashback to a skit from an old Saturday Night Live episode that came to mind when I wrote the title above, which I immediately realized could be misconstrued.

 

“You Can’t Put Too Much Water in a Nuclear Reactor”

That 1984 skit featured guest host Ed Asner (begins at 53:42) as a retiring boss at a nuclear plant, who gave the workers he left behind some advice that ended up causing confusion, from which much humour then ensued.

“Just remember, you can’t put too much water in a nuclear reactor” had some workers believing that you shouldn’t ever put too much water in, while others opted for the opposite interpretation, i.e. that it’s impossible to put in too much.

My “You can’t start too early” suffers from the same shortcoming, but my sub-head, “It’s never too early” clarifies my views.

Starting WHAT, Exactly?

It may help if I define what I’m referring to when I say “start”.

My work typically involves families who are trying to ensure that the wealth or business that they’ve created can be successfully transitioned to the next generation of their family.

Those efforts involve a number of legal and structural steps and procedures, of course, but those are always handled by other experts in those subjects, not by me.

My work is in the family circle, working the family dynamics and relationships aspect, which usually includes getting the family started with regular family meetings.

The work around these efforts, bringing the family members into these key discussions, is what I mean by “getting started”.

 

Try Not to Make a M.E.S.S.

I wrote about this back on 2017, in a post called Start Cleaning Up Your M.E.S.S. where “M.E.S.S.” was an acronym I had created to help readers remember four important aspects relating to getting started.

The “M” is for “Start Moving”, emphasizing that this is much more than just thinking about it or talking about it with one person, it’s about action.

The “E” is for “Start Early”, which is what we’re looking at today.

The two “S’s” are where it can get tricky for some, especially those who feel like they need to be in a hurry to get somewhere.

Some people just don’t do well with “Start Small” and “Start Slowly”, but they’re key for a number of reasons.

 

Why You Need to Start SMALL

It’s important to start small because you don’t want to lose anyone along the way, and onboarding family members into such a process needs to be done carefully, because you really want to make sure that you will maximize their engagement.

Taking big steps would allow you to feel like you’re making big progress, of course, but if it means that some of the more skeptical family members aren’t ready to buy in, then big steps work against you.

 

Why You Need to Start SLOWLY

Back in 2018, I wrote There Is No Destination, where I talked about the fact that life is more about the journey than the destination, and that’s an attitude I encourage parents to adopt.

Going slowly, and taking small steps, is important for the engagement question too, because again, you don’t want to lose anyone along the way.

You can really only go as fast as the group is willing to go, so erring on the slow side is what I always encourage.

 

There Is No Finish Line

There’s actually no need for big steps or going fast when you consider that there is no finish line to this work.

We’re not trying to get to the last page of the book or tick off all the boxes on a checklist, we’re trying to make sure that family knows where they want to go and how they will work together.

That work never ends.

Thoughts on Who Leans In and Who Leans Out

Most of the posts I write here weekly are based on ideas that have been simmering in my head for a few weeks or even months before I write about them for public consumption.

Every once in a while, like this week, they stem from an urge to quickly try to process a confluence of many recent ideas, before the potential magic they may contain begins to dissipate.

Leadership of families is often top of mind, but this week some conversations that included the ideas of “leaning in” and “leaning out” added to the mix, and so here we are.

Let’s see how I can tie something coherent together that is both useful and entertaining.


The First Family Meeting Is the Hardest

I should first set some important context though, because I recently had the privilege of working with a family for a number of months in preparation for their first in-person family forum.

When these go well, as this one did, there’s a magic that happens in the room, as the family comes together to discuss important topics as a group for the first time, and they typically begin to discover what’s possible for them going forward.

Too many families know that they should be discussing these things, but because they’re not sure how to start, or they fear that they’ll accidentally kick a hornet’s nest, they put these discussions off for “yet another year”.

So I was coming off a high, where I’d been with some people who had a new sense of possibilities for their future.


Yet Another PPI Call Inspires Me

As has occurred many times over the years, attending the weekly PPI Tuesday call was an additional source of inspiration.

The subject that week was women and philanthropy, and the guest mentioned that women need to learn to “lean in” to get more involved.

My friend Amanda, who was hosting the call and knew that I was in attendance asked if I had any comments, and of course I did (!)

They opened my line and I highlighted the concept of leaning in, and the fact that sometimes others, who have been leaning in, need to start to learn to “lean out”, so that others can play a more prominent role.

This applies to both women and men in philanthropy discussions, as well as to the Rising Generation and the Incumbents in families who are hoping to transition from one generation of leadership to the next.


How About the Outside Professional Advisors?

Part of the magic in a family forum comes from the fact that participants begin to realize that sharing of leadership is both welcome and required over the long term.

But the idea of leaning in and out is not just limited to the family members. 

As the outside facilitator of the meeting (and the only non-family person in the room), I also need to be aware of my own presence in the room, and to try to make sure I allow the family system to manage itself.

I may begin each part of the meeting by taking some leadership in teeing up a discussion or activity, but then I absolutely must lean back and let things happen organically, and only step back in as necessary.

If I try too hard to make everything work in a way that seems perfect, because I’m worried about looking good, I’m no longer properly serving the family.

My goal is to get the family members to lean in and put in the work required to build the connection and understanding with each other.


Sharing Leadership as a Family

The goal for many families is for their wealth to transition successfully from one generation to the next, and because that typically involves more people in subsequent generations, it’s important for everyone to learn to make decisions together in as democratic a way as possible.

Having all of the leadership and decisions concentrated in the hands of one person or a very small group can be a recipe for trouble.

There are usually more aspects of the family that require some leadership than they realize, and because everyone has different strengths, it makes sense to share roles among as large a group as possible.

And the parents first need to learn to lean back, and then the offspring need to lean in.

It’s Usually a Slow Journey to the Top

As the world returns to more in-person events, I’ve been playing catch up with occasions to be with like-minded colleagues. I’ve just returned from New York where I took part once again in the Institute for Family Governance’s annual conference.

I also got in some family time with my sister, my nephew, and my son, so that was a nice bonus.

Since family governance is about improving relationships among family stakeholders, this opportunity of combining the conference with personal family catch-ups was a big plus.

When thinking about a subject like family governance, I normally like to look at it from each individual family’s perspective, since no two families should approach it the same way.

However, meeting with colleagues who all work somewhere in this space allows me to also take the pulse of the professional community to see how the subject is understood and received in general, and I’m left with mixed feelings on that score.


Caring Enough to Understand

Some of those who showed up didn’t seem to care enough to try to understand the family relationship aspects that actually create most families’ governance challenges.

Perhaps I was jaded by some interactions at my lunch roundtable, but the subject of the families and their challenges in establishing some sort of governance seemed far from the radar of many colleagues.

Having self-selected to come to this conference and sign up for a table to discuss “Family Considerations when Designing your Family Office”, I had assumed that they’d care enough about it to try to understand better.

Or maybe they didn’t understand enough to care; maybe some of each (?).

Enough about the negative, because as usual, the presentations contained many positive nuggets worth remembering and sharing.

Some Random Nuggets to Share:

Josh Baron kicked off the morning discussing Owner Strategy for Family Enterprises, and he reminded us all how important the owners of any business are and the roles that they can and should play as owners.

The group of owners is much more than whatever it happens to say in their shareholder’s agreement, and he was encouraging them to work together with intentionality.


What Does the IRS Have to Do with This?

A panel after that shared a couple of nice take-aways, notably that it’s important not to let the IRS decide things for you. 

This underscores the need to make plans in advance of anyone’s death, although I suspect that for many, those plans are actually precisely about making decisions that are very much driven by the desire to deprive the IRS of any of the family’s dollars!

They also noted that there’s a serious lack of role models for generational stewardship for families to learn from. 

I think this is largely true, and hopefully changing for the better.

On Family Business Boards:

Brendan Wall then shared his lived experience in his eponymous family enterprise, discussing How to Design and Implement an Effective Family Business Board.

Keeping the Board fresh by rotating directors on and off was noted, as was the need to put the right people on the Board in the first place.

He also mentioned that the qualities of who should be on a Board differ widely when looking at outside independent directors versus family members who sit on the same Board.


A G5 Keynote to Remember

Matthew Fleming’s keynote on the Importance of Family Values was fantastic, as he shared stories from the heart about his family, who are now in G5 (the fifth generation of his family), and how their multi-family office maintains their family’s values at the center of the work they do with all the families they serve.

He shared their model of the Four Pillars of Capital, and also left us with an existential question:

        “Is your family office becoming a bigger problem than 

                      the problem it was designed to solve?”

Hmmmm, as any family office heading towards a generational transition knows, this is an important thing to consider, as a need to evolve to serve the rising generation will emerge at some point.

More Nuggets:

After lunch we were treated to some wonderful examples of families who Use their Family Fortune to Serve their Community, as well as trip down memory lane for sailing fans, featuring a member of a three-generation family who repeatedly won the America’s Cup.

Next years IFG Conference in NYC is set for May 3, 2023, and I’m looking forward to being there once again.

I hope we’ll all be a few steps closer to the top of the family governance mountain then.

Some New Ways to Look at Conflict in Families

Anyone who’s ever been involved in a family enterprise knows that the potential for conflict is never far away. 

Those of us who work in an advisory capacity for such families have seen every sort of denial and attempt to pretend that “our family is different”, yet those are actually quite rare.

There isn’t necessarily anything new under the sun for me to share here, but I did come across a couple of new angles on this question recently, and I thought they were worth writing about, if only to spur more discussion on the topic.


A Recent FFI Session on Conflict

The Family Firm Institute hosted a recent half-day webinar on the subject of conflict, and since two friends and colleagues of mine were among those presenting, I thought I’d check it out.

They did a nice job of covering the territory and the feedback was great. My take-away tidbit, though, came from a comment from another experienced practitioner in one of the break-out rooms.

She’s someone who not only works with business families, but has also lived the family business experience, having followed her father into this work.

She recalled a quote of his, which was the initial inspiration for this post:

           “We don’t run from conflict. We dance with conflict”

“Ooooh, I like that”, I thought, as I jotted it down. “This will turn into a blog post”.  (Thanks KSM)

Something Good from Social Media

The second different angle that came my way followed in short order, when I wasn’t expecting it, from social media.

I love LinkedIn and have found many treasures there, initiated plenty of relationships there, and swear that there’s nothing else like it for business.

But my go-to “regular” social media is Twitter, which I use mostly for news, sports, and politics, because I’m a bit of a junkie for those subjects.

But every once in a while, I get a great nugget there too, and this was once such case.

I follow Dan Rockwell, a.k.a. LeadershipFreak, and he shared a tweet about conflict that included this magic line:

                         “Conflict Is a Leadership Opportunity”

If you go to stevelegler.com and use the “search” function and type in “conflict”, you’ll find blogs, videos, podcasts, etc. that discuss conflict in various ways.

But I’ve never, ever, heard it put this way, and it struck me.


One Plus One Equals Five

So now we have a couple of elements to work with, and you may already see where I’m going.

We’re talking about dancing and leadership, and when people dance together, ideally, in most cases, someone takes the lead, and it helps when their partner is a good follower.

This metaphor actually has some legs, and the feet at the end of them are wearing their dancing shoes!

And we haven’t even brought in the dance teacher yet, who, if they’re any good at their job, will always play the appropriate level and speed of music so the dancers can succeed.


Willing Partners as a Starting Point

In order for any family to deal with their conflict, they need to acknowledge that it exists, and then someone needs to have the courage to take the lead and put it on the table and insist that it’s high time that the family face it and manage it.

Notice I did not say “make it go away”, because that’s usually not a very realistic expectation and can be a bridge too far.

It’s rare for conflict to completely disappear, but acknowledging it can usually allow people to discuss it in ways that they can learn to make some changes in order to be able to manage it.


Or Maybe You Need the Teacher First

It’s great when the participants are ready to discuss the conflict and try to dance with it by themselves, but sometimes there’s an unwillingness to engage from someone, usually caused by a fear of making things worse.

In such cases, it can help if you find yourself a “dance instructor”, who can then convince the other party that you can learn how to dance with conflict together.

Or even if the parties aren’t all ready for the dance lessons, the motivated party might begin searching for someone who can hopefully lead them to some agreement down the road. 

There are opportunities for leadership whenever there’s conflict. Who will step up in your family?

Plenty of Reasons to Make Such a Move

What used to be an obscure corner of the world of wealthy families has begun to go more mainstream over the past decade or so.

Whereas the term “family office” has existed for a long time, it used to elicit raised eyebrows of confusion, which nowadays have given way to nodding heads instead.

In many cases the confusion remains, but more people have heard the term and hence think that they know what someone is referring to when they hear it used.

Let’s dive in and look more deeply at this, from the perspective of the family who should be at the center of any family office, rather than the view of the professionals who work for such enterprises.


“If You’ve Seen One Family Office….”

Confusion about the family office space is compounded by the fact that no two family offices are alike, nor should they be.

They exist to serve a family, and every family is different and therefore has different needs, plus these needs evolve and change over time, meaning that they’re in a regular state of flux (or at least they should be).

This topic could take up an entire book (and it has) and I’m trying to hit a sliver of it in a blog post, so let’s get to the question in the title, “Why would a family even consider setting up a family office?”


On Inflection Points, Evolution, and Leadership

I’ve written on this subject before, notably in Putting the Family in the Family Office, for my site, as well as for other websites, for example, Don’t Forget the Family at the Family Office.

For a family to suddenly decide it needs a family office, there’s usually a catalyst, and the most frequent one is a liquidity event. 

For readers unfamiliar with that term, think about a family that owns a business worth $100 million one day, but then sells it and suddenly has $100 million of “liquid assets” instead.

Such a family suddenly has a new set of priorities and needs, and a family office can be the ideal way to address those.

Other families create a family office when they reach various inflection points as they evolve, often when there’s new leadership in the family, thanks to a generational transition.

But let’s never forget that the family’s needs should be driving everything (although this is often the exception rather than the rule).


After the Why – When, Where, Who and How

The Why and the When are typically connected, as the event kicks things into motion, bringing up other questions.

I laugh when I see articles about the best places in the world to set up a family office, focused on jurisdictions that are advantageous for tax and investment reasons.

Regular readers know my penchant for focusing on the family’s human capital over its financial capital.

The Where may become a factor as things evolve, but is rarely a huge concern at inception, unless there are billions of dollars involved.

The main questions I suggest families focus on are all about Who and How.


Don’t Forget the Family!

I’m a firm believer in having some family members involved at some level, because the family office will be responsible for a huge amount of the family’s net worth, and like any family business, the owners can and should play an important role.

If no family member is qualified to play the top investment role or handle other important executive functions, it becomes paramount for someone from the family to at least become quite conversant and comfortable with these subjects.

There’s certainly at least an oversight role that needs to remain in the hands of competent family members.


One Person at a Time: Grow with the Flow

One of the most important parts of the How is the question of timing.

I almost always advocate for a “go slow” approach, because you really want to get the culture right.

Hiring a person and making sure they’re the right fit takes time, and when you set up a family office, you’re truly playing the long game.

You need to find competent people to fill the roles that you can’t handle within the family.

When you add more people, you want to make sure they all fit well together too, and that’s not something to rush through either.

And since they’ll all be serving your family, you’ll want more than one family member involved in the selection process too, maybe several.

Not Every Family Needs “Full Service”

The past couple of weeks we’ve been looking at “connecting” with members of client families and then matching the solutions we have to these families.

All this made me consider one of the biggest questions that people often have for me when they learn about the kind of work I do.

The questions come in a variety of forms, but generally boil down to this: “Who ARE these families that actually do all of this governance stuff?”, along with “where do you find them?”.

If you stopped 100 random people on the street, you likely wouldn’t meet any people from such families, and very few would even have a personal connection to one.

However, if you shared the names of families who continually work on their governance, those names would be recognizable to most.


Are We “Exceptional”; Do We Even Want to Be?

Not every family is destined to be exceptional, and many don’t envision themselves as such either. 

For some families, just imagining themselves in this way is actually unnatural and even abhorrent.

Too often, though, professionals who serve families who’ve achieved a certain level of wealth creation begin to make assumptions about what these families should be doing to preserve that wealth.

Well crafted strategies to minimize taxes and keep financial wealth protected have become the go-to starting point for such families, because a whole industry of professionals exists to take care of these issues.

I’m always wary of situations where the tail ends up wagging the proverbial dog, and for me the “dog” is the family.

I prefer to help the family figure out what makes it exceptional and then plan for ways to grow and preserve that.

Once the family has set those priorities, by all means then let’s get the professionals involved to figure out the best strategies to employ to help accomplish that.


Many Varieties and Versions, and Ways to Make Progress

Some families will have an operating business that they wish to preserve, and finding ways to ensure that it continues to evolve and thrive with the economy, while still being owned by the family, might be their focus.

Others may have had a liquidity event, and are now searching for new opportunities, either through direct investing or philanthropy, or both, and incorporating the rising generation of their family into those projects will take center stage.

Still others may be searching for ways to recreate the entrepreneurial spirit and create a “family bank” that will allow their offspring and all of their human capital to thrive in their own ways.

There are so many possibilities, and the path chosen will vary from one family to the next.


No Two the Same = All ARE Exceptional

And because no two families are the same, they ‘re each potentially exceptional in their own right.

Too often, as advisors, we want to show how smart we are and we rush to get the family moving on our pet project for them, and that where we may be doing them a disservice, hurrying them into action.

A family is a system of many moving parts, and it takes time to engage all of those people properly, to the point where they even understand and believe that there may be a “family project” that will arise from the financial resources that have been created, by previous generation(s) of their family.


Vision, Mission, and Values Work

Some colleagues reading this will nod their heads and agree that helping the family identify its values and then figure out a vision and mission are great first steps, and in many ways I agree with them.

I’m advocating for more basic connection work in advance of those specific projects, which then become more clear with time. 

Discovery work with such families can take months before recognizing where we should actually begin to co-create a family project together.

Yes, the values need to be surfaced at some point, typically early on. But then the mission and vision need to be carefully considered in the context of where the family is now, and what its capacity is to undertake its first steps together in new ways.


An Iterative Process, More Journey than Destination

We’re talking about a family journey over the coming decades together, so there should be no rush to complete the plan in days or weeks.

It should be an iterative process; more about a journey than a destination.