One of the basic objectives of advising family enterprises is to assist the family in creating a continuity plan that maintains the family as the “trans-generational engine” for wealth creation over multiple generations. Having achieved the FEA designation, I reflected on what it means to establish the family as the trans-generational engine for wealth creation over multiple generations. How do I, as a FEA designate assist families to achieve that goal? The legal tools I use are aimed at wealth and are not designed to create a continuity plan over multiple generations. Even the FEA tools although useful are simply that, tools to be used by the skilled practitioner of family enterprise advising, to collaborate with a particular family to manage issues that are relevant to the family at that time, and provide the family with the necessary structures, processes and tools so that the family is able to chart its course into the future.
So where is the continuity in the planning? I was still restless and continued my intellectual pursuit of what I could do to assist a family enterprise to create a multi-generational continuity plan which led me to the concept of “culture”. As I delved into the subject, I found that there is little empirical research on the culture of family enterprise1 which in a way was a relief as it allowed me to free think about how the concept of culture relates to continuity planning.
In my First Nations practice, I saw the power culture has to bind communities together through adversity over multiple generations. The power of culture to hold communities together over multiple
generations, even under adverse conditions made me start thinking that the truly successful transgenerational families, the ones that have been able to keep the family enterprise together over multiple generations, must have created a family culture for that is the only way that the family enterprise could continue to stay as a family enterprise over multiple generations. There is nothing else strong enough to hold the family enterprise together over multiple generations. As a family moves through the generations, it moves from a nuclear family to an extended family and for the truly multi-generational family, ultimately to a community. Mom and dad hold the nuclear family together: culture holds the community together. If the goal is to become a true multi-generational family, then a family culture must be fostered.
The family may get along well now and everyone may listen to you now, but why will your great great grandchild care about your motives or the tools you used to implement your plan, with the emphasis on “your”? Unless the goal is to create the family culture, everything else is simply a tool that future generations may or may not use, or worst case scenario, set as their goal to break. Tools are intellectual. Culture is the family DNA.
In FEA jargon, we advise the family to move from the “intuitive” to the “intentional”. For example, how the entrepreneur/founder might do things intuitively without really thinking about it, needs to be articulated in a form that the next generation can emulate and learn from, or that intuitive knowledge will be lost. Intuitive to the intentional.
Creating a family culture means, to a certain extent, that we need to go full circle back to “intuitive”. Intuitive in the cultural sense relates to whether the family recognises who they are as a family and whether each individual belongs. Change is inevitable and the dynamic of change is predictable. It is the expression of that dynamic that is unpredictable over multiple generations which proves the undoing of most family enterprises. Creating cultural reference guide posts allows prior generations to provide their family cultural wisdom so the future generations can take advantage of this pool of wisdom. The family culture creates intergenerational conversation. A successful family culture will allow you to speak in a fashion that your great great grandfather would have understood culturally, just as your great great granddaughter will also. Money talks in the present, culture speaks over the generations.
If the goal is to truly be a trans-generational family, then there must be something other than wealth to bind the family together. Robert S. McNamara said that it is important to believe in something greater than oneself.2 In the context of family enterprise advising, family culture is that greater thing.
The key to continuity planning is that individuals must want to continue to belong together as a family for the family to remain as the “trans-generational engine” creating wealth across multiple generations.
You can't want to belong to wealth but you can want to belong to family.
written by: gregsenda@yahoo.ca
1 Values in family enterprise, Ritch L. Sorenson, SAGE Handbook of family enterprise, London 2013 at pg 477
2 The Fog of War, An Errol Morris Film
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