As Father’s Day approaches, it’s naturally a time to think about family. Relationships with families can be tricky at the best of times, but even more so when you add in wealth, fame and power. Whether you’re Mars, Comcast, or any number of large or small business dynasties, balancing the needs and expectations of generations of descendants from the original founder isn’t easy.
When family businesses struggle, it’s often because of a lack of clarity and planning that would otherwise have allowed the organization to achieve multi-generational success. Family relationships are fraught with emotions, and only by providing the wider network with the tools to navigate the choppy waters of change and development can the family give itself the best possible chance of establishing long-term stability.
In particular, there are a number of key areas that families and family offices should pay close attention to:
MAKE A PLAN
Not all multi-generational companies are led by a member of that family. The Walt Disney Company no longer has a single Disney descendant on its board, while the Scripps media family made sure to appoint professional management to its companies rather than have family members lead them. However, for businesses with a family member at the helm, it’s key to have a plan in place for generational transition. Too many businesses fail because of a lack of clarity around succession, or because of the absence of a playbook to ensure that the next leader is prepared and that the transition is well communicated.
EMPOWER THE NEXT GENERATION
You never know when transition might need to happen. In the UK, Hugh Grosvenor became the 7th Duke of Westminster (and the world’s richest person under 30) when his father died unexpectedly a few months after Hugh’s 25th birthday. Osmosis may seem useful, but there’s no substitute for making sure that younger family members have a solid knowledge of the family business. Institutional knowledge, key relationships and a sense of culture and values are not passed down the line without taking a deliberate and intentional approach. Sure, younger family members might seem more interested in Fortnite or the mall, but by taking a rigorous approach to identifying and empowering future leaders, founders can help ensure that transition is as seamless as possible.
SHARE A SENSE OF VISION
When Sam and Helen Walton moved to Bentonville in Arkansas in 1950 to set up a five and dime store, they probably weren’t thinking about how their values and mission would live on seventy years later. The Walton Family Foundation has gone to great lengths to ensure that their vision “to live in a world where people can accomplish anything when they have opportunity and encouragement” continues to be at the heart of the family office today. Without structure and rigor, it can be difficult for multi-generational families to create a shared sense of purpose, both in the strategic direction of their business and in their approach to philanthropy and giving back. By aligning stakeholders behind a common direction, families can avoid much of the pain and distrust that affects so many legacy companies.
PLAY TOGETHER, STAY TOGETHER
Email may be a great way to share information, but it doesn’t necessarily lead to the development of a shared understanding. It might seem peculiarly old-school, but multi-generational families – especially those with a significant business (or more) at their heart – should take the time and effort to meet in person at least once a year. The gatherings enable the family to take care of important business including proxy votes, strategic decisions, leadership changes or policy amendments, but also provide a valuable opportunity for generations to mix, learn, share stories and – for younger generations – gain a greater understanding of what it means to be a family member. By fostering a greater sense of togetherness, families maximize the likelihood that they will be able to navigate the more difficult times as easily as the glory days.