Playing the Long Game: Estate Planning 2.0

A great deal of attention gets paid to the creation of wealth, but not nearly as much is paid to its slow dissolution over successive generations. It would seem, however, that understanding the handful of ways great fortunes disappear would be quite useful to people who are planning for the disposition of those fortunes.  In this series of posts, we have suggested that there are three basic patterns found in the “endgame” of substantial wealth:  Division, Preservation, and Growth.[1] It seems that these basic patterns can strategically inform how estate plans are constructed and administered.

Making estate plans strategic – not just tactical – is a radical approach. Out of this mindset, the advisor can help a client determine which strategic path or endgame he or she would choose and what would be required to create a family culture that would permit that plan to be successful.  The role of strategic advisor who works from a perspective of “endgames” moves the professional from being a technician helping the client solve complex tax issues – which are tactical – to becoming a trusted advisor who is helping the client work through difficult issues and arrive at wiser decisions than they would otherwise have adopted. This intersection between strategy, tactics and familial capacity potentially opens much greater clarity for both the advisor and the clients they serve.

The Endgames Revisited

The endgame of Division involves the simple allocation and distribution of assets to beneficiaries.  Some assets may be placed in trust when beneficiaries lack the capacity to manage their affairs, but for the most part, under Division, the assets are distributed without strings, conditions or controls.  It is left “outright and free of trust”. This approach is the staple plan of the mass affluent.  It is rare, but not unheard of, in the plans of the wealthy.

When substantial wealth is involved two additional strategies come online:  Preservation and Growth.  In the game of Preservation, steps are taken to ensure that the patrimony lasts for as long as possible until it is eroded by the inevitable growth of the family and the demands placed on the accumulated capital by heirs.  These plans expect modest growth and slightly above average market returns.  The estate lasts for a few generations until spending and the law of large numbers renders the structure unsustainable.

In the current planning landscape, the vast majority of Preservation plans are driven by tax considerations.  The idea is that the greatest threat to preserving wealth are complex issues of taxation and investment that are best handled by professionals.  Plans may also attempt to control spending through the distributive functions of professional trustees.  Plans based on Preservation scenarios can become quite complicated.  In the game of Preservation, the family is rarely in charge of the wealth – such work is left to trustees, family office professionals, lawyers, and accountants.

The final scenario is the endgame of Growth.  In Growth, the patrimony becomes a pool of capital used by the family to invest in the human potential of individuals and the collective engagement of the family in businesses and maintaining familial growth and harmony.  The Growth scenario requires that financial wealth increases in each generation to keep the engine going.  This demands growth  significantly in excess of market returns which can be achieved only through the investment in and operation of enterprises.  This, in turn, requires the intentional development of evolving collective competence and coherence of the family as managers of complex interlocking financial entities. Such families know how to start, maintain, harvest and reinvest in profitable enterprises. Like Preservation strategies, Growth plans avoid taxes but, unlike them, they place high demands on the effectiveness of the family both as individuals and as a collective in their capacity wisely govern and foster entrepreneurial capacity within the family.  Few families are likely to know, with certainty, if they are truly in Growth scenario before the third generation.

The Role of Advisors

The endgames of Preservation and Growth come not only with legal structures that contain the wealth but also with a bevy of advisors to manage and administer those structures.  In wealthy families, these “Formations” (the ongoing interaction of structures and advisory networks) become a dominant reality of family life.[2]   Wealthy families, in practice, inherit not wealth, but Formations.  Their relationships to wealth are mediated by structures (trusts, family offices, foundations, etc.) and by professionals (attorneys, trustees, investment managers, accountants, consultants). As a result, in wealthy families, the dominant organizing force for their familial relationships is often the Formation comprised of entities and the advisors who serve them.[3]

Listen to Sallie Bingham:

I did not understand for many years the elaborate system of trusts, like an underwater mountain range, which had been piled up years before to avoid paying estate taxes. Little thought had been given to the effect on the next generation.  There was an unspoken assumption that money should be passed along, like jewelry and antique furniture, yet underlying this facile assumption was a great anxiety about money and its mystifying uses,  money and its perverse connection with love….[These decisions were] made before any of us were old enough to wonder whether we wanted our unborn children to become millionaires…The mountain range of trusts lay in that deep underwater world where the big fish swam: lawyers and accountants who understood the territory but had little incentive to share their secret information.  It would be many years before the beneficiaries of this mountain range understood that it existed and many more years before, I, at least, began to question inherited wealth.  The mountain range walled us off from more than poverty.

Sallie Bingham’s evolving rebellion as a third generation heir pushed back layers of secrecy, advisory authority, and corroded family relations.  Her unwelcome inquiry eventually resulted in her overt refusal to sign a buy-back agreement.  That simple act of rebellion pulled a thread that led to the unraveling of the entire Formation a few years later.  The story she tells of her family provides a graphic, albeit hotly contested, insider’s perspective on what can happen in wealthy families and serves as a cautionary tale for families and advisors alike.[4]

The Road Less Traveled

Success stories, while perhaps less plentiful, are not difficult to find. Families that thrive for generations develop a resilient family culture that serves to counterbalance the power of the Formation.  For these families, wealth becomes a blessing, not a curse or a burden.  For the most part, such families tend to avoid what Jamie Johnson referred to in his film Born Rich as “the voodoo of inherited wealth”.  These families work to avoid the infantilization of adults that often attends families of great wealth. They also become skilled at ensuring that the brute fact of wealth doesn’t negatively dominate their lives by causing heirs to become dependent on the Formation.  In these families, adult progeny rise to leadership positions within the family, in its collective businesses, and in the broader community.  Such families have their share of drama, but on the whole, they are productive and competent.  Most importantly, they manage to overcome the significant challenges of generational transition and gain the skill sets to work collaboratively to a degree that allows them to succeed together. Part and parcel of this is their ability to manage their advisors, rather than be managed by them.

 Different Endgames, Different Skills

The astute reader who has followed along will recognize that each endgame requires greater skills and capacity than the one before it.  To hang onto wealth in a Division scenario, the generation receiving that wealth must have financial fluency. That is, they must be good with money.  Heirs must know how to save, share and spend in sustainable ways.  They often will hold jobs and the amounts of inheritance they receive is not likely to result in demotivation or dissolution. Wealth will be healthy addition to their lives, not a debilitating anchor to their adult development. Wealth will tend to supplement but not underwrite their lifestyle.  Those without financial fluency go through the money and are left with little or nothing.  Some Preservation strategies grow out the recognition that beneficiaries without financial fluency must be protected from themselves.

Between Division and Growth is the game of Preservation.  This is the by far the most common endgame played by wealthy families.  Most often this is an endgame that has grown from the tactical decisions described at the beginning of this piece – opportunistic growth of an estate plan based on tax considerations.  The other impulse that can often drives these plans is a kind of paternalistic belief that the children must be protected from themselves. Here two options are theoretically available.   We now introduce a new idea – that the endgame of Preservation can be played in one of two ways.  The first is the default approach we have spoken of; that is, to turn the management of the accumulated capital over to professionals who will watch over a gaggle of relatively incompetent beneficiaries.  Let’s call this Advisory Preservation.  In some ways the advisors serve the structures as much (and sometime more) than they serve the beneficiaries.  Accountability for the success or failure of the strategy lies with the advisory network. The power dynamic in these structures looks something like this:

Engame - Advisory Preservation

There is another alternative.  Here the family is intentionally prepared to steward wealth wisely in collaboration with the advisors who serve the family, not the structures.  Let’s call this Familial Preservation. The skill sets required for Familial Preservation include, at a minimum, financial competency, wealth competency, and governance competency.  Not only must the family have the skills outlined above in Division, they must also be fluent with the legal structures that hold and preserve that wealth and know how to collaborate effectively with their advisors.  They will, in effect, work with and through their advisors to accomplish familial outcomes.  They must also be able to make collective decisions as a family and maintain familial dynamics that will nurture, not erode, the health of the Formation.  Final accountability for the success of the structure rests with the family[5] and its capacity to work wisely together.  In this plan advisors work for the family.  The power dynamic in this approach looks more like this:

Endgame - Familial Preservation

Note that these plans will be collaboratively designed across generations, will give the family much greater control over distributive functions and will view the structures as flexible tools to be used by the family to develop its human, cultural and social capital. The structures will be managed with and through advisors who are seen as working for the family, not serving the structures that have institutionalized their roles as protectors of the patrimony. Obviously structural limits may still exist, but the power dynamic is radically shifted under this model. This model assumes the development of real competence and capability of the family (and the individuals within he family) and the ability of the family to manage and develop itself over time.  The goal remains the preservation of structures.

For the Growth scenario to work, the family must be good not only at managing money, and be adept in stewarding wealth and developing governance practices.  It must also have the acumen and skill to build or invest in profitable businesses that will grow the wealth, and engaging in meaningful philanthropy, which paradoxically is a tool that most growth scenarios contain.  Few families accomplish this, but there are those that do.  The most important characteristic of this approach is that  structures are viewed as pools of capital to be invested and deployed by the family in dynamic environments that require skill and creativity to navigate.  Advisory network players change to meet the needs of the family structures as those structures evolve. This all requires a highly sophisticated set of skills (typically spread across different family members and branches).  Such skills do not occur spontaneously – they are intentionally curated and developed over time.  In Growth scenarios, every generational transition brings with it a geometric increase in complexity and its own adaptive challenges to be overcome. These are evolving, adaptive and developmental systems. This is not an easy path – it requires dedication, luck, intelligence, and real skill to become what the literature describes as an enterprising family.   The power structures in these plans will look much more like this:

Endgame - Growth

Of course, what is illustrated above is a set of “pure” cases.  Actual estates and real families are usually hybrids of the above with elements of the various models cobbled together.  Few wealthy families fall very cleanly into any one of these categories.

And therein lies the problem.

The Consequences of Tactical Thinking

If one looks at the typical estate plan of a wealth creator, the overall arrangement of entities has come together as a result of tactical moves usually driven by the desire to avoid estate taxes. A plan might include a living trust, wills, cascading GRATs, ILITs, LLCs, GSTs, Dynasty Trusts, a Foundation, a PTC and other structures from the alphabet soup available to skilled practitioners under the United States tax code.  In large estates, these can also include substantial family offices. Each of these entities was put in place at a specific time to address certain threats or to take advantage of certain opportunities. Such plans are not strategic in the sense that they are not driven by a set of interlocking long-term objectives over and above immediate felt needs for  reducing estate taxes and providing consolidated management.  While such entities do evolve, they most often evolve in ways that ensure their institutional survival.  In short they are formed subject to the primal contradiction, that is, “A strong individual leaves an organizational legacy that utterly fails to come to terms with the hard reality of collectivity.”[6]

The result of such plans is that the families that inherit these structures play out the endgame of Advisory Preservation by default, not design.  Professional advisors are in the driver’s seat and hold both positional and informational power. Under this scenario, the Formation dominates the family as it did in the Bingham family. For most clients, this is their worst nightmare – that their children will become dependent on a mass of capital in ways that impede their individual growth and development into fully functioning autonomous individuals. And to add to that particular horror, they have paradoxically created a structure that will ensure that the government will be an intimate partner with their family (in the form of legal structures subject to tax compliance and the legal process) for generations.

It is worth noting that few families actively prepare to play the game of Familial Preservation.  Under this scenario, the family, not its Advisors, actively govern the Formation. Setting the table for Familial Preservation to work requires that the family members not only manage their personal finances but that the family as a whole 1) develops expertise in the legal mechanisms of wealth preservation and 2) that it can work effectively with advisors and 3) that they gain skills of collective decision making. For this to work, the founding documents themselves must empower the family to make decisions and especially give them the power to hire and fire professional advisors (which presumes a degree of sophistication to tell when they are well or poorly advised). More importantly, these plans presume that the family can make collective decisions which, turn, requires that they develop a culture of effective collaboration.  The implicit and explicit decision making processes that emerge can be called governance.  Breakpoints in any one of these key skills – money skills, wealth skills and governance skills – can threaten the durability of the Formation.

Different Strategies for Different Endgames

Circling back to the question of strategic intent, the problem with estate plans that have grown by way of tactical responses to threats and opportunities under the tax code are frequently untethered from the more human strategic objectives of the first-generation wealth creators.  If a client is philosophically committed to an endgame of Division (which many are), the introduction of a Generation Skipping Trust (GST) that will endure past his or her lifetime and into the lifetime of his or her grand-children is tactically congruent to that strategic objective no matter how advisable it may be from a tax perspective.  A GST belongs only in Preservation or Growth plans.

If the client is driven to avoid estate taxes and wants wealth to be preserved, the planner and client are by definition “in” a Preservation strategy.  If the client is committed to preparing the heirs or the heirs have the personal and collective capacity and capability to constructively benefit from a GST on a familial level, then Familial Preservation becomes a viable possibility. If not, the planner has to consider whether he or she is doing a disservice to the client and the clients’ family in creating an Advisory Preservation plan and if the client is informed as to what he or she is actually authorizing.  Does the client really want the infantilization that most often comes when wealth is mediated by structures and advisory networks? If the GST runs the risk of creating long-term dependence and entitlement, then the client may have to think long and hard about whether that is truly the path he or she wants to go down, no matter how efficient that path may be from a tax perspective. When the client is not committed to preparing the heirs, and the family is displaying no inclination to work together, the client’s family will be saddled with a Formation managed by professional advisors  – and will have defaulted to the strategy of Advisory Preservation.  The client should know the downsides of that strategy going in.

To take another example, unless it is to be professionally managed after death without family involvement or interference, a Foundation is something that would only belong in a Growth scenario plan.[7]  If the Foundation is going to be managed by the family, it requires a host of skills that need to be presently evidenced and further developed in the rising generation.  Failure to discern these capacities accurately is likely only to institutionalize functional or dysfunctional family patterns.

Turning to the endgame of Division, estate taxes are often due.  This can be painful for a client to contemplate.  On the other hand, paying those taxes gets the government out of the family’s affairs quickly.  Setting up a series of structures that continue to hold assets means that the state will be acting in loco parentis through the structures and advisory network (by way of tax law and legal compliance) for as long as those structures exist. Moreover, Division may decrease the relative length of time the family will be dealing with the “voodoo of inherited wealth”. In many cases wealth will wreak havoc for a generation or two, but then it is over as the family will have transitioned back to the middle class. While it is the current fashion for clients to talk about leaving their children limited funds and giving the rest to charity (a plan that seems to be more talked about than practiced), rarely is the endgame of Division (and its implications) fully explained to clients at the front end. If clients truly understood the this endgame, they might make different estate planning decisions.

In sum, most first generation clients don’t know how to think deeply about the implications of the decisions they are making – they are told that they should avoid taxes, and they take that advice at face value.  Perhaps if they knew the likely scenarios, the consequences, and the alternatives, they would make different choices.  If the planner is guiding the client into a game of Advisory Preservation, it is important that a client knows that explicitly and weigh the consequences of such a plan. If Familial Preservation or Growth is the desired outcome, then the client must at least understand the work required to make that a realistic possibility. Advising from this more elevated strategic perspective is more satisfying for the planner and results in better plans.

The Implications for Planning

All of this resolves into a very simple framework for approaching the planning process.

Fist, the advisor would help the client become aware of the different endgames to the accumulation of wealth.  The planner, together with the client, would determine whether the client is basically committed to an endgame of Division, Preservation (with the sub-choices of Advisory or Familial) or Growth. If the client were inclined toward Familial Preservation or Growth, the advisor would explain what is required for these to be successful. For the rising generation this would involve the intentional development of the five wealth competencies (financial, wealth, governance, business, and philanthropy). If the family is demonstrating the nascent capacity to engage in Familial Preservation or Growth, the client would be coached to invest the time and money necessary to develop a family culture robust enough to serve as a sufficient counterweight to the Formation being created by the estate plan.

Second, the practitioner would ONLY advise the implementation of those estate strategies that tactically align with the client’s desired endgame. The advisor would think about various planning structures he or she uses in terms of their suitability for particular endgames. Dynasty trusts would not be put in plans implementing Division scenarios. GST trusts could be established in Preservation and Growth scenarios, but would have different governance structures based on the endgame being played. In Familial Preservation and Growth Scenarios, the family would be given more control over the governance of the GST. In Advisory Preservation scenarios, professionals would be given control. Family Banks would be found only in Growth scenarios where the family culture was equal to utilizing them effectively.  Private Trust Companies would be available options in Preservation and Growth scenarios but with the caveat that the family is equipped to govern these in Familial Preservation and Growth strategies. If the PTC would be professionally managed in an Advisory Preservation strategy, the family would be given less power, information flow would be limited, and controls tightened. Family business or enterprise succession would only become part of plans where the family is committed to a Growth scenario and had the capacity to execute on that strategic outcome.

Congruently, the drafting of various structures would shift based on the endgame they were supporting.  A trust might be created in a Division scenario where a client couple wanted to ensure that all of their grandchildren received a college education to get a good start in their adult life.  Such trusts would have quite limited distribution provisions, not the usual HEMS standard. They would contain sufficient capital to fund education and would then terminate with the expectation that the grandchildren would rise or not based on their skills and abilities.  In such plans trusts would be independently structured and capitalized based on the purpose of the trust.  Education trusts would look different from Health Trusts which would have very different provisions for whatever trusts were established to support lifestyle (Support and Maintenance trusts).

Advisors need not become experts in qualitative outcomes – only the rough outlines of the likely outcomes of various plans.  Of course, final decisions are up to the client, but to approach planning from a strategic point of view of the basic endgames of wealth gives the advisor a heuristic both to explain options to clients in meaningful ways and to design and draft documents that are more consistent with those strategic outcomes.  Advisors who are attuned to these issues will be less likely, for example, to advise clients to set up structures in cases where the family has evidenced little or no behaviors that make it plausible to believe that it will work or actually benefit them individually or collectively.

A Final Word About Growth

When I speak with wealth creators, few are interested in creating a “dynasty.”  Most often they simply want their children to be happy, competent and caring.  They want their families not to split apart because of the wealth.  They want their grandchildren to thrive.  Ironically, the things they hope for are the things that are requisite to sustaining wealth in a Growth scenario.  The scenario requires happy, successful siblings and cousins who work together for the good of the family as a whole and the communities in which they live.  It requires responsible stewardship and the ability to make good decisions.  It requires the development of personal and interpersonal skills. It requires keen minds and open hearts. It requires real work and acumen.  The Growth scenario is dynastic by its very nature.  Only flourishing families can sustain a family dynasty. Perhaps by throwing away the option of thinking dynastically, wealth creators are dismissing the very thing that has the highest potential to produce the outcome they most want.

It is true that few families are truly capable of operating under a Growth scenario. It requires intent, focus, and good leadership to create the kind of familial culture that will support Growth.  For those families that commit to this path, the financial and personal rewards can be high.  Often, however, whether a family is truly in a Growth scenario or they are in a Familial Preservation scenario only becomes evident in the third generation.


While the approach advocated here is not a silver bullet by any means, it seems to be an improvement on the present system.  A great deal of heartache and familial difficulty would be avoided by tailoring plans not to the tax code but to the educated and informed intent of the client who takes into account the capacities, skills and intentions of the family.  Families that are capable of growth would be given the tools they need to be successful and the authority to use those tools effectively. Families not capable growth would not be burdened with massive formations and their inevitable advisory networks they are neither equipped nor willing to manage.  Clients would gain much greater clarity on what they need to focus on in preparing their children for the wealth and how best to communicate with them.  Children would be clear on where they stood and what was expected of them with respect to the planning and preparation for receiving wealth. More importantly,  these rising generation family members could have meaningful input into those plans on a strategic design level particularly in Growth and Familial Preservation strategies.  Indeed these two strategies are not truly viable strategic options if the rising generation does not support those outcomes and is not involved in their design.


In our final installment, we will look at the conditions that must be in place to make Familial Preservation and Growth viable options for clients and what advisors need to know to help their clients make these determinations.


[1] My current thinking is that there are “healthy” and “unhealthy” versions of these endgames.  In this piece I will explore only the healthy and unhealthy versions of Preservation and leave the other two for another time. As a preview, unhealthy Division would be giving heirs assets outright for which they are not prepared – like giving a 16 year old the keys to a Ferrari.  Unhealthy growth is harder to find, but it would revolve around forcing people into unwanted familial partnerships.  In my experience, the “half-life” of unhealthy Growth plans is usually short – they quickly give way to games of Division in the form of legal disputes.

[2] I am indebted to George Marcus for inducing me to the notion of formations – a term he developed in his ethnographic studies of wealthy families as documented in Lives in Trust (1992).

[3] The ambiguity as to whether the advisor is serving the family or the structure here is deliberate. Advisors often have a vested interest in the perpetuation of structures, as justified by the founding documents, which can create its own series of tensions and even conflicts of interest. Too often estate plans are designed to effectively ensure that the advisors’ primarily allegiance is to the perpetuation of the legal structures rather than the deeper well-being of the individuals within the family. Ironically, the greatest threat to the endurance of the structures are the people they were purportedly designed to “benefit.”  Such structures, so designed, are inherently sclerotic – to borrow a term used frequently by my dear friend, Jay Hughes.

[4] Bingham, Sally, Passion and Prejudice: A Family Memoir (1989) pages 336-337.,

[5] Note that the advisors do not work for individual beneficiaries.  It is important to understand this distinction.

[6] What we mean by this is that the organization is preeminent over the familial context in which the entity is embedded.  For example, few such plans are collaboratively designed on an intergenerational basis –  they are not collectively created but designed behind closed doors.  One of the seemingly necessary corollaries of adopting a Family Preservation or Growth plan would be that the adult family members be intimately involved in the design of that plan – that the hard reality of collectively is itself addressed in the planning process.  No such involvement is necessary for a Division or Advisory Preservation plan.

[7] This will be controversial, in that a small Foundation could be considered a “training ground” for the family to manage the patrimony.  However, a large foundation will dilute the capital to be preserved and there are likely better ways to empower the rising generation to work together. In Growth families foundations serve multiple purposes including the development of social capital, business development opportunities and strategic connections to hard ROI as well as the development of the rising generation, the formation of family identity and the doing good work in the world. Whether a Foundation is a proper instrument in a Family Preservation scenario is, at the very least, a question worthy of real strategic consideration and clear design.

Playing the Long Game: Finding a Place to Start

The Current of Individualist Societies

As Jim Grubman and Dennis Jaffe have pointed out in their new book Cross Cultures: How Global Families Negotiate Change Across Generations, our Anglo-American society has developed an Individualist culture. By Geert Hofstede’s widely regarded scale, the US scores a whopping 91 on the individualist scale, making it the most individualist society of all.[1]  It turns out that the US is only one of seven countries that have individualism as its highest cultural value (the others are Australia, the United Kingdom, the Netherlands, Canada and Italy). We can easily point to various factors that have contributed to this as a national value – immigration, exploration, industrialization, entrepreneurship, the rise of a knowledge economy, personal liberty and a host of other cultural values, messages, and memes all support rugged individualism.

In high Individualist cultures, the self is seen largely through the lens of its uniqueness. Consequently, we Individualists tend to see family as instrumental. We tend to view the primary goal of childrearing as the nurturance of highly individuated, self-motivated adults who will sink or swim based on their individual skills and abilities. The family  naturally becomes a means in service of individualism. Beyond that, marriage and extended family is viewed through the lens of self-development, self-authorship, and psychological health. Marriage is often about the fulfillment of each partner and the ways in which the marriage serves the needs of each person. Divorce rates in the United States are not as high as some other countries, perhaps because we tend to factor in the personal fulfillment of each spouse from the outset.

In our post-industrial, post-modern society, fragmentation of families by distance and frequency of contact is the norm, not the rule. Many people drift away from their families of origin, retaining loose ties with cousins, aunts and uncles, siblings and even parents. We tend to develop social structures to replace the family – friends, colleagues, and affinity groups that meet our individual needs for support and social engagement.

The Flow in Collectivist Societies

Other cultures have a different understanding of identity and self-development. Some place a much higher degree of importance on “groupness” – what Hofstede refers to as “Collectivist” cultures. Countries such as Colombia, China, and Indonesia are among the least individualistic national cultures on Hofstede’s scale. In these countries, self-identity is seen as interwoven with social context. I am who I am by reference to others in my group. My group status, social expectations, and defined roles play a more dominant part in determining my sense of self.

Collectivist cultures tend to define the self by the group to which they belong. In collectivist cultures, the family is not so much a means to an end, but is seen more as an end-in-itself. The family is paramount in forming identity and, thus, maintaining familial relationship is more important than individual choice. As one might imagine, these cultures place a high value on harmony and closeness.

Of course, neither the Individualist way or the Collectivist way is inherently superior. Each approach has its set of strengths and weaknesses. Each reflects the evolution of that culture in its historical context. The reason I bring this up at all is to make a point about the development of family culture in families of wealth in the United States and Canada.

The Cultural Rub

When it comes to wealthy families, an additional dynamic beyond societal norms is put into play. A wealthy family situated in the United States often has had imposed on it a weighty overlay of legal structures (in the form of trusts and entities). It is expected to work together to make these function effectively, but it does so without much support from the broader culture. Families in the US that chose to be more Collectivist than the norm (in order to preserve or grow wealth) are fighting the powerful headwinds of an Individualist society in which every member of the family is socialized from an early age to be an a strong independent adult trained to go his or her own way. When looking at the three possible endgames of wealth – Division, Preservation, and Growth – our culture is almost wired for Division.[2]

Swimming Against the Current

For families swimming against the current of rugged Individualism, this impulse to work together is often coupled with the fact that planning for the patrimony (the wealth created by the founding generation)  occurred within what we have been calling the primal contradiction. That contradiction states: “A strong individual leaves an organizational legacy that utterly fails to come to terms with the hard reality of collectivity.”  Under these circumstances, the strategic organization of the estate (structure) is eaten for breakfast by the failure to take into account the collective nature of the family (culture).

The strong-minded Individualist founder, often with high control needs and a proclivity to dictate, plans in such a way as to see his (or her) vision realized in the estate documents. The very set of values and behaviors that created the wealth becomes institutionalized in the plans the wealth creator leaves behind. The deep irony is that to sustain and grow wealth in a family requires not strong, independent individuals, but strong independent individuals who are able and willing to work together. The abilities required to work well together are often diametrically opposed to the values that created the wealth. Where the founder wants clarity, the heirs must live comfortably with ambiguity. Where the founder was decisive, successful heirs are deliberative. Where risk built wealth, undue risk will destroy it. Where control developed wealth, flexibility sustains it.

In this sense, “passing on the founder’s values” actually becomes the seed of the destruction of the patrimony he or she worked so hard to create. This failure to take into account the culture of the family (the “hard reality of collectivity”) when creating the estate plan becomes a fatal flaw for many plans and it helps to explain why so many great fortunes result in human tragedies.

The Achilles heel of most plans to protect the patrimony is that they were not developed collectively – with input from the people who would be most affected by them, who will live with their consequences and who are charged with managing that wealth wisely. The plan was not conceived as a collaborative venture – designed to work within family dynamics. Nor was it designed for a collective governance structure with the assent of the governed – with checks and balances and opportunities for varying degrees of control by the beneficiaries. Perhaps more importantly, the family was never educated to work together. Instead, such plans are almost always organized to put professional advisors in the seats of real power. This leaves the family with the job of coming to terms with the collective impact of the structures put in place by well-meaning but myopic founders. All too often the family is ill-prepared and unequipped to cross the deep chasm between the planning and the execution of those plans. Often they simply become passive recipients of wealth.

So what are we to do?  Is there a framework to help us in starting to sort through this dilemma?

Burn the Mission Statements, Tell Stories Instead

 First, it seems that families (and the industry that supports them) would be well advised to move away from mission and vision statements that force people to conform to a set of idealized, abstracted – and ultimately artificial – notions of unity. Such statements often purport to express the will of the group, but all too often they require the suppression or sublimation of personal outcomes. As such, they can become expressions of illegitimate power with a view to suppressing individuation. Such brittle vision statements simply shatter in the face of social complexity and real familial stress. The alternative adopted by many families is to create a vision statement that is so innocuous – so vanilla – that no one will object. Such statements are rarely strong enough to generate the deep motivation necessary to move forward in the face of challenges. They are cast aside at the first sign of trouble.

The only way I have found to move forward beyond contrived unity is to tell nuanced “stories of the future” in which each family member can visualize and connect emotionally with how his or her legitimate needs will be met and how he or she can contribute in his or her own way. These stories honor individuation and individualism. Such stories describe a kind of territory the family could occupy if it worked together for the good of each individual in the family. Scenarios allow for a diversity of contribution and opportunities of pluralistic support. They allow all voices to be heard and reflected. When developed well, these stories are simultaneously plastic and inspiring. They can change and adapt with time.

When each family member sees how enough of his or her agenda is reflected in the possible futures of the family – and see his or her unique and powerful place in these stories of the future — the stories have done more than forge mere consensus based on a series of personal compromises. It has made the “pie” to be divided larger for everyone involved. Family members are not forced to “align” but instead have fabricated an entire “world” [3] that can attune a diverse group of people with different agenda’s to act in concert (albeit as individuals) to reach for common well-being (familial commonwealth).

If vision statements create marching bands, good scenarios create jazz ensembles. There is room for self-expression but self-expression within a broader theme that will evolve and shift over time. The creation of a shared set of multiple scenarios (rather than a singular vision) creates the space needed by each person to take account of (rather than to subordinate) the multiple truths that comprise family in Individualist societies.

The best family stories I know of are the ones that see that the family – and its individual family members – are in some form of what Joseph Campbell called the “hero’s journey.”  In the hero’s journey, a likable but very human hero is called from his or her normal existence to face a daunting challenge. The hero heeds the call and moves through circumstances of real difficulty and even darkness to arrive at a place of great reward. The hero then returns to the ordinary world transformed and ready to help others.

If everyone in the family is seen as someone who faces challenges and overcomes them – with the help and support of one another – some key principles are instilled. People see that adversity is normal – that wealth will not protect you from being human and that indeed the best parts of oneself have little to do with wealth. Wealth helps to free a person to find and express their potential but doesn’t substitute for it. People see that while wealth can be given, making meaning (found by building competence and connection) is something that money is powerless to deliver and can only support. People see that they cannot go it alone – there are always companions on the journey whether they are family members, friends, colleagues, or trusted advisors. People learn that triumph in life involves some degree of service to the world – creating something of value for others as well as for oneself.

In the end, the truly great narratives of wealth are initially forged in the creation myth of that wealth but then, in subsequent generations, in unfolding the ways the family deals with the brute fact of wealth in heroic (with a small “h”) ways. Every family that goes on to thrive has within it the family champions and leaders who are committed to remaining together as a family and have the skills to pull it off. Nathan Rothschild said, “It takes a great deal of wit to create a great fortune, and twice as much to keep it.”  I have found that to be true in the families I advise.

The Will to Power and the Will to Empower

Second, as our last piece suggested, for the collectivism necessary to preserve or grow wealth, there is a requirement that legitimate individual agendas are served. The key word in that phrase is “legitimate” – who is to say what is legitimate and what is not?  This is one place where the question of moral imagination comes to the fore.

If we see ourselves as standing in fluid moral relationship to one another, we have a chance of separating what is the “will to power” from the “will to empower.”  It is not guaranteed that these two forms of power will differentiate, or that one is not being masked in the other, but with a moral commitment at its core, the chances are higher that the will to empower can emerge. That which empowers and liberates is presumptively legitimate. The first approach gives in to anxiety, the second yields to ambiguity. The first tries to create certainty, the second creativity. That which empowers individuals in an individualist macro-culture can be at least presumptively be viewed as “legitimate.” This means that players in the long game are seeking expanded outcomes for all. The best phrase I know of that captures this sensibility is “One for all and all for one.”

In such environments, there is a dynamic interplay between the ascendancy of the individual coming into her own and the role of the group in supporting that move to congruent integrity. Such families are intentionally developmental (more on this in a future post). There is also a responsibility of each individual to contribute to the group’s capacity to empower the individual – and particularly to empower the rising generation. This forms the base for the complex dance between independence and inter-dependence.

 Avoiding the Individualist Trap

Third, let’s discard the quaint myth that we can forge a collective long-term “consensus” in families in which they are required to sublimate self-interest for the good of the whole.[4]  Here it is important to distinguish between “soft” and “hard” consensus.

Because of the anxieties generated by potential conflict and the existence of divergent agendas, there can be a rush to paper over individual differences through weak agreements. It is this impulse — to define the good of the whole as abstracted from individual needs and interests — that often underlies such endeavors as unifying mission and values statements we pointed to earlier. Such exercises presume a commonality that often doesn’t exist in reality.

Sometimes these “soft” consensus interventions are developed in the hope that a vigorous unity will emerge. It rarely does. In other cases, the consensus is premised on finding least common denominators of group interest or, alternatively, by adopting aspirational statements that are beyond the collective reach of the actual people in the room. In other cases, this is a nominal agreement of adhesion shaped largely by power holders and imposed on the larger family using emotional or fiscal control. None of this provides a sound platform for the long-term collaboration necessary for growth and preservation strategies to flourish.

Many consultants use a soft consensus approach to uncover the “objectives of the group as a whole.”  They ask individuals to leave their personal agendas out of the discussion. Often, and ironically, the person most likely to confuse “the good of the whole” with “the good of the individuals” is the consultant. Indeed, sometimes it is only the consultant who has a perspective on what the abstract “whole” might be. Family members in our society tend not to see wholes – they see individuals. The “whole” is often too abstract to be visible let alone be worthy of allegiance and the sublimation of self-interest. Soft consensus decision making in families is usually created through a series of personal compromises. The parties are encouraged to use moderation, engage in trade-offs, and find the middle ground. Often there is “a little something for everyone” in the resulting agreements.

This approach often generates brittle agreements that shatter against the hard reality of evolving individual agendas. In working with groups in Individualist societies, there is rarely a stable, unified whole – only fluid convergences of shifting interests. This means that there is never one “right” overarching answer that will “align” family members for very long. Each individual, each family branch, and each generation has its needs, interests, and ambitions. This means that multiple perspectives have to be accounted for to find a way forward. Procrustean compromise or weak “consensus” simply falls apart in the face of that level of social complexity.

What is perhaps the most pernicious of the effects of artificial unity is that it inherently and inevitably generates mistrust. If you create an agreement that all have nominally signed, but you know in your heart of hearts that no one truly supports, you have created a lack of authenticity that is inherently untrustworthy. The actual family culture isn’t reflected in the forged agreements thereby generating poor outcomes.[5]

What is required instead is hard consensus. Rather than agreements based on a series of weakly negotiated compromises, moderation, trade-offs, and finding middle ground, hard consensus will involve the more arduous work of negotiating differences that integrate solutions to meet the core interests of the various individuals and constituencies who are part of the collective. Such negotiations often involve vigorous debate, careful listening, skilled facilitation and a willingness to look beyond positions to core interests.[6] This process looks to surface “elephants in the room”. Over time, the family must be willing to deal with those issues. It will not seek conflict, but not go out of its way to avoid it. It will have as a part of its focus individual growth and empowerment. It will also contain within it a willingness to consider that there are advantages to collective action and that the interests of all are best supported by working together. Creating hardened consensus is not easy and in the end always contains within it ambiguity and uncertainty. Collaboration is hard work and requires real skills over longer periods of time.

Ironically, often families come to do the work of hard consensus building through trying weak approaches first. They create agreements that don’t work in reality. The path to negotiation lies in asking the question of why those agreements didn’t work. Such weak consensus often initially feels like relief from the anxiety generated by disunity. When families come to grips with the fact that they have smoothed over rather than confronted their real issues, they get to the real work. In a sense, the weak agreements make these more difficult issues visible. It is often then that hard consensus building becomes possible. The wise consultant knows that the mission statement the family so desperately wanted to create over the course of a weekend retreat is only am antechamber of deeper work. That consultant will warn the family that this might happen.

Action Based on Principles

Fourth, families that succeed in the counter-cultural move towards collective action adopt principles that support that movement. They have explicit agreements and those agreements mean something. Family members are expected by themselves and other family members to be more or less responsible adults who live up to their commitments. Far from curtailing autonomy, it is celebrated in these collective commitments. Each person entering into the agreement is a free agent committing to other free agents for mutual individual benefit. Of course in the real world, there are defections from these agreements. This gives rise to a need to candidly acknowledge these deviations, work through the conflicts that arise from them and moving towards reconciliation. This still honors the impulse to individuality. While such work requires both kindness and candor, when done well it sustains good boundaries and accountability which are at the heart of autonomy. This too, is the deeper work of hardened consensus building.

While in one sense principles are “values in action” in the sense used here, they are not aspirational. Rather they are actual operating agreements that create containers for work together that people view as fair and just. Such principles provide standards and norms for conversation. They are not rules so much as they are guideposts. They are not goals or outcomes. Instead, they define the process by which the family will pursue goals and outcomes. To violate a principle is to signal to the group that it is off track and that it needs to right itself. It is one thing to have declared shared values; it is another thing to operate on a set of agreed upon principles. Such principles set boundaries for the field of play within the family system.

The Importance of Gathering

Fifth, families must gather and bond. For a social fabric sufficient to sustain agreements, the family must find personal connections to things other than the structures of their wealth. They must come to see each other as a deep resource in the tapestry of their respective lives. One wise patriarch sent all of the women in the family (including married-in spouses) on an annual shopping trip. The informal bonds created had a lasting impact. The women didn’t always get along, and they often had very different views, but the nature of the relationship built in spending time together helped them to weather many a storm. This also forged bonds with in-laws and wove the family fabric in ways that were important. In another family, a seventh generation family member passed up the opportunity to ski in Gstaad with friends to attend her large family reunion. Families can create shared experiences through family gatherings that are not all business but filled with fun and re-connection. These kinds of tribal gatherings are critical to the creation of family culture.

Building Capacity

Sixth, families that thrive consciously build capacity to address the problems they face. In another context, a good friend of mine was consulting with a two-star general commanding a very large, mission-critical base. This general had received a specific mandate from the Secretary of Defense along with an unlimited budget to meet the objective. Given how the base was working, he saw no way for the mandate to be fulfilled. It seemed impossible. With no clear path, the general meet with my friend. After getting a handle on the situation, my friend asked the general to describe the core challenge he was facing. He repeated the orders he had received and the difficult obstacles he faced. My friend said, “I think you are wrong. I don’t believe that’s your challenge…I will be back in two weeks, and we’ll see if you can give me a different answer.”  Two weeks passed and the general repeated back to my friend the mandate in different words. My friend told him he still wasn’t seeing the big picture. He came back two weeks later, and the general admitted he was stumped. My friend then eased him off the hook by saying something like, “The mandate you have been given is a massive challenge, but it is not your biggest challenge as the commander of this base. While this project is significant, next year will bring an even bigger one and the year after that another even bigger one and so on. Your real challenge is not simply to meet this immediate challenge, but to ensure that, when your tour is over, this base can triumph over any challenge that is thrown at it in the future.”  This larger challenge became the centerpiece of the general’s message to the military personnel and civilian contractors working on the base. As a result, they accomplished that first, seemingly impossible, objective months before the deadline. More importantly, they built capacity they didn’t know they had. This notion of building sufficient capacity to solve not only the problems of today but to meet the challenges of tomorrow is a good way to describe capacity building in families. There is always a challenge du jour – that is why I get hired. The question for the family is whether it is equipping itself to address not only that problem, but whether it is growing collectively to address the challenges of the future. It is in this later work that I earn my fee.

Building capacity is about building both skills and competencies. Benchmarking can be invaluable to ascertain where a family stands and what it must work on to be successful. Doing qualitative and quantitative analysis at the outset often “wakes” up the family. Engaging areas of weakness revealed in such benchmarking helps to identify and build skills, competence and capacity to meet future challenges. This is the stuff of resilient, successful families. From there the work of building capacity can be targeted and developed in progressive, laser focused ways.


These are some interventions that can radically shift family culture. Those families that can successfully create a counter-cultural collective mindset have a fighting chance to play the endgames of either Preservation or, in rare cases, Growth. Those that don’t intentionally build their culture are likely to fracture – either quietly or dramatically – in the long game of Division.


In our fifth installment of the Playing the Long Game series, we will look at the implications of the three scenarios for planning and present a tool to help family leaders and their advisors think through the planning process more clearly.

© 2016. Matthew Wesley. All rights reserved.


[1] While Hofstede’s model is not the only game in town when it comes to comparing cultural values (see e.g. Trompaneers, Hunt & Weintraub, Bacon & Spear, Hal & Tonna, Beck, Lenski), his website offers the entertaining ability to compare different cultures using his model.

[2] As Grubman and Jaffe point out in their book, globalization has brought with both the dissemination of Individualist values from the West and, largely through education of wealthy children abroad, transformations in other, more collectivist cultures.

[3] In The Moment of Clarity: Using the Human Sciences to Solve Your Toughest Business Problems, authors Madsberg and Rasmussen note how we speak of the theater world, the sports world, the world of business and so on. Each “world” has its own set of rules, its own language, its own rituals. The same is true of every family – the family has a “world” of its own. This “world” is the manifestation its invisible culture.

[4] Some of what follows is influenced by the yet unpublished book by Adam Kahane tentatively titled “Collaborating with the Enemy: An Open Way to Work with People You Don’t Agree With or Like or Trust.”

[5] Note, this is not the case when agreements are truly negotiated and where different points of view are raised and resolved.  Some family constitutions, deeply negotiated over time and developed with a view to creating a process for self-governance are a solid example of this type of collective engagement with difficult issues.  Things slapped together without really looking at deep divides is typically not resilient enough to weather family dynamics.

[6] See Fisher and Ury, Getting to Yes (1992)

Playing the Long Game: The Importance of Imagination

If you remember, the first in our series on the Long Game identified the three “endgames” of wealth:  Division, Preservation and Growth.  The second told of the development of powerful structures and the need to create a family culture sufficient to counterbalance these structures and the advisors who support them.  This piece serves as a pivot: it describes one way of seeing the seminal reality of creating a robust and resilient culture.  This part of the series may feel abstract, but it lays a critical foundation for what is to come.

There is a little piece on the homepage of my website entitled “Imagine.”  It goes:


Your family is working together in ways they never have before.

Conflicts that you thought were not going to be solved are firmly in the past.  Your children are holding one another accountable.  Your success is empowering their success, not simply breeding entitlement.  Your family is not only realizing your hopes but is planning together and is excited about the future.

This need not be a fantasy – we help to make this a reality for the families who engage us.

At first blush, this seems a flight of fancy.  It seems impossible; as though it exists in a dream or an alternate universe.  It seems saccharine and unrealistic.  It may be true of other families, but not the family you are in.  Yet in my experience, that is not the case at all – this piece of imagination reflects the hardest edges of the realities of shifting family culture.   It expresses an in-breaking of an emergent future.

Otto Scharmer suggests that how we shape our collective attention determines outcome.  Another way of saying this is what is possible is determined by how we see things – that how we construct or fabricate our individual and collective lives depends on the limits of our capacity to see and, more importantly, to imagine. The more we lock up our perception, the less range of motion we tend to have.  The less range of motion, the more stuck we become. Opening to a wider future – creating new ways of seeing the ongoing development of our individual and collective lives – actually creates possibility and can even be seen as a core essence of what we call potential.  As the poet David Whyte says in his poem Mameen: “recall the way you are all possibilities you can see and how you live best as an appreciator of horizons.”  Potential, from this vantage point, is that which could plausibly unfurl from conditions as they now exist.

In this sense, all change begins as an act of creative imagination. I cannot intentionally move into a better future unless I can first imagine – in my mind’s eye – that better future.

I have written often of moral imagination.  The emphasis most people put on this phrase comes on first word – moral. It is a strong word that evokes visceral responses.  Many think of “morality” as constraining – harkening back to Puritanical or Victorian notions of buttoned-down propriety. They see it as a reactionary term consigned to a bygone age. Even the dictionary defines it in terms of principles and codes of conduct.  I thoroughly understand the response and in many ways I am sympathetic to it.

Yet there is a part of me that believes we too quickly consign powerful ideas (in the form of powerful words) to antiquated ways of thinking and thereby limit our ability to see things that could be important.  Words like grace, redemption, penitence and moral were coined and used in the context of a mythic age and cast aside in the collective zeitgeist of rational modernity and post-modernity.  Perhaps to leave these words behind leaves us impoverished and cut off from aspects of our deepest humanity.  These words, after all, described essential human experiences.   Babies could be lying in the street along with the bathwater we tossed out in our headlong rush to the future.  Turning away from such words with visceral disgust could reflect our societal shadow, but playing with them might bring us face to face with important aspects of a disowned self.

Our aversive reaction to the term “moral” makes visible something worthy of reflection.  This reactivity might mean we are running from what we just don’t want to see. In an age of dissection, cold rationality and relativity – and the apotheosis of individual freedom – words of soul and character can empower us to move towards hosting the future in different ways.  Ancient words – reimagined and stripped of their religious overtones but recast with the deeply human truths they carry – can restore meaning and deep relatedness in a social fabric.  What if “moral” doesn’t have to do with a code of conduct or rules – but rather is rooted in the ability to see one another as human beings and to understand that our collective futures are entwined?  What if our fates require us to see beyond words such as sustainability, civility and pluralism to ask the deeper question of what does it mean to be a moral agent in a world of relatedness? To ask the moral question becomes, “How can you and I, who are so different, stand and continue to stand in an ongoing relationship with each other.”  Orland Bishop suggests that a central question in his life is “Who must I be for you to be free?”  That is a deeply moral question – and it begs for a creative answer.

“Moral imagination” is something quite different from a moribund constraint or tired moral codes that serve only to limit individuality, freedom and self-expression.  “Moral imagination” cannot truly be dissected into two parts – the moral part and the imaginal part.  Rather it describes a gestalt where the whole is different than the sum of its parts.  It could be written “moral-imagination.”

When we place the emphasis on the idea of the imaginal, it shifts something in our understanding.  In our modern and post-modern world, we live in a place where distinction and dissociation reigns.  The scientific world view lulls us into a sense that if we can rationally tear things apart and understand the constituent parts, we can solve the problems of the universe.  In the West, we are all children of Aristotle.  The notion of rational dissection of wholes into parts is a powerful tool, and it yields profoundly useful results – but it also looses something in the translation.  I remember sitting in a biology class where we killed a frog (with ether) and then dissected it.  The dissection purported to teach us how the frog “worked.”  The irony of this exercise was utterly lost on the teacher and on me at the time. To understand “life”, we had to kill the living thing and thereby rob ourselves of any understanding of the “whole” of the frog. It turned out that the frog could not be reduced to its constituent parts – there was something “experiential” or “subjective” going on in the frog that killing took away. That subjective experience of “frogness” may have arisen from its biology and undoubtedly doesn’t exist without it (I am not suggesting some Cartesian dualism here), but this “aliveness” was clearly something in its own right, not mere epiphenomena.  The whole was indeed different from the sum of its parts.

So too with moral imagination.  Using moral imagination we conceive a future in which the fabric of relationships – the connected web of being – is different and better than it is today.  This notion presupposes that we cannot be fully autonomous, but that we are inherently connected at some level to other people.  We have options in how we fabricate that social tapestry. We can imagine a future that is much like the present – the same patterns and behaviors going forward in cyclic stuckness.  Or we can imagine a future that is worse – a descending spiral of acrimony and anger.  Or we can imagine a future of evolution and growth.  Each of these imagines us in a web of relationships.  And in each case these relationships have an experiential quality.  That experiential quality – the living process of relationship – is fundamentally a moral state.  In this sense “morality” has to do with the intersubjective (or shared) sense of what the relationship is.  How I relate to you IS moral.  I chose to be authentic or disingenuous.  I chose to act with compassion or cruelty.  I either listen or dictate.  All of these things are expressions of my capacity for moral imagination.  These are the easy cases.

In the harder cases, we face ever deepening levels of complexity where we must engage and then act.  If you and I come to agreements (what I might call covenants to reclaim and re-purpose another ancient word), we can choose how we will construct the fabric of our relationships.  This level of fabrication of our collective future becomes a gateway for creativity in the midst of ambiguity and complexity.  This is a decidedly post-postmodern notion of morality – not that there is a morality that has been given to us and exists independently of us (by divine fiat or natural law) or even one that is relative (your morality is as good as mine and so who am I to judge?), but one that is co-constructed with a view to maintaining and sustaining relationship.  In this sense, we are building the future together.

I suggested in the last piece that there is a primal contradiction in the planning for wealth that occurs in most cases, namely: “A strong individual leaves an organizational legacy that has radically and utterly failed to come to terms with the hard phenomena of collectivity.”  This hard phenomenon of collectivity is the “frogness” of a family – the whole – which is rarely taken into account in the planning process.  Planning, in most cases, is akin to vivisection.  It is coldly rational and supremely technical and, in its implementation, it can kill the frog – or, in this case, the vibrancy of family.

I find that working with families from the standpoint of moral imagination is critical to success.  Helping them fabricate a future – to see differently and with greater fluidity – is essential.  Of course, we don’t approach this task head on.  We don’t ask “How do you imagine a moral future of relatedness to each other?”  That is too abstract and too contrived. Instead, we start small with very concrete steps.  We make visible what is already happening.  We ask some big but grounded questions – all premised on the stems of “How do we…?” or “What would happen if…?” or “Why should we…?”   These types of questions – and others like them – open up imaginal space. They get the juices flowing. We often tell stories of possible futures (scenario planning) because stories open imagination of what is possible. We come to tentative agreements that we test out.  We co-design and co-deploy prototypes and probes to see if we can adopt new patterns of behavior.  As so, from this vantage of point of moral imagination, we begin to make progress.


Our next piece in the Long Game series will look at individuality and why the creation of unified visions are counterproductive for families.  We will see that the mission statements and the values statements that are the techniques du jour with families are potentially dangerous.  We will look at what is required instead to shape and form a family culture.

© 2016. Matthew Wesley. All rights reserved.

Playing the Long Game: In the Beginning….

This is how it starts.

Bob and Mary Campbell are sitting in their lawyer’s office doing estate planning. Bob, through hard work, real skill, and some luck has accumulated a substantial fortune. He has lived a rich and full life and built a company that he sold for an astronomic sum. He now invests in other emerging companies and real estate. A de-facto family office helps manage his diverse interests. Bob and Mary are now trying to make decisions about how to leave this fortune to their children. Bob wants to be responsible about his decisions. He wants to avoid taxes. He doesn’t want to create “trust fund babies”. Mary has her own concerns – she wants the children to be happy and to get along. She doesn’t want the wealth to “ruin” her children or grandchildren. They both want to do good in the world, and they want their family to learn to give money away responsibly.

The Plan

The lawyer proposes a plan that will avoid taxes at the survivor’s death and even create generation skipping trusts for the grandchildren. He suggests that Bob and Mary create a foundation to express their philanthropic intent and to help their children not only learn about money but develop compassion. He recommends strategies that will leverage gifting opportunities for the children by creating a qualified personal residence trust for a valuable second home and placing low value but likely appreciating assets into an LLC that will then be gifted to the children in cascading grantor retained annuity trusts. He has other ideas, strategems and tactics that will be put in place over time. By using these strategies, the estate tax burden is radically reduced. Vast sums will flow to the children, grandchildren, and even great-grandchildren.

Bob and Mary have had real concerns about entitlement, and so the trusts that they are creating have progressive distributions, but a good bit of the money will be locked away in trusts that will distribute funds based on a rational plan. These trusts will be administered by professionals with family oversight. There is a family bank that will fund the growth and development of the children and foster their maturity. Their lawyer is even progressive enough to suggest that their children learn about the wealth over time and that their financial advisor works with the family over time to educate the children and grandchildren to manage the wealth wisely. By almost every measure under current standards, this is purposeful and enlightened legal advice.

Bob and Mary are smart, and they understand the explanations in the lawyer’s office. When they leave, they realize that they could not explain what they just authorized to save their souls, but they trust their highly recommended and personable lawyer who seems to understand this complex world of wealth succession. Over the next few months and years, they meet with the lawyer several times and ask a lot of questions as they begin to implement the planning. They come to better understand the broad outline of the plan. The final pieces are put in place, all the documents are completed and signed. The lawyer writes a cogent letter explaining the entire plan in plain English – it even has diagrams. Whenever Bob and Mary become confused, they turn to the letter to refresh their understanding of the strategy.

The Plan Implemented

Fast forward forty years. The Campbell’s are now a “clan”. Bob and Marry had five children, four of whom are married and one divorced, there are 15 grandchildren and a growing number of great-grandchildren. The plans designed so long ago in the lawyer’s office have worked as designed. There is a complex network of trusts and entities that hold assets. The assets within these entities are professionally managed by lawyers, investment advisors, trustees, and accountants. There is a family office that coordinates, manages, and oversees this complexity. The family has family meetings to discuss and learn about the wealth. There have been some royal battles within the family over control of the wealth, but the family has survived with only one branch estranged from the others. There has been some entitlement and dependence, but the wealth has been prudently managed and preserved. This, by most measures, is a success story.

Or is it?

The Family Experience

It helps to peel back the layers of success. What I just told you is a part of the “mythos” of the Campbell family. The high points of the story are that Bob and Marry, who came from little, by hard work, acumen and a bit of luck built a company from scratch and created a fortune. Mary was a kind but disciplined matriarch. Bob was a firm but caring patriarch. Both were generous, and community minded, and they created a legacy for the well-being of their family and the good of their community.

This story leaves out details (and the details are always important), but in broad strokes it is the overarching story that the family tells itself, and it is the story that its advisors know well. It is also the rags to riches story for public consumption. What is interesting about this mythic narrative is that it is simultaneously believed and disbelieved by the family itself – they are acutely aware of the ironic nature of the story. Those advisors at the periphery don’t get to peek behind the curtain to see the stories behind the stories. I am not talking about secrets or dysfunction – but rather the realities of living within any wealthy family. Those trusted advisors who are closest to the family know and understand more of the private complexities involved.

As for the mythic origin story, official biographies of founders and videography or written histories of the stories of family members are created. These artifacts are often not quite hagiographies, but they are almost always sanitized and simplified. They make a point – and often a deeply moral point – about the nature and identity of the family. This origin myth, while self-consciously acknowledged as such – holds great power within the family as an organizing force. The families may knowingly wink to each other about these stories, but they hold profound sway in the hearts and minds of family members. These mythic stories become a reference point – an idealized point of view for both insiders and outsiders that plants a stake in the ground for understanding the family.

Parallel Narratives

Within the family, however, are a host of other narratives beyond the reductive “Myth of the Origin of Wealth”. These are stories of internal contradictions, struggles, triumphs, and development. One of the stories is about how the trusts and the advisory systems around that wealth have evolved and operate in the present. Family members have, as part of the family, a cohort of advisors who are neither quite in the family nor separate from it. As the family disperses psychologically and physically, these advisors increasingly shape the definition of the family itself. Even in close families, the family is continuously engaged in the ongoing saga of “advisory relationships”. These advisors are intimately involved in the life of the family. Indeed, it is this orientation – towards the structure of wealth and the advisors who support that structure – that holds the greatest sway in the sense the family has of itself.

The family defines itself and is defined by the structures that are created (and to a lesser extent the advisors who serve these structures on behalf of the family and mediate their impact). This is an extraordinarily private set of stories – never willingly shared with outsiders by the family or the inner circle of professionals who serve them. Even within the family, the mysterious workings of the structures of wealth may only be known by family leaders who have taken the time and interest to focus on understanding this complicated matrix. The scaffolding of this narrative was created by Bob and Mary in the lawyer’s conference room – it started in mystery, wrapped in impenetrable legal language and the doctrines of law and legislation. It was built out and realized during their lifetimes and in the lifetime of the second generation. The third generation is only now being inducted, selectively and carefully, into the mystery of this “legal narrative” through rites and rituals of “preparation”. The mystique and mystery of wealth are often a core concern for family leaders charged with the stewardship of this wealth and with good reason. There is a recognition that knowledge of these mysteries is easily converted into the currency of power and that power has the potential to be remarkably destructive.

There is also a family dynamics or “therapeutic” narrative – a story of the relationships within the family and the dynamics that drive that narrative. The behavior of members of the clan is exhaustively dissected and interpreted. People’s motives are imputed. Sometimes fights break out. Sometimes people withdraw. Sometimes leaders intervene to fix the situation. Many times maturity prevails. The spectral presence of forebearers is reflected in the naming of children (the number of common names within dynastic families keeps alive the connection within each generation and between the generations – it is almost certain that there will be a Robert and a Mary within the descendant lines and often the names of the second generation show up in the third in one form or another). That ghostly ancestral presence will shape the personal and collective experience of family members – often more than they are consciously aware of until they reach middle age. To the extent that darkness exists, this is often where those secrets reside: stories of addiction, mental illness, and abuse. Some are “open secrets” within the family circle, and some are held very close to the vest. These ties of blood, marriage, descent and familial relations create a complex skein of psychological and collective experience. The meaning attributed to this experience becomes a powerful set of narratives told within the family. Sometimes these issues become the subject of counseling and true therapy. They are often the domain of facilitation and even dispute resolution. These narratives may be known to close advisors or trusted confidants of family members. Here the family attempts to make sense of itself and create the shaping narratives that will serve as inspirational and cautionary tales for the next generation. Occasionally, through public exposure, some scandalous stories may leak out to the mass culture. Most often the dramas large and small continue behind closed curtains driven by anxieties and the full range of virtue and vice that we as human beings in relationships live within. Even here, however, the wealth – and the relationship of the family to that wealth – is a brute fact. It leaves little untouched.

While many outsiders consider this a narrative of family dynamics, that is a gross oversimplification. What people do not realize is that these are not dynamics defined by middle-class concerns about family – the sustaining of marriages and the raising of children (which are obviously shared by wealthy families), but dynamics of the relationship to the structures of wealth. It is wealth that gives rise to the family dramas and defines these relationships. This is family dynamics in the shadow of wealth. Without the wealth, these dynamics wouldn’t arise in the first place. Families themselves get this – they often tell me that they are not “dysfunctional” and they are right. They are wrestling with issues of natural and healthy human complexity, not dysfunction. This is also not, typically, about control or power over wealth, it is about its administration and the complexities of decision making and risk management when that is embedded in interpersonal and familial dynamics. This is why “therapy” is rarely effective in these situations. The problems are not usually pathological or diseased in the clinical sense. While the narrative may be “therapeutic” and couched in therapeutic terms of popular culture, the narrative is really about the inner workings of collectivity in complex social environments.

As a subpart of the family dynamics or therapeutic narrative is a special narrative of familial power and control. Families develop narratives about what might anachronistically be called “character” – it all started with Bob and Mary’s concern about entitlement and not spoiling the children or grandchildren. These notions of character – in this case, what it means to be a Campbell – have a deep impact on family dynamics. These narratives are particularly complex when it comes to women, in-laws, “black sheep” and youthful rebels. These family members often take on the status of second class citizens within wealthy families. The stories they generate and are imposed on them radically test the dominant narratives of the family. The family must create narratives that take these into account and ultimately reconcile the inherent uncomfortable contradictions raised by these upstarts and renegades. Within that testing however lies a more dominant narrative of power and how power is used, historically by the male lineage but increasingly by bloodline lineage as feminism has taken root in the broader culture. This control over the corpus of wealth plays a preeminent role in the unfolding of family culture in the context of the internal challengers to that legacy.

In addition to these narratives that are largely private to the family, there is also a public narrative. When families become prominent, they gain gravitas within their community. The family sits on boards, donates to charities and runs businesses within the community. These activities garner attention, and the larger community creates a narrative about the family. That narrative is always a caricature of the family – grossly simplistic and laced with only the most memorable of glosses and features. It is often patched together from bits and pieces of information and misinformation, and injected with voyeuristic curiosity about the “rich and famous”. However, this narrative is wholly known to the family, and it must incorporate this public narrative into its ongoing existence. It must reconcile this public narrative with the more private, legal and therapeutic narratives in play as well as the overarching origin “mythos” of the family.

The complex interplay of these various narratives – and others unmentioned – means that the family is dominated by the fact of its wealth.

Unlike most middle-class families, the wealthy family is organized and defined by the structures that Bob and Mary put in place so long ago in the lawyers office. This is the naked truth of wealth in families. The administration of wealth becomes the dominant reality of the family – indeed, the sense of “family” is largely appended to the structures and the administration of wealth. This has arisen out of the two foundational realities in play: first, the creation of trusts and legal structures that have mystified the wealth, leaving descendants suspicious, dependent and subservient to mechanisms they neither fully understand nor control and, second, the attempt to make sense of these realities to retain both psychological and cultural coherence of their existence in the shadow of this dominant reality. In short, families of wealth live out their lives in the shadow of the complicated machinery of wealth and the human reactions to that machinery.

The Primal Contradiction

There is a great deal more to be said about all of this, and we will get to that eventually, but the key dynamic is embedded in the primal contradiction that exists at the heart of almost all dynastic families:

A strong individual leaves an organizational legacy that has radically and utterly failed to come to terms with the hard phenomena of collectivity.

What arises out of this inherent contradiction is the authoritative appropriation of family identity by the structures of wealth and the advisors who serve as caretakers of that wealth, the public that interacts with the family in various ways, and the internal dynamics that form the private experience of families – all occurring within the larger umbrella of the “mythos” of the family. The family rides these narrative waves as largely passive participants in their individual and collective lives.

The central failure of coming to terms with collectivity at the outset has ultimate consequence. The reason the story set forth above may not be a success story from the point of view of the family and especially individual family members is that their collective and individual lives are effectively controlled by the wealth. The structures that were created and the advisors who serve those structures – even when acting as true fiduciaries – are more powerful than the collective family. This failure to account for collectivity started in the lawyer’s office. It evolved as the plan was put in place over time. It emerged full-blown as the advisors implemented those plans in the second generation. It is now a living breathing complex in the third generation and, by the design of the structures themselves, it is likely to come apart in the fourth as trusts expire and the “dynasty” falls apart.

Here is the key point: either the wealth will control the family or the family will control its wealth.

The Choice

The only possibility of realizing the second option is for the family to come to grips with collectivity – the ignored aspect of the primal contradiction. If the family will control its wealth, the family must mindfully construct its culture and then intentionally build that culture into an effective counterbalance to the structures of wealth that would otherwise define it. This is not to say that the second option is the right one – there is nothing inherently wrong or even dysfunctional about the way the Campbell family operates. What can be said about the Campbells with certainty is that by living in the shadow of their wealth, rather than building a culture that will control it, they have sold themselves short and are living a very cramped, if reasonably comfortable, existence. Choosing between being controlled (and serving) the structure of financial wealth rather than living a life of controlling wealth (and thus prioritizing personal and collective well-being) is a choice every family must make for itself.

If the family chooses the second option, it will be on a more difficult but ultimately much more liberating path. It will mean that the family will become the conscious author of its own narratives – it will assemble itself powerfully – as a social construction out of whole cloth – to create a culture with enough weight to counterbalance the formation of the structures that would otherwise define it. To do so, it must come to understand its deep moral purpose, it must consciously integrate disparate narratives, it must develop both formal and personal capacities. It must be built on foundations of trust, character and authenticity. It must evolve covenants, agreements, accountabilities and empowering communication within and across generations. If the family is to flourish and grow, it must not see itself in the context of wealth, but must see the wealth in the context of the family – with all of its complexity and dynamics. Failure to rise above the brute fact of wealth is rare – structured wealth is a powerful force. No family succeeds entirely – it is always saddled by the leaden structures it inherits. But it always has the choice to breathe life into those structures so that they serve the growth and development of human beings and the common well-being of the family as a whole. It has the power to shape and direct those structures at least in their administration and often in their form. Beyond that, it has the power to reconcile the deep contradictions of individualism and collectivism. It has the power to resolve the primal contradiction created at its founding – that a strong individual left an organizational legacy that radically failed to come to terms with the hard phenomena of collectivity.

 Playing the Game

I noted in the first installment of this series, Understanding the Endgame, that it seems there are three basic patterns for the fates of great fortunes: Division, Preservation, and Growth. The Campbell structure described above plays the game of Preservation. This game was effectively, if unwittingly, chosen by Bob and Mary in their lawyer’s office in the beginning. The Campbell’s are, by all accounts, playing that game rather well. Yet the game of Preservation, of necessity, is a game where wealth controls the family.

There is a game that transcends this game of Preservation. The game of Growth is quite different from the game of Preservation – it requires different rules, different skills, different patterns of communication, different relationships of all of the players, and so on. This game of Growth could have been framed at the start – it was a missed opportunity by Bob and Mary who could not know that that option was available or what it would have required. That said, it is not too late. The Campbells could “change the game”.

To play the game of Growth well requires, of necessity, that culture trumps structure – or at the very least provides an effective counterweight to it. It sees structure not as a static brute fact of family life, but as a malleable set of evolving relationships that can serve to grow not only the economic base of the family but its individual and collective development. It works creatively with both structure and complexity to forge a different future for itself. Ironically, if Bob and Sally had known that playing the game of Growth rather than Preservation was possible, many of their deepest aspirations for their progeny- the progressive development of character, competence and compassion in their children and grandchildren- would have been required. By playing the game of Preservation, they locked into place the very things they wished to avoid – dependence, entitlement, and fracture. Playing the game of Growth will not allow families to avoid the vicissitudes of fate and folly entirely, but to consciously construct a family culture that promotes personal, familial and economic growth will go a long way to blunt their effects.


© 2016.  Matthew Wesley. All rights reserved.

Playing the Long Game

 Part I: Understanding the Endgame

Wealthy families are different from ordinary families in at least one very particular way. It is not so much about lifestyle (though that can be an obvious part of it). The biggest difference has to do with the daily realities of living life in relationship to the mechanisms of accumulated capital. Lifestyle choices are only one aspect of that reality.

When substantial wealth is accumulated, it comes with a whole series of structures designed to protect the pool of gathered capital. These structures consist most often of trusts, corporate entities, governance mechanisms, interlocking accounts, legal agreements and charitable organizations. Every family of wealth has its unique configuration of these entities and structures designed to accomplish the general goal of preserving capital. The more particular goals are to preserve capital in ways consistent with the sources of the wealth, the intention, and desires of the founding generation, and the management of that capital within the ambit of the family system. If one takes a snapshot of this complex of legal and financial structures at the death of the wealth creator, one could consider that inherited structure as a “surrogate” for the authority and power that previously resided in the wealth creator. (See, Marcus, 1992.) The law (as applied through this complicated surrogate) has taken the place of the founders who are now deceased. The state’s legal infrastructure is now acting in loco parentis for the absent founders and is casting a long shadow on the individuals within the family. Living with this surrogate and in its shadow is the fundamental hallmark of wealthy families. How they live in that shadow – in matters of lifestyle, individual choice, and family culture – is the outworking of the impact of accumulated capital in the life of the family.

When the legacy of accumulated capital passes to the heirs, the bare surrogate of the legal structure begins to take shape in its operation – its administration becomes clear, and the family dynamics around it emerge and congeal into stubborn patterns. The formal surrogate that existed at death emerges over time as a functioning formation. (Id.) Official fiduciaries take on their duties. Family leadership begins to arise. Most importantly, members of the family now organize and orient themselves individually and collectively around this “surrogate” of patrimonial legacy as a “formation” and come to define fiduciary and leadership roles within the family. Individually, the surrogate must be integrated into the psychology of each family member. Collectively, there arises a family culture informed by and affecting the formation. This formation becomes a central fact in the life of the wealthy family. And so, it is the adoption of this formation – and its consequent impact on the family – that is the central reality of wealthy families. They live their family life in the shadow of legal entities that control capital. This all may seem obvious when laid out, but sometimes insight arises from taking a look at basic realities in a different way.

The Endgame

The formation functions as a core reality in the family of wealth until its endgame. That endgame seems, generally to follow one of three patterns.

Division: Cook the Goose and Serve It

The first endgame is the “simple” division and distribution of assets. One might consider this to be the scenario where the goose that lays the golden eggs is killed and a rich meal is had by all. Here assets are distributed to heirs with no common threads holding those heirs together. Each has an individual relationship with a fiduciary and little relationship with other heirs. This almost always results in relatively quick dissolution of the gathered capital formation and the assimilation of the wealthy family back into the middle class over the course of a generation or two. More often than not, there is a good bit of suffering that occurs as the wealth is consumed and eventually lost. Great wealth has a tendency to do great damage without the countervailing forces of personal character and deeper commitments to social productivity. Even where those exist, the temptations of wealth often subvert them. Those parents who use the surrogate as a way of continuing to parent their admittedly incompetent children and grandchildren foster this outcome. Even in those families that work hard to avoid entitlement in its grosser forms, there is always at least a subtle complex of psychological issues raised by inherited of wealth. Partial or complete disinheritance is rarely a solution and often does real damage. In this endgame, usually, there is a lost generation or two between the accumulation of wealth and its eventual disappearance. It is an endgame that can be fraught with entitlement, risky behavior, narcissism, substance abuse, psychological damage, business failures, and general malaise in heirs. There are of course, many happier exceptions but I have seen no one leave this game unscathed to at least a small degree.

Preservation: Care for the Goose and Enjoy the Eggs

The second endgame is one of preservation. In practical terms, the family engages in a rearguard action against the vicissitudes of time. The goal of this game is to steward assets responsibly and make them last for as long as possible. This approach is based on a belief that people are happier when they act responsibly. Threats to wealth abound – financial risk, economic risk, tax risk, political risk, administrative risk, and, most of all, familial risk. If family dynamics are good, the preservation scenario results in an environment with solid formal and informal fiduciary roles.

By design within the formation, the formal fiduciaries are the advisors and administrators who work to preserve the family capital as legal, trust, accounting and financial professionals. At their best, these professionals provide wise counsel. Elsewhere I have called this “patriarchal” succession. By emergence outside the formation, an informal fiduciary-like structure of family leaders arises to manage the family dynamics that pose the greatest risk to the formation (the functional structure that holds family capital). These people are supported by consultants and advisors who help the family function more effectively. This is “matriarchal” succession.

If the fiduciary system works well on both the technical and human sides[1] – the interface between “structure” and “culture” for those who follow this blog – then wealth endures. It takes hard work to ensure that this fiduciary structure remains healthy. It requires knowledgeable oversight on the technical side, and it requires conscious and persistent leadership development on the human side. In short, the proverbial goose is cared for – which requires work and coordination – and the eggs are enjoyed for as long as possible.

This preservation scenario typically has one of two basic outcomes. Often, with poor formal and informal fiduciary practices, there are catastrophic breakdowns of trust and communication – or there is a triumph of self-interest over familial well-being – which results in battles of control for the accumulated capital. This frequently arises where structures to preserve wealth are in place, but no one is prepared to operate these structures properly. As the moral authority of the fiduciary structure within the family system fails, litigation ensues. The capital formation is picked apart. Sometimes factions within the family “win” these battles and gain greater control of the patrimony – they end up with the goose as it were. Frequently, the costs of such battles are so high on both psychic and financial levels, that the patrimony is a casualty of the process – here the goose dies in the crossfire. That said, there are families that resolve their concerns in litigation and use settlements as a dispute resolution technique – here the fight is over the allocation of the eggs, not the control of the goose itself. All are very expensive forms of decision making, but not all that uncommon. Typically, these formations fail in their goal of preserving wealth. Here the family has a stated goal of preservation, but family members are, in reality, playing the first game of “Division” based on the restrictions placed on them by the surrogate.

The other endgame to the preservation path lies in fertility rates of the family members. Ultimately, the law of large numbers will be such that the wealth can no longer meaningfully contribute to the enhancement of the lives of the beneficiaries. Here the goose simply cannot keep up and finally dies of exhaustion. Over time, the wealth, which marginally supplemented a lifestyle of beneficiaries, becomes less and less consequential in their lives. If managed well by the fiduciaries – and if the wealth is used to enhance the human potential of individuals to be self-sufficient – this path typically results in a “soft-landing” for family members who have a chance to acclimate to the gradual diminishment of wealth and their assimilation back into the middle class.

In one family, the wealth supplemented the lifestyle of the second generation (all of whom had a good work ethic but all of whom lived beyond their means because of the income from the family wealth). The third generation was well-educated by the wealth – private schools, university degrees, and post-graduate achievements. In the fourth generation, with over 125 members, the wealth will supplement their education but, given the current realities, will do little more. Ultimately substantial wealth is done in by the law of large numbers. This particular family is a good family that is quietly but persistently being assimilated back into the middle class. They do, however, face an important choice in their current generational transition. They have the possibility of playing a different game and staving off the end for another generation.

Growth: Use the Eggs to Buy More Geese

The last possible endgame we will look at is a bit different – it is one of capital growth. Here the generation in power and the rising generation collectively ask not how the wealth may be preserved, but how it can be grown to keep pace with the needs of the family going forward. Here capital is being redeployed to optimize return within acceptable levels of risk. The family views its financial patrimony not merely as a static pool of capital to be preserved, but as a tool for the generation of sustainable success. Families with this view actively let go of legacy assets in favor of optimizing returns within long-term economic and social trends. To maintain peace, they will often harvest gains and distribute a portion of those gains to family members. The goal is not merely to refrain from killing the goose laying the golden eggs but to use the eggs to buy more geese. Here fiduciary structures are married to entrepreneurial or business savvy. Here fiduciaries function not merely to manage investments and preserve capital but to take calculated risks to grow it. These families become enterprising families with the professional and staff support to manage an array of investments designed not merely to preserve assets but to enhance and add substantial value to the capital formation.

Eventually, the law of large numbers is likely to catch up with even these families – but these families generate formations that sustain themselves for many more generations than the other family strategies. These families typically land softly – their assimilation back into the middle class is a slow and natural process. They also typically experience a lot of value along the way. Their productivity is a source of pride. Their civic engagement is meaningful. They know and enjoy one another more. The competence and capabilities of each rising generation remain relatively high. Many families involved in this game simply say it is more fun (when viewed over time).

Which Game Are You In?

If one looks at each of these scenarios as “games” some interesting observations emerge. For the most part, wealthy families don’t have much clarity on which game they are playing. Founders often don’t know what they want or even what the options are. They design plans that have elements of all three games, and, therefore, are likely to fail because of the weight of their internal inconsistency or contradiction. A great deal of pain and confusion could be avoided simply by the decision to play one game – are we playing a game of Division, Preservation or Growth?  Once that decision is made, steps can be taken to ensure that the family is prepared to play that game well.

In the second generation, most family members are predominately involved in the game of Preservation[2] (because of the nature of the surrogates and the formation that has emerged around it).  This means they are in the midst of urgent tactical concerns. They are managing businesses, or overseeing assets, or working out immediate squabbles and kerfuffles. They have little ability or aptitude for moving beyond these tactical concerns to address matters of grand strategy. Sometimes simply asking themselves what long-game they want to play becomes a useful intervention in its own right. Asking them to think “strategically” seems abstract and foreign. However, when grounded in the notion of a long-game, strategic thinking becomes relevant and even begins to shape how the tactical questions are resolved. Families with a long-game in mind tend to play the short game differently than those who are bouncing from tactical concern to tactical concern.

Of course, there are hybrids of these three games.  The heir whose assets are in trust who is spending them down while the fiduciary struggles to ensure the money will last are playing between Division and Preservation.  If the fiduciary is losing that battle, the game is shaded towards Division.  Some families have elements of Preservation with some aspects Growth.  And so on.  If these are viewed as a continuum, most families will be able to quite accurately put themselves somewhere on the spectrum.  Knowing the game they are in and identifying the game they want to play allows them to gain substantial strategic clarity.

In all generations, but particularly those after the second, the games can be confused and contradictory, giving rise to a host of problems and tangled family dynamics.  To play effectively, those families playing longer games must understand the consequences of these games and play by rules that support the game they are consciously choosing to be in. For example, many families say they are in the game of Growth, but are actually playing a game of Preservation and may even be playing with strong elements of the game of Division. To drill down, excluding in-laws in family decision making is a hallmark of the game of Preservation and is often wholly incompatible with the game of Growth. Preservation is often played with a lack of transparency and desire for control where Growth is played with transparency based on proven responsibility and appropriate sharing of decision making. Division is played by empowering branches. Growth is played by preparing and bringing on rising generation leadership in meaningful ways. One can tell what game the family is playing by the way they are actually playing the game, not in what game they think or say they are playing.

Every generation faces the question – within some intractable legal limits set by the formation – of whether they want to play the game of “Division”, the game of “Preservation” or the game of “Growth”. Each game requires different players, different rules, different skills, different capacities, and different capabilities. Understanding what game the family is playing is a first step. Knowing what game is being played is essential to professionals advising wealthy families. It is also essential to the formal and informal fiduciary structures within the family to know which game is being played. It is critically important to recognize that no game is better or worse than any other game – different families will find different games most appropriate at different times. There is no judgment here.   What is important, however, is clarity. Where families get into trouble is when there is an inability to be clear and honest about what game they are playing. Then mixed messages, poor communication, and fitful leadership degrade trust.

Of course, a great deal of conflict in families can arise over disagreements as to which game is “actually” being played and which “should” be played. Beyond that, the games of Preservation and Growth require the development of robust family cultures that will support the game being played by the family. This development of resilient cultures takes time and effort. Structures alone are insufficient – these are the surrogates without the functionality that formation requires. In our next piece, we will be exploring the arising of empowered family culture within these different games in greater detail.


[1] Of course, the notion of sides here is an oversimplification. The technical and the human are entangled, overlapping and interpenetrating. As an analytic heuristic, it can be useful to tease these apart to gain insight and to provide a way of speaking about the complexity involved. That said, the map shouldn’t be confused with the territory.

[2] By definition a second generation that is having to work together with a formation is playing either Preservation or Growth.

© 2016. Matthew Wesley. All rights reserved.

Problems, Challenges, and Capacity

When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’

’The question is,’ said Alice, ‘whether you can make words mean so many different things.’

’The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all.”

                                                                   Lewis Carroll, Through the Looking Glass

So what is the difference between a “problem” and a “challenge”? I am assuming there is a difference – however subtle – because typically two words don’t mean precisely the same thing. I sometimes find that gaining clarity on words – or even playing with shades of meaning – allows us to see things in new ways.

The dictionary is of some help with a possible distinction between a “problem” and a “challenge”. One definition of a problem is “a question proposed for solution or discussion”. One definition of a challenge is “difficulty in a job or undertaking that is stimulating to one engaged in it”. That may be a good start, but I would like to take these two words and ask them to work a little harder than their dictionary definitions might suggest. I may be stretching semantic form, but it is in service of something that I think is real – and which I think you, dear reader, will recognize as such. Without the distinction, the experience might not otherwise have a solid lexicon and could, therefore, remain largely invisible.

Family leaders almost always come to me with a “problem”. Some of these problems are big, complex issues of intergenerational succession or issues of broken relationships. They may be problems of entitlement or preparing the rising generation to wisely steward wealth. They may be questions around successful business transitions that could impact entire communities. They may be questions of family dynamics associated with giving money away to make the world a better place. These problems are obviously consequential or we wouldn’t be having the conversation.

What these families want is a solution to their problem – they want to fix it. Often quickly. They believe, rightly or wrongly, that I have some expertise to help them resolve the issue. At least they hope that might be the case. Yet the kinds of problems I work with are typically not amenable to “expert” fixes as they imagine they would want – that is the fixes aren’t accessible from within the boundaries of the existing world of the client system.

The Presenting Problem

In psychology, there is an axiomatic principle that when a client walks through the door, the problem they present is not likely the real problem – there is something underneath or behind it. This initial problem is referred to as the “presenting problem”. To work with a client, a therapist must treat the presenting problem with utmost seriousness, gain trust and build the relationship, but eventually the real problem reveals itself and then the true work begins. Sometimes it turns out that the presenting problem is symptomatic of the real problem, sometimes the presenting problem is a test of trust, and sometimes it is simple confusion.

I don’t do therapy with families – I work with their culture, not their psyches – but the presenting problem is very real in this work as well (as it is for many professions). In this process of uncovering what is “really” going on, I have come to see a vast difference between a problem and a challenge. Here is where I am asking the words to carry freight beyond their dictionary definitions. While this may not be a distinction that the bare words can support, I ask you to bear with me a bit as I explain a context for this distinction.

The Distinction Illustrated

One family leader came to me recently with a very specific problem – it had to do with business succession issues, ownership, and competing agendas and interests within the family. The family felt stuck and it wanted to get unstuck. I listened for about a half hour and asked some question to draw him out to get a clearer picture of the problem. It seemed, at this point, that he had gotten out what he wanted to say – and that he had exhausted how he was thinking about the situation. I then asked him, “As a leader in your family, what is your challenge?” He struggled a bit – he knew I had heard him, but the question threw him, so he essentially re-described the situation using slightly different words. I gently said to him, “No, that is your problem. What is the challenge?” He fumbled about for a minute or two and then he asked “What do you see as the challenge?” I told him that I wouldn’t give him an answer right then because I didn’t yet know enough, I wanted to hear more and, besides, I didn’t want to let him off the hook quite so easily. ( I wasn’t being coy here – I truly didn’t yet know enough and I wanted to let him live with the question a bit).

We continued to explore the contours of the problem and dive more deeply into what was going on. I asked hard questions that he had not asked himself, and he proposed possible solutions that I questioned and poked at. He became very, very clear on the dimensions of the problem. He understood its contours and textures far better than when we started. This clarity arose by giving him a place to explore more deeply and by asking some decent questions that began to shift his original “story” of what was happening in his family.

I then said, “Let’s circle back. What is the challenge you are as facing as a family leader?” He reiterated the problem (but with more nuance). This time I said, “That isn’t it.” He tried again. No luck. He then asked me to share with him what I saw that he wasn’t. What I said went something like this: “This problem your family is facing is a difficult problem – based on our deeper exploration, it is pretty clear that it is not something that you can solve given your current state as a family. As we have explored this, it seems that you see that you are truly stuck. I believe that together, we can solve this problem and there are ways to do that. I believe I could help you (by this time I had confidence that this was true.) The problem is that if we simply solve this problem, next year you will face a different problem, and the year after than an even bigger problem and the year after that a more complex problem. Your challenge is not to solve the problem in front of you but to build the capacity of your family to solve any problem that might arise.”   I could see the penny drop.

The Distinction Explained

This is what I see as the difference between a problem and a challenge. A problem can be solved (or not) with the resources you currently have available to you. I have a friend who says that if money can solve a problem and you have the money, it’s not a problem. What he is driving at here is that the solution to many problems is largely a matter of will or focus or discipline or some limiting belief – and the only thing making it a problem is “us”. These problems are relatively simple to solve (at least in theory).

Complex problems, on the other hand, can give rise to what I am calling challenges. With challenges – as I am using that word– we must transcend ourselves. We face a challenge when we are required to adapt – a challenge requires new skills and different capabilities. It requires not just the application of skills we have, but a quantum leap in development. In short, a challenge requires that we build capacity.

I find that these types of challenges in families are almost always cultural – they are embedded in the “software” underlying the behavioral patterns of the family system.

There seem to be some identifiable characteristics that make a problem complex enough to be transmuted into a “challenge”. First, the situation is “chaotic” in a formal sense (cause and effect are far apart, and the current conditions are the result of interdependent and often unseen variables). Second, the problem is personally complex (stakeholders have diverse perspectives, personalities, idiosyncrasies, and interests). Third, it is stubborn (the patterns driving them reflect longstanding habitual behavior). Fourth, it is indeterminate (the future is unpredictable, unfamiliar and uncertain). Often when “problems” have some or all of these characteristics, the solutions to the problems are not at hand. In the simple distinction I am proposing, these characteristics move the issue from being a “problem” to be solved into being a “challenge” to grow.

The Limits of the Rational

The challenge here does not lie within the problem that the family is facing (“solutions” may be obvious, but they are unworkable because of family culture). A rational actor on the outside can simply say, “If only….” and provide a half dozen reasonable options that “should” work but never will because of the particular configuration of the family culture. We chalk up the failure to the idiosyncratic irrationality of the people within the family to exercise what appears from the outside to be common sense.

The issue is that to execute on the “reasonable” solutions requires capacities that the family as a whole has not yet developed. For the family to find its path through the thicket, it must develop the capacity to solve not only the problem right in front of it but the parade of problems that will succeed that presenting problem. The challenge lies not in the problem itself, but rather in the implications of the observation that the problem reveals the gaps in the family’s adaptive capacity. It is a problem precisely because the family lacks the capacity to resolve it. If it were easy to solve (as a problem), they wouldn’t have called me to help.

Building Capacity

Winston Churchill defined history as “one damned thing after another.” For many families, that pretty much describes their experience – though to be fair, this “history” is often punctuated by “blessed” events as well. Churchill’s notion raises the question of whether families have the moral vision to move beyond simply muddling through problems (and cocking them up as often as not) or developing a culture that takes problems in stride and uses them as opportunities to grow, learn and love more deeply.

Contrary to myth, building capacity and shifting family culture for many families is not impossible (and in many cases not even that hard) if you know what you are doing, but it does require keen focus and uncommon wisdom. I also believe for reasons I have expounded elsewhere, it requires outside facilitative help by someone who knows what they are doing. There may be a few rare families that can shift their cultures, but for the most part, creating capacity requires some guidance and the discipline of an educated outside perspective. In my experience, culture shifts can even be rapid – and sustainable – if intervention occurs at the right inflection points using the right techniques and interventions to create leverage and polytrophic cascades.


As I work with family leaders, I find myself asking them more and more often whether they are simply solving problems or using the problems in front of them to build capacity. To some extent solving the problem is itself a capacity building exercise, but unless this is made intentional and becomes explicit, it will be lost quickly as the next “damned thing” crops up. In my experience, families that intentionally build their capacity – and have their vision on building skills to address the problems (and challenges) of the future – are much better equipped for the journey. I have found that the alternative is to be caught in an endless game of whack a mole until everyone is simply too tired and fed up to go on together. There are better alternatives.

Of Games and Culture

We are always in the grip of an idea. | Anonymous

Over the years, some approaches I have stumbled into have had quick results while other strategies evolve slowly. The rapid changes are more fun, more encouraging and even more lasting. They have the feel of someone flipping a switch – people see differently, they act differently and they bump into the furniture less often. Given this, I have been wondering lately what approaches create unusually rapid, sustainable change in family cultures. This seems to be a useful question.

An Emergent Idea

I have recently had a series of experiences that have prompted me to go to the roots to rethink the typical consulting process. In most of these approaches, the theory of change and interventions are founded on notions of liner progression, rationality and cybernetic systems thinking (that is, chains of definable cause and effect in sequential feedback loops). These approaches and the practices follow a progressive series of rather well-worn “steps” and “cycles” where the consultants first gather data, which is then synthesized, then turned into recommendations, which in turn generates family reactions, which engenders a plan that is then implemented. Families tend to find this laborious, slow and repetitive of other consulting experiences.  Given their limitations, these processes can be seen as broken (or at least sub-optimized) forms of consulting.

What began to emerge from this radical re-examination of the typical consulting cycle is a different approach to systems engagement that induces holistic and sustainable transformation and does so quickly and with a reasonable degree of certainty. There are various elements – or technologies – in this emergent approach. Until now, I have not put them together in a cohesive way or looked at the gaps between them that could be intentionally filled to create a more comprehensive approach. To date, I have only known that they work in isolation. They are now falling into place in a larger context and with some modest clarity of how they might fit into a broader, more conscious methodology.

I certainly don’t have all the pieces, but I believe I have put my finger on a number of them. A few of these include silence, mirroring, narrative, principles, moral imagination, covenant, inflection points, reconciliation, morphic cascades, and deep reframing. All of these are non-linear in the sense that they have no ordered sequence. They are more or less useful in kaironic, not chronoic, time (more on this later). These modalities are simply tools on the workbench. I use a number of them frequently and some only occasionally.

One of the more intriguing of these that is emerging and is adumbrated in earlier work, seems to be a core metaphor for family engagement. This emergent lens has to do with the use of “games” within family systems. I am leery of this term because it could imply a kind of trivialization or generate fields of judgement or denigration. I am looking for a better word or metaphor. But for our purposes here, I will provisionally adopt it. Beyond the dangers of the term, what is useful about the word “game” is that it quickly and accurately describes a complex reality that we all know. With this caveat, we will look at the theoretical grounding of this emergent perspective, keeping in mind that, just because it is theoretical, doesn’t mean it won’t be immediately practical. After all the “theory” of gravity has proven quite useful on an almost daily basis.

Types of Games

For our purposes, there are three types of games to distinguish here: finite games, meta-games and infinite games. Each of these types of games has its own characteristics and each is played out (by analogy) in family systems. One way to view a key aspect of family culture is to consider it to be a series of games played within interlocking games in a context of even larger games.

Finite Games

To begin, let’s look at finite games. Finite games are played within boundaries of time. There is a point at which he game “ends”. Finite games require that “players” take on roles. These roles are based on social contracts that cover the rules of the game and determine the game’s purpose and outcomes. In finite games, there is typically a “winner” (though in some finite games, everyone wins).

Roles in finite games are interesting. James Carse notes that in finite games, any person playing the game must assume a role and must commit to that role. He or she must play that role convincingly and others must believe in the performance for the game to work. For example, those playing “Classroom” must believe the teacher to be the teacher for the game to continue. If enough people doubt, the game crashes. To the extent the person is enacting a role, that person is “veiled” – he or she is bringing only a partial or abstracted self to the game – and it is through that veil that the person is interacting within the game.

In this sense, the finite game is always performed or enacted. In playing a role, the person must chose to forget or effectively bracket his or her deeper identity. The role of, say, “father” is different than the whole person – the person is more than just “father” – but to play the role well requires a kind buy-in “as if” the role and the person are one and the same. The player must sell that role and the rest of the players must be complicit in supporting that role. If some players no longer buy into their role or the roles of the other players, they must either adapt the game, leave the field of play or cause the game to stop. To this extent, finite games are “serious” and for the game to work, it must be taken seriously by the players.

If a player comes to fully identify with his or her role when the game comes to an end, that person is undone. They have subsumed their true identity in their role. By way of example, in family work, this failure to abandon roles can show up in “Entitlement” where parents and children have over identified in roles as “providing parent” and “dependent child”.

This all means that finite games are “dramatic” – they have an arc that keeps us wondering not about the nature of the ultimate outcome, but about the tension created by the progression of events within the boundaries of the field of play. This drama provokes a kind of anxiety or tension. “Close” or dramatic games where we have suspended our disbelief put us on the edge of our seats.

Beyond roles and drama, finite games include notions of mastery. Carse suggests, that people can become masters of the finite game they are playing. Becoming a master requires recognition by the other players and any relevant audience that a person has come to have achieved mastery. In this sense, mastery involves the minimization of surprise and novelty – the point of mastery is to control the field of play, contain risk, minimize the possibility of surprise and, to some degree, control the roles of the other players.

A Finite game is also repetitive in nature in each game or round follows the same general script. While there is infinite variation within a finite game in the way the play unfolds, the outcome is largely known in a broad sense. For example, in competitive games, the suspense is not that there will be a winner, but who that winner will be.

This brings us to the notion that finite games are most often premised on notions of scarcity and competition. Consequently, they are driven by aversion and desire. Controlling outcomes becomes critical and the way outcomes are achieved is by following rules – there is an ethics in playing finite games. Cheaters are not thought well of, though the stakes of the game may drive people to cheat. In all of this, to play finite games is to put oneself at egoic risk – a failure of role bruises pride. If one has come to over-identify with the role, then finite games have the potential to pose existential risk as well. Who am I without my role in my game?

Infinite Games

In contrast, there are also infinite games. These are games that are played on a much broader canvass over long periods of time. They may span many lifetimes or they may take up central space in a single lifetime. Here the goal is not for the game to end, but for play to continue. The point of the game is the game itself. In this sense the infinite game is not so much dramatic as it is “heroic” – it appreciates journey not arrival. (Arrival itself is impossible by the nature of the game.) Infinite games are deeply human endeavors – involving the whole person and calling forth the best in individual players and in others.

Because the entire point of the infinite game is to keep the game alive, what rules exist serve that end. Rules do not determine a pre-ordained outcome. In this sense infinite games are open systems designed and evolving to perpetuate play. In this broader scope, infinite games are more about horizons than boundaries. No matter how much progress is made in the infinite game, the horizon shifts. Players in finite games play in boundaries, players in infinite games play with boundaries.

Infinite games tend to be best played in non-linear time – they are played in moments of significance and in states of flow. Time becomes elastic with an experiential blurring of demarcations of past, present and future. When played fully, infinite games serve to experientially confuse categories and blend polarities such as immanence and transcendence, good and bad, power and love. We discover in infinite play that our mental maps of the world are not equal to our experience of the world as it is and that we are playing in games above our mental constructs. When an infinite game is well played, opposites begin to blend together with harmonic resonance.

The motif of infinite games is not “mastery”, but apprenticeship. The goal is not knowledge or skill but wisdom, facility and adaptation. Pablo Casals who, at 93, was asked why he still practiced daily after his profoundly successful career replied “I am beginning to see some progress.” This was a player who had mastered his craft but was apprenticed to a much larger game.

The only cheating that occurs in an infinite game is cheating or deluding oneself and play is ultimately in service of something larger than the self, but that larger something gives back to the self both meaning and significance. Infinite games are full of surprise and the outcome is impossible to know – and in this sense they put the players at risk – not that they may fail themselves or others, but that they may fail to wholeheartedly play the infinite game. In this sense, infinite games are not driven by ethics, but by moral imagination.

Infinite players also take on roles, but they take on those roles with a very clear understanding that they and everyone else in the game is not the role they are playing. There is a recognition that the game is an abstraction of reality, not to be confused with the whole of reality itself. Thus being human and how one “occupies space” becomes important. Infinite players recognize that descent into taking the roles too seriously – to treat the abstracted game as reality – will kill infinite play and force the determination of winners and losers. For that reason, they are able not to take the game too seriously. They play with abandon, but because the game will continue, they, in a sense, play with their own sense of play. They are both in the game and outside the game at the same time.

A Word about Time

Because finite games are played in boundaries of time and infinite games are played within horizons, the sense of time within these games is different. The ancient Greeks had two words for time –chronos and kairos. Chronos is linear time – it is measured by clocks and it consists of time where attention is focused on one thing following another. In chronos, there is a clear beginning, middle and end. Kairos is about significance. It is about the in-breaking of moments of time that we experience as extraordinary or luminous or meaningful. It is not so much about progression as it is about the ordering of things and the sense that is made of events. Apart from those with hyperthymesia, no one remembers every event of their lives – what we remember are salient events that have personal significance for us. That memory reflects kairos. Most of chronos is actually lost to our conscious selves.

Infinite games reflect the meaning that is created in kairos. As such there is a fluidity of past, present and future (not “objectively”, but in the way we experience time). In this sense chronos is ultimately about endings, time periods marked by events, and is thus filled with a sense of mortality (thanatos). Kairos tends to be about openings in time and is filled with a sense of possibility, sustainability and perpetuity (eros). Again these are not set against each other, for indeed Kairos is wholly dependent on chronological time to hold it and Chronos is purely mechanical – and bereft of living meaning – if there is no Kairos.

Playing infinite games

In his book, Carse writes as though finite games are bad and infinite games are good. This seems unnecessarily reductionist to me. Indeed, after giving it some thought, I cannot think of any infinite game that is not played through finite games. For example, “Learning” can be seen as an infinite game – it is a deeply human endeavor that has no boundaries played out in kaironic time. Yet learning occurs only in the abstracted experiences of finite “games”. We build skills and capacities in these finite games that are potentially open and which can build greater capacity to play the game of “Learning”. We play a finite game of “School” with the roles of teachers, student, administrators, parents, and so on. We participate in “Books” with roles of authors, readers, booksellers, publishers, and so on. We learn by joining with others in conversation and action in “Projects” or “Associations” or “Friendships” or “Family” with all the various roles implied and developed in these games. There is thus no Learning without engaging in specific behaviors and activities that have all of the hallmarks of finite games.

The question as to what form of game we are playing (finite or infinite) is answered by the point of view of our participation in the finite game. (In this sense we are always in the grip of an idea – which comes from the Greek word meaning “to see” – we are always coming from a particular vantage point or perspective.) If the game is seen as a finite game, it will be played one way – I will want to achieve an A in the class and thereby “win” at the game of “School”. If it is seen from an infinite frame, then the goal is different – it is about “Learning”. “Winning” in this larger game is measured by wholehearted participation and pushing of boundaries. I may still want to attain an A but only because it is an external validation of my growth and devotion to “Learning”. This makes learning a hero’s journey and one infused with moral imagination. The audience in this sense is myself and the authorship of my own experience arises in the context of self-development in community. Indeed, I may not care about the grade if I believe the infinite game has been well played. After all, the professor who graded Frederik Smith’s paper with a C didn’t dissuade him from playing the larger game of actually creating Fed Ex – which, quite dramatically, “changed the game” in its field of endeavor.

In my estimation, we actually cannot play infinite games as infinite games – we must play finite games as though they were infinite and we must, at times, be serious about finite games. Likewise finite games are richer, more fluid and a lot more fun when they are approached as infinite games. As infinite games infuse finite games, finite games gain meaning, and elevate the human spirit. They engender creativity, innovation and joy. Becoming more skilled and capable at finite games allows for greater enjoyment of infinite play. Yet we are playing not to “win” but simply to perpetuate play.


Carse has much to say about choice and freedom in games and there is a great deal of attention that could be given to this aspect in both finite and infinite games. I find that I don’t agree with a great deal of what he has to say (this is one of those few times when I read a book that has something quite useful to be gleaned, but actually wouldn’t recommend it to others). With that caveat, I am willing to say that, to be effective, games require participants who have chosen to play a particular game. Carse would go so far as to say that all participants are willing to play (at some level). To me this comes dangerously close to making players in some games of oppression responsible for their own victimhood. That said, there is a sense that in less coercive games there are people who might be considered players who opt out – whether that choice is physical or psychic withdrawal. To the extent, as a player, I am not committed to the game and making effort, I am either resigned to losing a finite game or I simply choose not to play in that particular infinite game.

Games and Family Culture

So what does any of this have to do with families? For some this may be self-evident. Those of us working with families often see our clients locked in finite “games” that produce very real suffering. Indeed, one lens for thinking about family culture is to consider it as a complex fabric of finite games. This notion of a matrix of games raises the concept of yet a third form of “games” not explored in the literature – namely meta-games. A Meta-game would be system of interlocking finite games that come to comprise its own game. These interlocking finite games create substantial complexity. Every person has multiple roles and each of these roles can be seen as being a “player” in a different game system. How these roles interact in us and then in our families adds complexity to any particular “game” we might be observing. Being a parent, a friend and a breadwinner might cause us to be playing games of “Parenthood”, “Work”, “Friendship” and “Work-Life Balance” all at the same time. In this case, “Work-Life Balance” is what I might call the meta-game. Each game affects the others and the meta-game hovers over the swirling mix adding its own complexity.

In my experience most suffering in families (and individuals) arises from stuckness in the patterns of engagement and interaction. Without minimizing the pain of this stuckness, these patterns might be treated “as if” they were finite “games”. This again is not to trivialize what is happening – the suffering is real and there is an intense seriousness in the way this is working out. This is not a playful thing – and it has very real human consequences. Nor do I want to over-simplify what are very complex problems. The patterns internally, externally, interpersonally and structurally can be daunting and almost impossible to tease apart. This is particularly true when it comes to family culture – the entire notion of family culture itself is amorphous and difficult to describe. This complexity and ambiguity can give rise to tremendous amounts of anxiety, reactivity and drama within family systems.

With all of these caveats, as a lens to tease apart complexity, the notion of “game” is a clean metaphor that allows us to gain useful handles around what is going on. In that sense, it provides a rubric. Again, we do not believe the complex reality is in fact a game, but look at it “as if” it was a game to help us gain some critical insights. Most often the greatest amount of suffering is generated by the ways in which the family is playing what we would see, and they would recognize if it was called out, as having analogous characteristics to a finite game as we have described it.

Alleviating Suffering

When families come to me, there is most often a problem to be solved. Treating the problem “as if” it was a game simplifies the problem and makes its complex component parts visible to the family itself. This allows distance and safety to step back and look at how the family is actually enacting certain patterns of behavior based on persistent attitudes and beliefs that are generating results that increase human suffering in the family system. Treating these patterns “as though” they were a finite “game” – with roles, scripts, defined outcomes, boundaries, and so on – allows the family to make its own complexity visible to itself. It makes their culture an “object” they can examine and thereby allows them a degree of “objectivity”. For example, a “game” of “Succession” in a family is socially fabricated by the family through roles, scripts, patterns of behavior, objectives and so on. Once the family can have a conversation about how it is actually enacting that experience and make sense of it through the metaphor of “game”, and they have thoroughly dissected the implicit and perhaps explicit structures of that “game” of Succession, they are in a position to be empowered to make different choices.

Once the “game” has been thoroughly assessed, meaningful conversations can be had about choosing to play a different game or play the same game differently. To play this new game inevitably requires shifts in roles, rules, scripts, definitions of outcomes, boundaries and so on. This means that complex changes no longer need to be linear – they may be played out on multiple levels in non-sequential fashion. This also allows for imperfection. The shift of game takes on the experimental nature of infinite play and learning occurs until the new game becomes settled. Because this is reframed as a game, people can be invited to be more tolerant and forgiving of themselves and others. The stakes go down in one sense, but the existential satisfaction goes up. This all becomes a lever for more rapid change that occurs on additional levels and results in recursive positive reinforcement in a morphic cascade.

The trick in all of this, of course, is in how the old game is made visible to the family so that they can see it themselves and then in the design, prototyping and development of new games that allow families to gain more skills, see new horizons and begin to play with each other with the flavor of the bigger and perhaps even infinite game. This process (with its mix of other high impact strategies described earlier) becomes the secret sauce of shifting family culture. Gamification alone will not get you there, but it is an important piece. Families that learn to see their own games and redesign them, can change the game. Those who are stuck in finite games will typically flail their way to the end of the finite game and miss the opportunity to play the longer game.

For Phil Cubeta and Anyone Inclined to Eavesdrop

Phil Cubeta, a man I have long admired for his wit and wisdom, wrote on his brilliant blog, Gifthub, a kind endorsement of my occasional musings. I am grateful for his accolades. But Phil, being Phil, also asked Difficult Questions. And I am as grateful for these pricks of perspicuity as I am for the praise that preens pride. I immediately felt his provocative Questions worthy of a considered response. This blog will be an inside baseball sort of thing. If you are in the wealth management industry and you care about its future, or you are concerned about the market forces driving the provision of the services of preparation for wealthy families, my idiosyncratic musings might be useful or at least thought provoking. If not, feel free to skip this one and we will soon return to our regular programming.

The Dark Side of Human Nature

Phil, as a man of the world, is keenly aware of the dismal side of human nature. Of all of those in our profession, he is perhaps the most publically dour. He has the courage to say out loud what others privately think. He thoughtfully warned me against joining him in his Dumpster. I am unwilling to heed that advice for a number of reasons.

One of the first pieces I read by Phil (and one that has had a wonderfully subversive impact on my thinking ever since) had to do with the values cards that many consultants use to help “align” families (as if that was even possible). He asks, “Given, though, that values are most often honored in the breach and that most human behavior is determined by delusion, obsession, bad habits, foibles, eccentricities, temptations, besetting sins, moral cowardice, vanity, and addiction, it seems the values exercises are incomplete. Why not give clients vice cards and ask them to sort by their own besetting sins?” This is the Joker in the deck – the enduring march of the folly of our frail human condition. It speaks to what Jay Hughes has pointed to: that failure is not only normative but overwhelmingly probable. The reasons for this, as Phil points out, are often rooted in the darker realities of human nature. The success rate is dismal. This is something advisors will not speak aloud.

In his response to my recent post on preparation, Phil said: “I would ask [Matt] would the Holy Spirit herself with the wonder-working powers of God Almighty fix [the folly and callowness of wealth]? Would the spirit create a new business model so Matt and others in this work could get paid more? Or, would it move us as advisors to follow the priests and nuns in taking vows of poverty?”

Phil rightfully embeds this smaller question in much broader concerns of the morality of wealth in society, which raises questions of the moral virtues and efficacy of serving the wealthy. “A body politic cannot thrive when any part is sick unto death. What is needed for a healthy society with rich people successful within it, and many non-rich people doing ok too, is for the whole to thrive. That healthy body politic cannot be created or fostered by advisors operating at $500 an hour, or .5 in basis points, or on a project fee or on a retainer to help a very few, very privileged, families flourish. It is not that there is no business model. The problem is that we think a business model is the answer.”

These are Big Questions that few dare ask aloud and fewer still address with compassion, insight and deep wisdom. In recounting Phil’s point of view, I hope that I have done him and the context justice. I will allow Phil to respond as he sees fit as to the adequacy of my summation.

The Broader Sweep of Time

Permit me to begin a dialogical response by stating the obvious: we exist in broad sweeps of time. The concentration of wealth is a rather temporary problem in one sense. It is almost certain that the wealthiest among us will not stay that way for long. Wealth dissipates. The greatest fortunes today are likely to be vapor in a scant 100 years. For example, relatively little inherited wealth shows up in the Fortune 400. Even there it is almost all “new” money and what “old” money is in that vaunted list is almost all less than a century old. Indeed, I have come to suspect that old money distains new money precisely because it knows it won’t last and that new money is uneasy in this distain because it realizes that old money knows key secrets it does not begin to understand. For old money, it is a matter of waiting a few generations to see if the pretenders have the grit to hang onto it. In this rarified world, making money is the easy part. Sustaining it requires an entirely different order of skill undreamed of and opaque to new wealth. This again speaks to Jay’s point – intergenerational success is very rare.

As for Phil’s recognition that sickness often lies close to the heart of wealth, I don’t disagree. In Power: Why Some People Have It and Others Don’t, Stanford business school professor Jeffrey Pfeffer describes why nasty people do well. He tells us what we already knew; great fortunes are not necessarily made by nice people – in fact, it is quite the opposite.   Massive fortunes are often built on autistic, monomaniacal and even psychopathic frameworks and personalities. All of the gauzy leadership tropes that comprise the pablum of the management sections in bookstores espousing the kinder and gentler forms of leadership are sadly misaligned with what actually works in the realpolitik of wealth creation and the sharp elbows of markets. Nice guys may not finish last, but they almost never finish first either.

In my experience truly astronomic wealth is often this way – and, in my small sample set, more often it is autistic (that is reflecting a stunning lack of emotional intelligence) than psychopathic (that is built on intentional and immoral ruthlessness)[1]. (Those with psychopathic tendencies rarely reach out to people like me whereas, when it comes to their family, the emotionally clueless often see the need for help.)

That said, most of my clients are neither “autistic” or “psychopathic”. My clients have been highly successful by ordinary standards. They have usually stumbled into substantial, but not stratospheric, wealth. For the most part, and with exceptions, they are in the one percent, but not the .01%. Many of these folks are decent people and what helps to make my work successful is the fact that they can truly imagine that the fruits of their life’s work could realistically evaporate without a trace within a generation or two and do great damage along the way – and they actually care about both of those possibilities. They have enough to create real concern, but not so much as to create complacency.

It seems, for the good of the social order, the corruption that often lies at the heart of great fortunes plants the seeds for its inevitable dissipation. And, I suppose equally fortunate, there is little that I or anyone can do to protect such venal wealth even if we wanted to. The great crimes that can lie at the heart of great fortunes are as wormwood. I cannot fix terminally damaged families and undo the effects of deeply neurotic or psychopathic parenting. The best that can be done, in most cases, is palliative work. (Interestingly, estate plans that are expected to act in loco parentis fare even worse.) When venality is at the heart of wealth, children are most often damaged in the process to the point that their capacity or capability to sustain their good fortune, or even find much real happiness, is out of reach. Again, failure is far more likely than not. This is not to say that the wealthy will not always be with us, but it is to say that, given a time horizon of a few generations, the plutocracy looks like a time-lapsed game of musical chairs. In this sense the great influence of personal wealth – while it can do real damage or palpable good in the short term – is historically fleeting.

Beyond these smaller cycles, the questions of larger historical good hold broader sway. Phil raises the question of the health of the commonwealth. With respect to the grand sweep of history, it seems that when wealth has become overly concentrated, revolutions of various sorts follow. It may be as simple and non-violent as populist uprisings and legislative adjustments to economic and tax policy aimed at correcting income and wealth distribution. It may also come in the form of the violent overthrow of unjust and oppressive regimes. Dramatic imbalance can even portend the downfall of nations and civilizations. The patricians of ancient Rome realized that they existed at the pleasure of the Mob. Just as it ever was, is now and likely will be. As Jay Hughes so rightly points out, no society long tolerates a perpetual leisure class. The Romans understood this and the wealthy funded the state because of it. The British understood it and based their empire on noblesse oblige. The French, ultimately, did not, understand it, and the royals lost their heads. The jury is still out in our brash, unseasoned city on a hill. As our societal focus remains on quantitative aspects of wealth as opposed to the qualitative aspects, the prospects dim.

Turning back to families, what turns out to be the case, at least in my experience, is that without moral imagination – without a view that first, wealth is more than money and, second, that financial wealth must serve something larger than the self by providing some value to society, financial wealth simply vanishes. It seems that the internal dynamics of wealth see to that. Venality slouches toward dissipation. In these cases, baser human nature impoverishes what it touches at all levels – as it has always been.

In the end, great fortunes are, with the greatest of ironies, most often redistributed not by governments or tax policy but by the folly of the wealthy who lack the imagination, the wit and the wisdom to retain it. That the wealthy fixate on taxation is itself a symptom of their misdirected attention and a dry rot at the heart of their thinking about money and wealth. There are much bigger fish to fry than the taxman – namely the forces of renewal in their own house.

The Other Side of Wealth

Not all wealth, of course, is venal. There is another kind of financial wealth and I most enjoy working with these families. In one such family, four second generation siblings declared in a family meeting that they had more than enough and wondered why they would want to become even wealthier. In their mind, they have more than they or their children could reasonably spend. In this case, the family holds substantial amounts of real estate in a city of moderate size. In our conversations, they realized that they could realistically use their wealth to revitalize entire swaths of their city by viewing real estate investment as a social intervention designed to create thriving neighborhoods. This would not be a charitable endeavor – they would generate healthy business revenue to fund expanded impact and make more big investments – but they were thinking seriously about how to make money for a greater purpose than their own hoarding or consumption. The jury is out as to whether they will do this or it is simply too much for them to take on; but if they do move forward, it will be this act of moral imagination that will move them towards becoming stewards of their wealth for greater social good. In this, they would provide value. That said, they may, in the end, choose a more modest path. The work of choosing to join together with uncertain outcomes is hard work is not easy.

On a less quixotic level, but one at least as meaningful, a family with a manufacturing business has transitioned that business to the next generation. The transition was fraught with complexity, and they did this in part to sustain the family wealth for the benefit of family members — but they are also keenly aware that the company employs and therefore supports many families. They are continually mindful of the impact of their business and how it is woven into the fabric of their community. They are rightly proud of the fact that their enterprise is founded on this contribution. This family provides well-paid jobs which in turn serves up untold opportunities for employees, their spouses and their children to live good, honest lives. They see how these good things ripple out to all of the stakeholders associated with their business. Again, this is hard work, but they have thrown their lots together based on a combination of habit, love, vision and a commitment to children and grandchildren.

These are just two of many stories I could tell.

The Market Forces.

Beyond this social and historic commentary, it is worth talking about markets of service to families for a moment. Phil notes, “That advisors are paid to do legal docs, fund and manage investments, reduce taxes, sell insurance, manage trust structures, and litigate the messes made by their peers. All of which nets out in many cases to human misery, given (what Kant termed) the crooked timber of humanity from which nothing straight can ever be made. The heirs just can’t implement the plans or manage themselves, and all is for naught, for very human reasons. And no business model supports fixing this at scale.” I couldn’t agree more. Indeed, it is this point that serves as the beating heart of my last two posts about the need for shifting family culture through the work of preparation.

My work to shift family culture is not to fix dismal outcomes in every case. Where venality will dissipate, there is little that I or anyone else can do. But where there is sufficient virtue for wealth to create value beyond its own consumption, there is real hope. It doesn’t take much to generate traction– often there are only gestures and impulses – but these are often enough. It is here that I am willing and eager to serve. Fortunately, a few others (both clients and advisors) are seeing the world in the same way.

With all respect to Phil, the business model for this work is, in many ways, irrelevant. As near as I can tell, the industry I am in is riding the upside trajectory of an innovation curve. There were intrepid pioneers who did the heavy lifting. They created scaffolding, pieced together a set of heuristics and explored markets of those willing to test and experiment. Their work has been noticed and is gaining traction at accelerated rates. Early adopters are now creating a version 2.0 on both the supply and demand side of the market. In this mix, there is a nascent profession emerging. I and a few colleagues are part of this second wave. I would imagine it will remain small for a time — for after all venality and its consequent desolation in the lives of offspring is rampant and the number of families with the grit to sustain wealth are rare. But there is a gradual awakening, and I expect that there will be a steady expansion of this trend. The first wave to be served were the uber wealthy. That is trickling down to the wealthy in this second wave. As the dynamics are better understood, scale, of a sort, will be achievable in yet another iteration. If real value is created, a market will support it.

There are many reasons for this modest optimism of which a few are most salient. On the supply side, financial and legal firms simply cannot meaningfully differentiate and so must find new value propositions if they are to remain relevant. Otherwise, they risk becoming mere peddlers of low-cost commodities where price wins every time. There is a downward pressure on fees and old models of assets under management are rapidly dying. Those who cannot figure out how to add substantial value beyond mere portfolio management and financial planning will fade away in favor of robo-trading.

A few firms that can read this graffiti are beginning to scramble to differentiate. Some are doing so by claiming to work with families. Most of these are just slapping on a website with nothing of substance behind it. They believe they can fake it or fake it until they make it. This vacuous carnival barking is driven in part by industry studies that show clients are increasingly asking for help with family governance. These firms have no credible way to deliver on the complexity of their newly minted brand promises. Beyond that, their advisors are totally unequipped and terrified of even broaching the subject with their clients. Breakpoints are legion. From where I sit, putting lipstick on pigs seems a dangerous marketing strategy. But then again, what do I know?

Other firms are muddling through with fuzzy ideas what they are doing – throwing stuff against the wall to see if it sticks. Some are sincere and learning on the job. These few firms have the commitment of C-suite leadership or have dedicated budgets to support the work the brand promises. A select few are experimenting well and most, while well-meaning, are spending lots of money and failing miserably both in the development of business models and the work they do with families. This experimentation creates a robust market for people like me as these firms come to realize the difficulty of what they have promised to deliver and find they cannot do so at the depth their families need and expect. (This all gets to the problem of business models — not in my industry –but in the services of financial management, law and accounting. In my experience, managing money at a profit and engaging in protracted deep culture change in families cannot live comfortably under the same roof beyond a certain critical but relatively modest point.)

I make half of my decent living helping these sincere but baffled firms out of this branding quagmire by consulting to help them build offerings and go-to-market strategies they can develop, describe and deliver with strategic credibility. I make the other half helping client families when the firms and other advisors have reached the end of their rather short tether. I need no sophisticated business model to pick this low hanging fruit. I simply need to understand the dynamics in play and have something of value to offer that helps. Interestingly, it is only a select few in my industry who have truly figured out the codes to effectiveness on either side of the equation.

To add fuel to this supply side force for acceleration of the innovation curve, there is the demand side, the great glut of Baby Boomers (of which I am an ambivalent member) will change the process of succession in the same way they have changed everything else. It is already happening. In their perpetual adolescent rebellion against the ways of their parents, the Boomers will demand more collaborative engagement with their Millennial children in the process of planning (and their Millennial children will expect it as well). These Boomer families will find that working together is easier said than done. This will drive them from mere planning to the more profound work of preparation – at least for some. Despite the talk of philanthropic disinheritance, there is very little of it going on. If inheritances will be a positive force in the lives of the rising generation, they will need to be prepared. While still an estate planning attorney in the early stages of doing intergenerational work, I remember asking a client couple a question that has continued to be core to the work I do today. Tim and Susan had about $80 million and they wondered how much they should leave their children, who at the time were 8, 10 and 13. When Tim asked the question, I looked at him, and in a moment of boldness and I like to think clarity, asked, “Why wouldn’t you want to raise children who could [wisely] handle all of it?” They began a journey with their children of doing just that. This still seems like a half-way decent question. In the right hands, with a family that is well prepared, the financial wealth will drive family businesses that enrich communities, and can provide nimble and progressive ways to make the world a better place through investment in non-profits, establishing social impact enterprises and deploying capital in socially responsible investments. And there are as yet undreamed of opportunities for good.

A Word about Business Models

As for the business model of those of us in this space of working with families untainted by the provision of other legal or financial services, I am touched that Phil wants to see me well-paid. He needn’t worry (though everything is always fragile, and I do not take my good fortune for granted). I will say that I paid dues and for a time sojourned with the nuns and priests in their vows of poverty (or at least scant income) for a few years. I have seen this pattern of famine before plenty repeated with others; it seems the market often tests the mettle of those who would serve in this capacity – as, ideally, it should. I have come to see this tempering as a necessary crucible of learning and character. Phil speaks of “the frauds, humbugs, bunko artists, or panders and charlatans” in this profession. I don’t disagree. If these people are not serving two masters (in the form of dual careers where one pays the bills and the other is an avocation), these pretenders are not paid well and eventually many of them leave for greener pastures. Dare I say good riddance?

More troubling is when incompetence is subsidized by firms seeking a marketing edge. It boggles my mind to see families cavalierly trust their bankers and investment advisors to do work they are wholly unqualified to do by years of study and training, or even capacity or capability. These advisors are seeking entrée into the most intimate aspects of the lives of their clients (with possible mixed motives of seeking to gain more assets under management) and, in some cases, clients open their emotional kimonos. Stunning. And a mistake of new money that will take any ship in the storm. Beyond that, the potential for doing damage is great. Of these advisors who go where angels fear to tread, some are well meaning but naïve, and some are rank opportunists. Those who are well-meaning are ill-equipped. I hold degrees in ministry and law and have apprentied to this work for at least 35 years as a minister, lawyer and consultant. I read voraciously in fields as diverse as biology, peacemaking, group dynamics, design thinking, family therapy, linguistics, organizational development and so on. I have read north or south of a thousand books related and unrelated to this field and seek to deeply integrate what I am learning at every turn. I think about this constantly. And I put what I learn into my work with families in very practical ways that seem to make a real difference. In the end, I can relate to Pablo Casals who, at 93, when asked why he still practiced daily after his profoundly successful career replied “I am beginning to see some progress.” This work is not for the faint of heart.

This is not to castigate all who are doing this work from within firms. I have dear friends who do so and I am forever grateful and respectful of those individuals and firms that know their limits and do their homework with rigor and a keen strategic eye. I laud their work and cheer them. But there are many who are doing real damage and only a select few who have humbled themselves, making the personal and institutional commitment to spend the time and money required to gain competence.

To work with a family ought to be held as a sacred trust. The power to do serious damage is real. Families are right to be cautious in who they retain. Hiring a consultant will be inevitably disruptive. That reality should be taken seriously. A few are paid well by professional standards – but there are not many of us. Most don’t make it and many struggle. That will change a bit as the market shifts. In response to Phil, what concerns me more than business models that support a livelihood in the work of preparation is the sorting out of who is qualified and who is not. The market will do some of this as it has been doing and it will certainly sort it out over time, but this is a slow and uncertain process. Beyond that testing by ordeal, mere training is insufficient. Knowledge can be certified, art cannot. The skills and intelligence required to deliver value at the requisite level is far more art than science. It requires what Dean Fowler has called interdisciplinary fluency. This fluency is rare and hard won by study and a long apprenticeship. Other required capacities are rarer still.

As we close, vice, as Phil suggests, is always present and human nature is more than a little rough around the edges – after all we live with neurosis and selfishness at every turn. For those families who don’t prepare, their vices will eventually ensure their deportation from the land of wealth and almost certainly that deportation will bring greater misery on the outbound journey than necessary. For those families who do prepare, I find that there is often enough virtue to make my work with them worthwhile. In these families, suffering does wane and they begin to flourish. And as they flourish, the world is made an ever so slightly better place by small measures. In the end, it is a game of inches, and ultimate winners of that game are truly known only on the scale of generations. The health of any society is a close run thing, and it always teeters. All we can do is what we can do and hope that the efforts of others for good will come to congeal for the common improvement of all.

So Phil, thank you for your Wise Questions. My answers are partial and perhaps not terribly satisfying, but they are honest. In the end, it seems, Grace is at work in all of this as is Mystery.

[1] I am using neither of these terms in the clinical sense. I speak her of personality tendencies, not diagnoses.

The Autopoiesis of Preparation

My last post suggested that preparation has a substantial impact on succession. To recap, the central notion was that advisors spend a great deal of time with their clients planning for succession, but not nearly as much in preparing them. I suggested that families are increasingly seeing this gap and are looking to close it. They aren’t finding many who can help them. Part of this is because the market has not caught up with the need; there is no developed profession specifically charged with preparing families. Planning can be monetized in the sale of product and services. In contrast, preparation has no industry that supports it. As a result families are left on their own with a few advisors whose business models and core skill sets are fully focused on preparing the family for key transitions.

The post presupposed that the nature of preparation is clear. Some people who responded spoke about preparation but clearly remained focused on planning (as though they were the same thing – they are not.) Some responded with ideas of “education” and others seemed to talk about the preparation of the parents but didn’t address the preparation of the rising generation. Others seemed to understand that the preparation lies in the development of capacities and capabilities of the rising generation. With this much confusion about what preparation looks like, I thought it worthwhile to focus on how successful families prepare.

In this piece, we will be taking a deeper look at how families practically prepare for transition. To a certain extent this work is autopoietic (it self-reinforcing and self-generating). The word autopoiesis appeared for the first time in the international literature in 1972, in an article published by two groundbreaking Chilean biologists, Francisco Varela and Humberto Maturana, in which they suggested that living beings and ecosystems may be seen as systems that continually produce themselves. Thus, it can be said that an autopoietic system is at the same time the producer and the product – its processes constitute its identity. This  self-renewing dynamic is very much in play in families that prepare well. Autopoiesis goes to the heart of a critical distinction between planning and preparation.  Often planning is episodic, linear and set.   It is valuable for those reasons – it provides  as sense of direction in a chaotic world.  In contrast, preparation can be see continuous, self-reinforcing, recursive and adaptive. It is what allows living systems to survive in a chaotic world. Planning is often exogenous to the system (it is a conceptual map of what will be done to shape the system).  Preparation, by contrast, is often endogenous – it is something that is happening within the system.

I have had the good fortune of working with a number of families that have become well-prepared. From colleagues, I also know of many others. These families differ in many ways but also have some things in common. Successful families tend to demonstrate the following commitments:

  • First, they are committed to cohering as a family.
  • Second, they view their financial wealth through eyes of stewardship.
  • Third, they become a learning community.

These might be seen as the three golden principles of successful transition. Yet beneath each of these is a structure of commitments and practices necessary to create and sustain the outcomes reflected in these principles of success. Let’s take each in turn.

Cohering as a Family

As my dear friend Joe Paul suggests, it is axiomatic that in family succession, trust is more important than love. For a family to cohere, they must come to trust each other. Trust in family systems is as elusive as it is complex. I find that the most enduring forms of trust rest first in a common commitment to core moral purpose. I trust those whose motives I understand. If I truly believe you and I are headed in the same direction and committed to the same general outcomes, then I will be more likely to trust that your agenda and mine, while not identical, are close enough to allow us to trust one another. I have written about this in other places – it is what I refer to as enacting moral imagination. Moral imagination can be seen as existing where personal presence meets values meets purpose meets service to something beyond the self. This goes well beyond what most people talk about in terms of “mission” or “vision”. One way to develop this sense of moral imagination as a family is to generate dialog that allows a common dream to emerge – to create a story of the future that meets people’s individual and collective needs. If this preparatory work is done well, it will generate a sense of common purpose that binds the family together and will be expressed in their wanting to spend time together in community. Yet this collective sense is not enough.

Trust also requires that each individual be sufficiently autonomous to be authentic. Families that cohere are candid with one another. This is not a cruel candor, but one borne by sincere self-disclosure without fear and the ability to give honest feedback in environments that foster honest engagement. These skills are learned over time. Families that cannot be candid will not succeed. Neither will families who cannot find kindness in candor. As Patrick Lencioni suggests, a lack of commitment (and drift) is often premised on these failures of trust and fears of conflict. To confront difference head-on and seek to resolve it is essential to trust. When fear leads to weak commitments, failures of accountability follow. (Lencioni, 2oo2.) Then results suffer. This kind of communication is often a matter of both training and practice.

Beyond candor, it is important that each family member is allowed to live a life of purpose and meaning as they define it. Positive psychology tells us that to be happy, we all need to have a sense of our competence in the world, and we have a need to be connected to others. Each of us needs these in differing ratios, but the recipe for deep and abiding happiness lies in our efficacy and our engagement. Too often wealth derails these drives of competence and connection – wealth can foster dependence and infantilization, and it can serve to isolate and numb. Families that succeed, launch their children – but they also do much to ensure that differentiation in adulthood is not at the expense of mature and willing commitment to family.

The development of common purpose or shared agenda that both speak to the heart and inspire commitment to something bigger than self-interest coupled with honest communication by differentiated family members seem to be required competencies for good succession. Developing these competencies requires acquiring skills of deep listening, anxiety management and moving to the synthesis of divergent points of view. They involve processes and commitments to personal maturation and growth in the community of family. All of these must be practiced – planning alone will not produce these results. Most often consultative intervention is useful if not downright necessary. As the family learns these skills, they are moving beyond planning and are on the path of preparation.


Beyond purpose and candor, the family must come to points of developing a deep commitment to stewardship. Having moral imagination helps with this – there is a shared sense of what the financial wealth is intended to serve that moves beyond mere self-indulgence to broader engagement that brings meaning and significance to the family. Of course the money must be enjoyed – this is not a grim commitment to some form of post-modern Puritanism – but there is a recognition that the dissipation of financial wealth will be inevitable over a few generations if larger purposes are not honored and actively in play.

The capacity for stewardship means that individuals must develop core literacies when it comes to wealth. They must know how money works and practice good financial habits. They must know how wealth works and become fluent in the ways of trusts and entities and interlocking connections. Part of this involves becoming skilled at working with their financial, legal and tax advisors. Beyond wealth and financial literacy, they must learn to make good decisions collaboratively. If they are in business together, they must understand what it means to be great owners, managers and directors of family enterprises. And they must learn how to use philanthropy strategically.  These five literacies – financial, wealth, governance, business and philanthropic – are preconditions to good stewardship practices.

Beyond individual preparation, there is work to be done in the development of the family as a whole. The family must co-labor (collaborate) to structure their wealth to survive generational transitions by creating estate plans that will work with their family dynamics. They must also develop the capacity to agree among themselves and make collective decisions that both preserve and grow collective wealth. They must learn to take appropriate risk as a collective and act in rough concert to engage in the work of succession (which is afterall, a team sport). These habits of stewardship must become the disciplines of everyday life for families that are going to weather the inevitable choppiness of transition.

All of this requires not only planning but participation in the development and execution of those plans. This requires implementing good principles developed in design thinking paradigms. Plans created behind closed doors often don’t work as designed and are at best sub-optimal. It is why Warren Buffett has repeatedly said that, at some point, the rising generation must be involved in the design and development of the plan. To gain that voice, the rising generation will have developed individually and collectively to make that participation meaningful and productive as stewards, not mere consumers, of the wealth. As the rising generation participates in the design of its own collective future, they become more responsible and are empowered in healthy ways.


The final golden principle of preparation can be seen as the evolution of the family as a learning community. If you were paying attention, you can already see that learning is essential to the development of both stewardship and familial coherence. But what are the elements of this learning community? There are many things that contribute to learning.

One way to think about the core skills required has to do with maintaining an open mind, an open heart, and an open will. There is the old story of the zen master, Nan-in who received a university professor. As they began their conversation, the university professor made many observations with many conclusions and had grand ideas about the nature of zen. After some conversation, tea was brought in and Nan-in began pouring the tea from the pot into his guest’s cup as the professor continued a long, convoluted discourse about an obscure point – Nan-in continued to pour and eventually the cup began to overflow. The professor, all of a sudden, noticed the saucer filling up and with alarm said, “Stop! The cup is overfull. No more will go in!” Nan-in replied, “Like this cup, you are full of your opinions and speculations. How can you know zen unless you first empty your cup?” We are often “overfull” with thoughts, emotions, needs, opinions, judgments and so on. To be a learner requires an open mind – a recognition that “certainty” is merely a feeling, a sort of mental indigestion. This humility allows us to “empty our cup”. Learning requires this spirit of inquiry and curiosity about others, ourselves and what the future holds.

It also requires an open heart – the ability to listen simply to other people in a spirit of curiosity. We need not agree or endorse what others are saying, but learning requires that we suspend our need to impose ourselves in favor of hosting the other person and giving them the honest opportunity to participate fully in the process. In her wonderful book “More Time to Think”, Nancy Kline talks about giving people space to explore their feelings and ideas. This gift to others of equanimity in our listening is critical to others learning something new. We do not learn if we repeat the same things over and over – we learn when we explore. The more consulting work I do, the less I believe that I am changing anything. What I am doing is helping people find the space to think and then find the courage to act in innovative ways. That hosting requires an open heart.

And finally, learning requires an open will. We all want to control outcome – and we are all uncomfortable with ambiguity and uncertainty. We lock on to quick solutions or push our positions. But learning requires that we suspend ourselves for a time in the liminal space of not knowing the outcome. This requires of us that we manage our anxiety and that we provide a calm presence for others that will contain their anxiety. This non-anxious presence is the precursor to learning that is another word for change or transformation.

Beyond this, we must allow for real failure. People learn not by doing things perfectly, but from failure – and often repeated failure. Failure is inevitable and rather than seeing failures in practice as failures, these experiences become feedback. Gaining any skill comes with falling short in the beginning. With practice, preparation takes root. And when enough practice has happened, the family has developed the adaptive capacities to succeed when it counts. Letting go of the need to control perfect outcomes becomes essential to the sort of preparation necessary to succeed.

When failure does happen, the immediate response is often to rescue or fix the problem to make it perfect. It is often better to explore the failure, own it and truly understand what the failure has to teach us about ourselves and our work together. Realistically, as part of this learning, families must come to grip with situations where failure is persistent and learn how to contain and manage stubborn failure points to protect the overall good of the whole. As one family member put it – the jump from one fishbowl to the larger fishbowl may result in “fish on the floor.” Learning how to address these real world problems is a necessary part of succession.


To effectively learn, families must eventually find the simplicity beyond complexity – they will need to find resolution and not live in ambiguity forever or fall in love with process for the sake of process (which, in its uglier forms, looks like falling in love with drama for the sake of drama). Yet to move into these spaces of great clarity, it is a necessary reality that families are inevitably required to hang suspended for a moment between the two trapezes of the comfortable present with its known devils and the unknown future and unexplored terrain of individual and collective growth.

The capacity to approach those times of suspension with an open mind, an open heart and an open will can make all the difference between forward movement and transformation or being sucked irrevocably into the common patterns that sabotage transitions. There will be failures, and until the art of the trapeze is mastered, there is a need for nets. But at some point, as the real transition approaches, and the family has adequately prepared and practiced, they will have acquired the ability to soar above the ground without the need of nets. It is then that good plans will be well-executed with successful outcomes. The family will cohere, and they will steward wealth with skill. They will have learned and they will set up the patterns necessary to continue to learn as they face ever new adaptive challenges together.

© 2015. Matthew Wesley. All rights reserved.


The Problem with Planning

Last week I was in a conversation with a friend and we were noting that, when it comes to succession work, the emphasis by most advisors is on planning. It seems that on websites, in marketing materials and in conversation advisors talk about the time they spend with clients on clarifying objectives, goals and values and then on developing strategic plans aligned with those values, goals and objectives. There is nothing inherently wrong with this, but as near as I can tell, the process typically ends there. Planning is the norm. It seems to be the current state of a best practice. However, in my experience, it not enough. Not by a long shot.

The Focus on Planning

Indeed, it seems that in succession work this exclusive focus on planning can be catastrophic. As we all know, with any plan, the rubber hits the road in execution. In corporate America, it is evident that most strategic change initiatives fail to achieve their objectives (most studies of C-suite sponsored change show that 80-90% of these initiatives fail to achieve the expected results). Increasingly this is being seen as an issue of too much time spent in planning and too little time spent in preparing the culture to adopt the desired change. The assumption has been that if you plan really well, you will have taken culture into account, and the people will respond. This type of planning involves clarifying objectives, strategic thinking about complex issues, discussion about alignment, seeking input from various stakeholder groups (including employees), communicating the plan and so on. Months are often spent on the planning and launch phase of these initiatives – only to have those months of preparation fade into obscure institutional memory and soon to be replaced by the next big initiative. In the corporate development world, it is assumed that planning is enough. It turns out the assumption is daft.

Turning to the world of family succession (as a form of inevitable change), the situation is not so different. There is an old estate planning joke (of sorts) where an attorney is being arrested standing over the dead body of a client with a smoking gun on his desk. When questioned as to his motive, the lawyer says, “That plan he just signed was so complex and elegant, with so many moving pieces, I just had to see if it would actually work.”   As morbid as that is, it is uncomfortably close to the truth of what most planning attorneys do in reality. They may have a pretty good idea that the plan will save money, but whether the plans will actually enhance the lives of the people most affected by them is almost always near total guesswork by both the attorney and the clients. The plans will reduce taxes (which often seems to be their core objective), but beyond that it is Russian roulette. Will the family be able to make those plans work? Will trusts work as designed to realize the deeper intent of clients to help their children lead productive, connected and happy lives? Or will the estate plan foster conflict, pain, entitlement, waste and ill-will? Will the estate plan support the sustainability of the family and the enterprises they own or will the entire edifice crack and crumble under the strain of transition? Will a life’s work have a net positive impact or will that legacy be dissipated? In short, will the plan foster greater well-being or will it breed suffering? Too often the answer is “We just don’t know – we’re guessing”. People know the outcome they want, but they have no idea if they will achieve it by the plan they create.

Structural Solutions

Recently, I heard about a leading attorney in the estate planning field who ran a little experiment. As told to me, he gave one group of attorneys a written scenario and asked them to design a plan. He give the same scenario to another group and showed them a video clip of the hypothetical scenario family arguing and asked them to design a plan. He expected that the attorneys who were shown the video would be more sensitive to family dynamics in the planning they did. Apparently, to his real surprise, the attorneys who were shown the clip created much more restrictive plans with far less flexibility. Their response was to double down on what they knew – namely create more structure and exert more control through restrictive documentation. We know from family dynamics that this emphasis on control only exacerbates anxiety and its all too familiar responses – fight, flight, flock, freeze and fix. Adding more restrictive structures serves only to perpetuate reactivity and drama – and with it, emotional suffering and financial loss. Exacerbating the problem, clients, who feel out of control themselves, often grasp at structural solutions and thereby collude with the advisors’ impulse to impose greater restrictions.

Under these conditions, is it any wonder that estate planning often becomes problematic? What we know is that most estate planning does not work in its main purpose – namely preserving financial wealth for generations. It’s success rate on that score is dismal – roughly the same as the corporate failure rates. Most great fortunes are squandered rather quickly, not because they are taxed or mismanaged by professional advisors but because the human dynamics render the plans dysfunctional. Wealth is lost for non-technical reasons and most families can’t get it right. They stand mesmerized by the wrong things. Those families that manage to sustain wealth are few and far between.

The Missing Link

Between planning and execution of the plan lies a profoundly important step that is almost universally ignored in all but the rarest of estate planning processes. Yet this missing piece is probably the most important aspect of transitions. It marks the difference between success and failure.

Let me illustrate. I follow the Seahawks and the season has just begun. Whether you like or hate football, the Seahawks have been a team that plans well and executes well enough to keep bringing home divisional and league championships year after year. It is a team that is well coached. Pete Carroll generally is good at what he does. While I have never heard him asked this question, I do wonder what he might say if he was put to the choice of having either the best game plan in the history of football or the best-prepared team in the history of football. My suspicion is that he would choose preparation over planning without giving it a second thought.

There are reasons for this. The first goes back to the famous saying of the renowned Prussian Field Marshall, Helmouth Von Moltke, who famously said, “No battle plan survives contact with the enemy.” Or perhaps less elegantly, what Mike Tyson said about boxing, “Everyone’s got a plan until they get hit.” In football, players practice the same plays over and over. They rehearse situations through visualization. They watch film of the other team. They even meditate and do yoga. They talk about the situations that will arise with coaches and teammates and within their unit. They physically and mentally prepare to deal with those situations individually and collectively. They practice the skills of their positions and they know their assignments. They rely on their teammates to do their jobs with skill and ability and work hard to come to trust their teammates to do that. If a teammate is in trouble, they know what they will do to support that player. They know what they will do if the entire play falls apart in the middle. They study the opposition and know their weaknesses. The game plan is the least of it – often discarded or at least back-burnered after the first 10 scripted plays once the real game begins. Players and teams triumph not because of their exquisite game plans, but because of their relentless preparation.

By analogy, wealth succession can be seen as demanding sport. It is not played physically, but it is played against the backdrop of people’s emotions, personal histories, family narratives and the sense of moral justice among family members. If the stakes are high, the financial wealth is often imbued with the freight of need, insecurity, anxiety, past hurt, and a host of other concerns practical and ephemeral. Is it any wonder that plans that are designed to do the lightweight lifting of saving taxes cannot do the heavy lifting when it comes to the weight of family culture? In the face of this complexity, it is preparation that creates both resilience and flexibility. It is preparation that allows family members to flex with the inevitable vicissitudes of transition and to adapt to fluid and challenging situations. Preparation, when done well, shifts a culture to ensure that it has the capacity and the capabilities to move through the choke points of generational succession.

The Difficulty of Preparation

So if this gap between planning and execution is so evident – if it is clear that preparation is key to successful generational transition – why does it get virtually no attention? There are a number of reasons:

First, it takes time. People are busy and they don’t see the importance of preparation. Preparation takes a degree of commitment and work on the part of the people involved to communicate and work together. They must learn and learning involves making mistakes and evolving to new levels of competence and ability. Families often lose focus and motivation to do the necessary work.

Second, it takes the family leader stepping off the field and assuming the role of coach. After being the quarterback for so long, this transition to the role of coach is not easy for many matriarchs and patriarchs. Those who successfully navigate this transition are far more successful than those who insist that they will capture the spotlight to the very end. The successful leaders view their job not so much as preparing individual children for the responsibility of wealth, but as developing a team of family members who can address the relational and financial complexities of transition.

Third, it  is demanding work. Successful transitions often require difficult conversations and the development of skills and capacities that are not currently in place. It requires skilled facilitation and commitment over time. It requires learning new things about the nature of family and how wealth successfully moves from one generation to the next. This means that families must constructively confront their own anxieties – not avoid them.

Fourth, it typically requires that someone outside the family take professional responsibility for preparation. But there are few professionals who are incented to take this on. Why is it that no one tells the parents that the critical difference between success and failure in generational transitions lies in preparation? Why is there a deafening silence on this issue? I suspect that it is because no professional is paid to pay attention to it. Lawyers are not paid to prepare the family, only the plan. Financial advisors are constrained by business models, skill sets and compliance restrictions from doing much beyond rudimentary education, coaching, and facilitation. Most accountants have their eyes firmly fixed on the rearview mirror and have little interest in this part of the process. Exit planners are working on deal making because that is how they are compensated. In short, no industry is being paid to pay attention to this and consequently no one is motivated to take on the deep work of preparation. Without incentive, the most important aspect of successful transition gets scant attention.

This is a case – at least in part – of following the money. No profession’s business model supports this deep work. No profession is specifically trained in it. Even more troubling is that the skills required to prepare a family are not the skills these professions have developed. And, to make matters worse, many professions face both ethical and compliance requirements that discourage substantial involvement in this area. Consequently, the message in the marketplace is all about planning – pay attention to the ads and websites and you will notice that it is universal. Because the incentives lie in planning, everyone focuses on planning and the planning process. The market gaps around preparation mean that very few talk about it in meaningful ways.

The Evolving Market

More and more families are tumbling to this gap and looking for professional help in their work together, but it is hard to find those who truly know what they are doing. There is a slowly growing supply of advisors who are competent to deliver these services, but they are a scattered and rare breed. The very wealthy are finding their way to the handful of people who do this work well, but the skill sets of those who are effective are uncommon and the work often require high degrees of what Dean Fowler calls inter-disciplinary fluency.

The ratio of planning to preparation in most families is typically 98% spent on planning and 2% spent on preparation. For successful transitions to become normative, that ratio probably needs to be reversed.

To shift that balance, what is needed first is some common sense. It is as simple (and as complex) as recognizing that the gap between planning and execution must be filled with preparation. What is needed to fill that gap are professional advisory networks that empower family leaders to do the right things to prepare their family for succession. What is needed is a revolution in the mindset among advisors and clients that planning, while clearly necessary, falls far short of sufficiency. What is needed is a deep recognition of the fundamental moral obligation by all who touch the family system to shift family culture through that preparation. What is needed is a rising and expanding profession of skilled inter-disciplinary advisors who can help families do that foundational work of preparation. What is needed is a commitment to ensure that financial wealth – when passed on – will do good in the lives of those who receive it.

Otherwise families suffer.

Advisors, it seems, agree that they have a moral obligation not to add to that suffering. And family leaders – at all generational levels – would most likely agree that they have a moral obligation to ensure that the lives of family members will be enhanced and not damaged by the plans their advisors create. Change is in the wind – the revolution of deep preparation is beginning to take root. It is the wave of the future. The work is no longer pioneering. Families and their advisors are rapidly climbing the innovation curve. There are questions of scale and there are market inefficiencies, but the shift is underway. If you have read this far, you are clearly part of this growing movement that believes in a better way and you are part of the emerging solution, not the problem.