One of the things that I find overwhelms family leaders is the level of complexity in their families.  There are diverse personalities.  There are dyadic relationships that grow algorithmically with family size and each of these  affects the others.  There is family culture affected by family lineage from diverse families of origin.  There are generational differences and personality types and communication styles – the list is endless.  This complexity often paralyzes family leaders to the point where gaining any real clarity seems impossible.

In spending time with a family, I often (but not always) find that there is a “golden thread” running through the family dynamics.  In my mind’s eye, I think of this as a thread that, if pulled on in the right way, will untangle a great deal of the knot of suffering at the heart of family dynamics.  Sometimes it has to do with values, sometimes with family narrative, sometimes with scripts that are played out, sometimes communication style, sometimes trust.  In my work, I look for this thread and then test and discard hypotheses about what it might be until I hear things that seem to get at the heart of the dynamic.  Often there is a pause or a kind of deflection that hints at its presence.  Most often it is deeply poignant when it is seen and has a felt sense of heartbreak for the family member that first identifies it. These threads vary radically from family to family.  Most often, because the family leader is part of that dynamic (and often at the center of it), they cannot see this thread let alone tug on it constructively.  With outside help, and the wisdom to see the “golden thread” and the skill to address it, a family gathering can become an inflection point for cascading change.

Most often this golden thread involves a kind of recasting of family narrative, often by way of metaphor or image.  In one family, the metaphor revolved around the family telling a story that had become too small.  In another it had to do with paying attention to the heart more than the head.  These images, when rooted in a felt sense of what is going on with families gets at something fundamental about the dynamic and shifts things. The family that was telling small stories how checks in to see if they are operating out of a large enough story.  The family that was all head, now asks about the heart.  These images worked because they got at something everyone was feeling but could not articulate.  Of course it is never as easy as announcing a metaphor – it requires work and engagement and wisdom and good design.  But with all of that, and more than a little luck, things can shift.

Questions:

1.   Have you seen this golden thread at work in your own family or families you work with?
2.   Do you agree that re-framing metaphors can be powerful ways to shift family conversation?

Family retreats are an essential tool in sustaining wealth over generations.  These retreats create opportunities to develop common worldviews, align values and dream about the future.  However these opportunities are often not effective at best or down-right destructive at worst.  What may seem like a good idea at the time can fall flat or even become the occasion for family flare-ups that are difficult to resolve.  So, what makes for a good family retreat?  We have found that there are five critical elements:

1.  Develop a defined outcome.  Successful family retreats have realistic and clearly defined outcomes that are based on input from the entire family and that are known going into the meeting by every participant.  These outcomes must be concrete, achievable and relevant to all.  Having a defined outcome by the family leader that does not have input from others is a recipe for a poor or even destructive meeting.

2.  Thoroughly prepare. Failure to prepare well is the single largest cause for family meetings that fall short of the anticipated goals.   There is a great deal of design work that goes into making the meeting engaging and interesting for everyone.   It is important that there should be no surprises and that the meeting is designed for the dynamics of the particular family.  If one person is a troublemaker, that has to be anticipated.  If the family hates sitting, that has to be factored into the design.

3.  Bring solid content. The family should learn something about themselves as individuals and collectively.  Family retreats are opportunities to gain family cohesion around certain ideas and perspectives.  If the family is viewing itself from a unified framework, it makes decision making and conversation much easier.  Communication and values assessment tools or simulation games can be great ways to create this sense of common framework.

4.  Ensure effective process. Too often family leaders focus on the content of the meeting and do not think about the process involved in the discussion.  Processes must be fair, open and engaging to ensure participation.  While content is critical, it is usually process problems that derail communication and create problems.

5.  Bring in outside facilitation. Family leaders should not facilitate family meetings for two reasons.  First they are too close and often don’t see dynamics in play until they are too late.  Outside facilitation brings objectivity and perspective.  Second, it is almost impossible to participate in a family retreat and facilitate it at the same time.  The facilitator has  to step back from full engagement to monitor the process.  Taking the family leader out of the game in this way is almost always counterproductive.

Families that are successful over generations are families that have a strong sense of collective identity. Family members know what it means to be part of the family and much of this identity is rooted in values. These values endure across generations and while they shift in particular expression, the foundational values remain relatively constant at their core. In his groundbreaking work Values Shift, Brian Hall delves into the relationship between values and development, making the case that values shift in groups through dynamic interplay between leadership and skills building based on the history and aspiration of the group as it seeks to meet basic human needs. Hall suggests that leadership in groups evolves from autocratic to benevolent to managerial to empowering to collaborative to visionary. Those who follow these leaders within a family system move commensurately from oppressed to dependent to autonomous to creative to interdependent to catalytic. Even through these rather dramatic shifts of leadership and followership, the historic values peek through and create an enduring legacy.

This rubric gives terrific clues as to the leadership style in play in a family.  If children are dependent, then the leadership is probably “benevolent”.  If children are highly individuated, creative and engaged, the family leadership is most likely empowering.  Families upshift through these cycles of leadership and followship by paying attention to core family identity and developing deeper skill sets that allow for greater range of motion.  As these shift, family identity expands and with that expansion, the family can see more possibilities for growth and development.

Questions:

1. Are there people you know who reflect these differing leadership styles?
2. What do you see happening in their families?

A colleague and I were recently discussing a case that has one wealthy family on the verge of litigation. The stakes are high, emotions are intense, and long simmering acrimony between siblings carefully fostered by a now deceased patriarch has reached a boiling point. In cases where family dysfunction is high and the stakes of family discord even higher, sometimes the only option is formal mediation. In cases on the verge of litigation or where trust is broken, it is important to understand that not all mediation is the same.

Many professionals are familiar with the kind of mediation that approximates a settlement discussion in a lawsuit. The parties are separated and the mediator shuttles between them with offers and arguments in an attempt to find middle ground. Once that middle ground is discovered and agreed to, a legal document memorializes the agreement. Parties rarely leave these proceedings with anything more than a bare agreement. While this may be all that is possible, it fundamentally involves a zero sum game of dividing spoils. In cases where those spoils are hard to divide, this kind of mediation may be inadequate to the task.

Other forms of mediation actually make the pie to be divided larger and hence create more value for all involved. These types of mediation almost always involve some degree of face to face discussion. The role of the facilitator in these engagements is to create a strong container for discussions to occur and then enforce the rules in the course of the discussions. Depending on the parties capacity for self-management, the facilitator will allow greater or lesser flexibility in the discussions. When handled deftly, the parties are able to air grievances and eventually articulate what it is that will appease them. In some cases, a measured sense of reason (if only a recognition of mutual self-interest) can be restored and the parties can begin to craft agreements that do more than simply divide a limited pie. While healing may not be possible, such agreements, when legally enforceable, can bring a kind of nominal peace and put an end to truly destructive behavior.

When done extremely well, mediation can be an opportunity to challenge not the positions of the parties, but the very framing of the issues involved. Skilled facilitators who understand family systems can often reframe the family stories, shift family roles, disrupt worn family scripts and open new possibilities for discussion that did not exist before the mediation. By disrupting the family system and forcing the family to redefine itself, these mediations can actually do a great deal to create truly positive outcomes for the families involved.

1. Have you seen families litigate  against one another?  What were the results?
2. Do you believe that some form of mediation or other alternative dispute resolution would have been workable in these cases?  Why or why not?

The right kind of preparation is critical to the success of family meetings.  To do preparation well, one must understand the needs and expectations of everyone involved.  This assessment work should focus on understanding the current state of the family and its capacities to address difficult issues.  Good preparation often involves the use of a diagnostic tool, both to facilitate family conversation at the meeting itself and to ensure that potential issues are surfaced early and accurately.  At the very least, family members should be individually canvassed prior to the meeting in a way that surfaces their candid concerns, gains their perspectives and insights into the family dynamics and issues involved, and determines what they individually require for the meeting to be considered successful.

Once the assessment work is complete, the meeting then needs to be carefully designed. Good meeting design almost always includes educational and experiential components that serve to frame and shape the discussion. When done well, the facilitator can use these as process competencies that will bring meetings that are going off the rails back on track. Bringing emotionally charged, high-stake issues into a family meeting agenda without knowing how people will react and having a structure that can address whatever reactions arise can end up doing more harm than good.  Obviously, the higher the stakes, the more critical the planning and execution of the meeting becomes.  In actually holding the meeting, most family leaders find it quite difficult to step back into a kind of facilitation role – they are eager to fully participate in the meetings (as they should and often must) but this frequently creates a flash points that quickly derails the meeting.  They want to appear as a neutral arbitrator of the discussion but their own agendas undercut this and the family re-acts to this dual role.

In high-stakes environments, family leaders are well advised to consider retaining an outside consultancy to help with the assessment, design and execution of the family meeting.

Questions:

1. Have you seen family meetings that went off the rails?  Do you think the failure was due to poor preparation, meeting design or execution?
2. What do you see as the advantages and disadvantages of using outside consultants for family meetings?

Recurring communication patterns are common in most families. These patterns, which we might call “scripts”, are triggered by particular events or circumstances. When a specific kind of contextual cue arises, the script begins to play itself out with family members quickly falling into preset, highly defined roles. The ensuing conversations are familiar to the family members as they move towards quite predictable outcomes. Sometimes these scripts are benign rituals, but often they can be destructive.

A common example of a maladaptive script is found in the classic drama triangle. In this script, one family member (the “persecutor”) will attack another family member (the “victim”) over some persistent fault or shortcoming. A third family member will step in to restore the peace (the “rescuer”). The roles in the drama triangle often shift with the person who was the victim in the first act of the drama gaining the upper hand and becoming the persecutor in the second act. Alternatively, someone turns on the rescuer who then becomes the new victim to be rescued by the third participant. Each person in this particular play is getting psychic rewards from playing their role and there are often implicit payoffs for the family as a whole as well. When scripts are dysfunctional, the family’s problems often escalate. In cases of severe dysfunction, these scripts devastate individuals and families. Dysfunctional scripts cause significant problems for the family and deeply undermine its capacity for long term success by spawning family mistrust, resentment, longstanding feuds and even litigation.

Changing these scripts is often a matter of calling attention to the script being played out and then breaking the script’s pattern through creating new roles, challenging assumptions, creating new family narratives, and helping one or more individuals refuse to play thereby ending the play. Once the script unwinds, real communication can begin and the family can make genuine progress towards productive outcomes.

Questions:

1. What scripts operate in your own family?
2. What scripts do you see playing out in the lives of your client families?

Every prospective client comes to me with a story. These stories invariably reflect certain perspectives, assumptions, and conjectures. They are laden with facts, interpretations, heartbreak, hope, fear, pride, concern, love, success, failure, confusion, and a host of other currents both obvious and subtle. Often this story distills the complexity of a life lived over decades into a few short minutes of narrative. The stories are always, by their nature, an oversimplification.  If I am fortunate enough to work with this client, I will hear the stories of other family members – all of which are a equally complex and inevitably partial. There will usually be some overlap in the stories, but they are almost always widely and obviously divergent in important respects.

It is most often these stories – these views of the world “as it is” – that create the limits of what a family can do together.  Families define themselves, as a collective and as individuals, by the stories they tell.  The stories then serve as boundaries that limit the family’s possibilities.  In most ways, families systems cannot consistently outperform the stories they tell about themselves.

The core of the work I do is actually deceptively simple in theory – I guide families as they create larger stories for themselves. This happens through a process of education, coaching, mapmaking, and simply facilitating conversations that require the family to find new ways of being together and thereby creating a more robust narrative. The rewoven narratives become the center out of which individuals and families as a whole gain the capacity to act differently.  These larger stories open new possibilities for thinking, acting and engaging with each other and the world.

Questions:

1. What is your family narrative? In what way is that narrative too small for you?
2. Think back on the last story you heard from a client. Other than the “facts” what did the client tell you about him or herself.

Most children of the affluent classes will not be forced to work at a traditional job.  They may spend much of their lives simply being wealthy. While this may not seem difficult, and most of us would gladly trade places, it turns out that hanging onto the wealth is extraordinarily challenging.  Very few families – even those with extreme wealth – succeed for very long.  If wealth is going to be sustained and not wasted over one or two generations, then each generation must become truly competent at being wealthy.

The skills required to do this are not taught at any university or college.  While there are many courses directed at helping children of the successful understand the technical aspects of investments, taxes, legal structures and the like, relying on these courses alone is a recipe for disaster.   Educational approaches simply do not equip children for the “job description” facing them as they mature into adulthood and even with the best technical training, wealth disappears. As it turns out, the job of being wealthy requires the development of human skill and the creation of a family culture that supports honing these skill sets.

These capacities have little to do with the technical aspects of money management and everything to do with such things as values, accountability, depth of character, good judgment, and emotional intelligence. For most of us, these intangible skill sets are learned in the grit of everyday living where wealth does not insulate us from having to develop the capabilities we need to make our way in the world. Where do those with inherited wealth gain similar skills necessary to do their jobs well? They certainly can learn some of this from their families — provided the family is creating the right conditions to foster their development.  If children are going to succeed at being wealthy, it is critical that the family leaders design approaches that foster the skills the family will need to be successful in the long run  There is a growing body of work that identifies the principles underlying successful  approaches to building sustainable wealth.  Families that understand and can adopt these principles are much more likely to create successful heirs.

Questions:

1. Do you know families where they view the management of wealth as a job?
2. What do you see families doing to equip their children for the job of being rich?

When you have just a minute, we encourage you to pull out a few transition planning documents for your major clients and review them. As you scan these documents, ask yourself if the structures your clients have created will do anything to 1 ) intentionally teach their heirs about themselves and the world, 2) build their heirs’ connections with others, 3) allow them to experience real world consequences of decisions they make, 4) help them develop personal responsibility, or 5) contain mechanisms for  accountability to the family as a whole. If your clients’ heirs are simply passive recipients of wealth, you might want to invite them to revisit their transition planning documents and include at least one or two simple structures that are designed to increase human, social, or historic capital.

The number of strategies that can be implemented to accomplish these objectives is limited only by the imagination of the client families. Of course, to be successful, these plans must be elegantly designed, financially solid, and legally sound. When that is achieved, these sorts of dynamic transition plans do much more than merely pass on wealth.  They use the family’s financial resources to invest in the long-term well-being of the family. When done well, this type of transition planning creates a profound sense of accomplishment and answers some of the deepest concerns our clients are raising with us. It is not easy work, but it is rewarding and it leaves a lasting legacy.

Questions

1. What do you discover when you look at your clients estate documents?
2. Do you know what you would say to your clients to help them re-imagine their transition plans?  (If not, please feel free to contact me. I’m always happy to chat with fellow advisers about these kinds of problems.)

In the last several entries, we explored the various elements of transition plans that can work to shape the mindsets of beneficiaries to manage wealth well. These included teaching components, connection components, consequences components, responsibility components, and accountability components. While all of these structures and the principles underlying them can be wonderful, it seems that they simply don’t work if they are merely imposed by the senior generation.  We have all seen private foundations that have buy-in by the entire family and those that don’t.  If everyone has a voice in its governance, the structure can be a wonderful legacy. However, we also know that if the senior generation sets up the structure without that deeper buy-in, the foundation becomes, at best, a burden to the future generations.  The same dynamic seems to be in play with these more innovative trust structures. Whether the family continues to cohere is a set of decisions that needs to be made anew by at least the first three or four generations.  The skill in creating an estate plan is not in designing structures that will foster human, social and cultural capital – that process is relatively simple.  The difficult part lies in being able to facilitate a process in the family dynamics whereby multiple generations come to agreement as to what these structures should be and how they should function in ongoing family systems.   In our experience, no one generation can ensure the success of the family as a whole.  We find that the only way to create these kinds of successful transition plans is to give the family tools that will allow diverse people to work together in ways that bring life to these structures.   Many advisors can create mechanical structures that ostensibly fit these needs.  Facilitating a process that creates trans-generational buy-in to the process is the true art of this type of transition planning.

Questions

1. Is it your experience that many transition plans fail because the family was inadequately prepared and had too little input into the process?
2. Do you see value in having family meetings to create transition plans in which the entire family participates?