It turns out that families that are successful across generations are very rare. Only 5% of families manage to maintain true wealth into the third generation and only 2% into the fourth. What separates these uncommon families from the many families that fail? It seems that there is no one answer and certainly there is no magic bullet that will ensure family success. However, one thing that these successful families share, almost by definition, is an ability to come together and collaborate within and across generations. While this seems obvious, the simple notion of “coming together” masks a great deal of underlying complexity. “ Even after years of research, the factors that determine which families make it and which do not are only dimly understood. That said, we do have some understanding of these factors based on observations of highly successful families:
First, families that remain successful across generations come together physically. They meet regularly and, in meeting, hold purposeful conversations that matter.
Second, these families have developed core competencies that are passed from generation to generation. These competencies consist of both “hard” and “soft” skill sets. We have some idea of the nature of these competencies.
Third, these families remain both highly aligned in critical ways across generations and have remarkable capacities to adapt and change.
Because competencies occupy a pivotal between the first and third aspects of these successful families, the next blog entries will focus on the core capabilities wealthy families must develop to remain successful across generations.
Questions:
- What do you think are the core competencies must families develop to sustain wealth across generations?
- How do think families develop these competencies?