In a recent post on linked-in a Canadian lawyer I greatly respect, John Mill, spoke of a conversation he had with a client in which he stated:
I was speaking yesterday with a client about using his business to create his own “utopia”. This seemed a surprisingly normal conversation. As we defined it, this meant engaging in high quality value added work with a group of partners/shareholders who understood the value of reciprocal contribution and participation. The goal is to develop a group of “reasonable” people where decisions can be made easily without confrontation so that everyone is free to do what they do best. In this environment the “technical” issue of control has much less significance and seems antithetical. However the nagging concern that giving up control is somehow “technically” incorrect remains. Matt I get the sense that a lot of your work involves moving the patriarch away from a technical control perspective to a more easy free flowing situation where consensus and decisions emerge organically.
With some editing, these were some of my thoughts in response:
It seems that financial wealth is created by individuals, while that financial wealth is sustained by families.
Those few families that succeed over generations understand well Nathan Rothschild’s adage: “It requires a great deal of boldness and a great deal of caution to make a great fortune; and when you have got it, it requires ten times as much wit to keep it.”
From my perspective, and a lot of the research I am aware of, it seems the critical challenge in the G1 to G2 transition can be summed up in the task of creating truly effective sibling/in-law collaboration. Jaffe (2013), Williams & Pressier (2010), McCollough (2013). This has everything to do with fostering communication and trust, common vision, growing skillsets, teamwork, resilience, and so on.
All too often, the skill set that created the wealth contains within it the seeds of its inevitable dissipation. The very strength of will and force of personality that was required to create a fortune often comes to dominate the family in ways that leave little perceived room for anyone else to flourish on their own. This dominance erodes the family’s capacity to sustain wealth or use it in meaningful ways.
Those who shine not only as business leaders, but also as family leaders, are those who recognize that the force of will that built the empire must give way to a kind of letting go (willingness) that will allow their families to flourish. Hughes (2004, 2007)
I very much like the conversation you were having with your client about “utopia” – what a great way to frame and talk about the future! It seems to have unlocked something for your client (and perhaps for you) and it has obviously served to open a really valuable conversation.
The issue of control in the family context is an interesting one. The question, it seems to me, is where the locus of control is and what drives it. If it is at the center and the center fails (death or decline), then the whole thing tends to come apart rather quickly. This is the great weakness of the command/control model (which has great advantages in the wealth building phase).
If instead substantial control lies in the edges, because of the recognized value created for the whole system and the desire to sustain that value (a collaborative model), then control comes from everywhere in the system – the center and the edges – it is self-reinforcing and autopoetic.
In the beginning it takes strong and visionary leadership to listen well and hold a center firmly enough to become established; to help engage the conversation in which utopia is defined and incubated and becomes firmly rooted in the family as a whole. The forces to have this fly apart are typically substantial and the commitment required to forge this common value is high.
In this sense leadership is more about protecting or stewarding a way of being as a family. It is about creating systems that protect the process of developing that value and reinforcing the actions that support it, than it is about getting everyone to do what they are “supposed” to do.
I mentioned in one of my posts that a founder in a co-housing community said, “When I started, I thought leadership was about getting stuff (not the word he used) done. After about ten years, I realized that leadership is almost always about the quality of the process of how stuff (again, not the word) gets done.” Leadership and control here is around process – not content – and yet the process discipline will drive the results far more effectively over the longer term than the command and control approach will drive behavior. Leadership that is playing the long game understands this.
If people are bought into that story – that utopia – and they buy-in and are freed up to make it their own (that is, the process has credibility), then their behavior will attune itself to that reality and “control” becomes a non-issue – or at least an episodic one. The leader doesn’t have to worry about aligning everything to match up – indeed the utopia itself demands self-expression as you so clearly articulated above. This avoids the whack-a-mole game that many families play where dysfunction is popping up all over the place to be beat down. It becomes more like jazz than like a marching band. Then, when people diverge, the group as a whole can either morph to the improvisation of the individual if appropriate or, if necessary, create accountability structures for that individual that protect the utopian dream they share because of the value that dream has to the system as a whole.
The trick, of course, is ensuring that “utopia” is fluid enough to accommodate not only the kind of conversation you had with your client in your office, but that that conversation is allowed to flourish (with a willingness to allow it to evolve over time) within the family system. A core role for leadership lies in the stewarding of that conversation.
© 2013. The Wesley Group. All rights reserved.
— September 10, 2013