James Clear famously said: “Ambition is when you expect yourself to close the gap between what you have and what you want. Entitlement is when you expect others to close the gap between what you have and what you want.”

Not everyone is ambitious – some people are just happy with what they have or don’t have a large gap between what they have and what they want. And that’s perfectly fine.

But what of the people from wealthy families who were “born on third base”? While they are often stereotyped as “entitled”, things are not quite so simple. They may have ambition to take the wealth they were given and do even more with it in their own way, or create their own stamp on the world.

If they are happy with what they already have (even if that is a lot and even if they did nothing to close any gap), then by Clear’s definition they are neither ambitious nor entitled. That ought to be as acceptable in society as for someone who is not of significant wealth.

Having been “born on third base” is not a choice anyone made; no-one gets to choose their parents. The choice is in how you view it. A bit of humility can go a long way.

Consider This: If you are a wealth inheritor, what are your ambitions? What obligations do you think you have simply because you were born into wealth? Do you find it harder to be ambitious because you already have a head start?

Further reading: https://www.forbes.com/sites/standard-chartered-bank/2023/03/16/a-three-step-plan-for-a-successful-succession/?sh=2610fc103280, https://www.campdenfb.com/article/career-trajectories-top-where-does-ideal-family-office-leader-come, https://www.forbes.com/sites/dennisjaffe/2020/08/26/how-a-culture-of-values-preserves-family-fortunes/#4d29c8432e79, https://www.accountancydaily.co/family-owned-businesses-suffer-trust-fund-syndrome

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement 
#nextgensuccession #intergenerationalwealth #governance #leadership

#entrepreneurship

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source https://davidwerdiger.com/2023/05/ambition-vs-entitlement/

In society, the wealthy often get a bad rap.

If you’re a wealth creator, people may view the wealth you have created as coming at the expense of someone else. They may rally against “inequality” – that some people have (a lot) more than others. The fact is that the gap between wealthy and poor is increasing – each one is a reinforcing loop so the rich tend to get richer and the poor get poorer. That can lead to feelings of guilt about the wealth you have created. If you are a wealth inheritor, these feelings are compounded because you “won the genetic lottery” and have received an unfair leg up in life.

A further level of guilt can arise when considering how your family’s wealth was acquired. If the family money came from fossil fuels or tobacco, the rising generation may feel a need to divest and shift into other investments because those assets might now be considered “toxic”. They may further be driven to direct philanthropic efforts to combat climate change, and feel a need to “atone” for the negative impact on the environment made by their ancestors.

It can even go further. Some families are now delving into their past to determine if their families benefited from slavery, and if so they wish to make amends philanthropically.

There is an important distinction to make here. If wealth was created using means that were legal or acceptable by the standards of society at the time, it is not fair to judge our ancestors by today’s ethical standards. On the other hand, if the wealth was created through activities that were illegal or criminal at the time, they could well be considered “ill gotten gains”.

Consider This: What do you know of your family wealth “origin story”? How is this told within your family? What “secrets” are kept regarding this? Is there a diversity of views on this from different generations and if so, how are they reconciled?

Further reading: https://www.philanthropy.com/article/more-foundations-are-examining-the-ethics-of-where-their-money-came-from-and-changing-their-grant-making, https://www.privatebankerinternational.com/features/esg-philanthropy-products-hnwis/, https://www.theguardian.com/commentisfree/2023/mar/25/slaves-trade-amends-grenada-laura-trevelyan, https://www.bloomberg.com/news/articles/2022-02-23/family-offices-see-next-leaders-ceding-profit-in-succession-rift, https://www.mondaq.com/uk/wealth-asset-management/1136088/responsibility-writ-large-how-families-are-broadening-perspectives-on-philanthropy-and-ethical-investing

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement 
#nextgensuccession #intergenerationalwealth #governance #leadership
#entrepreneurship

The post Wealth Guilt 2.0  appeared first on David Werdiger.

source https://davidwerdiger.com/2023/05/wealth-guilt-3/

The headlines are everywhere – a high percentage of family businesses have no formal succession plan – and then the story launches into the usual tropes about estate planning, life insurance, choosing a successor, etc.

But maybe we should be turning this upside down? After all, by necessity, a family business succession involves two generations – the incumbent and the rising – and so much of the thinking about succession focusses on (a) the perspective of the incumbent generation, and (b) the legal, structural and procedural.

What does succession look like from the rising generation? Are they plagued with self-doubt or burdened with high expectations? What of their own personal dreams and needs to individuate? While they may be chosen/groomed from a young age to do the job, it’s very important that they are taking it on for the right reasons, and have the space to make the role truly ‘theirs’.

And just like company mergers most commonly fail on culture, family business successions are seriously put at risk if there are family “elephants in the room” that are not dealt with. Issues that might seem petty (especially to parents) can fester over many years, and explode once the incumbent generation have stepped aside or passed away.

Consider This: Is the rising generation in your family business interested in taking over? What are their dreams and aspirations (both about the family business, and in general)? Have you discussed this with them early in your own succession planning process?

Further reading: https://www.kiplinger.com/business/small-business/603023/what-role-should-your-children-play-in-your-business-succession-plan, https://www.campdenfb.com/article/how-next-generation-can-conquer-their-fear-and-anxiety-family-business-succession, https://ifamagazine.com/article/psychology-of-family-governance-appreciating-the-importance-of-family-dynamics-in-succession-planning/, https://www.saltwire.com/nova-scotia/business/exit-planning-family-matters-have-to-be-ironed-out-before-business-succession-273087/

Actionable Generational Wealth Succession: 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement #nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post Turning Succession Upside Down appeared first on David Werdiger.

source https://davidwerdiger.com/2023/05/succession-upside-down/

Most wealth is created through entrepreneurship. When wealth creators think about the legacy they leave to future generations, the most common thing that comes to mind is the wealth itself, which is the product of entrepreneurial activity. But what of the entrepreneurial spirit itself?

Gates, Bezos, Musk and others received support from their families in the early stages of their ventures. Family members who are so inclined can more readily access seed capital to fund their ideas. However, it’s important to bear in mind that decision-making and risk-taking abilities are influenced by the socioeconomic background of the founder.

Some midlife entrepreneurs are forming businesses alongside a younger member of their family or with a co-founder decades younger. This is a wonderful intergenerational bridge and a great way to transmit those values as well as generational wisdom and experience.

Some rising gen family members are carrying forth her family’s legacy in their roles, and adding new dimensions, such as women’s empowerment in entrepreneurship. Another approach is to honour the family’s entrepreneurial legacy while also approaching their industry in a new way.

Of course, this is not for everyone. Just because someone comes from a family of entrepreneurs doesn’t necessarily make them one. Entrepreneurship has several ingredients including appetite for risk, grit and determination, and leadership.

Consider This: Does your family have a cultural memory of the entrepreneurial spirit that created its wealth? How is this expressed? Is entrepreneurship encouraged/developed in the rising generation?

Original articles: https://www.forbes.com/sites/forbesbusinesscouncil/2021/11/01/considering-generational-wealth-as-a-factor-for-entrepreneurs/, https://www.forbes.com/sites/bernhardschroeder/2021/06/26/advice-and-insights-for-millennial-entrepreneurs–from-a-millennial-entrepreneur/, https://www.forbes.com/sites/nextavenue/2021/01/17/how-to-launch-an-intergenerational-small-business-in-midlife/, https://www.forbes.com/sites/stephanieburns/2020/05/24/how-to-build-a-legacy-for-your-business/#608a408d1380, https://www.entrepreneur.com/article/338538, https://www.weforum.org/agenda/2019/08/family-businesses-lifeblood-of-the-middle-east/, https://www.smh.com.au/business/small-business/hyatt-heir-says-there-is-no-secret-sauce-when-it-comes-to-succession-planning-20190609-p51w1x.html, https://www.forbes.com/sites/jaredhecht/2019/01/15/how-the-great-recession-killed-the-entrepreneurial-spirit-of-millennials/#5ff01d1811ff, https://www.fastcompany.com/40513553/can-the-wave-of-boomer-entrepreneur-retirements-create-a-surge-of-worker-owned-businesses

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement 
#nextgensuccession #intergenerationalwealth #governance #leadership
#entrepreneurship

The post The Spirit of Entrepreneurial Legacy appeared first on David Werdiger.

source https://davidwerdiger.com/2023/05/spirit-entrepreneurial-legacy/

A recent survey has found that only about a quarter of HNW parents plan to split their wealth equally amongst their children. Factors in the decision include their children having different approaches to money, estrangement, not wanting to support a child’s partner, and adjusting for previous significant financial support. There are also variations for the different care responsibilities of children, and the number of grandchildren.

There are two key lessons here: firstly, equal is not the same as fair. We like to think “equal” can be measured objectively, but even then, there are different ways to measure it – we can adjust for inflation because of the age gaps between children, or for many children each child has, or for previous gifts. So even “equal” has many interpretations. Seeking to be “fair” starts to bring in other more subjective factors like the specific needs of each child, or other sources of wealth they may have.

There is no right or wrong way to do this, and just as in parenting generally, the needs of our children may conflict and have us making trade-offs between them. It’s important to avoid viewing (and framing) matters as a zero-sum game – that one child ‘wins’ at the expense of another (who therefore ‘loses’).

The second lesson follows directly from this: having open discussions about wealth transfer helps children understand the ‘why’ and therefore achieve buy-in to the parents’ plan. Parental edicts can be just that until their children reach about teenage-hood. Beyond that, we can’t expect our children to simply accept what we want at face value. We need to consider their perspective. Communication is the foundation upon which any wealth transfer must be built.

Consider This: Does your family favour “equal” or “fair”? How does this work in practical terms? How do family members feel about it?

Further reading: https://www.wealthbriefing.com/html/article.php?id=193349#.YgR1UN9BxqZ, https://www.forbes.com/sites/forbesbooksauthors/2021/10/01/how-to-start-wealth-conversations-with-your-family/

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement 
#nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post Fair or Equal? appeared first on David Werdiger.

source https://davidwerdiger.com/2023/05/fair-equal/

“How to transition the family business to the next generation?” The answer depends on (a) who is asking (incumbent or rising generation) and (b) when (in the life-cycle of the business) they are asking. More often than not, the question is raised too late – when the incumbent generation is thinking of retirement, when there are already unstated expectations from both generations, and when there is already latent conflict.

The key ingredients to a successful family business transition are open communication between the generations working in the business and with other family stakeholders (current and future owners), a shared vision both for the future of the business and for the family itself, and a good governance structure.

Those things are the foundation required for succession. They come before identifying the right family member to occupy any particular management position.

Most families don’t set the foundations first, but that doesn’t mean all is lost. A process of vision alignment, improving communication and establishing strong governance can get things on track and reduce the risk of the latent conflict blowing up.

Consider This: Has your family business thought about succession? Have your imagined or visualised what succession looks like (for both the incumbent and rising generation)? Do both generations have a clear understanding of what will happen and when?

Original articles:

https://www.forbes.com/sites/forbescoachescouncil/2019/10/16/the-10th-commandment-of-family-business-succession-create-family-unity/, https://knowledge.insead.edu/family-business/the-key-to-making-succession-work-in-family-business-12546, https://www.propertycasualty360.com/2019/09/26/six-lessons-to-successfully-moving-a-family-business-to-the-next-generation/, https://www.asianjournal.com/life-style/lifestyle-columnists/family-unity-is-critical-for-business-continuity-part-2-of-2/, http://www.campdenfb.com/article/bringing-next-generation-family-business, https://www.forbes.com/sites/forbesbostoncouncil/2019/09/16/how-to-transition-a-family-business-to-the-next-generation/#2d9ab33c173d

[reprinted with permission]

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement 
#nextgensuccession #intergenerationalwealth #governance #leadership
#entrepreneurship

The post Family Business Transition Key Ingredients appeared first on David Werdiger.

source https://davidwerdiger.com/2023/05/key-business-transition/

Family offices (FOs) come in so many shapes and sizes that the term ceases to have specific meaning. It’s simply a set of services provided for a family.

The origins of the FO often determine their primary focus: there are plenty of FOs that are simply vehicles for co-investment, or glorified reporting platforms.

Having a FO essentially means taking a professional approach to managing the affairs of the family. It’s interesting that 92% of FO leaders believe the most successful FOs have external hires in key leadership positions.

What your FO will include depends on with your goals, so it’s important to consider them before you set one up (or start searching for a suitable MFO), and then to review against goals regularly.

The stuff everyone seems to look for are financial and investment services, but it’s hard to truly differentiate in those services.

The most ‘value’ you will actually get from FO services are the things that are the hardest to measure: creating continuity, cohesion and engagement across families for generations, helping the family define its purpose, and promoting family unity, harmony and happiness.

The rising importance of sound formalized investment management governance goes hand-in-hand with enhanced family governance.

Consider This: Does your family office have clearly articulated goals (both financial and non-financial)? How often do you measure performance against those goals? How often do you review the goals to ensure they are relevant to the family as it evolves?

Original articles: https://www.forbes.com/sites/forbesfinancecouncil/2021/07/19/how-a-family-office-can-uncover-goals-with-a-family-meeting/?sh=7b59ff99c1f5, https://www.forbes.com/sites/forbesrealestatecouncil/2021/06/29/how-to-build-a-family-office/, https://www.forbes.com/sites/paulwestall/2021/06/08/family-office-to-keep-it-in-the-family-or-not-to-keep-it-in-the-family-that-is-the-question/?sh=1cfe05b53f70, https://www.finews.asia/services/advertorials/34441-trust-administration-fiduciary-services-estate-planning-wealth-structuring-family-office-family-governance-trusts, https://www.kiplinger.com/retirement/estate-planning/602492/do-i-need-a-family-office-a-guide-for-the-rich-and-not-so-famous, https://www.campdenfb.com/article/rising-importance-social-capital-family-offices, https://www.lexology.com/library/detail.aspx?g=8b8eae4c-061f-47c9-8399-c5468b03e742, https://www.forbes.com/sites/johnjennings/2020/08/04/how-to-decide-what-your-family-office-should-outsource/#20f2c87e221c

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement 
#nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post Priorities of Family Office appeared first on David Werdiger.

source https://davidwerdiger.com/2023/05/priorities-family-office/

Wealthy people are a soft target at the best of times. The media revels in sensational stories about wealthy families, especially when things go wrong. And if that wasn’t enough, neo-socialists in the US preach redistribution and question whether the world should have billionaires.

The emerging “wealth minimisation” movement encourages inheritors to redistribute “excess wealth” for the betterment of society. In some cases, this is about making up for the “harm” done by the wealth creation in the first place, which plays to feelings of guilt. There is some overlap with those who advocate destruction of statues that are no longer politically correct.

What does all this mean to someone born into a wealthy family? Forming a positive identity about their wealth can be a huge challenge. The “acquirer’s and inheritors dilemmas” can lead to feelings of shame.

Families need to get ahead of this, and have open discussions about their family’s wealth to encourage positive feelings. Family philanthropy and impact investment can be framed as ways to serve the wider community, rather than being an act of penance.

Consider This: At what age did you start talking to your children about the family wealth? Do they have the tools to be comfortable with their wealth in dealings with with friends, colleagues and advisors? Are they able to discuss concerns within the family?

Further reading: https://www.yesmagazine.org/issue/how-much-is-enough/2021/08/10/rich-redistribute-money, https://www.kiplinger.com/personal-finance/603205/ok-boomer-vs-avocado-toast-how-to-talk-money-across-generations, https://www.rgj.com/story/news/money/business/2021/02/18/8-important-money-conversations-have-your-family-brian-loy/6793796002/, https://www.forbes.com/sites/rainerzitelmann/2019/12/16/the-six-most-overrated-factors-in-getting-rich/#59a7f68e7f75, https://www.kiplinger.com/article/retirement/T064-C032-S014-wealth-shame-when-wealth-changes-your-life.html, https://www.nytimes.com/2019/08/02/your-money/parenting-wealth-discussions.html

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement 
#nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post Wealthy; Pride, Guilt or Shame appeared first on David Werdiger.

source https://davidwerdiger.com/2023/05/wealth-guilt-2/

Family business succession plans (or the ideas for them that are embedded in the minds of the incumbent generations) are often loaded with assumptions. For example: that the “presumed/nominated successor” wants to join the family business, that they are a like-for-like replacement of the incumbent, that the business should largely keep doing what it does for the foreseeable future.

Any robust business (or organisation such as the family that controls the business) should be prepared to challenge assumptions on a regular basis. Unfortunately, family business do this less than other businesses for several reasons. Firstly, the attributes of grit and self-belief so essential for any founder make it hard for them to adapt and change. Also, family members stay in executive roles in family businesses for much longer, which can lead to them becoming stale.

Rather than using terms like “succession” which can carry assumptions like the ones mentioned, it’s more helpful to think of “continuity” and to do so in the broadest terms (i.e. not just the business in its present form, but the family as a evolving system).

In many fields, education has shifted from training people for specific occupations to teaching people the skills to learn new skills, and to take on jobs that don’t yet exist. One of the most important skills the rising generation must learn is to be adaptable and open to regular strategic renewal, rather than to be carbon copies of their parents.

Consider This: what assumptions are implicit in your family’s (documented or not) succession plan? what skills is the rising generation in your family learning that will serve them in future leadership roles?

Original articles: https://www.campdenfb.com/article/generational-handover-family-business-it-better-appoint-internally-or-externally, https://www.entrepreneur.com/leadership/heres-why-your-children-should-not-inherit-your-business/446621, https://www.campdenfb.com/article/redefining-wealth-succession-comes-fore-family-businesses, https://business.inquirer.net/371556/succession-in-family-businesses-heres-the-perfect-solution-if-the-next-generation-doesnt-want-to-take-over, https://www.forbes.com/sites/mindydiamond/2021/01/27/choosing-a-successor-5-lessons-learned-in-our-own-succession-planning-process/?sh=2657968c15c8, https://www.inc.com/christine-lagorio-chafkin/carlson-family-business-gold-bond-stamps.html

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement 
#nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post “Succession” & Strategic Renewal appeared first on David Werdiger.

source https://davidwerdiger.com/2023/04/succession-strategic/

David will be speaking at Prestel & Partner’s Family Office Forum in Singapore on 16-17 May.

Topic: Pruning the Tree
Many families that share significant assets may at some point consider whether to continue managing their wealth, business, or philanthropy together or going their separate ways. These questions can arise when a conflict or crisis hits, and they are forced to make decisions.

The post Speaking at Prestel & Partner – Singapore appeared first on David Werdiger.

source https://davidwerdiger.com/2023/04/speaking-at-prestel-partner-singapore/