Family Leadership Strategies

26 Successors face even greater challenges growing wealth What then might a family do when faced with the situation of not having next generation candidates capable of growing wealth? Many will turn to outside investment firms such as private banks or asset management firms to steward existing wealth and provide access to direct investments (in such areas as venture capital, private equity or real estate) as a means of growing wealth, albeit not at triple digit rates. Sibling and cousin dynamics A second area that merits examination is the unique dynamics of siblings and cousins. To the extent that parental influence results in complexity for the developing or new family leader, the addition of siblings and cousins amplifies this complexity many times over. This is not to say that such dynamics are negative. By virtue of adding more voices, more personalities, more agendas to the process, greater care must be taken to achieve positive outcomes. Indeed, when leadership transitions are done effectively, one might argue that the involvement of siblings and cousins and the strength and support this may bring is a competitive advantage of families. Harnessing the collective passion and dedication that binds a family in good times and bad is the challenge for every family leader, formal or informal. Indeed, the entire process of leadership transition, if carried out in a thoughtful way should aim to strengthen not weaken the bonds of siblings and cousins. As such, it is crucial that families give particular attention to sibling and cousin dynamics when addressing what is a successful outcome for them. In large families with multiple branches, deciding who is or is not eligible to take on a leadership role can be complicated. Family branch rivalries, peer competition, and family history can impede communication and constructive outcomes. The challenge is one of addressing these legacy issues head-on while emphasizing the collective vision for the future of the family. Implicit in any effective process is the understanding of the family’s long-term mission. Out of this mission or vision for the family, candidate requirements and eligibility for leadership will be established, and a well- articulated succession plan will evolve. Everyone — cousins and siblings alike — need to understand this long-term vision and how the rules will impact them.