Family Leadership Strategies

Observations • To sustain family spending power across multiple generations, families can either place constraints upon consumption, or embrace the need for further wealth creation. • Entrepreneurship and concentrated investment bets are the most common paths toward further wealth creation. • New family leaders or enterprise leaders must not only demonstrate strong personal characteristics as well as functional abilities; they must also create the potential for next generation members who may have novel new business ideas, or a talent for investing to generate new sources of wealth. It is often advisable that families draw upon the experience of a facilitator to guide them through such a process. Family leadership candidates need to get candid and actionable feedback either through a formal 360-degree assessment or through an informal process to encourage effective communication and promote teamwork. It is important that family members — particularly siblings and cousins — as well other stakeholders are given the opportunity to share candid views on candidates’ role fit and willingness to collaborate. Both transition process and conflict resolution between siblings and cousins need to be fair and open. Where necessary, seniors must intervene and adjudicate disputes around succession, control, and ownership interests early on, and ensure consistency with agreed succession and governance principles. Families must keep in mind that siblings and cousins are also susceptible to bias, preconceptions, and inconsistent behavior. Families must therefore show patience and persistence. The use of a selection committee comprised of outside (non family) directors or trusted advisors may add objectivity to the effort.