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In the book, Wealth of Wisdom, Ellen Perry talks about the importance of passing on your values to the next generation. 

This is one of the most important questions we can ask—and answer—but often one of the most avoided topics. It’s easy to pass on business plans and profits and trust funds, but it’s far more challenging (and important) to pass on our values. In fact, these are things that will offer our children and grandchildren the opportunity to not only grow the businesses we created, but also be happy doing so.

The authors say there are five things that determine whether or not your values will be passed on: 

  • Values are caught, not taught. 
  • Values are different than beliefs, preferences, choices, and principles.
  • Leading a life that is consistent with one’s values is the greatest predictor of happiness.
  • Storytelling is a valuable means of sharing values.
  • If the family is to flourish for multiple generations, the attention to human capital should be as serious as that of financial capital.

Values Are Caught, Not Taught

This means that values are learned from the people who practice them, instead of being told how to behave. We catch these values by seeing them live by example. I have a friend whose mother always said when they left home for school, a date, to hang out with their friends, to their job, or even to run an errand, “Remember who you are and what you stand for.”

What she was installing in them from the moment they could talk was that the things they were learning at home were the values she expected them to take into life.

If your children or grandchildren do not live your values, it’s likely because they did not see you embody them in everything that you did. Fortunately, it’s not too late to do that!

Make a list of the things you want to pass on and then begin to live them. Remember, always, who you are and what you stand for.

Values Are Not Beliefs or Principles

Your values are your “why.” They are the reasons why you do what you do and think what you think. Values are part of your internal guidance system. 

Principles or beliefs, on the other hand, do help guide your behavior, but only if your values are aligned with them. Principles or beliefs don’t necessarily depend on your values and they are independent of religious and personal belief systems.

What it comes down to is that values govern your behavior and principles govern the consequences. 

As you help your children and grandchildren “catch” your values, keep in mind that they may change over time, particularly as you learn more, make mistakes, and learn again.

Greatest Predictor of Happiness

A study by Applied Research Quality Life found that people may be happier when their personal values benefit them not in and of themselves, but because they give a sense of belonging and make it easier to navigate the world.

Unsurprisingly, it found that happiness comes first from the values that surround our family, friends, and religion. 

Tell Stories

Oftentimes, when you ask people about their values, you might hear words such as ethics, humility, loyalty, and commitment. But what do those words mean—and how do you help your family “catch” them?

Tell stories.

For most of my career, I worked with my father in his business and we focused on the normal things—profitability, strategy, and growth. He was my very best teacher in my business life, not only what to do, but also not what to do. 

As part of my learning with him, I watched him do things to people, including me, that, at best, could be called harsh. I quickly realized that behaving that way demoralized employees and made customers angry and resentful. Our business was unique and at that time customers had little or no alternatives to the value proposition we provided.

Years later, after no longer being part of the family business, I learned there was a practice for advising family businesses. While most businesses focused on the same subjects my dad and I focused on – profitability, growth, and strategy – virtually none of the owners of these family businesses focused on emotional intelligence, building trust between family members or planning for succession so that the business and the family could flourish for multiple generations.

Attend to the Human Capital

Three centuries ago, there lived a political economist named Adam Smith, and to him the key to business success was clear. Production depended on four types of fixed capital: tools, buildings, land, and the “acquired and useful abilities of all the inhabitants or members of the society.”

Unfortunately, this was how businesses began to operate, and people became part of our working capital. The human side—the people—was lost in translation.

Don’t let the people in your business—family, friends, and colleagues—get lost in the effort to make money and pass it on. 

Sharing your values, allowing your family to “catch” them by watching you and listening to your stories, and living by example are the best ways to pass your values on to the next generation.

Recommended Reading

Further Reading at Family Wealth Library 

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