A Call for Holistic Prosperity.
“Words in our field have been the enemy,” Jay Hughes insightfully remarked at a recent roundtable discussion I was part of.
While there are many words that could fall into this category, he highlighted the term “wealth.”
Historically, the word “wealth” has encompassed a much broader spectrum of meaning than merely financial prosperity. The Old English root “weal” signifies well-being, welfare, and happiness. In medieval England, for instance, legal texts often described wealth in terms of the communal health and prosperity, indicating a societal rather than individual focus.
Religious teachings across Christianity, Judaism, and Islam similarly approached wealth from a holistic standpoint: spiritual richness and moral integrity were deemed as vital as, if not more important than, material accumulation.
“Wealth” is so much more complex than how we use the word today, particularly as advisors in the family business space. We’ve been trained and rewarded to exclusively focus on financial assets like money, stocks, and real estate. But this limited perspective primarily serves the consultants and institutions managing these assets, frequently to the detriment of the families they aim to help.
As Jay has repeatedly emphasized, in family businesses, actively re-emphasizing well-being as an integral part of wealth can transform both family dynamics and the enduring success of the family business. By focusing on developing human capital (skills, health, values), intellectual capital (knowledge, innovation), emotional capital (trust, resilience, emotional intelligence), and spiritual capital (shared beliefs, ethical standards), advisors contribute to the overall health and potential of each family member and the business.
Healthy individuals translate to healthy families. Not only does this approach enhance individual self-worth and job satisfaction but it also builds a resilient, adaptable, and ethically grounded enterprise. In fact, it serves as an antidote to the axiom “shirtsleeves to shirtsleeves in three generations.” Sustainable prosperity results from cultivating deep-rooted values and broad-based well-being.
However, from what I’ve observed, trustees of family wealth are often hemmed in by systems primarily designed for financial growth. Rewards are tied to monetary gains, not the enhancement of family well-being. As I’ve noted in discussions, these trustees face constraints from legalities and expectations to grow wealth, which starkly limits their capacity for a broader, more holistic approach. This institutional framework stifles family conversations that lead to engagement and conversation about what family well-being looks like.
As a community, family business advisors must help families reframe the fullness of wealth, which includes, as already mentioned, the human, intellectual, emotional, and spiritual capitals essential for true prosperity. But how do you do that when trustees aren’t trained to do so?
Ready to Fight the Enemy? You Need a CLO.
The role of a Chief Learning Officer (CLO) becomes increasingly essential as society moves towards a view of wealth that is purely financial. A CLO is tasked with cultivating a culture that prioritizes all forms of capital within the family enterprise—human, intellectual, emotional, and spiritual. By focusing on these areas, the CLO works to align the family members’ individual and collective goals, significantly reducing conflicts and enhancing overall well-being.
This role is not merely administrative; it’s fundamentally about mentorship and fostering an environment where every family member can thrive. Given their depth of experience and vested interest in the legacy of the family business, founders are uniquely positioned to step into this role as they transition to the next phase of their leadership.
As I’ve written about previously, founders need something to engage their entrepreneurial spirit after passing on the business to the next generation of leaders. By becoming a CLO, a founder can continue to exert influence in a way that ensures the business not only prospers financially but also cultivates a robust foundation of well-being that can sustain the family enterprise for generations to come.
This transformation allows founders to leave a lasting impact that extends beyond profits, securing a legacy of holistic prosperity for their family.
To effect meaningful change, we, in the family business community, must challenge the entrenched norms of the industry. Redefining wealth as well-being will not only prevent the erosion of financial assets through unnecessary conflicts but also preserve and enhance the familial bonds and personal fulfillment that constitute true prosperity.
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