Evolution is about keeping your value proposition relevant. The number one concern among the family business and high-net-worth families is whether their wealth will unify or divide their family. Learn to spot the red flags that indicate a family might not remain unified through the wealth transition process and what to do about it.
- What is your role when family members won’t attend family meetings?
- When family leadership is unwilling to talk about the wealth?
- When the next generation fails to launch?
Navigate Challenging Conversations
Inherent in transitioning wealth is the need to navigate challenging conversations.
A mantra we use is, “The right conversation at the wrong time is the wrong conversation.”
Pay attention to your mood about the conversation and the situation it happens in to increase the likelihood of the conversation going well.
Consider inviting the person to the conversation by saying something such as, “I’d like to have a conversation about aligning our expectations regarding wealth transition. Is this a good time to have that conversation?”
By inviting people to the conversation, you allow them to opt-in, and that puts the conversation on more equal ground.
Be Curious, Not Critical
The complex conversations needed to prepare heirs for wealth transition are often stalled because family members are afraid of being judged or having their opinions interpreted critically. But delaying those conversations can lead to divisiveness, solidified opposing positions, and increased friction in relationships.
We suggest trying a new perspective: “Be curious, not critical.”
Ask more questions from a place of curiosity to understand the other person’s intentions. Ask open-ended questions such as these:
- What do you see as your role in wealth transition?
- What are your expectations of me?
- How do you see this wealth transitioning well to your family?
This allows the conversations to happen on a more even playing field, in a mood of mutual respect, which will give way to more possibilities vs. family members defending their positions.
Hit the pause button on their reactivity, take a breath and be “curious, not critical” with the people you care most about in your life.
Alignment vs. Agreement
Merging expectations inherent in generational wealth can be tricky if an agreement is the only option. Conflict often happens when family members argue for agreement and one person has to capitulate or “lose” resulting in hurt feelings and/or resentment. Instead, we suggest having conversations to reach alignment.
In other words, search for a common goal, and accept there may be more than one way to get there.
In a recent family meeting, a son and daughter could not “agree” on how the foundation funds should be used, causing increasing tension in their relationship. We helped them first reach an understanding of what was important to each other and align on purpose.
They were then able to co-design alternative ways of accomplishing their goal. Although the venues they wanted to serve were different, they shared a commitment to be a force for good locally.
To find alignment, first check your understanding of the other person’s “why”, what is important to him or her? Then explore the intersection of what is important to both of you.
The Dichotomy of Cordial Hypocrisy
Speaking honestly about draft picks for the NFL is one thing. Speaking honestly about inheritance is another thing entirely.
Family communication styles are developed over time and passed down through generations. One pattern we see frequently is cordial hypocrisy. This is characterized by ugly thoughts behind the well-rehearsed warm smile.
Most people can sense this dichotomy but have only unfulfilling practices to cope with it.
Unspoken expectations or fear of judgment squash authenticity and put family harmony at serious risk. Necessary conversations are delayed, increasing the dissonance among family members, often leading to competing factions. Power struggles replace congruence and cooperation. And the cordial hypocrisy spreads since that is the principal way the family communicates about delicate matters.
Notice when you hear yourself saying “yes” when you really mean “no.”
This is an affront not only to your integrity but the listener’s integrity as well. Well-designed practices can and do make a big difference in putting relationships first during wealth transition.
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