by Doug Gray | Apr 1, 2025 | Consulting, Leadership, Uncategorized
Summary: In a time of rapid AI acceleration, family business leaders must balance innovation with intergenerational trust. Here are six key risks—from data privacy to ethical forecasting—and practical AI applications already transforming client engagement. Drawing on examples from the AFHE Spring Conference last week, and my client case studies. AI must support, not replace, human relationships. For family advisors, innovation is no longer optional—it’s expected.
Artificial intelligence (AI) dominates many conversations. For some people, AI is a catalyst for innovation. For others, AI is a threat cloaked in code.
The Technology Adoption Curve model describes how tools such as AI have been adopted by Innovators (2.5%), Early Adopters (13.5%), Early Majority (34%), and Late Majority (34%). That model begs my question: How can we measure our rate of AI adoption in Family Business?
Many younger people are more digitally trusting than elders and owners. Some multi-family offices, RIAs, and consulting firms are designed to serve Millennial and Gen Z inheritors. Advisors know that family business leaders must not only preserve capital—they must also preserve trust across generations.
At the recent Attorneys for Family-Held Enterprises (AFHE) Spring Conference, I asked advisors to rate their own AI usage and fears on a scale from 1 to 10. The responses painted a familiar picture of curiosity mixed with concern. One advisor quipped, “I’ve used ChatGPT to write emails, but I still don’t trust it with anything sensitive.” I shared how to create a customized GPT that protects sensitive client information and does not share data with large language models (LLMs). Another enthusiastic advisor described AI adoption as “table stakes” for maintaining relationships with Next-Gen clients, who expect personalized planning, 24/7 access, and digital transparency. He is worried about retaining AUM from younger owners.
That tension—between confidentiality and innovation—describes the risks, challenges and need for change. Here are some practical applications based on my AI consulting solutions that readers can implement.
Six Risks for Family Business Leaders
- Data Privacy & Security: All leaders must access and protect sensitive financial and family data. Data breaches aren’t just costly—they’re unacceptable. Every trusted advisor in every business sector knows that our fiduciary demands require closed access, digital firewalls, and the most robust multi-factor authentication security protocols. I have heard stories of repeated multi-million-dollar attacks. Countless Family Offices and business leaders are targets for cybercriminals because they have access to wealth. We also know that inconsistent human behavior is a poor substitute for those AI-driven criminals.
- Over-Reliance: Replacing human emotional intelligence with algorithms may feel good because of the dopamine surge, but it erodes relational trust. I’ve heard clients say, “I interact more with my GPT than with people!” Psychologists and clinicians have studied the impact of digital addiction for decades now. We know that over-reliance on digital resources is a factor in anxiety, depression, sleep problems, obesity, neck and eye strain and memory loss. In short, AI is not a substitute for positive human interactions.
- Ethical Predictive Use: There are tools like Lex Machina and Bloomberg Law that can forecast divorce or succession risk. But should they? AI-driven actuaries and healthcare data sets can now predict lifespan and health risks. But should they? There is no universal acceptance of the ethical boundaries that can be recommended to protect individual rights. There is no acceptance that any government, tech company, or international community has defined ethical uses of AI. The implications for insurance companies, health care providers, philanthropy and estate planning are rarely discussed. We need to develop ethical boundaries for AI use.
- Regulatory Uncertainty: As AI applications accelerate, the tools always get faster, cheaper and more accurate. Some regulatory agencies, including the SEC and FINRA, have developed guidelines. But the bottom line is that AI applications are designed to learn from themselves, to improve efficiency in microseconds. By their design “black-box AI tools” are secret. They lack transparency and defy regulatory compliance. We need to develop regulatory AI guidelines that resist bias and protect individual confidentiality.
- Resistance to Change: In response to countless threats, humans have always adapted to evolve slowly. We always protect our assets. Some are inclined to say, “Yes, of course I embrace change. You go first.” Many solo advisors admit lacking the bandwidth to vet new AI tools or automate workflows. One of my clients said, “I know I need AI scanning tools like Optical Character Recognition (OCR) someday- but certainly not during tax season!” Thankfully, anyone can now use AI to design business templates for any possible change.
- Talent Gaps: We all make mistakes when we “don’t know what we don’t know.” Did you know that there are some key competencies that are uniquely human and will never be replaced by AI? Those competencies include resilience, humility, empathy, curiosity and learning agility. When we identify how to assess and develop those competencies, then we redefine career and talent gaps. Without doubt, AI is here to stay. How we use AI will redesign all family business consulting.
Consider the following examples.
Using AI to Re-Design Family Business Consulting.
- Adopt AI-tools that scaffold learning, like micro-coaching sessions, or simulations. One example is my AI-assisted communication coaching platform that provides confidential analysis and feedback using customized role plays. Imagine selecting a role play like “sibling conflict” or “succession planning.” Then select an avatar based on the interactions you anticipate or skills you need to develop (e.g., blunt, skeptical, friendly, etc). Then record your interactive learning. Study the confidential analysis, feedback, and transcript. Practice again and again. We know that deliberate mastery accelerates skill development. When I did a demo with an audience last week, they said, “This is incredible technology, and gets at communication– the heart of all conflict problems.” Those individual, recorded sessions are GPDR and SOC2 compliant, and have been embraced by Korn Ferry, Spencer Stuart and Google. Any presentation, interview or recoded content can be uploaded for analysis and feedback. Imagine improving your communication skills with immediate feedback before meeting with a demanding sales manager. One tech company found a 24% increase in sales when they used this platform. Another large company trained 15,000 people in weeks, with a 97% training completion rate and high engagement scores. See www.JITCoach.com or ask for a demo.
- Use AI to record meetings summaries, create action plans and task lists. With permission from all participants, many host platforms (e.g., Zoom and Microsoft Teams) can provide summaries for any number of participants. I have hosted webinars where AI Summaries (e.g., Otter and Fireflies) outnumber the number of human participants. The value for busy professionals is access to the webinar content when they may be double-or-triple-booked. The value to me as the webinar host is high quality, consistent distribution of my key points within minutes to those who want that summary.
- Use AI summaries as a personal development tool. Self-coaching with “mirror, mirror on the wall” is not useful. However, recording a private session on your zoom screen is an opportunity for assessment and development. That recording can be stored on a password-protected thumb drive for security. If uploaded into a private YouTube link, you can then click a button and see your transcript. Any GPT can then edit your text and suggest changes. If you want to be more assertive, the AI will provide a revised text. If you want to be more emotionally vulnerable, AI will provide another revised text. We have more access to behavioral feedback than ever before in human history.
- One of the most powerful developments is the ability to create customized AI systems. I’ve built what some call a “closed chat GPT”—an AI trained on my books, dissertation, research papers, blog posts, and website content. I call it “Gray Matters” and share it with my clients. When asked, “How would Doug respond to this situation?” it provides evidence-based answers drawn from that data set. Crucially, you can configure these closed systems to maintain confidentiality, which prevents your data from being shared with large language models.
Small business leaders can leverage this same technology. If you need to maintain client confidentiality for legal reasons but want to provide unique value to those clients, a closed AI system offers a perfect solution. This fact explains why there are so many chatbots on company websites—they’re cost-efficient and can provide consistent service 24/7. Do you need to invest in Schwab or Fidelity or Vanguard? Then you need to interact with bots before humans.
- Use multiple AI tools to develop expertise. If I ask Chat GPT “How can I accelerate succession planning for a family business?” It will provide pages of information. If I’m confused, I can always ask “Tell me more…” and it will do so. But the quality of my prompt determines the quality of the response. So, if I copy that first response and paste it into Grok I can then ask, “Analyze this document and suggest improvements.” Then I can take the second response and paste it into Gemini to ask, “What am I missing?” and now I have responses from three data sources. Like asking three colleague or three interns for their perspectives, the value of that final result is 3x better. Consultants have always sought opinions from multiple sources. When you add AI to your research the quality may be surprisingly good.
Case in Point: A Next-Gen Shift
Consider a second-generation family CEO in Nashville, TN, who introduced AI-generated financial dashboards to quarterly family meetings. The elder cousins were initially skeptical. They embraced the dashboards—not because of the tech, but because the founder emphasized how these tools would reduce conflict and increase transparency.
The result? Fewer side meetings, more collaborative planning, and, surprisingly, more laughter around the kitchen table and the board room table.
Takeaways for Family Business Leaders
- Start small: Try AI-generated summaries (e.g., from Zoom or Microsoft Teams, with client permission). Edit them and share discretely. Select an AI tool (e.g., Chat GPT, Claude, Gemini, Grok) for searches. Save it in your task bar so that you use it frequently. Edit results from one AI tool to another, then select the tool that best serves your needs.
- Engage your team: Create internal cross-functional task forces with IT, compliance, and client experience leaders. Focus on solving client problems, rather than cool new solutions.
- Educate clients: Share how AI supports (not replaces) your professional counsel. Solicit feedback on topics or services required by your clients. Automate those services and continue soliciting market feedback.
- Ask the trust question: “How does this AI tool deepen our trusting relationship?” Clients stop engaging advisors when they perceive limited value. AI tools can add significant value when used with care.
Final Word: Innovation is Now an Expectation
As fiduciaries, educators, and ethical leaders, family business advisors must balance technical advancement with emotional insight. Clients trust advisors who care—more than those who depend on AI.
Doug Gray, PhD is the CEO of Action Learning Associates, author of The Success Playbook for Next Gen Family Business Leaders (2024) and creator of JITCoach.com. He specializes in leadership development, AI coaching, and succession planning in family-owned enterprises.
by Doug Gray | Dec 27, 2024 | Business, change, Consulting, family, Family Wealth, Leadership, strengths, Success
And why we should talk about it!
Yes, the pyramids and Great Wall are significant structures.
However, if I were to list the greatest wonders of the world, Tribalism would be #1. Think about it.
You and I do whatever we can to protect our loved ones. Their safety is critical. We may mortgage the house to protect our children who require healthcare. Our social groups reinforce whatever world views we think are accurate. Algorithms are as ancient as the walls in Jerusalem that separated tribesmen. Why assume that tribalism is always a bad thing?
Tribalism describes the social fabric in every community. In every corner of the world. We have dress codes that reinforce local norms. We have countless languages, and jargon, to reinforce who is in the group. And we have endless examples of battles for property and social honor. Those tribal histories create identity and protect shared values.
My family roots include a Scottish clan that brutally fought for marginal farmland and sheep. My wife’s roots include a different Scottish clan that brutally fought against my antecedents. And today we embrace our shared Scottish roots. When I travel abroad and hear someone with an American accent I’m immediately drawn to them. Tribalism at work. We quickly identify those who “in group” and those who are “out group.”
Psychologists (like me) know that those judgements occur in a millisecond. Thankfully! They enabled my antecedents to survive. And they enable you and I to quickly discern threats from allies.
Tribalism in extended families permits all of us to protect and distribute assets (That’s the second wonder of the world, on my list of two wonders. For a different post). We save money and property so that we can distribute it to our loved ones.
When families protect assets, they can compound over time. The Vanderbilt assets were dissolved within one generation amid squalor. The Rockefeller assets are wisely distributed to this day because the family and their advisors subscribe to a shared belief: wealth requires responsible stewardship and service to others.
All philanthropy is the result of tribalism at work. Look around your city. Look at the names on the buildings such as that museum, university, church, synagogue, stadium…. Look at the beautiful shared spaces like parks, libraries, with anonymous donors who want to support their legacy.
Recently I video-recorded some comments about tribalism and compounding assets with a Family Office client. They serve 80 wealthy families with complex needs. At root, most of them share the same values of integrity, asset preservation, legacy leadership, stewardship, philanthropy.
We don’t talk about family business succession because we don’t understand wealthy people. All family enterprises are built on tribalism.
Fears prevent us from understanding the greatest wealth transfer in human history, which is quietly successful, and happening today.
I wonder what would happen if we discussed the power of tribalism and compounding assets more openly? I can think of 4-5 people I’d like to learn from. How about you?
Schedule a 1:1 session with me soon!
by Doug Gray | Dec 24, 2024 | Business, Consulting, faith, family, Family Wealth, Leadership, strengths, Success
What interest should go first?
Family Capital is defined as durable family harmony and governance.
Financial Capital is any investable asset – time, treasure, tithe or truths.
I’m not sure which form of capital goes first.
But I am sure that values drive behaviors. We love our children, and we would take a leave from work to care for our children. Right?
Recently one of my clients shared a story of a family that did just that. They rallied around a 2-year old fighting cancer. They re-designed work loads and scheduled care givers. They pooled money to support the healthcare costs. And last week they rang the bell- to celebrate! The nurses lined the hallway. The neighbors lined the street. The grandparents drove the car. The parents waved to neighbors and protected their immune-compromised child from any risks. Values drive our behaviors.
I am also sure that most families share the same values: integrity, asset preservation, legacy stewardship, philanthropy, responsible service to others.
When I directed a non-profit summer camp program at a Quaker School near Washington, DC, I saw those values every day. Parents invested as much as possible to provide more opportunities for their children. That program grew over 800% because of their shared values.
Many of those parents struggled to support their children. They wanted to support their family capital. And they had limited financial capital. Just like you and I.
My experience is that most families struggle with financial literacy because they don’t discuss financial capital enough. There is an endless need for family meetings to discuss cash flow and investing.
When our children were in Middle School and High School we had Sunday evening meetings after dinner to discuss the week, and financial matters. They were short meetings. The children led parts of them. They learned to live below their means. They learned that what their friends posted on social media was not always true. They learned to invest in compounding assets.
Now I facilitate family meetings for clients. On Tuesday night I facilitated another virtual 90-minute family meeting. The patriarch, matriarch and a sister represented the Elders. The Next Gens included 3 children aged 28-40 and one spouse. Three wealth advisors provided content on retirement and investing options. My role was to encourage the Next Gens to ask questions about Roths, IRAs, compounding, employee matching… everything needed for them to make more informed decisions.
That was their second educational session and we will have at least two more in the next 4 months. One breakthrough was when the daughter, newly divorced and single, realized more options from her employee match. Another breakthrough was when one of the sons realized that as an independent contractor doing work for the family business, he needed to contribute more to his pretax options.
As the children shared their takeaways the father was glowing with delight.
Every Elder wants their children to make smarter financial decisions.
Maybe Family Capital and Financial Capital go hand in hand.
Any thoughts?
by Doug Gray | Dec 20, 2024 | Business, Coaching, Consulting, Financial Professionals, Leadership, Managers, Meetings, money, organizational leadership, strengths, Success
… that ANYONE should avoid
A grey-haired patriarch recently told me, “I love my kids and grandkids. But I don’t trust their ability to manage my money when I’m gone. My lawyer tells me that I need to restrict their access. What do you recommend?”
This Family Business Chaos myth assumes:
- That fears motivate most human behaviors
- That Elders need to restrict access to financial assets
- That the Next Gen family members are unable to manage money
- That advisors can recommend effective solutions
How silly.
Tragically, I’ve met “Family Business Consultants” who boast about $100,000 annual retainers to “manage the process.” They presume that family business leaders are inherently unstable, dysfunctional, heading toward chaos. With a wink they say, “And who knows when you will need me?”
How tragic and silly.
I call it the Family Business Chaos myth. In future posts I’ll share some more related myths. In this post, let’s look at each of these 4 statements in turn.
- Fears do motivate most human behaviors. When we are hungry we eat. When we are threatened we fight. When we are confused or uninformed we create stories to “fill in the silence.” I recently heard about two Elders who anticipated a visit from their niece, whom they had not seen in 15 years. They created stories to explain the visit, from “she must have cancer” to “her husband may have abused her.”
In the same way, Elders often create stories to explain their kids and grandkids. It’s a delightful, ancient past time! When I visit Elders they may entertain me with stories, just as we drink lemonade on the porch. They often voice fears such as “she will never find a man who appreciates her” or “he couldn’t make money if we served it on a golden platter.” Those stories are entertaining. But they may be downright silly.
- That idea that Elders need to restrict access to financial assets is ancient, and often based on some local precedent. We all repeat stories that reinforce our biased beliefs. Have you heard about our neighbor named Bubba who received a trust fund when he turned 21, then became an opioid addict? Confirmation bias occurs when we repeat desired beliefs. The fact is that most people with access to money learn to live below their means. They practice financial literacy.
Restricted access to wealth, or any resource, does not accelerate social change. In fact, restricted access can imprison people. Look at global slavery, work conditions, oppression of women or poverty. Restricted access may cause violence. Look at global divorce, broken families, suicides, loneliness, drug abuse. Instead, what if wealth advisors actually shared their knowledge in a series of educational sessions? What if digital courses encouraged Next Gen leaders to ask questions about index funds, incentive trusts, donor assisted funds, IRAs, retirement, employee matches?
The #1 web browser is Google because people search for information. The #2 web browser is YouTube, because people search for answers. And they are both owned by Alphabet. The fact is that Next Gens are digitally trusting, better educated than many Elders, and often want to develop more financial literacy. Just ask them!
- The notion that Next Gen family members are unable to manage money is based on ignorance. Throughout recorded history, in every corner of the world, most assets are quietly transferred to the Next Generation. (Also called the Rising Generation, like a Rising Tide or a tsunami). If Elders are not able to teach responsible wealth management, then other advisors can do so. One positive outcome from the Certified Financial Professional (CFP) designation is that wealth advisors are better self-managed to actually serve their client interests. For many decades “financial managers” were incentivized by higher commission fees or transactional incentives from their product managers.
Throughout my career I’ve taught people how to manage their precious time, money, treasures and talents. Nothing is more important. Perhaps anyone reading or sharing this article shares that same commitment.
Teaching financial literacy assumes that Elders and Next Gens are willing to learn. When I facilitate family meetings, I encourage the Next Gens to ask questions, because curiosity is the currency of learning. When they ask questions, the wealth advisors can share resources. I also encourage the Elders to bite their tongues- which is difficult. They often want to share their values and knowledge. But our kids learn to swim from other adults, not from their parents. Our kids learn to golf from professionals, not from their parents. In the same way, when Next Gen leaders ask questions and learn, the Elders smile with delight. They are practicing financial literacy and seeing that “light in their eyes” when their children and grandchildren actually learn.
- We want to believe that advisors can recommend effective solutions because we want to trust “experts.” We go to physicians when we require healthcare, and they diagnose and treat us. We go to lawyers when we require asset transaction or protection. For many years, when I asked Google “Can you provide some business consulting?” it replied “Not at this time.” Now over 40% of my clients use ChatGBT for business consulting. Immediately. I have copied responses from one platform, like Claude, to ask other platforms, like Inflection, to provide more details. And recent studies confirm that some AI platforms demonstrate more empathy than “professionals.”
Let’s assume that advisors using AI will be more effective than those not using AI. And they will become even more effective next month. And every month thereafter. The best advisors are already using AI to provide more recommendations than ever for their clients. In seconds. Converging technologies, such as healthcare and AI consulting, will increase in power and provide even more value. Accurately. Imagine an empathic robot that suggests how Elders can bite their tongues. Imagine a hologram of the founders that can explain the values and challenges faced 50 years ago. Imagine a family meeting with 5 generations of healthy, opinionated owners instead of 3 generations.
Now imagine that one “family business consultant” can serve your legacy needs. How silly.
The example of the $100,000 annual retainer from that winking “family business consultant” who says, “you never know when you may need me” could be a waste of money.
My experience is that the presumption that family business leaders are inherently unstable, dysfunctional, heading toward chaos is downright silly. It may be lucrative for those using retainers. But it ignores the reality that family business leaders can flourish.
Yes, I’ll address HOW to flourish in a series of future posts. Please share this post with anyone who might appreciate it.
And add your thoughts or comments on this post about the Family Business Chaos myth? This could become a discussion.
Schedule a 1:1 with me today.
by Doug Gray | Dec 19, 2024 | Business, change, Coaching, Consulting, Family Wealth, Financial Professionals, Leadership, Personal Development, Uncategorized
… and Succession Facts
You know the myth: Business succession is difficult and full of conflicts.
The myth is that outrageous Hollywood movies like Succession, The Godfather, Dallas or Dynasty are the norm. The myth is that tax advisors are never able to minimize taxation, that estate attorneys are well intentioned but haphazard, that more wealth leads to more conflict.
The fact is that most wealth transitions occur quietly when there is shared understanding of decision making. That’s called governance.
Good governance is the reality for ALL of my clients- or they wouldn’t hire me.
Good governance can be taught and developed.
Let’s start with two definitions. Then I’ll share 4 steps that really work.
There are two types of conflict: Interpersonal conflict is usually bad, and Task conflict is usually good.
Interpersonal conflict is based on emotions and should be managed carefully, even if you dislike that cousin who just said something outrageous. But how do we self-manage? We are emotional animals driven by fears. Threats are everywhere. !Right?! Behavioral psychology research confirms that we think faster or slower depending on the stimulus and the situation. When I’m inclined to speak impulsively, I often massage the back of my head. Why? Because I want to slow down, think, and respond with care. We can all practice self-management. The oldest part of our brain is in the back of our skull. The prefrontal cortex, our executive center, is in the front of our brains. So, on good days, we practice self-managing to avoid interpersonal conflicts. (Or not…)
Task conflict is based on different understandings of information or roles. When one cousin wants to invest in a new digital marketing program, and another cousin wants to invest in a new building, they will have task conflict. Task conflict is usually good because it may lead to innovations. I define innovation as “new ideas applied.” One reason for agendas and information packets before board meetings or family meetings, is to share information so that the participants can make smarter, more informed decisions. There can still be emotional moments- full of drama- but the focus of the meeting is on decision-making to address the task conflicts.
One reason for a facilitator with expertise in behavioral psychology (like me) is to minimize the interpersonal conflict and maximize the task conflicts.
As a species we all want to create order out of chaos. That’s why we construct processes, and (occasionally) organize our closets. That’s why we ask experts for advice. When we require a healthcare assessment we expect nurses to collect data, so that physicians using AI can diagnose and treat our evolving needs. Right? When we require a transfer of assets we expect attorneys and wealth advisors to assess needs in a deep discovery process, then recommend next steps. Right?
I organize teams of advisors to serve families because I know what works. Holistic advising is here to stay. And my clients deserve a team of experts. They also deserve a cleanly defined process. Something useful.
Here are the 4 steps in my Family Capital Discovery Process (based on my research and decades of consulting). Think of these as 4 phases in any engagement together. Notice the verbs in bold font. Perhaps you can adopt these?
a. Assess the current and future Family Enterprise ecosystem. I call these states the Now and the Next. Each ecosystem has unique history, values, legacy, stages, visions, and risks. A Family Business may generate assets, like a golden egg or a core business. And there may be multiple businesses over time, called a Family Enterprise. Think of Cargill or Walmart. Or think of the nearby franchise owner or car dealership in your city. Perhaps you know that over 60% of our GDP and job growth is driven by Family-Owned Businesses. How do you assess those unique strengths and weaknesses? Lately I’ve been using AI tools to accelerate that assessment process.
b. Develop a Family Manifesto that describes the Family Purpose and reasons for working with multiple advisors. Most families have a verbal understanding of what the founder, Elder or owners want. When that verbal understanding is written and shared, teams can evolve. For example, in a recent series of meetings, I conducted interviews with the Elders, took detailed notes, and shared their asset map with the Next Gens. They had never seen one list of their capital and financial assets- and there were plenty of rumors! Finally, they were able to draft a manifesto that accelerated succession planning. After decades of avoidance and mystery, they were finally able to make crucial investment decisions. Four branches – over 50 people- were relieved. When verbal or unstated assumptions become written and shared, family businesses can evolve. That’s called organizational maturity. And that process is not too difficult. Perhaps you know a family that can benefit from a Family Manifesto? Perhaps you can accelerate that process?
c. Define the four Family Focus Pillars. These are 4 critical questions used by families with over $50M in investable assets, who may have a Family Office to organize their legacy. (With credit to my friend Peter Vogel and his team at IMD). My experience is that these 4 questions can be useful for any family, with any amount of wealth. Perhaps you can answer them this weekend when you sit down for your next family dinner. Who we are? What do we own? How do we function? What is our impact on society and the environments and legacy? Yes, I’ve had these discussions with our nuclear family. Yes, you can do so also!
d. Organize more effective work guidelines with a team of advisors. We all need a little structure at times. We can’t play football without yard lines and goal posts. We can’t have a swim meet without lanes and a timing system. I recommend the least amount of structure in the moment. Families need to evolve. The reason I wrote the Success Playbook for Next Gen Family Business Leaders (2024) is because clients asked me to do so. It’s a playbook of books, structures, and great resources. Perhaps you know someone who needs a little structure or a loving nudge?
Bottom line: Now you know what works. Please share this post with those who would appreciate knowing what works.
- One fact is that succession usually happens quietly, without conflicts.
- Another fact is that good governance can be taught and developed.
- Another fact is that we can each minimize interpersonal conflicts and maximize task conflicts.
Any thoughts or comments?
Schedule your 1:1 session now here.
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