Over decades of work with family business leaders, wealth advisors, and family office professionals, I see the same pattern. Failures result from too much dependence on financial and legal matters. People are emotional. Families are doubly emotional! Right? Think of your family or a client’s emotional mess. Yikes!
Those blind spots can be avoided. Most successful wealth transfers and succession plans occur when some third party expert facilitator supports the process- not the financial and legal factors.
The Missing Piece in Traditional Wealth Planning
While financial and legal expertise IS necessary, they are NOT sufficient. This insight comes from decades of observing what actually happens in family wealth transitions.
Traditional approaches to succession planning typically excel at the easy details that AI can now provide:
Creating tax-efficient structures
Drafting comprehensive legal documents
Developing sophisticated investment strategies
But owners and advisors frequently overlook critical components such as:
The psychological readiness for wealth responsibility – As I’ve written previously, “Next Gen leaders always question if they truly belong, especially if they joined through marriage or face complicated family dynamics. Many Next Gen leaders feel anxiety, loneliness, or self-doubt… and optimism.”
Family communication dynamics – In my experience, even the most brilliantly crafted estate plan fails when the family can’t effectively communicate about difficult topics. Someone is likely to say or do the wrong thing. Unless the process is expertly facilitated.
Leadership development beyond technical knowledge – As noted in my work with books, “Next Gen leaders need more than financial literacy. They need communication skills, emotional intelligence, and the ability to balance innovation with tradition.” Those are dynamic skills. Measurable skills. And very coachable skills!
Thoughtful technological integration – When technology serves human connections instead of replacing them, even the most traditional family members can become enthusiastic supporters.
The Kitchen Table Council Approach
In my article “Making AI Work for Family Businesses,” I described the concept of a “kitchen table council” where multiple generations come together to solve problems collaboratively. This approach exemplifies what effective wealth transition looks like in practice. It is bringing together different perspectives while respecting each voice.
This methodology addresses the full spectrum of challenges facing family enterprises, not just the financial and legal aspects but also the crucial human elements that ultimately determine success or failure. This approach tackles all challenges for family businesses, including financial, legal, and critical human factors impacting their success.
The Four Pillars of Our Legacy & Wealth Leadership Approach
Based on decades of work with family enterprises, our Legacy & Wealth Leadership approach addresses four essential dimensions:
1. Individual Coaching
Next-generation leaders face unique challenges in assuming wealth responsibility. Our coaching helps them develop:
Decision-making frameworks for complex situations
Communication skills for difficult conversations
Emotional intelligence to navigate family dynamics
Personal clarity about their role in the family legacy
Next Gen leaders particularly benefit from structured peer environments where Family and Non-Family Business leaders can share experiences, expert practices, and gain clarity.
2. Team & Family Facilitation
Even brilliant individuals falter without effective team dynamics. Our facilitation services help family enterprises:
Resolve communication breakdowns
Transform destructive conflict into productive dialogue
Align around shared values and vision
Develop governance structures that stand the test of time
In my experience, the power of an interdisciplinary team of advisors cannot be minimized. It’s hard for advisors to ‘sing from the same page’ as if huddled around one piece of paper, but we can do so! And the results can be a beautiful four-part harmony.
3. AI Strategy & Integration
Technology is transforming every industry. Our approach helps family businesses:
Identify the right technological opportunities for their unique situation
For the past year, I’ve focused on how AI can accelerate leadership development. In speeches and product demos clients have practiced difficult communication skills. One client went to www.JITCoach.com and selected role plays and avatars, then practiced 14 times before her next family meeting. The implications are profound for any individual or team leaders who are committed to professional development.
4. Family Office Structuring
For more complex family enterprises, comprehensive wealth structures are essential. Our family solutions help:
Design integrated governance systems
Create communication protocols that strengthen family bonds
Develop decision frameworks that balance innovation with tradition
One of the most influential thinkers alive today is XPrize founder and MD, Peter Diamandis… [who shared] “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” I wrote about those changes for Family Business Consulting in the International best seller,
Why 2025 Demands New Action
The coming months represent a critical period for family enterprises for several reasons:
Technological transformation is accelerating at unprecedented rates
Economic uncertainty accelerates both risks and opportunities
Generational expectations continue to diversify
The pace of wealth transfer is increasing as Baby Boomers age
Families who address these challenges holistically will not only preserve their wealth—they’ll strengthen the bonds that give that wealth meaning.Families who comprehensively tackle these issues will safeguard their wealth and reinforce the relationships that make it valuable.
Join Me for a Virtual Open House: Legacy & Wealth Leadership
If you’re responsible for family wealth—whether as an owner, Next Generation leader, or advisor—I invite you to join me for a virtual event where we’ll explore these topics in depth.
On May 22nd at 11am ET, I’m hosting a short “Legacy & Wealth Leadership” Virtual Open House. You’ll learn:
Why traditional approaches to wealth transition often fall short
Our integrated methodology addressing human dynamics alongside financial structures
Real outcomes in both family harmony and financial returns
As I often tell my clients, “Smart leaders don’t wait for the perfect moment… because they understand there is no perfect moment.” The time to address these critical family wealth challenges is now.
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.
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.
IF you had to work with her, now imagine that you had a cheatsheet like the following one… for key behaviors, her preferred communication style, and what NOT to say to her.
Behavior
•Creativity, spontaneity, and unconventional thinking
• Individuality and freedom of expression
•Unpredictable behavior
•Impulsive decision
Preferred Communication Style from Others
•Open-minded, receptive to new ideas
•Willing to engage in brainstorming sessions or unconventional approaches
•Exploration and experimentation
What Not to Say or Do
•Rigid structures or limitations
•Dismissing her creativity
•Not being sensitive
In my consulting engagements, I never get a cheat sheet like the one above. Who does?
One of the reasons I developed these cheatsheet notes (with my friend Richa Singh) is because we were presenting a workshop called “Consulting With Next Gen Leaders” at the Purposeful Planning Institute in Denver, CO, on July 30, 2024.
Another reason for this post is because we developed 10 avatars… and can share them with our clients.
He stood there for so long that a gigantic security guard said, “You can’t just stand here.”
No response.
Then the guard said, ” If you don’t move along then I’ll have to fine you $100.”
Still no response.
Then the guard said, “What are you doing here? Where are you going?”
The positive psychologist smiled and said, “How about if I pay you the $100 and come back next week? I want you to ask me those two questions week after week.”
And so began the history of professional coaching…
Yes, you can define a meaningful outcome for yourself!
Based on my research, here are the top outcomes for business coaching. Pick one or two.
Top business coaching outcomes:
o Banking and financing
o Board of directors/advisors
o Branding
o Change management
o Communication skills
o Compensation and benefits
o Computer security
o Conflict resolution
o Customer service
o Ethics
o Insurance / risk management
o Leadership assessments
o Managing growth
o Managing others
o Marketing
o Net profit
o Operations
o Personal finances
o Personal health and well-being
o Presentation skills
o Safety/ workers compensation
o Sales
o Talent development
o Time/energy management
Now what?
Find someone who can ask you those two questions: “What are you doing here? Where are you going?”
I’m often surprised at what business psychologists know, that ANYONE could benefit from knowing and practicing…
This content is #1 of 3 articles.
Title: The HERO Model: An approach for Navigating Organizational Changes in Family Enterprises
All leaders and advisors struggle with Organizational Change. How could our work be anything else? Family enterprises are infinitely complex. No one likes to be told to change. We all bring our biases and adopt heuristics to reduce that complexity. Attorneys say, “We mitigate risk.” Wealth advisors say, “We leverage capital assets.” Next Gens say, “We want to innovate.”
We all use heuristics (patterns for what works) to reinforce the structures that reflect our worldview for each family system. One common example is the multidisciplinary views of capital, that include financial, social, human, family, legacy, and intellectual views of capital. Those views of capital are resource-based, and the capital diminishes as we age. In my final years, for example, I will forget people and information, and my financial assets will be invested into healthcare… just like each of our clients.
What would happen if more practitioners adopted a more pervasive and universal view of capital?
Social psychologists (like me) know that Psychological Capital (PsyCap) is a dynamic, validated construct that can be used to describe our clients. PsyCap is defined as a construct based on 4 inter-related competencies: Hope, Efficacy, Resilience, and Optimism (see the APA link here, or read the book here).
As the primary author, Fred Luthans, recently stated to me, “PsyCap has and continues to take off across the world … I have over 166,000 citations of my research which has been awarded in the top 1% of all researchers in all fields in the world and ranks #1 in organizational behavior textbooks. In other words, I am very happy with how PsyCap research is going, especially in the global economy.” (direct communication 9.5.24).
The HERO model is more than a convenient acronym. The HERO-within model is a critical approach that practitioners can apply at multiple levels- individual, team/ family, and organizational/ societal.
I have applied the PsyCap model with countless clients for decades. You can also do so!
And ANYONE can apply this model to themselves.
Practitioners, by definition, need to practice new behaviors and share them widely. My opinion is that practitioners have a fiduciary responsibility to practice both new ideas (innovation) and celebrate strengths (stability) every day.
The purpose of these 3 short articles is to introduce the HERO model, like a new vocabulary term, and examples that can be applied by advisors in any discipline. I invite you to assess how you can apply these practical examples with yourself, your loved ones, and with the clients you serve.
Imagine that you are building a house with a garden that you hope will support generations of loved ones. Hope is defined as “the will and the way” to build a better future (read the book here). Every business founder believes “I can build this product or service.” Their hopes are often defined in founder’s history books or videos, vision statements, the stories told and re-told at gatherings. Efficacy is the capacity to build that new house, to get the job done. We all use blueprints such as values statements, family constitutions, charters, phased strategic plans for new projects. Resilience is our capacity to respond to adversity by returning to the same or a better level. Examples include our responses to global disease, market adversity, or loss of our loved ones. Optimism is our choice to believe in a positive outcome, such as well-being for our children and grandchildren. All four of these competencies can be measured, taught in under 90 minutes, and developed over time. The PsyCap impact is more significant when all four competencies are measured (a second-order effect) than when only one or three competencies are measured.
Here are examples for how we can accelerate PsyCap at three levels: Individual, Team/ Family and Organizational/ Societal.
Article #1 of 3: The HERO Model applied at the Individual level
We all need to look in the mirror at times. We all need to exhale. All good leadership development models start with self-awareness and lead to new actions, so it makes sense to start this list of activities with assessments, then several new behaviors that you can implement immediately.
A. Pre-Meeting or Annual Surveys. For years I’ve embedded these 4 questions into surveys so that I can provide a summary of PsyCap changes over time. Directions: On a scale of 1 (low) to 10 (high) how do you assess each of the following?
1. Hope. I have “the will and the way” to achieve my goals.
2. Efficacy. I feel confident that I know what I need to do to achieve my goals.
3. Resiliency. I can get through difficult times or challenges.
4. Optimism. I am optimistic about what will happen to me in the future.
When I share the data, I also encourage people to use these four vocabulary words regularly.
B. Self-Assessments. Individuals and teams can clarify values using free tools like https://www.viacharacter.org/ or https://www.lifevaluesinventory.org/
Personality and behavioral data including strengths and derailers can be assessed from https://www.hoganassessments.com/ or https://www.discprofile.com/
C. 360-Assessments. The most valid form of assessment is anonymously collected from others and focuses on the behaviors of family and non-family leaders. See my process at https://assessnextgen.com/
D. Reflected Best Self activity. When I ask 10-15 people to describe my strengths and weaknesses, those details can help me identify how I can be “At My Best.” Our colleagues and loved ones may never have been asked to provide feedback or advice. (See details at https://hbr.org/2005/01/how-to-play-to-your-strengths).
E. Three Good Things. The gold standard in social science, with over 100 years of research, occurs when a random sample population repeatedly has a significant result from an isolated behavior. Imagine that you practice this new behavior for a week. When going to bed, write down or state out loud Three Good Things that happened that day. Simple activity, right? If we measured your subjective well-being (happiness) daily, it would increase. Related prosocial measures, like gratitude and kindness, also increase. If you extend your Three Good Things activity into a journal for months and years, then you can ask your loved ones if they notice any results. (read the book here).
F. Adopt a metaphor, such as building a new house with a garden where your great grandchildren can flourish. When we “design a future self or future house” then we can adopt that metaphor and practice flourishing. Ask any founder. Or ask any parent. When we hold newborn children, we always whisper our best intentions and hopes. Why not do the same for yourself and your clients?
Time to pause… what do you think?
Article #2 in this series will focus on the team/ family level.
Article #3 in this series will focus on the organizational/ societal levels of organizational change.
Conclusion
Like every practitioner, I’m regularly reminded of how little I know. I ask for advice, and read, and on good days I listen well. Then I try something new. The PsyCap term may be new to some readers. However, the words “hope, efficacy, resilience and optimism” are ancient and familiar.
If we embrace the HERO model for our loved ones and our clients, then we are practicing ancient wisdom, in a new way. (See my riveting dissertation here).
My experience is that Psychological Capital describes family-centric values over a longer term than any other measure of capital.
Please add your thoughts if you share that bias or want to continue this conversation!
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