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. How sad.
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 bizarre 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 Family 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 Perplexity, 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. How sad.
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.
Recently I read Wealth 3.0. and the authors state that interdisciplinary knowledge is one of the key predictors of success for consultants. I agree.
After a recent client engagement, my colleague said, “I never would have asked about the topics you brought up- increasing 1:1 time with each child, and family meetings to discuss charitable giving. How did you become so damned smart about so many different topics?”
I stuttered and paused with embarrassment.
I do read daily, and study new topics on YouTube, I listen carefully to what people say, and I watch what they do. But those are skills.
The deeper questions are “How did I develop my interdisciplinary knowledge?” and “How can I encourage others to do the same?”
Here are some loosely chronological stories about how I developed interdisciplinary knowledge. Perhaps they will trigger similar stories for you.
I encourage you to consider HOW you develop interdisciplinary knowledge.
As a child I was expected to research answers from the set of books on the shelf, called Encyclopedia Brittanica. Long before wikipedia and digital tools, that was the preferred way to answer questions or settle disputes. My siblings were often more correct than me! We all learned to seek answers.
Multiple Elders challenged me to think for myself. The Boy Scout volunteers used merit badge content to reinforce new skills, and values like honesty and loyalty. Faculty members, who worked with my father, spent holidays with us and quizzed me on any topic- the power of compounding assets at TIAA-CREF, or the wisdom of building a private campground as a long term investment. I learned that adults may share their wisdom, and I may not agree with them.
That saying, “Never let schooling get in the way of a good education” is attributed to Mark Twain. It could have been a family motto above our doorframe. We were expected to attend schools.
At a large public high school in Clifton Park, NY, I was expected to take honors and New York State regents classes. I also elected to take AP Psychology and Sociology classes. And as a senior I left school at 1:00 each day to work at a nearby food warehouse to save money for college. I didn’t have a car, so my mother drove me there and back for a year. From her I learned to work hard and save my earnings. From those workers I learned that education could create opportunities.
When I enrolled at Hamilton College, in Clinton, NY, I learned that it was one of the Top 10 Preppiest Colleges in the country. In my ignorance, I created a survey for all the incoming freshmen and stuck it in their mailboxes to ask “How well prepared are you?” and “where did you attend high school?” I learned that a 40% response rate was strong, and that there was no significant difference between self-confidence and high school preparation.
The class size at Hamilton was about 10 students. We were expected to ask questions and respectfully challenge one another. In one mid-January class, 5 of us sat in the professor’s office while he smoked his pipe and we discussed the explosive power of humanism in the Middle Ages. When a different professor shared that she studied with the author of one of our books, I learned that authors are accessible. And that they often disagree! Academics of any age can and should challenge one another. Later I learned that there was no mandatory course of study at Hamilton. Students there are expected to be interdisciplinary.
After two years there, amid a family relocation and financial stress, I went to the University of Minnesota in Minneapolis. Some of my class sizes were now hundreds of students! I learned that any undergraduate could substitute graduate level courses, so that’s what I did. My classmates were expert administrators or teachers. They all had strong opinions. I recall doing a project on creativity with a student who was also a professional videographer. Somehow we gained access and conducted interviews inside the public schools. Interdisciplinary skills were tolerated for entrepreneurial students.
My next few years were spent in applied leadership sessions, as an instructor in wilderness Outward Bound courses, backpacking expeditions in Wyoming and Montana, canoeing in Minnesota, trekking in England… Those seasons were great opportunities to observe how people experience stress, resilience, endurance, conflict. Then I spent years teaching English at four independent day and boarding schools. One prevailing lesson is that financial wealth does not protect people from stress or challenges.
My next formal schooling lessons were at Dartmouth College, in a program called the Master of Arts in Liberal Studies. We could study anything! So I explored the influence of landscape art in New Hampshire, educational pedagogy, feminism, equality, and social psychology. My thesis was a longitudinal study on Adolescent Risk Taking Behavior, because I wondered what led some people to embrace risks, and others to avoid risks. Perhaps I’m still collecting data on that topic!
My last example of formal schooling is called a terminal degree for good reason. After years of managing executive coaches, leading a nonprofit, and some time working in colleges, I knew I wanted to focus on applied psychology. And I needed to continue generating revenue through my consulting! In my 50’s. The Chicago School of Professional Psychology was a good fit for online content, with two onsite events to validate our identity and assess our knowledge. I loved the structure of weekly reading, writing, commenting. In the three decades since I had studied psychology, there was a sea change in research away from what is wrong with people (anxiety, depression, violence) and toward what enables people to flourish (meaning, engagement, relationships, achievements). My dissertation focused on Positive Psychology Coaching protocols that accelerate leader development. Yes, I’m still collecting data on that topic too!
That’s my listed attempt to answer the first question: “How did I develop my interdisciplinary knowledge?” In short, my answer is, by observing and reinforcing the strengths of others.
The second question was “How can I encourage others to do the same?”
I think each of us can say and do a better job of practicing interdisciplinary knowledge.
I encourage you to make your list of influences- formal schooling or informal lessons.
I encourage you to share that list with your loved ones. They need to know what you think and value.
I encourage you to share some of your examples in the comments below. Action leads to learning.
I suspect that when we are vulnerable about our interdisciplinary knowledge, then we are better practitioners.
What do you think?
This can become a discussion if you share any thoughts or comments below.
Imagine that you meet someone like Crazy Cathy. She may not look like this image…
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 more avatars.
If you want to see the others, or use them to understand the emotional complexity in your family system, then contact me today.
I’m often surprised at what business psychologists know, that advisors 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!
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 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!
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?”
The rise of artificial intelligence is not on the horizon.
It’s already here. Read Harvard Business Review, Forbes, The Conversation app, or any news post. As Peter H. Diamandis writes in Metatrend #2: AI & Quantum (2024), the question isn’t whether AI will change the world- it’s how quickly, and how well prepared we are to adapt. I’m a fan of his books.
Since 1997, I’ve worked with leaders across several sectors using the Action Learning model– a proven framework that aligns real-world problem-solving with strategic learning. In that time, I’ve watched leaders panic or pivot in the face of digital disruptions. You have seen the panic in 2008. Today is the pivot.
The key difference? Those leaders who thrive don’t wait for government programs or corporate re-skilling. They invest in mastering three core skills that shape their adaptability, agency, and long-term success. That’s why I earned my PhD in business psychology in my 50s… Here are some highlights. You can master these skills.
The Three Essential Skills in an AI World
In a recent Moonshots podcast conversation between Peter Diamandis and Tony Robbins, they outlined three core competencies to help leaders remain relevant:
Pattern Recognition, Pattern Utilization, and Pattern Creation.
These three skills are not new to those of us who practice Action Learning. In fact, they are embedded into the very DNA of our model.
Let’s break them down and show how they’re alive in the executive leaders I’ve coached for three decades. YOU can apply these three skills immediately.
1. Pattern Recognition: Learning from Data
Tony Robbins describes Pattern Recognition as the ability to look at history, human behavior, and technology trends and say, “I’ve seen this before.” The result is less fear.
In Action Learning, we often begin with what Revans called “programmed knowledge” and “questioning insight…” the act of recognizing patterns in current systems, processes, and outcomes. I teach leaders to ask questions like:
“Where else have you seen this behavior?”
“What patterns are repeating here?”
“What’s being ignored?”
“What numbers and words can we us to describe this behavior?”
For example: In a healthcare company facing massive turnover, our Action Learning team mapped resignation data and recognized patterns of burnout following project cycles. By naming the pattern, the client was no longer surprised by attrition. They recognized seasonality and then began to prevent it.
2. Pattern Utilization: Acting on What You See
Recognition is only useful if it leads to effective action. As Tony Robbins notes, civilization began when we learned to use the pattern of seasons—planting in spring, harvesting in fall. The leap from fear to control came through utilization. Today is the season of springtime.
In Action Learning, we emphasize “taking action and reflecting on the results.” A team that sees a pattern of client dissatisfaction, for example, must test new workflows, measure response times, before they can adapt. Tools like surveys, interviews, observations, 360 assessments are helpful.
For example: One healthcare client noticed repeated delays in patient discharges every Friday. Instead of managing around the bottleneck, they used Action Learning to test discharge protocol changes. They used cross functional teams, called Action Learning Sets, to explore solutions. They saw a 17% improvement in weekend flow within 60 days. And yes, automation helped immensely.
3. Pattern Creation: Designing What Comes Next
This is where great leaders shine. This is where YOU can shine.
Diamandis calls it the highest skill: creating new patterns. Not just responding to the world but reshaping it. He founded Singularity University, the XPrize’s, and the Open EXO community to embrace converging technologies. In Action Learning, we guide teams to generate new frameworks, policies, and cultural norms based on data and learning.
This level is visionary. It’s where leaders become creators. Practical creators of one solution after another.
For example:In a regional asphalt company, an Action Learning team created a new RACI-based scheduling protocol that reduced field crew conflicts by 42%. That new pattern, tested and refined by a newly promoted operations manager, became company policy within one quarter.
The BIG Identity Shift: From Manager to Creator
This AI revolution is not just about skills. It’s about identity.
The Action Learning model pushes leaders to shift from “problem manager” to “solution creator.” That’s the identity shift Robbins, Diamandis, Revans and I are describing. We say, “Stop managing problems. Start creating solutions.”
FACT 1: You won’t be replaced by AI. FACT 2: You’ll be replaced by someone who uses AI more creatively than you do… unless you become that person first.
If you’re interested in diving deeper into the frameworks behind this post:
Diamandis, Peter H. (2024). Metatrend #2: AI & Quantum.
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