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Tribalism: The First Wonder of the World

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!

Business Conflict Myths

… 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.

  1. One fact is that succession usually happens quietly, without conflicts.
  2. Another fact is that good governance can be taught and developed.
  3. 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.

Market Analysis for Small Family- Owned Businesses in the US

Yesterday a client said, “We’re too small.  We can’t afford consulting.  We make less than $1M in annual revenue.  We build decks and patios.  This business pays the bills.  I guess it’s my retirement plan…”

Sound familiar? 

Yikes.  It sounds short-sighted and dangerous to me! 

People provide solutions… and customers buy solutions.  That’s the bottom line.

This business leader does not ONLY build decks and patios…  Not really.   That would be short-sighted.   He creates “outdoor living experiences for loved ones.”  Something remarkable.

How much would you invest in a backyard party for your child’s birthday?  Or your family reunion?  Or your weekend football game party?  Or that special bottle of wine or bourbon?

If you invested $30,000 into an outdoor living redesign, wouldn’t you expect decades of priceless experiences with your loved ones?  That solution is priceless.  

Case Study: Joe

A second business leader said, “I don’t think I have anything valuable, so when I retire, I’ll just let it shut down.”

I asked, “What’s your annual revenue and earnings?”

He said, “Our revenue is about $1m/ year and I make about $250,000 year.   Everything else goes back into capital expenses and employee compensation.  We’ve had a good life. I’ve raised my family.”

I asked, “What if you assumed 4x earnings, and someone offered you $1,000,000 to buy your business next week?  Would you retire?”

FACT:  Most business leaders don’t know their value and succession options.

Market Analysis Figure 1:

Check out these details… do they look familiar to you?

Segment  Annual Revenue  Avg. No. of Employees  Avg. No. of Owners  FTEs  Strengths  Weaknesses  Key Problems  
Small Family-OwnedLess than $1M10-502-35-25Strong community ties, family unityLimited resources, dependency on few customersLack of growth strategy, succession planning

In every corner of the world, in every business sector, small businesses define the success of every economy.   They are the social fabric of communities.   They define success.  They create over 65% of jobs and GDP in the US, and a higher percentage in Asia.

Most of the time, business leaders quietly pass on their business to family members or capable leaders.  Sometimes there is conflict because of bad communication.  Those succession planning discussions require expert advising from consultants.  

“Do-It-Yourself” consulting or “Consulting From a Book” always leads to failure.  Don’t waste your time or money.

I hire experts to build outdoor living experiences.  Or to do any plumbing, electrical, legal, and financial work.  Don’t you hire similar experts?

Market Analysis Figure 2:

How much would you expect to invest in a consulting solution? 

Consulting Needs  Consulting Fee Range (Phase 1)  Consulting Fee Range (Phase 2+)  Representative Business Types  % of U.S. Economy, approx. #  Familiar Family-Owned Businesses  
Business planning, succession and leadership coaching$5,000 – $15,000$10,000 – $25,000 annuallyLocal restaurants, niche retail, craft breweries~10%, 3.1MZabar’s (NYC), King’s Hawaiian, Goorin Bros.

There’s no need for confusion about pricing.  That approach only leads to distrust.

•  Consulting Needs are problems that require external solutions, such as conflict resolution, strategic planning, or leadership coaching.

Consulting Fee Range (Phase 1: Initial Discovery/Assessment) includes the initial consulting phase, such as discovery, assessments, and strategic recommendations.

Consulting Fee Range (Phase 2+: Annual Consulting Phases) covers ongoing consulting needs in subsequent phases, including implementation of solutions, leadership coaching, and strategic execution over a year or more.

Back to the first example of the business leader named Joe, who doesn’t know the actual value of his business.  Joe has three options:

  1.  No investment in consulting.  When Joe retires the business dies.
  2. Small investment in consulting, $15,000- 40,000 over 12 months.  When Joe retires the succession plan may enable the business to continue.
  3. Larger investment in consulting, $75,000 – 200,000 over 5 years.  When Joe retires the succession plan may provide over $1,000,000 in real value to the owners or their benefactors.  The community retains jobs.  The business legacy may continue for generations.

Sound familiar?

The solution for most family-owned business leaders is NOT venture capital or private equity investors.   They will extract value and disappear within 3-5 years.  That would be short-sighted and dangerous. 

The solution is to invest in consulting solutions, such as “family capital for loved ones.”

Succession Advisory Teams

The only way to win a football game is expertise on the offensive team, the defensive team, and the special teams.  Each team measures success differently to “put points on the board” or “hold them to three downs” or “run it back.”

In the same way, a Succession Advisory Team brings multi-disciplinary experts together to achieve a win.

Lawyers provide risk mitigation and contractual agreements.  Accountants provide business valuation and options.  Wealth advisors provide investment options.  Business psychologists (like me) facilitate the process. 

We are the quarterbacks.

Your next steps are simple. 

Use these numbers.

Build your Succession Advisory Team today.

Contact me at http://contact us

Play football.

Schedule a short 1:1 free consultation with Doug here.

Do poor people smile more often?

Recently I watched a Netflix video on the Dalai Lama…

And he stated that poor people smile more often.

If the reincarnated Buddha, a fountain of wisdom and mystery for hundreds of thousands of people, were to hit me with a hammer, then perhaps I should listen.  Is that true?  Do poor people smile more often?  He certainly made me think…

The Dalai Lama explained that westerners, and wealthy people in particular, do not smile as often.

With higher net worth comes fear of protection.  He called it “excessive greed.”  Hmmm….

Is that true?

So I did a quick “Thought Experiment.”  Just like years ago in graduate school.  I imagined two isolated control groups and tested this thesis.

Group 1:  A recent gathering of parents and independent school students.  Dressed to kill for Prom.  At a private backyard.  With a photographer. Spectacular flowers and layers of gardens.  Private waterfall.  Limos waiting outside.  Dozens of spectacularly dressed young people.  Casually dressed parents.  Gnoshing on appetizers, wine, beer, cake pops on a stick. Casual conversations.  Smile factor among the higher net worth crowd:  4 out of 10.

Group 2:  A recent gathering of college students at an independent coffee shop.  Gatherings of 1-3 people.  Macbooks and ear buds.  Light music.  Sunlight cascading through the hexagonal shaped room.  Windows retrieved from some ancient church.  Plants overflowing from colorful ceramic pots.  Ripped jeans and tatoos.  Black grunge tee shirts sitting next to red flannel shirts.  Occasional outbursts of laughter.  Smile factor among the lower net worth crowd:  6 out of town.

These results are inconclusive.

What do you think?

Do poor people smile more often?

Call me with your story and examples… at 704.895.6479

Corporate earnings vs. wage earnings vs. professional development

Perhaps you have seen this chart from Q4, 2012?  This data amazed me.

The red line indicates corporate earnings, which are at an all time high.

The blue line indicates individual wage earnings, which are at an all time low.

The gap between these lines is one indication of low engagement by most workers.

IMHO we need more professional development of key talent.  Companies have the cash assets.  Individuals have the need.

What does this gap suggest about the need for professional development at your company?

What does this gap suggest about the proliferation of outsourced specialized roles, such as external coaching and consulting?  (Some 40% of the American workforce…)

I need your help.  I am part of that 40%.

Since 1997, I have guaranteed results with coaching and consulting clients.

Please give me a call and let me know how you are doing.  704.895.6479.  Thanks.