Culture is widely considered to be one of the most important elements of a successful business.
It’s also critically important for any family—especially when creating a long-term wealth plan and sustainable legacy.
Culture is the shared set of assumptions, attitudes, values, goals and practices that characterize the family.
Through our experience working with high net worth families, we have found that communication is the common thread that runs through the principle of evolving a healthy family wealth culture, and we have identified three best practices that are the foundation for achieving this goal.
Preserve stories and history. Your family stories and history reflect where you have come from and where you want to go.
They also include the unique values shared by the members of your family—an essential component of developing a lasting family legacy—and create a knowledge base for younger generations.
These stories are an opportunity for older family members to impart their wisdom on their children and grandchildren while helping them understand the importance of not only preserving, but also being good stewards of the family’s wealth.
Storytelling can also be used to overcome what sometimes occurs among members of younger generations—guilt, embarrassment or discomfort about family wealth and the privilege it implies.
When younger generations hear stories of their older family members, they can often relate better to the values reflected in the history of how their family wealth was created.
Articulate a common purpose. The families that are most successful in maintaining their legacy over many generations often share a vision and purpose.
However, one of the challenges with articulating a common purpose is the uncertainty the future holds.
Therefore, when identifying your family’s shared vision, it is important to create an accompanying wealth plan that is flexible enough to adapt to the family’s evolving circumstances and dynamics, as well as any other forces that may have an impact.
One exercise that can help your family articulate and bring to life its common purpose is developing a family crest—a visual that reflects the unique values central to your family’s success.
Engaging in this activity can help each family member understand how to make decisions that are aligned with your family’s values and vision.
Foster communication. Good communication is critical to a healthy family life. It’s also a crucial factor in developing a family wealth plan and enduring legacy. Families that succeed through generational transitions of their legacy have developed a trust built through empathetic and candid conversation.
Often, families begin to feel stuck when discussing issues of high importance.
Some family members may not feel heard, or they may think that their communication style is being disregarded. When initiating these conversations with your family members, it is important to understand that every communication style has its strengths and weaknesses, and the healthiest families are those in which all styles are appreciated and respected.
The key word in the principle of “evolve a healthy family wealth culture” is evolve.
Just as it takes a considerable amount of time and energy for a family to develop goals and engage in strategic planning that supports their legacy aspirations, it requires the same commitment for a family to preserve stories and history, articulate their common purpose and foster good communication.
For many families, getting started can be the most difficult part. However, something as simple as scheduling a time to begin these conversations is often the most effective approach and can lead to many more opportunities for productive and enlightening discussion.
