Most business owners and CEOs whom I coach acknowledge the importance of having ongoing meetings with their leadership team. The purpose of these meetings ranges from clarifying their vision for the company to discussing potential challenges and executing company goals successfully. Yet many of these same business leaders are reluctant to have similar transparency in personal discussions with their family, resulting in leaving their families and their financial futures vulnerable.
With the expected intergenerational wealth transfer of $41 trillion through 2052, there is a critical need to ensure that the next generation is able to sustain wealth in a responsible manner. However, research indicates that a majority of families have been unable to successfully transfer their wealth upon the patriarch's death. This highlights the need for parents to proactively have conversations with their children about money, family values and their financial future.
Although most business owners are probably loathe to add more meetings to their schedule, treating communication at home more like you treat it at your business can ensure everyone knows the plan. Family meetings offer opportunities to discuss critical issues that can impact future generations. While wealth management will always have a place on the agenda, family meetings can also provide an unparalleled opportunity to build stronger family cohesiveness. Once family members get comfortable with the process, meetings can inspire the development of family mission statements, formalization of family histories, family education projects, philanthropic efforts, and other ventures that reflect established family values.
Preparing for the meeting
To frame how you approach this idea, just think that a family meeting is to the family what a strategic planning meeting is to a company. Preparation is the key to ensuring a successful outcome. First, you need to decide who will facilitate the meeting, whether it's and outsider (such as a family business adviser) or if you will do it yourself. If you are not comfortable initiating personal conversations; your family constellation is complicated (i.e several marriages or children from different relationships), or there are current conflicts brewing, it might be a good idea to engage an outside consultant to guide the family through these intimate discussions.
One of the most important things a family meeting facilitator must do is ensure all the participants have equal standing. Another is conducting some pre-meeting due diligence, which may mean interviewing various family members to become familiar with their personal agendas as well as their hot buttons.
These pre-meeting interviews should ask relevant questions about all aspects of family members' views on legacy (values, history, family traditions, wishes to be fulfilled, family heirlooms and possessions of emotional value, and financial assets, for example).
The goal is to identify the unique issues that are critical to family members' emotional and financial well-being. The most important question to ask is: “What worries you about your future?” As a member of the older generation, you need to consider what you want upcoming generations to know about you, your values, lessons learned and life experiences. Consider the impact you want your accomplishments and lessons learned to have on future generations. Just as importantly, ask the younger generation what they want to know and understand about the older generation.
And, just like at the office, you want to enter a family meeting the purpose of achieving a goal, and surprises can derail its achievement. Typical family meeting goals include:
-Creating a framework for the optimal development of family financial interests;
-Sustaining the value of the family legacy;
-Keeping the family together;
-Supporting individual family members in meeting their goals and potential;
-Setting expectations and responsibilities for family members.
Finally, prior to the family meeting it is imperative that you establish ground rules. Each family should tailor the rules to fit its needs. Some issues to consider are:
-Make sure one person talks at a time and everyone gets a chance to speak.
-Keep an open mind. Remember, “where you stand depends on where you sit.”
-Make “I” statements. Don't blame or attack; talk about how you feel and say what you think.
-Create an action plan with a follow-up for each topic.
Family meetings can be a critical part of achieving the goals you have as a family as well as making sure you lay the groundwork for the lasting family legacy you envision. As a family leader, they can also provide an opportunity for you to express your vision for your family, recognize and resolve conflicts, preserve family values and share family history so younger generations can gain an understanding about the commitment they need to make to the family and prepare for inherited wealth.
Denise P. Federer, Ph.D. is founder and principal of Federer Performance Management Group. She has 27 years of experience working with key executives, business leaders and Fortune 500 companies as a behavioral psychologist, consultant, coach and trainer. Contact her at: [email protected]