The Home Team Advantage
Successfully preparing your family for the future
by thomas c. rogerson
Senior Managing Director
and Family Wealth Strategist
Wilmington Trust, N.A.
ke y p oint s
• A five-step process can
help families build their
home team advantage
based on some of the
same tools that help
business leaders build
teams at work
• These tools and strategies
can help families start
building healthy teamwork,
communication, education,
and ultimately healthy
family governance
©2017 Wilmington Trust Corporation and its affiliates. All rights reserved.
Home Team ADVANTAGE
In any sporting event, having the
“home team” advantage creates
a greater opportunity for the players
to come together as a unified team
to secure the win.
When you think about family dynamics, very often
there’s a lack of that home team concept and feeling of
unity. Establishing that home team within your family
early on offers the greatest opportunity for generational
success.
The need to prepare the family for the future is
particularly important for families that own and run
a family business which they hope to pass down to
future generations. At a recent meeting with a group of
successful entrepreneurs, the question was posed:
“How many of you would like your children to
have great communication with each other, work
well together as a group, and help each other out
long after you’re no longer here?”
Of course, all of them raised their hands. However, only
one member of the group raised his hand when the next
question was asked: “How many of you have this type
of relationship with your siblings?” The consensus of the
group was that wealth-related issues were the biggest
reason their relationships had deteriorated with their
siblings. They had not built trust and communication
with their siblings when they were younger, and they
had no idea of how to start doing so now.
Most family businesses give up the home team
advantage because they never build a home team to
begin with. One business owner recently told me, “I
thought my role as a parent was to build unique, strong,
and confident children so that they could blossom and
do whatever they wanted to. However, I thought my
role as a business owner was to take a group of unique,
strong, confident managers and get them to work
together effectively as a team.” He quickly recognized
that he had not encouraged the concept of team at home
as he had with his management team at work.
Many business owners spend a great deal of time and
money bringing their management team to an off-site
retreat where they take tests to identify their abilities,
continued
©2017 Wilmington Trust Corporation and its affiliates. All rights reserved.
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Home Team ADVANTAGE
agree on their shared values, and think through their
mission for the future and how to get there. They often
FI V E STEP PROCESS
the time they realize their family is fragmenting into a
STEP 1:
Family Education
STEP 2:
Family Communication
STEP 3:
Shared Family Experiences / Values
assume that their family naturally does these things. By
group of independent, self-interested individuals, it can
be very difficult to reverse the trend.
The same concerns apply to families that have created
significant liquid wealth. They face the challenge
of how to prepare the next generation to deal with
wealth-related issues, and also to address an attitude
of entitlement, lack of motivation, low self esteem, and
other symptoms of “affluenza.”
STEP 4: Family Group Decision Making: Philanthropy
STEP 5:
Family Governance: The Home Team
You Will! versus Will You?
Future generations need to understand the difference
between the family goose and the family golden eggs.
The goose is the family business or liquid investments
that must keep working to lay the golden eggs. Often,
future generations never appreciate the difference and
end up eating the goose. Parents in high-net-worth
STEP ONE:
Family Education
Education should be focused on the general issues that
families of wealth deal with, such as:
families often spend a great deal of time preparing their
• How much is enough for heirs without destroying their
preparing their family for the money. That’s what leads
• When and how do you tell children what the numbers are,
money for their family, but they rarely devote much time
to the old adage, “shirtsleeves to shirtsleeves in three
generations.”
A five-step process can help families build their home
team advantage based on some of the same tools that
motivation or creating a sense of entitlement?
and when they will have access?
• What do you do with the in-laws?
• How do you bring spouses into the family in a way that
help business leaders build teams at work. These tools
allows them to feel welcome, while, at the same time, getting
them to sign the pre-nup before the wedding?
teamwork, communication, education, and ultimately
• How do you achieve ‘equal’ or ‘ fair’ in family distributions,
and strategies can help families start building healthy
healthy family governance.
especially when some members are in the business and some
are not?
• You can fire an employee who doesn’t perform, but what
do you do with a family member who doesn’t want to
participate?
• How do you create independence and interdependence?
After my introductory overview during a recent family
meeting, one of the daughters stopped me and said,
“Wow, I feel so much better.” We had not covered any
of the material yet, so I asked her why she felt that way.
continued
©2017 Wilmington Trust Corporation and its affiliates. All rights reserved.
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Home Team ADVANTAGE
“Why?” She said. “Because I finally realize that all the
Over the years a communications test can be insightful
know how to talk about in this family, are the same
their communication styles and, more importantly,
things that have been causing me angst, that I didn’t
things other families struggle with. For the first time I
feel normal! Second, I’m realizing this is important and
we ought to be doing something about it.”
This is a powerful bottom-up example of a child learning
the importance of building a family team and wanting
for families. First, family members will learn about
how to change their styles to enhance group decision
making. Many families gain an understanding of past
disagreements and are able to find ways to improve the
future, just based on their styles of communication.
to be involved in doing something about it, rather
STEP THREE:
Shared Family Experiences / Values
telling experience is very different from a team-learning
Although people often say they want to transfer their
than being told from the top by her parents. A parentexperience.
values to their children, rarely can they articulate their
STEP TWO:
Family Communication
both shared and individual values.
In their book, Preparing Heirs, Williams and Pressier
results. In the bestselling book, Tipping Point, Malcolm
interviewed more than 3,000 families that failed to
preserve their family businesses, wealth, and sense of
family. They found that 60% of the failure was due to
a lack of communication and trust, 25% of the failure
was caused by unprepared heirs, while only 3% of the
failure could be blamed on mistakes in planning and
investing. So why do so many families spend so little
time trying to understand their family members’ styles of
communication?
Most family disagreements are not about the issues
at hand, but rather how the information has been
communicated to other family members in the first place.
During an initial meeting family members should be
tested on their communication styles.
When I had my own family take a communication
test, I discovered that my style of communication was
damaging my relationship with one of my sons. Not
only was I blaming him for our communication issues,
I was punishing him for a problem that was not his
fault. Unfortunately, I had not known that I was the
problem or that I could address it by simply changing my
approach. What a relief to have the tools to improve
my relationship with my son!
values effectively. A values exercise helps them identify
A values process turns out to be more powerful than
Gladwell explains that a study involving students found
if you asked someone why he is friendly with someone
else, he’ll say it is because he and his friend share similar
attitudes. But if you actually quiz the two of them on
their attitudes, you’ll find out that what they actually
share is similar activities.
Gladwell found that shared activities — such as
experiential exercises like identifying values—were
more important at building a group than shared
attitudes and values. Experiential, team-building
exercises at offsite retreats help managers, employees,
and boards of directors build trust and communication.
Values testing enhances the family’s decision-making
process to prepare them for their future family roles.
One father, who had sold the family business ten years
ago, told me, “I remember these tools that you’re talking
about. Back when we owned the business we would get
the management team together and go through these
very types of tests. We would do “Myers-Briggs” testing
to figure out our abilities. We would come up with a
mission statement and a value proposition. We had a
culture that was very important to us and we worked
hard to preserve it. These things made sense to us at
work but we never thought about bringing them home.”
continued
©2017 Wilmington Trust Corporation and its affiliates. All rights reserved.
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Home Team ADVANTAGE
STEP FOUR:
Group Decision Making: Philanthropy
In many families of wealth, decisions are made at
the top, with very little involvement from the next
generations. Family philanthropy is a great place to start
making group decisions, but bringing in philanthropy
day-one isn’t the best first step. Here’s why: Say you
go home and tell your family, “Here’s $10,000, which
I want you to give to charity. Let’s come up with ideas
about which charities to support.” It may seem like you
are initiating a family process, but in reality, you are
introducing a “me” decision, not a “we” decision. This
is a parent-telling versus a team-learning experience. If
you introduce philanthropy as step four in this process,
Often, problems transitioning family wealth are
exacerbated by the nature of people who build the
wealth. Most wealth creators are entrepreneurs and
business leaders who like to make decisions themselves.
They are strong and confident decision makers; many
refer to themselves as Type A personalities. Although
this trait is great for building wealth and running a
company, it isn’t helpful when trying to build leaders in
the family. Strong and confident decision makers like
making most decisions in the family independently.
As a result, too often their children not only do not
participate in making family decisions, they don’t even
see the decisions their parents make. Most decisions are
made behind closed doors.
your family is more likely to perceive it as a “we”
For example, a group of young teenagers was asked:
this stage gives a family a chance to test drive decision
who came from a modest financial background could
decision, with “buy-in” from all. Using philanthropy at
making with money they’ve already decided to give
away. They are still competing for ideas and ideals based
on their values, but without self interest.
STEP FIVE:
Family Governance: The Home Team–
You Will! versus Will You?
Families can engage in consequential, group decision
making by starting small and working up to bigger
decisions. For example, start with decisions such as,
“what do we do for family vacation this year?” or “what
education resources should we bring in this year to our
family meeting?” Then the family can move on to bigger
issues such as, “what do we want to do with the family
foundation?” and “what do we want to do with the
family business?” or “should we be advocating pre-nups
for new family members?” These are difficult questions.
If the family tries to jump into them before they have
built a foundation of communication and trust, these
issues can be fraught with emotion and can lead to
disaster. However, if introduced after they’ve built the
home team, these issues may not become easy, but they
become easier.
“What’s the process of buying a new family car?” Those
describe the process in detail, as most had experienced
it first hand, from being strapped into the back seat for
the test drive to hearing their parents discuss affordable
options at the dinner table. However, teens from affluent
families typically said, “Dad just drove home a new car
today.” The more expensive the car, the less likely the
parents had involved the children in their decisions or
thought process. It might not seem to make sense to
talk to eight year-olds about an $80,000 car, but the
unintended consequence is that such children will not
have a chance to see how their parents make decisions
about resources.
Over the years, more often than not, I have found that
the first time children get together to make decisions
about wealth is when they are settling their parents’
estates. This is a tough time to begin making decisions as
a group. During such times, family dynamics are seldom
positive, and it’s hard to think clearly during the early
stages of loss and grief.
Families that begin a five-step process well before an
anticipated wealth transition will find it very helpful.
As families learn to build a family home team, they can
continued
©2017 Wilmington Trust Corporation and its affiliates. All rights reserved.
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Home Team ADVANTAGE
also end the “shirt sleeves to shirt sleeves” paradigm
and begin to build a meaningful family legacy. They
become skilled in the group decision-making process
and prepared to engage the next generation in making
positive, intelligent decisions regarding family wealth
long into the future.
The families of the entrepreneurs who had strained
relationships with their siblings have since embarked on
a process of changing the dynamic with their children
and with their siblings’ families. They are not bringing
their extended families into major decisions regarding
significant wealth, but they are trying to get them
involved in smaller issues such as group philanthropy
and plans for family retreats, and they are introducing
Thomas C. Rogerson
Senior Managing Director
and Family Wealth Strategist
Wilmington Trust, N.A.
617.449.3391
[email protected]
Tom is a recognized leader and pioneer in family governance,
assisting families with communication, philanthropic vision,
legacy planning, succession, and education. Tom incorporates
these critical issues into a client’s comprehensive wealth management plan, not only helping to prepare the money for the
family, but to also prepare the family for the money. He holds
a bachelor’s degree in Economics from Ithaca College and is
an international speaker on the topic of family governance.
a five step process that will lead to healthy family
governance. Go “Home Team!”
sources
Roy Williams & Vic Preisser, Preparing Heirs, Robert D.
Reed Publishers, 2003
Malcolm Gladwell, The Tipping Point: How Little Things Can
Make a Big Difference, Little Brown, 2000
This article with commentary is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. This article is
not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.
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©2017 Wilmington Trust Corporation and its affiliates. All rights reserved.
CS15809 Revised 6/2017
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