Helping enterprising families to envision future transitions

Stewardship in Your Family Enterprise:
Developing Responsible Family Leadership
Across Generations

By Dennis T. Jaffe
2010, 312 pp., $19
www.cambiopress.com/djaffe

San Francisco family business consultant and scholar Dennis Jaffe is an extremely prolific writer. His latest book (the total is now in the teens) is a compilation of articles that together serve as a how-to guide for establishing what Jaffe calls in his preface “a family legacy of wealth and success as a source of pride and livelihood for future generations.” Much of the material is reprinted from Family Business Magazine and other publications; some of the articles are written with co-authors, including Jaffe’s former partners at consulting firm Relative Solutions.

In his preface Jaffe describes the evolution of his career and notes that, like many of his colleagues, he has shifted his focus from family dynamics within an operating company to long-term sustainability of the family as a multigenerational economic unit. “In order to create a mind-set and value of stewardship,” he writes, “the family must do more than establish rules for their estate and for the family-business inheritance; they must instill specific values, attitudes, skills, and practices in the next generation.”

Jaffe’s insights are drawn from decades of practice in the field and observation of harmonious as well as contentious families of wealth. This comprehensive volume addresses the family enterprise as a system, governance and decision making, communication and conflict resolution, succession challenges, training the next generation, and stewardship of family wealth.

“This book is a call to action for your family,” the author asserts.

Multiple sittings will be needed to review and absorb the abundant information provided in Jaffe’s writings. There are many points to consider and recommended actions to take. “An enterprising family must learn how to act not just as an extended family, with informal bonds and social contact,” Jaffe notes, “but also as a disciplined financial and business entity, with boards, defined leadership, accountability, and strategic goals and direction.”

Several (alas, not all) of the articles are accompanied by “Keys to Success,” a list of tips to help readers achieve important goals. Helpful tables and figures are also included throughout.

Jaffe unearths the relationship issues that lie at the root of most family business dilemmas. “When leadership and the enterprise are undergoing radical changes—and trying to adapt to a rapidly changing world—there is great potential for dissension in the family and tension in the business,” he writes.

The book is a valuable resource for enterprising families who are trying to avoid roadblocks on the horizon and forge a clear path to the future. “One of the most differentiating characteristics of successful enterprising families,” Jaffe writes, “is that they put aside the time to do the required work.” The tools and practices he offers in this volume will help bring family members together as they prepare to tackle the challenges ahead.

Best practices for keeping
wealth and legacy intact

The Legacy Family: The Definitive Guide
to Creating a Successful Multigenerational Family
By Lee Hausner and Douglas K. Freeman
Palgrave Macmillan, 2009
206 pp., $39.95

What is a legacy family? In the first page of their introduction, authors Hausner (a psychologist) and Freeman (an attorney) set a high standard: the Rockefellers. “Each of those members who has fulfilled a personal dream, added to the composite of the family’s history and legacy, raised another generation of educated and motivated young adults, and shared their time, talent, and treasure with their community, has fulfilled the vision of the founder of this extraordinary family,” they write.

The Rockefellers are exemplary, suggest Hausner and Freeman—respectively, the president and chairman of First Foundation Advisors, an Irvine, Calif., strategic planning and wealth advisory firm—not because of their abundant inheritance, but because of each generation’s ability to create new wealth and interest in contributing to society. “Every family, regardless of financial condition,” can achieve legacy status, the authors assert.

In legacy families, they write, “members recognize the importance of contributions to the financial, human, intellectual, and social capital of their family and community. They are connected to their heritage, maintain positive family relations, communicate effectively, and promote generational governance structures that assure the success of those to follow.”

Hausner and Free-man’s book is a guide to creating such a family. The steps they recommend include developing a family strategic plan that extends 100 years into the future, a family constitution, a family governance system and family meetings. Also required, they note, are well-considered ways of managing wealth and shared assets, engaging in philanthropy, resolving conflicts, planning for business succession, and training family members in financial competency and life skills.

Although the issues it addresses are complex, this well-organized volume is enjoyable to read. It includes examples of the concepts in practice as well as a section of appendices that readers can adapt for use in their own families. The many lists and subheads are welcome aids for those seeking to refer back to key passages. (A word of caution, though: The repetition, capitalization and italicization of “legacy family” throughout the book is distracting.)

The authors offer wise counsel on long-term thinking, particularly on matters related to wealth. “The unexpected must be expected,” they caution. “Long-range planning that does not contemplate such change and that can’t be adapted to new realities will soon become oppressive and costly. Unfortunately, much of today’s estate planning is often designed to avoid the possibility of change.”

It’s daunting to envision our families 100 years into the future. Hausner and Freeman deftly guide readers through the process and gently urge them to plan for greatness.