McCullough and Whitaker spent more than a year questioning wealthy individuals about their major concerns; as a result, they identified 50 main issues. They then commissioned a different specialist for each of the 50 issues to address how each issue affects wealth and family-business management.
Before discussing the book’s content, I should make several points about its structure:
The book should be considered a reference work or handbook rather than a cohesive thesis, as it is best read in parts. This field has long been in need of such a book, and the resulting volume is indeed of superior quality.
The author of each chapter addresses the assigned issue in a rather open-ended manner. Although the book includes many concrete recommendations, it also leaves much room for discussion of underlying dilemmas. At the end of each chapter, the author includes questions and useful references to enable additional reading on the topic at hand. This feature further underscores Jungi’s call (in the book’s foreword) for “more in-depth thinking,” which this book provides in what Jungi calls “a master class in sustaining family wealth, backed by decades of experience and generations of insights.”
The contributors are largely North American. Some readers might perceive this as a weakness, but I disagree. US-developed managerial approaches and thought leadership are at the forefront of wealth and family-business management.
The contributing authors and editors include consultants, family-business office managers, and researchers who are not writing about the challenges of managing their own family fortunes. Thus, the book has a sociological flavor (in which the authors externally analyze wealthy families) rather than an anthropological one (in which wealthy people discuss the issues directly from their own perspectives). This is a potential weakness, but the contributors definitely bring very detailed knowledge and new ways of thinking to their tasks!
As noted, the editors have gone to great lengths to identify and answer relevant questions. They have categorized these in nine areas:
Thinking about what matters. In their essays, six authors cover issues such as legacies and inherited values. Family histories and storytelling can also shed light on this important issue that often differentiates family business from regular business, and provides the former a distinct competitive advantage over the latter (see for instance, Nadine Kammerlander's articles published here on the platform).
Planning thoughtfully. In this section’s introductory remarks, the editors state that planning entails thoughtful decisions, a road map, and conversations about sustaining wealth between parents and their children. This section includes six pertinent essays on these subjects, even including a discussion of the often-overlooked topic of planning for the continued use of a family vacation home.
Investing wisely. These eight essays comprise perhaps the most valuable section of the book. The authors state that individuals should pay special attention to the goals, risks, and choices related to their investments. The key questions center on a family’s goals, realistic returns, and the risks that a family is willing to bear. The answers to these questions reveal what a family’s investment strategies should be. For instance, in Chapter 15, J. Brunel presents a scheme for dividing overall portfolios into specific areas of interest. This is similar to what I wrote about in my new book, in which I described the five divisions in my family firm’s overall portfolio: stocks and bonds, real estate, shipping, ventures, and education. (1)
Preparing the rising generation. The editors argue for the use of the term “rising generation” in place of “next generation” to signal a sense of evolution and continuity rather than any possible degradation after the first or older generation. The development of independence and self-worth is key. Furthermore, developing self-worth entails that education, a nondominant leadership style, and assigning meaningful tasks are all important issues. Thus, the rising generation section covers various aspects of this important theme.
Making shared decisions. The seven essays in this section deal with family governance. The editors state that governance could be interpreted as referring to the study of how people make shared decisions. The key advice here is the need to share all financial information with other family members (i.e., transparency). Strategies such as a family constitution, a regular family assembly, an established board of directors, and a family owners’ council are all often used. Open, nondominant styles are crucial.
Combining family and business. No family business lasts unless the members of subsequent generations are motivated to continue it. As a result, the alignment of family and business goals is crucial. However, this prioritization does more than just motivate the rising generation, it also helps develop strong future leaders, ensures that the family stays together, and so on. The classical Three Circle Model (which combines family, ownership, and management) is at the heart of this way of thinking. (2) The six essays in this section cover these and related issues.
Giving. Much has been said about this topic already, and it is undoubtedly a central concern for many wealthy families. Key aspects include charity (e.g., strategic charity), philanthropy, and impact investing. In terms of sustainable, impact-led investing, I would like to refer the readers to the two recently posted articles on the emerging bio-economy and recycling of materials and wood into products that replace plastic. I also want to mention Svein Wilhelmsen's article on wildlife conservation in Kenya's Masai Mara National Park. These examples show how important impact investing can be, and, clearly, charitable giving and philanthropy is an enormous topic.
Seeking sound advice. This section addresses the best ways to find good advisors. Given the increasing complexity of the world, most people need advisors, but it is not always clear whether an advisor is trustworthy, credible, and reliable. An advisor should also be good at discussing relevant issues when needed and have few or no potential conflicts of interest. (Such objectiveness is not always easy to find, thus it makes perfect sense for investors and business owners to join together in communities and associations to discuss key issues with each other.) In total, five chapters of the book are devoted to the issue of finding and interacting with trusted advisors.
Facing the future. When facing the future, it is key to learn from history and to resist the temptation to extrapolate too much from current trends and think that events might proceed differently in the future than in the past (very often, they do not!). These chapters focus on the future. In her essay, Christine Lagarde argues that a society’s economic growth hinges on the productivity of the family-business sector, but she also notes that excessive wealth inequality should be avoided when achieving such growth. She thus extols the power of redistribution, social entrepreneurship, and philanthropy.
This book is both relevant and very insightful. It certainly covers most of the topics that readers could hope for in such a book. However, as stated at the outset, this book is more of a handbook for how to manage wealth successfully than a book that should be read from cover to cover. In other words, this book is best seen as a source of inspiration that readers can return to often.
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