Review of: Family Legacy and Leadership – Preserving True Family Wealth in Challenging Times
Family Legacy and Leadership
Preserving True Family Wealth in Challenging Time by Mark Haynes Daniell and Sara S. Hamilton, copyright 2010, published by Wiley & Sons (Asia) Pte. Ltd.
Summary
Imagine that your new business is a huge success and you sell it for 50 million dollars, or you write a series of best selling books that earn royalties for you each year of 5 million dollars, or that you actually win the mega millions lottery! On a more mundane level, imagine that you work hard, save your money, invest it well and end up being a multimillionaire.
What does all that money mean for your family? What will your children, grandchildren and great-grandchildren do when they get it (if they get it)? Do you want it to provide a way for the family to create a legacy, develop a plan to make that wealth work for them for a long time and be better as a united family than as individual family units? How do you make that happen?
Daniell and Hamilton address these questions in Family Legacy and Leadership. In their words: “United, fully engaged, and well led, legacy families can create something together that is far greater than anything they could accomplish, or could be, on their own.” p234
The authors provide a high level road map, desirable characteristics and traits, along with step by step instructions and examples from real families on how to become a legacy family.
They define a legacy family as one that thinks about the family in the context of ones great-grandchildren.
The suggestions focus on gaining family consensus; defining the legacy desired; selecting and developing the family leadership needed to carry forward the legacy; understanding the differences between motivations of the creating generation vs. succeeding generations; preparing the children; and continuing renewal of the family assets via risk management, financial management and keeping an entrepreneurial mindset in all generations of the family.
Read this book to understand and address:
- Differences in views of inherited assets (are they a windfall to be spent or an asset to be passed on?) and how to utilize both views in your plan.
- Steps get the family on board with becoming a legacy family, including setting up a ‘family promise’ with agreed on vision, mode of operating and constitution.
- Preparing the children to assume family responsibilities.
- Working with the 4 pillars of family enterprise – family, business, financial and philanthropic.
- Family leadership – characteristics, training, skills needed, organization modes, and why it is critical to continuance of family.
- Specific tips for leaders such as ways to create consensus and how leading a family is different than leading a company.
- Difficulties and tips on passing the leadership torch from generation to generation.
- Challenges that are specific to each wealth generation.
- Managing risks.
- Utilizing the ‘eco-system’ around the family – roles, success measurement, importance – including the family office.
What I liked
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Stories of actual people doing the things the authors talk about.
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Specific suggestions on steps to take to define and setup a family legacy enterprise.
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Definitions of legacy, wealth, and family eco-systems.
What I wished for
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More focus on what folks in the lower categories of wealth can do to utilize these concepts.
Favorite quotes
- “By all accounts, the wealth passing from one generation to another in coming years will be unprecedented in scale,……Navigating that successful transfer of wealth will be an unfamiliar challenge for may families, who have little or no precedent to guide them on the transfer of financial wealth, business leadership, or family responsibilities.” p 136.
- “For all families creating wealth for the first time, the land of great wealth is like a new world” p107.
- “Legacy is a living concept that transcends time and place”. P1.
- “Families cannot retain their wealth over multiple generations when their members spend more than they contribute to the pool of family assets” p 24.
- “Thoughtful , intentional preparation of children and grandchildren for the responsibilities of ownership is the most critical component for sustaining a family legacy for generations” p 47.
- “Perhaps the greatest challenge for family leaders is to lead this collection of individuals toward a better future than they might have had without the leader’s insights and actions” p 122.
- Reaching agreement on the most important metrics and deciding how much family time to invest in reaching these goals is a critical step forward in the family process. Families who do this best have formal discussions about ‘investing in future generations’ and clearly articulate a vision of where they want to be in 50 to 100 years as a family enterprise, and what leadership skills are needed to get them there.” p 130.
- “The opportunity to pursue a higher purpose and contribute to a continuing family legacy are two of the principal reasons that justify the personal sacrifice and collective investments required by all branches and generations of the family. United, fully engaged, and well led, legacy families can create something together that is far greater than anything they could accomplish, or could be, on their own.” p234.
