All posts by David Lansky, Ph.D.

Globalization and the business family

David Lansky
David Lansky

Business families are increasingly composed of global citizens. It is not unusual for cousins who share ownership in a business or who share other financial assets to have grown up in different countries, to have been educated in different school systems, and even to have different religions.

How then to promote alignment around policies, plans and strategies when such globalization may introduce significant geographic dispersion and cultural diversity?

Some thoughts:

  • Develop an intentional plan to ensure that different family members spend enough time together to understand and strive toward a common family culture.
  • Increase the frequency of family meetings.
  • Encourage cross cultural and cross demographic sharing of personal and business experiences.

Demographics and the business family

David Lansky
David Lansky

The Pew Research Center recently released its 2014 study of social and demographic trends in the U.S. Some results included:

Family members are living longer.

  • Average life span has increased from 46.3 years (men) and 48.3 years (women) in 1900, to 77.4 years (men) and 82.2 years (women) in 2013.

Family members have different views on what IS family.

  • Nearly four-in-ten survey respondents (39%) say that marriage is obsolete; in 1978 when Time magazine posed this question to registered voters, just 28% agreed.
  • 86% of respondents say a single parent and child constitute a family; 80% say an unmarried couple living together with a child is a family; and 63% say a gay or lesbian couple raising a child is a family.

Families LOOK different.

  • Rates of intermarriage have doubled since 1980.
  • About 50% of U.S. marriages end in divorce.

Good engagement with, and effective implementation of a family’s structures, policies and plans will be enhanced by recognizing the increased diversity that these demographic trends foretell.

Multiple active generations in the same room at the same time, multiple ethnicities and religions, and multiple views of exactly what constitutes “family” will require greater flexibility and tolerance on the part of all generations in a family.


The most valuable values for smooth transitioning

David Lansky
David Lansky

In my previous blog post, I noted the “Value of Values” in the course of a family/business transition.

Two values I believe to be of particular importance to the course of a transition are Trust and Integrity.

I think of Trust as deriving from several factors:

  • Competence – Trusted parties are good at what they aspire to.
  • Honesty – They speak the truth, even when difficult to do so.
  • Intimacy – When speaking the truth they are caring and compassionate – they don’t believe in “brutal honesty.”

Integrity is a quality that is demonstrated by consistency between words and actions.

Families suffer, trust is undermined and lots of hard work is diminished when words and actions don’t match.

Family vision, family policies, and  family value statements can help to guide a smooth transition. However, a sure way to sabotage progress is to dismiss those words with careless (or uncaring) actions. Integrity means “walking the walk” –  that we act consistently with our vision of family; that we follow policies that we agreed upon; and that we are true to the values we have aspired to.

If you are managing a family/business transition how are Trust and Integrity being cultivated?


A distinction among successful families: The value of values

David Lansky
David Lansky

Family leaders must be concerned with the tactical elements of a transition:

  • What the estate plan will look like.
  • The details of a leadership or ownership succession plan.
  • How best to develop the next generation.

But in my experience, families who have been most successful in continuity planning distinguish themselves not solely by the quality of their planning. An additional key feature of their success is their commitment to live by a set of values.

One family I know were wrestling with how to divide shared assets when it became clear that separate branches needed to pursue different business goals. They successfully arrived at a solution that preserved both family and business by establishing right from the outset two guiding values: Preserving good family relationships and having senior family members be proud of their process.

If you are contemplating a transition, what are the values that will guide your process?


Decisions are more likely to be sustainable and to preserve the quality of family relationships when they are perceived as “fairly derived”.

David Lansky
David Lansky

Asset sharing families often struggle with questions of fairness. It’s a familiar dilemma: Must we treat all family members the same (equally) in order to be fair? An affirmative response requires ignoring differences between people and this may be perceived as unfair and paternalistic. A more realistic approach is to recognize the differences and to be transparent in discussions, explaining WHY family members are being treated differently.


Listening does not require agreement. Sometimes people just want to be heard.

David Lansky
David Lansky

Family members occasionally resist really listening to each other out of fear that listening signifies agreement. Not true. In fact, good communication may occasionally be reinforced by the conscious intention to not express agreement or disagreement, but simply to listen. That’s harder for some people than for others.


“Silence Is Golden”, “Pandora’s Box”, “Peace At Any Price” undermine good communication.

David Lansky
David Lansky

All of these aphorisms have a similar goal: To suppress open communication about potentially disturbing topics. But suppressed communication does not mean an issue is not present. On the contrary, it is often the things we don’t talk about that have the most impact in our relationships. The solution is to create a process for safely putting issues on the table, accompanied by mutually respectful listening and problem solving. A third party facilitator can really help in this regard by helping to identify the right issues, promoting good listening and driving toward effective problem solving.


Good communication is more important to asset sharing families than to others.

David Lansky
David Lansky

While of course good communication is important for all families , the stakes are higher for asset sharing families. Communication breakdown, conflict, and family dissension may affect not only family relationships, but business integrity and  the  livelihood of family members, employees, community members  and many other stakeholders. So asset sharing families would be well advised to make good communication an integral part of family culture, something to strive for, to nurture and to preserve.


What Promotes Change?

David Lansky

I noted in my earlier blog three factors that inhibit change in a family: Inertia, Fear of the Unknown and Psychological Reactance. Here are three guidelines for promoting change.

Vision and Values
Clarifying vision and values through family meetings or individual discussions, and documenting your findings, can  add energy to a family system by raising hopes for the future and will help to alleviate Fear of the Unknown by articulating clear family goals.

Inclusiveness, Open Dialogue and Good Questions
Much of the energy for change comes from process. How do you create a good productive process? Ensure open dialogue. How do you  do that? Schedule opportunities to discuss change and why you want it to occur. I occasionally ask families to sit down with each other and give each person a chance to speak uninterrupted for 10 minutes at a time.

Asking questions ensures that people feel included and valued. This enhances the sense of choice in a family.

Questions are an opportunity to learn what  a person is really thinking without his or her  feeling coerced or pressured to do anything in particular.

There are some questions that persist in your mind for weeks, months or years, and continue to spur curiosity and engagement. You know that a question  is effective in this way when the question is met with a long pause, or when the person says “Gee, I never thought of that before” or “I never knew the answer until you asked the question”.

Balanced Task/Process Orientation
All of this requires a balance between leadership that is focused on accomplishing a task and leadership that is attentive to process. And sometimes leading change in family requires a very different set of skills than leading change in a business.

Some business leaders are incredible visionaries and very bold and they will “go where no one has gone before” because they are hard charging and tough. The problem is that sometimes these business leaders find that they have left their families behind. Or more accurately, the family has not decided to move ahead with them.

I worked with one family in which the family leaders created a transition agreement to the next generation that was visionary and generous and would have permitted the next generation to assume ownership at a very good price and over a reasonable period of time. They spent a small fortune on attorneys’ and consultants’ fees to create the plan. The problem was that the next generation as a group couldn’t tolerate each other personally; but the family leaders never had a real sit down to discuss the situation.

What helps in the business context – focus, drive, task orientation – may well get in the way on the family side.

Leading change in a family means being able to balance both of these orientations.


What Inhibits Change in Families?

David Lansky

Family leaders are in the business of promoting change in their families, yet change is often difficult to implement. Here are three reasons why:

The Principle of Inertia
Newton’s first law of motion states that to change direction, an object in motion requires the application of an external force. This is the concept of inertia.

Inertia: the property of matter by which it retains its state of rest or its velocity along a straight line so long as it is not acted upon by an external force.

Once set in motion in one direction, the universe doesn’t like objects to change direction. So inertia requires the application of an external force. Families are like that. Implementing new practices in a family requires the application of energy. And as we know, energy is at a premium when family members are active in their businesses, personal and family lives. I often hear people complain that introducing change in a family is difficult. Well it is. So the need to apply energy when introducing new practices is simply the natural course of events. Change takes time, energy and patience.

Fear of the Unknown
Nobody wants to step off the deep end without knowing what they will be stepping into. I worked with one family where we discussed a very important recommendation – restructuring their board of directors so that board members were there not to represent branches but to contribute to the business. The family was strongly resistant to the idea – “We have always done things this way”, one member said to me, “How do we know that your recommendation won’t make things worse for us?”

Worse than a constant battle over equal representation?

Well, as they say “Better the Devil you know than the Devil you don’t….”

Psychological Reactance
Psychological reactance occurs when a person believes that his or her choices are being restricted by others. Reactance will then cause a person to adopt or strengthen a view or attitude that is contrary to what is intended, and will increase resistance to persuasion.

Now this is very important: When people feel that they do not have a choice or that choices are limited, they are likely to react in two ways: – they push back against the change , or they spend lots of time thinking about how to remove whatever constraints they believe are being imposed.

That’s why it is so important in succession and wealth transfer planning for next generation people to feel that have had a voice in the planning process. This is the reasoning behind the principal of inclusiveness in family governance.