So this month we ask, metaphorically, how do you tend to your garden?

FW = R (HC + RC)

Growing family wealth and establishing long term family legacy (FW) requires strong family cultures (RC). Cultures are byproducts of their inputs (R, HC).

The Cynefin Framework applied to Family Enterprise. 

The family enterprise system is categorized as “complex” within the Cynefin Framework*, and compared to the other forms of systems in this framework (chaotic, complicated, and clear), a complex system can attempt to identify cause and effect in retrospect (unlike “chaotic”) but not in advance (unlike “clear” and “complicated”).

I highly recommend Torsten’s articles (here and here) on the topic and from what I’ve seen, the work that Greg McCann, Torsten and the Generation6 group is superb.

Ultimately, Torsten recommends that families recognize their complexity, and with this recognition comes an important perspective: culture planning must be multi-faceted to appeal to all family members.

Our motivations drive our behaviours and all family members are motivated by different aspects of family enterprise. So a family has the highest probability of long-term success by delivering within all of these types of motivating factors.

The ingredients of a good garden / the motivating factors of families.

On a 2X2 matrix, there are four dimensions created by two factors that impact motivation:

The two factors in the matrix are:

1. the relationship involved (split into the family and the enterprise), and
2. the motivational appeal (split into emotional and logistical).

A family that focuses on the logistics/enterprise group will only attract family members motivated by the financial affairs of the business. This works when all of the family members are motivated by the financial success of the family enterprise – risky business!

For me, for example, the appeal of the emotional aspects of family enterprise are far more motivating. I would consider that kind of culture “cold” and despite being interested in the business, I would feel like a poor fit and be demotivated.

We are all different and valuable in different ways motivated by different things.

Here are some examples of topics that can motivate within the four groups:

(crediting Torsten’s powerpoint deck with permission: all rights reserved. Torsten uses slightly different group descriptions)

Dimension 1:
Family Emotional

• Regular meetings
• Family name and history
• Interesting personalities
• Philanthropic activities

Dimension 2:
Family Financial

• Money and other material objects
• Inheritances
• Intra-family lending
• Elevated life style

Dimension 3:
Business Financial

• Dividends
• Shareholder agreements
• Investing and business opportunities
• Salaries in excess of market wages

Dimension 4:
Business Emotional

• Quality products
• Archives, museums, and other artifacts
• Plant tours and internships
• Corporate Social Responsibility

Stay intentional and try many things! The experimentation is itself valuable because:

1. it recognizes that strong families put time and attention into their families, so experimentation exhibits caring; and
2. it recognizes that even a cohesive family is dynamic and changing through growth, so experimentation exhibits humility.

WRAPPING IT UP

OK, please put your gardener’s hat back on.

A gardener does not know the outcome of their efforts at the outset. You tend to your garden by working on the components of the environment (seed, water, garden design, etc.) but you cannot garden with the end result clearly in mind. If you remain engaged in the progress of your garden, you are often rewarded with beauty and success – yet you are not always rewarded.

Sometimes uncontrollable factors derail even the strongest family cultures (and gardens). Show you care by experimenting, tend to your garden, and the good outcomes will outweigh the bad.