Family Narratives: The Future of Family Charters

    Family Narratives: The Future of Family Charters

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    Oprah’s interview with Prince Harry and the Duchess of Sussex Meghan Markle clearly demonstrates what happens when a family narrative starts to break. A prominent next-generation family member marries outside the “establishment”. Soon, the values underpinning the whole family are questioned. Relationships fracture between siblings and with parents. The Royal Family’s central story – which has lasted for centuries – suddenly seems very shaky.

    Most families don’t have anything like that level of scrutiny or history, but a shared narrative is still the thing that holds them together. A strong story increases the chances of future success. A weak or vague story heightens the risks to wealth and unity.

    Families can derive great meaning from their stories. They can forge trust with one another – and across generations – by exploring their shared history. They can find purpose in the present by building on their collective experiences in the past while also clarifying their vision for their future. When they don’t, factions can develop and create great chasms within and across generations.

    This situation exists because families tend to get bigger and more complex over time. New members arrive by marriage and birth, and differing opinions and even competing values and priorities can develop. Successful families tend to amass greater wealth and assets over time too. Thus, stewardship of the family’s estate gets more complicated and new structures like family offices and family foundations are created to preserve and manage the family’s assets.

    The Family Charter (or “Family Constitution”) is often used as a written guide to help family members navigate this complexity. The Charter acts as a statement of the family’s heritage, culture, hopes, and aspirations for the future. The Charter usually details the following principles for governing the family:

    • Mission & Values – What are the family’s long-term objectives, and what do they consider to be most important with regards to communication, familial relationships, etc.?
    • Ownership – How is the family’s wealth to be managed from generation to generation? Can the family business be sold – even in some small portion – to outside investors or key executives? Are there other assets that must be maintained and passed on to future generations?
    • Employment – Are family members required to work in the family business/office? If so, what roles will they play, and what are the requirements for joining the family’s enterprise – like going to college or gaining outside work experience?
    • Compensation – How are family members to be compensated for their work in the family enterprise? What about any “inactive members” who might not have formal roles but serve on the Board or Family Council?
    • Leadership & Succession – How does the family make significant decisions? Have you established a Board or Family Council? And what are your expectations for and commitments to grooming the next generation of family leaders?

    For more on Family Charters, please read one of my past articles Is It a Family or a Business? The danger with these traditional Family Charters, though, is that they may not capture the family’s real story.

    Stories are scientifically proven and have been used throughout history to motivate and unify, to bring people together, to inspire and inform. Successful multi-generation families tend to have clear and powerful stories that connect past generations with generations in the present and future. From an early age, children are raised in these families to understand their family’s history. They are told stories about what their elders did and why they acted in certain ways. Family storytelling is the age-old way values and wisdom are transmitted, celebrated, and renewed.

    With a keen focus on a family’s assets and business ventures, traditional Family Charters can easily become empty documents, neither lived nor cherished. Many Family Charters simply gather dust or are forgotten on someone’s hard drive, only to be pulled out at times of conflict or during a decision-making stalemate. Younger family members especially struggle to find an emotional connection to the Charter, which can be written in rather dry and formal legal language.

    To more fully engage family members in their legacy planning and create even stronger bonds to one another, we propose an upgrade. We’ll call this new approach “Family Charter 2.0” and believe the key element missing in traditional charters has been the family narrative. A narrative is the family’s core story and details the family’s –

    • History: Meaning from the past
    • Purpose: Motivation in the present
    • Vision: Intended destination for the future

    This new Family Charter 2.0 emerges from a positive and collaborative process of capturing, developing, and celebrating the family narrative. Without a clear narrative, values often become spray-on principles of convenience rather than foundational concepts rooted in deep truth. Only through this exploration and search for meaning from past stories can we reveal the family’s true values and guiding principles.

    This heritage, however, must also blend with the stories of the present and – as yet unwritten – stories of the future. We see all too often what happens when the narrative breaks. Next generation family members do not see the relevance of the story or simply do not perceive its enduring value for them. Remember our opening comments about the Royal Family?

    Typically, at this point, succession within a family fails. Business interests are sold, and family members go their separate ways dividing the family’s estate. This does not have to be a tragedy. Sometimes, it is better for the new generation to start a fresh story of their own. Before the work of a lifetime – or several generations – is liquidated though, it is vital to explore whether the narrative that brought success in the past can be renewed.

    Stories are only powerful to the extent that we find meaning in them. A meaningful narrative will bind us together. But for such alignment to exist, the narrative has to be inclusive enough to carry significance into the future.

    Family founders and leaders have usually led interesting lives. Sometimes they started with nothing, building businesses and amassing tremendous wealth through their own grit and determination. And, while it is vital to capture the patriarch or matriarch’s life story before it is too late, a family narrative should not just be a fawning tribute to the original hero. The stories of younger family members must also feed into the family narrative, if it is to have any staying power or relevance beyond its “interesting” history.

    Capturing a family’s narrative generally requires the support of outside advisors who act as neutral journalists, hearing family stories without preconception or prejudice and coordinating the collaborative effort from start to finish. These individual and group interviews occur with family leaders and other family members over a period of several days if not weeks or months. Some of these interviews are recorded on video for future reference. Then, in a workshop with all key participants, these story fragments are explored together as a group.

    The process of assembling the family narrative may be smooth or messy, depending on the dynamics within the family. A messy process isn’t bad. In fact, it may indicate that members are truly engaging with honesty and commitment to their shared outcome. Simmering issues and conflicts may emerge and can be addressed fairly and openly, in the spirit of searching for truth within the family narrative.

    Following these family meetings, the family and its external advisors can prepare the narrative. It is not a single story that every family member will feel perfectly matches their own values and vision for the future. Instead, the search is for common ground. The narrative should be consistent enough to encompass each family member’s story, without omitting any significant pieces. The narrative should also include important family quotes, anecdotes that depict the family’s values, and any other life lessons learned from key family figures.

    A strong narrative may serve as the introduction to the Family Charter 2.0. Or a family may choose to separate the legalese about any business structures, shareholder agreements, etc. from the narrative, using the narrative itself as the core Charter. As such, the Charter may generate greater emotional and ceremonial power. Either way, the Charter must be lived and celebrated. It should be a source of constant reference and inspiration, playing a role at family gatherings and planning sessions.

    Grandparents can share their stories with grandchildren. Daughters and sons with their mothers and fathers. Whether family members are 8 or 80 years old, they can enjoy this storytelling as a way to connect with one another and across generations. As the years go by, more structured family meetings and retreats can be designed to revisit and refresh these family narratives thus ensuring they remain a constant source of inspiration and connection.

    The enduring test of any charter document is whether it captures one’s imagination and lives in the heart as much as the head. Families should feel its resonance. If the process has worked, family members will hold a powerful sense of loyalty to their narrative. They might also address some of their most challenging questions and concerns, as tend to impact more complex and successful families. While the narrative is not an instant fix for these issues, it can be an enjoyable and positive way to start some of the bigger conversations.

    Have you captured your family’s narrative? Will your children and grandchildren – and great grandchildren! – know what matters most to you and your family? Give me a call at 310.589.4612 or email me today to discuss how best to approach this sensitive subject. If you start the process now, you too can create a multi-generation high-performance family that continues well beyond your own legacy.

    Author’s Note: Special thanks to Mike Sergeant for being a powerful champion for sharing a clear and compelling story and especially for his generous contribution in co-authoring this piece for our families.