The expressions “people are our most important asset” and “putting people at the forefront for sustainable organizational success” are heard often, usually in a business setting. But they also apply in the enterprising family context.
People form the human capital of all organizations. Human capital embodies the skills, knowledge and behaviours acquired and enacted throughout our life experiences. It is the individual and collective product of being.
The idea that human capital is an enterprising-family resource whose value can change over time becomes evident. The impact of these changes over generations can be quite difficult to forecast, particularly if there is no sense of purpose and game plan attached to the development of all the family members.
Elevating the full potential of human capital: Never too soon!
Enterprising family founders and the next generation often voice their concerns about being unprepared for leadership and ownership succession. Dysfunctional parent-child or sibling dynamics can undermine the possibility of bridging the generations. Gaps in trust, respect, knowledge and shared experiences between multigenerational enterprising family members limit the full potential of everyone’s human and social capital.
Turning a blind eye to the make-up and evolution of the family’s human capital is an early warning signal for floundering under the Rule of 92: shirtsleeves to shirtsleeves in three generations. It is never too soon. Start the learning journey as early as the pre-teen years.
The essence of a learning culture
A learning culture is like an effective vaccine. Learning and development provide a proven level of immunity against obsolescence and aimlessness.
Learning is often achieved by reading, going to class and writing exams, but also through experimenting, sharing with others and living our values in a multitude of contexts and roles. These life interactions can actually better us because of the feedback we receive from others, the rewards and pain we harvest, and our introspection on these learnings. Through learning comes connections that bring richer relationships, better problem solving and decision-making.
Who stewards the human and social capital
From our human interactions, we create and nurture relations that transform into social capital. Human and social capital are invaluable and necessary resources to break the Rule of 92. A learning culture develops through thinking and behaving in ways that recognize that knowledge and skills are neither soft nor hard, but rather perishable or durable.
But who stewards the human and social capital of a multigenerational enterprising family? Who manages the preparedness of the family talent pool to deal with leadership successions, selection, transitioning and onboarding family leadership roles? Who helps family members find purpose and a sense of belonging in the context of significant wealth and social status? Who guides family members on the roles, responsibilities and the possibilities of being an owner or influencer of substantial financial and reputational resources? Who assesses the depth and readiness of the family talent pool for change and innovation?
Antoine Mayaud, a member of the French Mulliez family, describes their Affectio Societatis as the family organization enabling the family leadership to facilitate multigenerational proximity and permeability between enterprise and family. Such proximity emerges by nurturing diversity, inclusiveness and fairness among the greatest number of family members regardless of geography. Mayaud founded the Affectio Societatis as the chief learning and development office of the Association Familiale Mulliez about 25 years ago. It is distinct from their family office, Mobilis.
The chief learning and development office (CLDO) is not the family office
The CLDO is the evaluator, coach, curator and custodian of the family’s learning culture. In partnership with a family champion, the CLDO can help the family by leading the preparation and execution of all facets of a learning culture. The CLDO is situated and organized in the family system.
In contrast to the CLDO, the family office stewards the enterprising family’s ownership interests in real and financial assets. The family office provides administration, compliance, capital allocation and investment management services. Its processes are structured and driven by expected financial outcomes and key performance indicators such as tax rates, returns on invested capital, distribution payout rates and potential drawdowns. Despite their organizational differences, the CLDO and the family office should operate symbiotically.
The CLDO has many forms
The Lee Kum Kee family’s business roots lie in the invention of oyster sauce in mainland China in the late 19th century. The fourth-generation siblings decided to sustain a “1,000 year plan” to close the growing gap between those family members involved in the family enterprises and those outside. A family learning and development centre was created as a unit under the family council. It supports the family’s multigenerational communications model so members can stay connected regardless of their position and roles and nurture the breadth and depth of the family’s ownership and leadership talent pool. The CLDO is also separate, yet interconnected, with the family office.
The Brenninkmeijer family believe ownership is earned, not inherited. The origins of this sixth-generation enterprising family lie in Germany and the Netherlands. To become a leader and owner of their family holding company, Cofra, necessitates at a minimum, with no guarantee, a 15-year apprenticeship. Ownership is a matter of eligibility, not entitlement. Cofra has its own learning and development office that is headed by a family leader and is also separately organized from the family office, Anthos.
Advancing the family vision
The CLDO examples above have evolved over decades to accommodate the family’s growing complexity and stewardship mindset. They were all initiated by visionary family champions and continuously supported by the senior family leadership group.
Dr. Mark W. Auger is the CEO of Crysalia Inc., the Chief Learning & Development Office for Significant Enterprising Families, based in Montreal. Crysalia helps enterprising families and their family members honor their roots, be adaptative and live purposefully for generations.
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