Learning and development are vital to an enterprising family's success
The chief learning and development office is a necessary part of the family's C-suite
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.
Each enterprising family member grows as an individual wearing multiple hats. Life may be experienced as a child, parent, sibling and spouse. Or as a family steward – head of the family council, a board director or an investment committee member, or a family executive of the family business, family office or family foundation. Even as an entrepreneur, an artist and an athlete. Each of these hats has its unique set of “know why,” “know what,” “know how” and “know who.”
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?
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.
At its core, the CLDO oversees the development of human potential. Human potential is about making sure every enterprising family member has the freedom to choose and live purposefully their life paths. Operationally, the CLDO assesses the enterprising family’s human potential, then designs and implements processes that use learning to accommodate changes in family and fortune.
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
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.
The CLDO improves the family’s multigenerational adaptive capacity to remain aligned with a shared sense of purpose and meaning. Family members living at their full and happy potential ultimately fuel a broad range of personal and collective goals. As a strategic C-suite member, the CLDO ultimately unleashes family talent to purposefully sustain the wealth and preserve the family’s wellness.