In Western culture, we prize the individual. But is that bad for family business?

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Do you view people from various world cultures as having either hard shells (coconuts) or soft (peaches)? Are they driven by virtue, honour or power? Understanding world cultures can make it easier for us all to get along, a pertinent skill for family advisors in multicultural Canada.

Canadians are generally grouped among the Western “individualist” cultures, which tend to value independence and self-reliance. Our communication style is direct, and the needs of the individual supercede those of the group. Freedom to choose your own spouse is typical within individualist cultures, while collectivist cultures often favour arranged marriage.

Canadians tend to be less individualistic than residents of the United States, but more so than the British.

Individualism goes back at least as far as Classical Greek philosophers who wrote about the rights and duties of the individual citizen. A recent study by researchers at Harvard and Virginia’s George Mason University postulates that in the early Middle Ages, measures taken by the Roman Catholic church to prevent incest, such as forbidding marriage between cousins, had the effect of breaking up previously powerful kinship structures and thus promoting the rise of individualist culture.

Later, those elements of Christianity that would inform the Protestant movements of the 1600s fostered another aspect of individualist culture through the “work ethic” that holds that every person has the capacity to succeed in life through personal diligence. In the 1700s, Locke, Rousseau and other Enlightenment philosophers further explored the value of individual freedom, setting the stage for the founding of the U.S., perhaps the nation that has most strongly embraced individualist values.

Today, the countries of Western Europe and North America tend to favour individualist values, while other nations are more informed by a collective outlook. Some researchers further group collectivism into the “harmony” cultures, prevalent in Asia, that prioritize respect for hierarchy and shun expressions of discord, and the “honour” cultures of Latin America and elsewhere, which place the highest value on family loyalty.

In Canada’s multi-ethnic social fabric, is an individualist mindset helpful or hurtful to family enterprise?

Individualism favours the disruptive mindset. That said, I think the Western mindset can lack discipline and commitment.

Matthew Fleming, Stonehage Fleming

It depends, says Shai Dubey, adjunct assistant professor and Distinguished Faculty Fellow of business law at Queens University’s Smith School of Business in Kingston, Ont.

“Entrepreneurs, as they start a business, are probably individualist, but as their businesses mature and they think about growth and succession, they probably tend to become more collectivist, as collectivist thinkers tend to make decisions based on long-term considerations,” he says.

He points out that Canadians don’t perfectly match the individualist mould that we are labelled with: “Generally, individualists tend to make decisions based upon outcomes and choices that are in their control for their personal benefit, while collectivists make decisions that are for the benefit of the collective – for example, their families and staff.

“Whether one is individualistic or collectivist is shaped by many factors: education, family, religion and careers. People can be individualistic in one part of their lives and collectivist in another.”

A hard or soft shell

Dubey uses a model identified by psychologist Kurt Lewin, who divided the world’s cultures into “peaches” and “coconuts” according to how they form relationships.

“Peaches are squishy on the outside – that is, friendly and easy to interact with – but have a private inner core that is hard to penetrate. Coconuts, on the other hand, take a long time to get to know, but when they trust someone, they go out of their way to help,” he says.

“Canadians are generally labelled as being peaches, but if they have roots in a collectivist culture or profession, they may be coconuts.”

The more individualist your culture, the harder it is to create a shared purpose, and a shared purpose “sits at the heart of everything,” says Matthew Fleming, partner with the international wealth management firm Stonehage Fleming, based in London, U.K.

“Individualism favours the disruptive mindset,” Fleming says. “That said, I think the Western mindset can lack discipline and commitment.” On the other hand, in collectivist cultures, the requirement to respect hierarchy and tradition can be at odds with the need for change, he says.

“If you took the best out of each mindset and harnessed that, you would get the best family business,” Fleming says. “We know that the greatest threats are poor leadership, family disputes and failure to engage the next generation. When you talk about these three areas, the most successful families that we work with are those that have a multi-leader model. They realize that one person can’t lead in all areas.

“But again, it all comes back to shared purpose. I think, whichever culture you’re from, a lot of it is underpinned by the ability to create a set of shared values.”

‘Who am I accountable to?’

We live in a global world, and this is especially true for high-net-worth families, says Marco Blankenburgh, international director of the consulting firm KnowledgeWorkx, who is based in Dubai.

“They typically travel more, they have investments in other countries, they are exposed to relationships across cultures,” he says. “What’s more valuable is to say that every person is on their own unique cultural journey, and this is especially true when you start looking at generations in families.”

Rather than define families along the polarity of individualism versus collectivism, KnowledgeWorkx asks, “Who am I accountable to?” The answer might be oneself, one’s family, one’s nation or anyplace in between.

“We use a tool called the Three Colours of Worldview,” Blankenburgh says. He explains that this model groups people according to whether they most highly value doing “right” versus “wrong” – typical in the West – or preserving honour, or achieving power and influence. Comparing these with the concept of individualism versus collectivism helps to define family members’ positions along key polarities.

When family members occupy very different positions along these polarities, conflict often ensues, but “it’s not a problem to be solved, it’s a polarity to be managed,” he says. “In polarity management, you need to embrace the beauty of the opposites and avoid the pitfall of both. And that, to me, is the secret.”

Shai Dubey says, “When you label people, you don’t often make the effort to get to know who they really are. People are complex, and labelling creates stereotypes that impact on how we interact with them.”

The last word goes to thought leader Jim Grubman of Family Wealth Consulting in Lexington, Mass.

“Family enterprises have the best outcomes and longevity when they adapt to having structures and processes that foster both the collective and the individual,” he says, “from whatever their starting point may be, culturally.”

More from Canadian Family Offices:

• The beer-brewing family who lost it all
• Naim Ali, CEO of Calgary’s SM2 Capital Partners, on immigrant success story
• Bill C-208: Advisors work overtime on succession plans as tax changes loom

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